UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


~~[X]~~☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30,~~, 2017~~ 2022

ORor


~~[ ]~~☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _______________

Commission file number: 001-37908

CAMPING WORLD HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware	81-1737145
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer
~~incorporation or organization~~	Identification No.)

250 Parkway Drive, Suite 270

Lincolnshire, IL60069

~~Telephone: (847) 808-3000~~

(Address ~~including zip code, and telephone number, including~~

~~area code,~~ of registrant’s principal executive offices) (Zip Code)

Telephone: (847) 808-3000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock,

$0.01 par value per share

CWH

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or ~~15 (d)~~15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒⌧ No ☐◻

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). Yes ☒⌧No ☐◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐⌧	Accelerated filer ☐
	◻
Non-accelerated filer ☒◻	Smaller reporting company ☐
~~(Do not check if a smaller reporting company)~~	Emerging growth company ☐
		~~Emerging growth company~~ ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒⌧

As of ~~November 7, 2017,~~October 28, 2022, the registrant had ~~36,527,406~~42,132,228 shares of Class A common stock, ~~50,836,629~~41,466,964 shares of Class B common stock and one share of Class C common stock outstanding.

BASIS OF PRESENTATION

As used in this Quarterly Report on Form 10-Q (this “Form 10-Q”), unless the context otherwise requires, references to:

●

“we,” “us,” “our,” “CWH,” the “Company,” “Camping World” and similar references refer to Camping World Holdings, Inc., and, unless otherwise stated, all of its subsidiaries, including CWGS Enterprises, LLC, which we refer to as “CWGS, LLC” and, unless otherwise stated, all of its subsidiaries.

●

“Annual Report” refers to our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2021 filed with the Securities and Exchange Commission (“SEC”) on ~~March 13, 2017.~~

February 24, 2022.

●

“Continuing Equity Owners” refers collectively to ML Acquisition, funds controlled by Crestview Partners II GP, L.P. and the Former ~~Profit~~Profits Unit Holders and each of their permitted transferees that continue to own common units in CWGS, LLC after the ~~IPO~~initial public offering (“IPO”) of our stock and the ~~Reorganization Transactions~~related reorganization transactions (each as ~~defined~~discussed in Note 1 – — Summary of Significant Accounting Policies to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q) and who may redeem at each of their options their common units for, at our election (determined solely by our independent directors within the meaning of the rules of the New York Stock Exchange who are disinterested), cash or newly issued shares of our Class A common stock.

Direct exchanges of common units in CWGS, LLC by the Continuing Equity Owners with CWH for Class A common stock are included in the reference to “redemptions” in relation to common units in CWGS, LLC.

●

“Crestview” refers to Crestview Advisors, L.L.C., a registered investment adviser to private equity funds, including funds affiliated with Crestview Partners II GP, L.P.

●

“CWGS LLC Agreement” refers to CWGS, LLC’s amended and restated limited liability company agreement, as ~~amended to date.~~

amended.

●

“Former Equity Owners” refers to those Original Equity Owners controlled by Crestview Partners II GP, L.P. that have exchanged their direct or indirect ownership interests in CWGS, LLC for shares of our Class A common stock in connection with the consummation of our IPO.

~~“Former Profit~~Profits Unit Holders” refers collectively to ~~our~~Brent L. Moody, Karin L. Bell, and Tamara R. Ward, who are named executive ~~officers (excluding Marcus Lemonis),~~officers; Andris A. Baltins and K. Dillon Schickli, who are members of our board of directors, and certain other current and former executive and non-executive employees and former directors, in each case, who held existing common units in CWGS, LLC pursuant to CWGS, LLC’s equity incentive plan that was in existence prior to our IPO and who received common units of CWGS, LLC in exchange for their ~~profit~~profits units in connection with our IPO.

●

“ML Acquisition” refers to ML Acquisition Company, LLC, a Delaware limited liability company, indirectly owned by each of Stephen Adams and our Chairman and Chief Executive Officer, Marcus A. Lemonis.

●

~~“ML Related Parties” refers to ML Acquisition and its permitted transferees of common units.~~

~~“ML RV Group” refers to ML RV Group, LLC, a Delaware limited liability company, wholly owned by our Chairman and Chief Executive Officer, Marcus Lemonis.~~

“Original Equity Owners” refers to the direct and certain indirect owners of interests in CWGS, LLC, collectively, prior to the Reorganization Transactions and Recapitalization (as defined in Note 1 – Summary of Significant Accounting Policies and Note 13 – Stockholders’ Equity to our consolidated financial statements included in Part I, Item 1 of this Form 10-Q, respectively) which includes ML Acquisition, funds controlled by Crestview Partners II GP, L.P. and the Former Profit Unit Holders.

“Tax Receivable Agreement” refers to the tax receivable agreement that the Company entered into with CWGS, LLC, each of the Continuing Equity Owners and Crestview Partners II GP, L.P. in connection with the Company’s IPO.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts contained in this Form 10-Q may be forward-looking statements. Statements regarding our future results of operations and financial ~~position,~~position; the impact of the novel coronavirus (“COVID-19”) pandemic on our business, results of operations and financial position; the expected impact of the February 2022 Cybersecurity Incident (as defined below); the expected impact of inflation; business strategy and plans and objectives of management for future ~~operations, including, among others, statements regarding~~operations; the timeline for and benefits of our 2019 Strategic Shift (as defined below); expected new retail location openings and closures, including greenfield locations and acquired locations; profitability of new retail locations; the impact from the Tax Receivable Agreement of the redemption of common units described below relating to the October 2017 Public Offering (as defined below); sufficiency of our sources of liquidity and capital and any potential need for additional ~~financing; use~~financing or refinancing, retirement or exchange of ~~proceeds from~~outstanding debt; our ~~borrowings under the Existing Credit Agreement;~~stock repurchase program; future capital expenditures and debt service obligations; ~~refinancing, retirement or exchange of outstanding debt;~~ expectations regarding industry trends and consumer behavior and growth; our ~~comparative advantages and our plans and~~ ability to ~~expand our consumer base; our ability to respond to changing business~~capture positive industry trends and economic conditions; our plans to increase new products offered to our customers and grow our businesses to enhance revenue and cash flow, and increase our overall profitability; volatility in sales and potential impact of miscalculating the demand for our products or our product mix; our ability to drivepursue growth; anticipated impact of the acquisition of Gander Mountain Company (“Gander Mountain”) and its Overton’s boating business (the “Gander Mountain Acquisition”); the number of Gander Mountain locations the Company expects to open and operate and the anticipated timing of such store openings; expectations regarding assumption and rejection of leases for the locations acquired under the Gander Mountain Acquisition; rebranding of Gander Mountain expectations regarding increase of certain expenses, including in relation to the Gander Mountain Acquisition;our pending litigation, and our plans related to dividend payments, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘expects,’’ ‘‘plans,’’ ‘‘anticipates,’’ ‘‘could,’’ ‘‘intends,’’ ‘‘targets,’’ ‘‘projects,’’ ‘‘contemplates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘predicts,’’ ‘‘potential’’ or ‘‘continue’’ or the negative of these terms or other similar expressions.

~~Forward-looking~~ We have based these forward-looking statements ~~involve known~~largely on our current expectations and ~~unknown~~projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We believe that these important factors include,assumptions, including, but ~~are~~ not limited to, the following:

●

risks related to the COVID-19 pandemic and related impacts on our business;

●

our ability to execute and achieve the expected benefits of our 2019 Strategic Shift and costs and impairment charges incurred in connection with the 2019 Strategic Shift may be materially higher than expected or anticipated;

●

the availability of financing to us and our customers;

●

fuel shortages, or high prices for fuel;

●

the well-being, as well as the continued popularity and reputation for quality, of our manufacturers;

●

trends in the RV industry;

●

general economic conditions in our markets, including inflation, and ongoing economic and financial uncertainties;

●

changes in consumer preferences or our ~~ability~~failure to ~~attract and retain customers;~~

gauge those preferences;

●

competition in the market for services, protection plans, products and resources targeting the RV lifestyle or RV enthusiast;

●

our expansion into new, unfamiliar markets, businesses, or product lines or categories, as well as delays in opening or acquiring new retail locations;

●

unforeseen expenses, difficulties, and delays frequently encountered in connection with expansion through acquisitions;

●

our failure to maintain the strength and value of our brands;

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●

our ability to successfully order and manage our inventory to reflect consumer demand in a volatile market and anticipate changing consumer preferences and buying trends;

●

fluctuations in our same store ~~sales~~revenue and whether ~~they~~such revenue will be a meaningful indicator of future performance;

●

the cyclical and seasonal nature of our business;

●

our ability to operate and expand our business and to respond to changing business and economic conditions, which depends on the availability of adequate capital;

●

the restrictive covenants inimposed by our Senior Secured Credit Facilities and Floor Plan Facility;

●

our reliance on ~~three~~six fulfillment and distribution centers for our retail, RV furniture distribution, and e-commerce ~~and catalog~~ businesses;

●

the impact of ongoing class action lawsuits against us and certain of our officers and directors, as well as any potential future class action litigation;

●

natural disasters, whether or not caused by climate change, unusual weather ~~condition,~~conditions, epidemic outbreaks, terrorist acts and political events;

●

our dependence on our relationships with third party providers of services, protection plans, products and resources and a disruption of these relationships or of these providers’ operations;

●

any delays, new or increased tariffs, increased cost or quality control deficiencies in the importation of our products manufactured abroad;

●

whether third party lending institutions and insurance companies will continue to provide financing for RV purchases;

●

our ~~inability~~ability to retain senior executives and attract and retain other qualified employees;

●

~~our ability to meet our labor needs;~~

risks associated with leasing substantial amounts of space, including our inability to maintain the leases for our retail locations or locate alternative sites for our stores in our target markets and on terms that are acceptable to us;

●

our business being subject to numerous federal, state and local regulations;

●

~~regulations applicable to the sale of extended service contracts;~~

changes in government policies and legislation;

●

~~our dealerships’ susceptibility to termination, non-renewal or renegotiation of dealer agreements if state dealer laws are repealed or weakened;~~

our failure to comply with certain environmental regulations;

●

climate change legislation or regulations restricting emission of ‘‘greenhouse ~~gases;~~gases’’’

;

●

a failure in our e-commerce operations, security breaches and cybersecurity risks;

●

our inability to enforce our intellectual property rights and accusations of our infringement on the intellectual property rights of third parties;

●

our inability to maintain or upgrade our information technology systems or our inability to convert to alternate systems in an efficient and timely manner;

●

disruptions to ~~our information technology systems~~ or breaches of our ~~network security;~~

or our third party providers’ information technology systems, including the February 2022 Cybersecurity Incident;

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●

risk of product liability claims if people or property are harmed by the products we sell and other litigation risks;

●

risks related to our pending litigation;

●

risks associated with our private brand offerings;

●

possibility of future asset impairment charges for goodwill, intangible assets or other long-lived assets;

●

potential litigation relating to products we sell or sold, including firearms and ammunitions;

●

Marcus Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition Company, LLC and ML RV Group, LLC, has substantial control over us ~~and may approve or disapprove substantially all transactions and other~~including matters requiring approval by our ~~stockholders, including, but not limited to, the election of directors;~~

stockholders;

●

the exemptions from certain corporate governance requirements that we ~~will~~ qualify for, and ~~intend to~~ rely on, due to the fact that we are a ‘‘controlled company’’ within the meaning of the New York Stock Exchange, or NYSE, listing requirements;

●

whether we are able to realize any tax benefits that may arise from our organizational structure and any redemptions ~~or exchanges~~ of CWGS Enterprises, LLC common units for cash or stock; ~~and~~

●

other risks relating to our organizational structure and to ownership of shares of our Class A common stock; and

●

the other factors set forth under ‘‘Risk Factors’’ in Item 1A of Part I of our Annual Report, ~~and~~in Item 1A of Part II of this Form ~~10-Q.~~

10-Q, and in our other filings with the SEC.

~~We qualify all of~~These risks may cause our actual results, performance or achievements to differ materially and adversely from those expressed or implied by the forward-looking statements.

Any forward-looking statements ~~by these cautionary statements. The forward-looking statements in~~made herein speak only as of the date of this Form 10-Q, ~~are only predictions. We have based these forward-looking statements largely on our current expectations~~ and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on ~~these~~ forward-looking statements as predictions of future events. ~~The events and circumstances~~Although we believe that the expectations reflected in ~~our~~the forward-looking statements ~~may not~~are reasonable, we cannot guarantee that the future effects, results, performance, or achievements reflected in the forward-looking statements will be achieved or ~~occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan~~occur. We undertake no obligation to ~~publicly~~ update ~~or revise~~ any of these forward-looking statements ~~contained herein, whether as a result of~~for any ~~new information, future events, changed circumstances or otherwise. For a further discussion of~~reason after the ~~risks relating to our business, see “Item 1A—Risk Factors” in Part I of our Annual Report and “Item 1A—Risk Factors” in Part II~~date of this Form ~~10-Q.~~10-Q or to conform these statements to actual results or revised expectations.

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(In Thousands Except Share and Per Share Amounts)

September 30,

December 31,

2017

2016
Assets

Current assets:

Cash and cash equivalents

$
163,225

$
114,196
Contracts in transit

79,499

29,012
Accounts receivable, net

73,700

58,488
Inventories, net

1,204,138

909,254
Prepaid expenses and other assets

27,685

21,755
Total current assets

1,548,247

1,132,705
Property and equipment, net

183,485

130,760
Deferred tax assets, net

262,433

125,878
Intangibles assets, net

37,972

3,386
Goodwill

328,402

153,105
Other assets

17,940

17,931
Total assets

$
2,378,479

$
1,563,765
Liabilities and stockholders' equity (deficit)

Current liabilities:

Accounts payable

$
158,026

$
68,655
Accrued liabilities

125,349

78,044
Deferred revenues and gains

78,934

68,643
Current portion of capital lease obligations

908

1,224
Current portion of tax receivable agreement liability

7,378

991
Current portion of long-term debt

7,400

6,450
Notes payable – floor plan, net

799,682

625,185
Other current liabilities

26,822

16,745
Total current liabilities

1,204,499

865,937
Capital lease obligations, net of current portion

207

841
Right to use liability

10,231

10,343
Tax receivable agreement liability, net of current portion

102,485

18,190
Long-term debt, net of current portion

709,507

620,303
Deferred revenues and gains

56,782

52,210
Deferred tax liabilities

49

—
Other long-term liabilities

35,775

24,156
Total liabilities

2,119,535

1,591,980
Commitments and contingencies

Stockholders' equity (deficit):

Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of September 30, 2017 and December 31, 2016

—

—
Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 30,227,113 issued and 30,227,061 outstanding as of September 30, 2017 and 18,935,916 issued and outstanding as of December 31, 2016

302

189
Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445 issued; and 57,031,184 outstanding as of September 30, 2017 and 62,002,729 outstanding as of December 31, 2016

6

6
Class C common stock, par value $0.0001 per share – one share authorized, issued and outstanding as of September 30, 2017 and December 31, 2016

—

—
Additional paid-in capital

157,031

74,239
Retained earnings

35,655

544
Total stockholders' equity attributable to Camping World Holdings, Inc.

192,994

74,978
Non-controlling interests

65,950

(103,193)
Total stockholders' equity (deficit)

258,944

(28,215)
Total liabilities and stockholders' equity (deficit)

$
2,378,479

$
1,563,765


	September 30,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	148,235	$	267,332
Contracts in transit		87,487		57,741
Accounts receivable, net		117,428		101,644
Inventories		1,900,127		1,792,865
Prepaid expenses and other assets		46,869		64,295
Total current assets		2,300,146		2,283,877
Property and equipment, net		728,208		599,324
Operating lease assets		719,656		750,876
Deferred tax assets, net		178,808		199,321
Intangible assets, net		21,819		30,970
Goodwill		533,217		483,634
Other assets		29,532		24,927
Total assets	$	4,511,386	$	4,372,929
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	187,613	$	136,757
Accrued liabilities		252,644		189,595
Deferred revenues		101,917		95,467
Current portion of operating lease liabilities		61,001		62,217
Current portion of finance lease liabilities		10,397		4,964
Current portion of Tax Receivable Agreement liability		11,686		11,322
Current portion of long-term debt		15,827		15,822
Notes payable – floor plan, net		899,568		1,011,345
Other current liabilities		83,959		70,834
Total current liabilities		1,624,612		1,598,323
Operating lease liabilities, net of current portion		743,914		774,889
Finance lease liabilities, net of current portion		95,496		74,752
Tax Receivable Agreement liability, net of current portion		159,790		171,073
Revolving line of credit		20,885		20,885
Long-term debt, net of current portion		1,368,380		1,377,751
Deferred revenues		73,294		69,024
Other long-term liabilities		87,517		52,338
Total liabilities		4,173,888		4,139,035
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of September 30, 2022 and December 31, 2021		—		—
Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 47,855,259 issued and 42,129,078 outstanding as of September 30, 2022 and 47,805,259 issued and 44,130,956 outstanding as of December 31, 2021		476		475
Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445 issued as of September 30, 2022 and December 31, 2021; and 41,466,964 outstanding as of September 30, 2022 and December 31, 2021		4		4
Class C common stock, par value $0.0001 per share – one share authorized, issued and outstanding as of September 30, 2022 and December 31, 2021		—		—
Additional paid-in capital		117,151		98,113
Treasury stock, at cost; 5,442,009 and 3,390,131 shares as of September 30, 2022 and December 31, 2021, respectively		(190,658)		(130,006)
Retained earnings		280,772		189,471
Total stockholders' equity attributable to Camping World Holdings, Inc.		207,745		158,057
Non-controlling interests		129,753		75,837
Total stockholders' equity		337,498		233,894
Total liabilities and stockholders' equity	$	4,511,386	$	4,372,929

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(In Thousands Except Per Share Amounts)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2017

2016

2017

2016
Revenue:

Consumer services and plans

$
46,169

$
45,442

$
144,518

$
135,868
Retail

New vehicles

715,182

545,154

1,982,644

1,532,919
Used vehicles

188,331

181,675

531,324

576,964
Parts, services and other

187,750

151,090

478,169

422,316
Finance and insurance, net

101,570

67,710

268,829

188,607
Subtotal

1,192,833

945,629

3,260,966

2,720,806
Total revenue

1,239,002

991,071

3,405,484

2,856,674
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):

Consumer services and plans

20,085

19,953

61,792

59,071
Retail

New vehicles

614,624

471,140

1,703,622

1,317,147
Used vehicles

138,796

138,637

393,436

454,659
Parts, services and other

108,830

81,105

265,376

223,781
Subtotal

862,250

690,882

2,362,434

1,995,587
Total costs applicable to revenue

882,335

710,835

2,424,226

2,054,658
Operating expenses:

Selling, general, and administrative

236,174

186,255

640,108

536,966
Depreciation and amortization

8,382

6,219

22,819

18,144
(Gain) loss on sale of assets

(5)

21

(292)

(227)
Total operating expenses

244,551

192,495

662,635

554,883
Income from operations

112,116

87,741

318,623

247,133
Other income (expense):

Floor plan interest expense

(7,414)

(4,322)

(19,303)

(14,851)
Other interest expense, net

(11,012)

(12,715)

(30,973)

(38,040)
Other expense, net

(96)

—

(79)

(2)

(18,522)

(17,037)

(50,355)

(52,893)
Income before income taxes

93,594

70,704

268,268

194,240
Income tax expense

(8,336)

(2,288)

(28,247)

(4,638)
Net income

85,258

68,416

240,021

189,602
Less: net income attributable to non-controlling interests

(65,131)

—

(193,036)

—
Net income attributable to Camping World Holdings, Inc.

$
20,127

$
68,416

$
46,985

$
189,602

Earnings per share of Class A common stock (1):

Basic

$
0.68

$
1.97

Diluted

$
0.68

$
1.92

Weighted average shares of Class A common stock outstanding (1):

Basic

29,522

23,854

Diluted

88,452

85,947

Dividends declared per share

$
0.1532

$
0.4596

~~(1)~~

~~Basic and diluted earnings per Class A common stock is applicable only for periods after the Company’s IPO. See Note 16 — Earnings Per Share.~~


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenue:
Good Sam Services and Plans	$	50,352	$	46,581	$	144,504	$	134,354
RV and Outdoor Retail
New vehicles		834,112		864,303		2,746,323		2,745,057
Used vehicles		525,988		519,550		1,484,978		1,273,944
Products, service and other		268,940		305,882		761,914		862,706
Finance and insurance, net		165,136		167,779		513,921		483,718
Good Sam Club		11,154		12,479		35,070		36,383
Subtotal		1,805,330		1,869,993		5,542,206		5,401,808
Total revenue		1,855,682		1,916,574		5,686,710		5,536,162
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans		18,871		21,637		54,532		53,241
RV and Outdoor Retail
New vehicles		675,119		612,418		2,171,660		2,014,206
Used vehicles		398,882		376,852		1,115,876		934,874
Products, service and other		167,298		212,444		467,680		556,542
Good Sam Club		1,824		1,847		6,279		5,586
Subtotal		1,243,123		1,203,561		3,761,495		3,511,208
Total costs applicable to revenue		1,261,994		1,225,198		3,816,027		3,564,449
Operating expenses:
Selling, general, and administrative		419,102		424,385		1,245,540		1,193,668
Debt restructure expense		—		24		—		9,055
Depreciation and amortization		18,207		23,552		61,369		49,297
Long-lived asset impairment		887		316		3,505		1,398
Lease termination		—		329		1,122		2,085
(Gain) loss on sale or disposal of assets		(40)		96		390		7
Total operating expenses		438,156		448,702		1,311,926		1,255,510
Income from operations		155,532		242,674		558,757		716,203
Other expense:
Floor plan interest expense		(9,484)		(3,125)		(24,483)		(9,886)
Other interest expense, net		(20,526)		(11,250)		(49,762)		(35,262)
Loss on debt restructure		—		—		—		(1,390)
Tax Receivable Agreement liability adjustment		—		—		—		(3,520)
Other expense, net		(177)		(122)		(472)		(77)
Total other expense		(30,187)		(14,497)		(74,717)		(50,135)
Income before income taxes		125,345		228,177		484,040		666,068
Income tax expense		(22,397)		(38,869)		(75,808)		(83,259)
Net income		102,948		189,308		408,232		582,809
Less: net income attributable to non-controlling interests		(61,822)		(109,605)		(238,065)		(331,596)
Net income attributable to Camping World Holdings, Inc.	$	41,126	$	79,703	$	170,167	$	251,213

Earnings per share of Class A common stock:
Basic	$	0.98	$	1.75	$	4.01	$	5.57
Diluted	$	0.97	$	1.72	$	3.99	$	5.49
Weighted average shares of Class A common stock outstanding:
Basic		41,985		45,628		42,419		45,072
Diluted		42,505		47,022		42,947		46,433

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Table of Contents

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Stockholders' Equity

(In Thousands)


										Additional							Non-
	Class A Common Stock			Class B Common Stock			Class C Common Stock			Paid-In		Treasury Stock			Retained		Controlling
	Shares	Amounts		Shares	Amounts		Shares	Amounts		Capital		Shares	Amounts		Earnings		Interest		Total
Balance at December 31, 2021	47,521	$	475	41,466	$	4	—	$	—	$	98,113	(3,390)	$	(130,006)	$	189,471	$	75,837	$	233,894
Equity-based compensation	—		—	—		—	—		—		4,572	—		—		—		5,735		10,307
Exercise of stock options	—		—	—		—	—		—		(166)	11		397		—		—		231
Non-controlling interest adjustment for capital contribution of proceeds from the exercise of stock options	—		—	—		—	—		—		(111)	—		—		—		111		—
Vesting of restricted stock units	—		—	—		—	—		—		(4,067)	130		4,749		—		(682)		—
Repurchases of Class A common stock for withholding taxes on vested RSUs	—		—	—		—	—		—		243	(41)		(1,481)		—		—		(1,238)
Repurchases of Class A common stock to treasury stock	—		—	—		—	—		—		28,398	(2,593)		(79,757)		—		(37,774)		(89,133)
Redemption of LLC common units for Class A common stock	50		1	—		—	—		—		416	—		—		—		(45)		372
Distributions to holders of LLC common units	—		—	—		—	—		—		—	—		—		—		(24,836)		(24,836)
Dividends⁽¹⁾	—		—	—		—	—		—		—	—		—		(26,427)		—		(26,427)
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability	—		—	—		—	—		—		(299)	—		—		—		—		(299)
Non-controlling interest adjustment	—		—	—		—	—		—		(1,028)	—		—		—		1,028		—
Net income	—		—	—		—	—		—		—	—		—		44,730		62,569		107,299
Balance at March 31, 2022	47,571	$	476	41,466	$	4	—	$	—	$	126,071	(5,883)	$	(206,098)	$	207,774	$	81,943	$	210,170
Equity-based compensation	—		—	—		—	—		—		4,467	—		—		—		4,500		8,967
Exercise of stock options	—		—	—		—	—		—		(25)	2		66		—		—		41
Non-controlling interest adjustment for capital contribution of proceeds from the exercise of stock options	—		—	—		—	—		—		(18)	—		—		—		18		—
Vesting of restricted stock units	—		—	—		—	—		—		(3,562)	108		3,798	��	—		(236)		—
Repurchases of Class A common stock for withholding taxes on vested RSUs	—		—	—		—	—		—		48	(9)		(327)		—		—		(279)
Distributions to holders of LLC common units	—		—	—		—	—		—		—	—		—		—		(90,842)		(90,842)
Dividends⁽¹⁾	—		—	—		—	—		—		—	—		—		(26,111)		—		(26,111)
Non-controlling interest adjustment	—		—	—		—	—		—		527	—		—		—		(527)		—
Net income	—		—	—		—	—		—		—	—		—		84,311		113,674		197,985
Balance at June 30, 2022	47,571	$	476	41,466	$	4	—	$	—	$	127,508	(5,782)	$	(202,561)	$	265,974	$	108,530	$	299,931
Equity-based compensation	—		—	—		—	—		—		3,394	—		—		—		3,398		6,792
Exercise of stock options	—		—	—		—	—		—		(26)	2		71		—		—		45
Non-controlling interest adjustment for capital contribution of proceeds from the exercise of stock options	—		—	—		—	—		—		(20)	—		—		—		20		—
Vesting of restricted stock units	—		—	—		—	—		—		(14,713)	503		17,618		—		(2,905)		—
Repurchases of Class A common stock for withholding taxes on vested RSUs	—		—	—		—	—		—		829	(165)		(5,786)		—		—		(4,957)
Distributions to holders of LLC common units	—		—	—		—	—		—		—	—		—		—		(40,933)		(40,933)
Dividends⁽¹⁾	—		—	—		—	—		—		—	—		—		(26,328)		—		(26,328)
Non-controlling interest adjustment	—		—	—		—	—		—		179	—		—		—		(179)		—
Net income	—		—	—		—	—		—		—	—		—		41,126		61,822		102,948
Balance at September 30, 2022	47,571	$	476	41,466	$	4	—	$	—	$	117,151	(5,442)	$	(190,658)	$	280,772	$	129,753	$	337,498

(1)The Company declared dividends per share of Class A common stock of $0.625 for each of the three months ended March 31, 2022, June 30, 2022 and September 30, 2022, respectively.

Table of Contents

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated ~~Statement~~Statements of Stockholders' Equity ~~(Deficit)~~

(In Thousands)

Additional

Non-

Class A Common Stock

Class B Common Stock

Class C Common Stock

Paid-In

Retained

Controlling


Shares

Amounts

Shares

Amounts

Shares

Amounts

Capital

Earnings

Interest

Total
Balance at January 1, 2017

18,936

189

62,003

6

—

—

74,239

544

(103,193)

(28,215)
Issuance of Class A common stock sold in a public offering, net of underwriting discounts, commissions and offering costs

4,600

46

—

—

—

—

121,399

—

—

121,445
Non-controlling interest adjustment for purchase of common units from CWGS, LLC with proceeds from a public offering

—

—

—

—

—

—

(53,648)

—

87,203

33,555
Issuance of Class A common stock for an acquisition by a subsidiary

164

1

—

—

—

—

5,719

—

—

5,720
Non-controlling interest adjustment for capital contribution of Class A common stock for an acquisition by a subsidiary

—

—

—

—

—

—

(2,261)

—

3,678

1,417
Equity-based compensation

—

—

—

—

—

—

2,792

—

—

2,792
Vesting of restricted stock units

—

—

—

—

—

—

—

—

—

—
Repurchases of Class A common stock

—

—

—

—

—

—

—

—

—

—
Redemption of LLC common units for Class A common stock

6,526

66

(4,972)

—

—

—

69,091

—

5,191

74,348
Distributions to holders of LLC common units

—

—

—

—

—

—

—

—

(124,996)

(124,996)
Dividends

—

—

—

—

—

—

—

(11,874)

—

(11,874)
Deferred tax adjustments related to tax receivable agreement

—

—

—

—

—

—

(55,858)

—

—

(55,858)
Non-controlling interest adjustment

—

—

—

—

—

—

(4,442)

—

5,031

589
Net income

—

—

—

—

—

—

—

46,985

193,036

240,021
Balance at September 30, 2017

30,226

$
302

57,031

$
6

—

$
—

$
157,031

$
35,655

$
65,950

$
258,944


										Additional							Non-
	Class A Common Stock			Class B Common Stock			Class C Common Stock			Paid-In		Treasury Stock			Retained		Controlling
	Shares	Amounts		Shares	Amounts		Shares	Amounts		Capital		Shares	Amounts		Earnings (Deficit)		Interest		Total
Balance at December 31, 2020	42,799	$	428	45,999	$	5	—		—	$	63,342	(572)		(15,187)	$	(21,814)	$	(36,005)	$	(9,231)
Equity-based compensation	—		—	—		—	—		—		2,988	—		—		—		3,121		6,109
Exercise of stock options	—		—	—		—	—		—		(417)	91		2,407		—		—		1,990
Non-controlling interest adjustment for capital contribution of proceeds from the exercise of stock options	—		—	—		—	—		—		(1,012)	—		—		—		1,012		—
Vesting of restricted stock units	—		—	—		—	—		—		(1,220)	49		1,318		—		(98)		—
Repurchases of Class A common stock for withholding taxes on vested RSUs	—		—	—		—	—		—		(25)	(7)		(189)		—		—		(214)
Redemption of LLC common units for Class A common stock	3,029		30	(2,848)		(1)	—		—		22,926	—		—		—		2,336		25,291
Distributions to holders of LLC common units	—		—	—		—	—		—		—	—		—		—		(16,926)		(16,926)
Dividends⁽²⁾	—		—	—		—	—		—		—	—		—		(10,353)		—		(10,353)
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability	—		—	—		—	—		—		(19,441)	—		—		—		—		(19,441)
Non-controlling interest adjustment	—		—	—		—	—		—		2,068	—		—		—		(2,068)		—
Net income	—		—	—		—	—		—		—	—		—		62,322		85,103		147,425
Balance at March 31, 2021	45,828	$	458	43,151	$	4	—	$	—	$	69,209	(439)	$	(11,651)	$	30,155	$	36,475	$	124,650
Equity-based compensation	—		—	—		—	—		—		3,123	—		—		—		2,924		6,047
Exercise of stock options	—		—	—		—	—		—		(135)	25		674		—		—		539
Non-controlling interest adjustment for capital contribution of proceeds from the exercise of stock options	—		—	—		—	—		—		(257)	—		—		—		257		—
Vesting of restricted stock units	—		—	—		—	—		—		(1,645)	64		1,707		—		(62)		—
Repurchases of Class A common stock for withholding taxes on vested RSUs	—		—	—		—	—		—		(31)	(2)		(43)		—		—		(74)
Repurchases of Class A common stock to treasury stock	—		—	—		—	—		—		22,127	(1,150)		(45,470)		—		(22,127)		(45,470)
Redemption of LLC common units for Class A common stock	1,152		12	(1,144)		—	—		—		11,785	—		—		—		(376)		11,421
Distributions to holders of LLC common units	—		—	—		—	—		—		—	—		—		—		(106,921)		(106,921)
Dividends⁽²⁾	—		—	—		—	—		—		—	—		—		(11,560)		—		(11,560)
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability	—		—	—		—	—		—		(9,233)	—		—		—		—		(9,233)
Non-controlling interest adjustment	—		—	—		—	—		—		(1,434)	—		—		—		1,434		—
Net income	—		—	—		—	—		—		—	—		—		109,188		136,888		246,076
Balance at June 30, 2021	46,980	$	470	42,007	$	4	—	$	—	$	93,509	(1,502)	$	(54,783)	$	127,783	$	48,492	$	215,475
Equity-based compensation	—		—	—		—	—		—		3,574	—		—		—		3,339		6,913
Exercise of stock options	—		—	—		—	—		—		(860)	58		2,107		—		—		1,247
Non-controlling interest adjustment for capital contribution of proceeds from the exercise of stock options	—		—	—		—	—		—		(592)	—		—		—		592		—
Vesting of restricted stock units	—		—	—		—	—		—		(16,376)	544		19,892		—		(3,516)		—
Repurchases of Class A common stock for withholding taxes on vested RSUs	—		—	—		—	—		—		(411)	(177)		(6,467)		—		—		(6,878)
Repurchases of Class A common stock to treasury stock	—		—	—		—	—		—		19,623	(1,060)		(41,354)		—		(19,623)		(41,354)
Distributions to holders of LLC common units	—		—	—		—	—		—		—	—		—		—		(55,878)		(55,878)
Dividends⁽²⁾	—		—	—		—	—		—		—	—		—		(22,933)		—		(22,933)
Non-controlling interest adjustment	—		—	—		—	—		—		(1,143)	—		—		—		1,143		—
Net income	—		—	—		—	—		—		—	—		—		79,703		109,605		189,308
Balance at September 30, 2021	46,980	$	470	42,007	$	4	—	$	—	$	97,324	(2,137)	$	(80,605)	$	184,553	$	84,154	$	285,900

(2)

The Company declared dividends per share of Class A common stock of $0.23, $0.25 and $0.50 for the three months ended March 31, 2021, June 30, 2021 and September 30, respectively.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Table of Contents

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)

Nine Months Ended September 30,

2017

2016
Operating activities

Net income

$
240,021

$
189,602

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

Depreciation and amortization

22,819

18,144
Equity-based compensation

2,792

60
Gain on sale of assets

(292)

(227)
Provision for (recovery of) losses on accounts receivable

(23)

1,701
Accretion of original issue discount

706

915
Non-cash interest expense

3,210

3,698
Deferred income taxes

3,256

3,089
Loss on remeasurement of tax receivable agreement

79

—
Change in assets and liabilities, net of acquisitions:

Receivables and contracts in transit

(64,211)

(38,415)
Inventories

(150,653)

68,316
Prepaid expenses and other assets

(6,381)

(8,324)
Checks in excess of bank balance

—

(7,478)
Accounts payable and other accrued expenses

105,154

67,935
Payment pursuant to tax receivable agreement

(203)

—
Accrued rent for cease-use locations

(91)

286
Deferred revenue and gains

14,863

12,849
Other, net

37,053

3,876
Net cash provided by operating activities

208,099

316,027

Investing activities

Purchases of property and equipment

(49,759)

(29,203)
Purchase of real property

(16,820)

(12,871)
Proceeds from the sale of real property

6,000

7,291
Purchases of businesses, net of cash acquired

(345,140)

(67,690)
Proceeds from sale of property and equipment

603

3,486
Net cash used in investing activities

$
(405,116)

$
(98,987)


	Nine Months Ended September 30,
	2022		2021
Operating activities
Net income	$	408,232	$	582,809

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		61,369		49,297
Equity-based compensation		27,434		19,069
Loss on lease termination		1,122		2,085
Loss on debt restructure		—		1,390
Long-lived asset impairment		3,505		1,398
Loss on sale or disposal of assets		390		7
Provision for losses on accounts receivable		168		767
Non-cash lease expense		44,757		45,175
Accretion of original debt issuance discount		1,650		930
Non-cash interest		1,470		2,053
Deferred income taxes		10,245		(9,463)
Tax Receivable Agreement liability adjustment		—		3,520
Change in assets and liabilities, net of acquisitions:
Receivables and contracts in transit		(45,766)		(87,667)
Inventories		(77,388)		(198,310)
Prepaid expenses and other assets		16,876		14,821
Accounts payable and other accrued expenses		112,167		164,617
Payment pursuant to Tax Receivable Agreement		(11,322)		(8,089)
Deferred revenue		10,719		23,672
Operating lease liabilities		(47,388)		(47,895)
Other, net		5,679		11,690
Net cash provided by operating activities		523,919		571,876

Investing activities
Purchases of property and equipment		(118,445)		(88,560)
Proceeds from sale of property and equipment		1,105		2,253
Purchase of real property		(41,696)		(61,056)
Proceeds from the sale of real property		6,809		1,360
Purchases of businesses, net of cash acquired		(83,227)		(99,749)
Purchase of other investments		(3,000)		(7,983)
Purchases of intangible assets		(851)		(2,580)
Net cash used in investing activities	$	(239,305)	$	(256,315)

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)

Nine Months Ended September 30,

2017

2016

Financing activities

Proceeds from long-term debt

$
94,762

$
134,325
Payments on long-term debt

(5,550)

(43,615)
Net borrowings on notes payable – floor plan, net

174,497

(65,967)
Borrowings on revolver

—

12,000
Payments on revolver

—

(12,000)
Payments of principal on capital lease obligations

(950)

(1,111)
Payments of principal on right to use liability

(112)

(164)
Payment of debt issuance costs

(1,176)

(2,685)
Proceeds from issuance of Class A common stock sold in a public offering net of underwriter discounts, commissions and offering expenses

121,445

—
Dividends on Class A common stock

(11,874)

—
Members' distributions

(124,996)

(214,782)
Net cash provided by (used in) financing activities

246,046

(193,999)

Increase in cash

49,029

23,041
Cash at beginning of the period

114,196

92,025
Cash at end of the period

$
163,225

$
115,066


	Nine Months Ended September 30,
	2022		2021
Financing activities
Proceeds from long-term debt	$	—	$	124,893
Payments on long-term debt		(11,869)		(174,148)
Net (payments) proceeds on notes payable – floor plan, net		(99,802)		19,199
Proceeds from landlord funded construction on finance leases		6,028		—
Payments on finance leases		(4,541)		(2,169)
Proceeds from sale-leaseback arrangement		27,951		—
Payments on sale-leaseback arrangement		(87)		—
Payment of debt issuance costs		—		(1,827)
Dividends on Class A common stock		(78,866)		(44,846)
Proceeds from exercise of stock options		317		3,775
RSU shares withheld for tax		(6,474)		(7,166)
Repurchases of Class A common stock to treasury stock		(79,757)		(86,824)
Distributions to holders of LLC common units		(156,611)		(179,725)
Net cash used in financing activities		(403,711)		(348,838)

Decrease in cash and cash equivalents		(119,097)		(33,277)
Cash and cash equivalents at beginning of the period		267,332		166,072
Cash and cash equivalents at end of the period	$	148,235	$	132,795

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Camping World Holdings, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

September 30, ~~2017~~2022

1. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The condensed consolidated financial statements include the accounts of Camping World Holdings, Inc. ~~(“CWH”)~~ and its subsidiaries, ~~(collectively, the “Company”),~~ and are presented in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the ~~Securities and Exchange Commission (the “SEC”).~~SEC. Accordingly, these interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for fair presentation of the results of operations, financial position and cash flows for the periods presented have been reflected. All ~~significant~~ intercompany accounts and transactions of the Company and its subsidiaries have been eliminated in consolidation.

The condensed consolidated financial statements as of and for the three and nine months ended September 30, ~~2017~~2022 are unaudited. The condensed consolidated balance sheet as of December 31, ~~2016~~2021 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016 (the “Annual Report”)~~2021 filed with the SEC on ~~March 13, 2017.~~February 24, 2022. Operating results for ~~the~~ interim periods are not necessarily indicative of the results that may be expected for the full year.

CWH was formed on March 8, 2016 as a Delaware corporation for the purpose of facilitating an ~~initial public offering (the “IPO”)~~IPO and other related transactions in order to carry on the business of CWGS, ~~Enterprises, LLC (“CWGS, LLC”).~~LLC. CWGS, LLC was formed in March 2011 when it received, through contribution from its then parent company, all of the membership interests of Affinity Group Holding, LLC and FreedomRoads Holding Company, LLC (“FreedomRoads”). The IPO and related reorganization transactions ~~(the “Reorganization Transactions”)~~ that occurred on October 6, 2016 resulted in CWH asbecoming the sole managing member of CWGS, LLC, with CWH having sole voting power in and control of the management of CWGS, ~~LLC. Despite its~~LLC (see Note 14 — Stockholders’ Equity). CWH’s position as sole managing member of CWGS, LLC includes periods where CWH ~~has~~held a minority economic interest in CWGS, LLC. As of September 30, ~~2017,~~2022 and December 31, 2021, CWH owned ~~34.1%~~50.1% and 51.2%, respectively, of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its condensed consolidated financial statements. As the Reorganization Transactions are considered transactions between entities under common control, the financial statements for the periods prior to the IPO and related Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes.

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

COVID-19

Within a few months of the initial significant outbreaks of COVID-19 in the U.S., the Company experienced elevated demand for recreational vehicles (“RV”) and many of its related products and services. The Company believes that consumers view RVs as a safer alternative to many other travel and recreational activities, in addition to an opportunity to enjoy the outdoors after many consumers spent much of their time at home during portions of the pandemic. The Company believes this led to an introduction of many new customers to the RV lifestyle and a greater appreciation of outdoor activities. For much of the COVID-19 pandemic, demand and interest in new and used vehicles outpaced vehicle supply. Beginning in September 2021, the Company was able to procure more new vehicles from its suppliers than were sold and new towables inventory levels, in particular, normalized in early 2022.

During the height of the pandemic, and related government orders directing non-essential business closures or reductions, the majority of the Company’s retail locations continued to operate as essential businesses. The Company has implemented preparedness plans consistent with government directives to keep

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

Historically, most of the Company’s consumer shows and events take place during the first quarter. As a consequence of COVID-19, the Company held one in-person consumer show in 2021, compared to 37 in-person consumer shows held prior to the pandemic in 2019, and plans to hold fewer than five in-person consumer shows in 2022. Moving forward, the Company has shifted its consumer show strategy to focus on shows that support its own Camping World dealerships as opposed to hosting other competing dealerships. The Company expects to annually host fewer than five ticketed in-person consumer shows under the Good Sam brand in future years.

Cybersecurity Incident

The Company relies on the integrity, security and successful functioning of its information technology systems and network infrastructure (collectively, “IT Systems”) across its operations. In February 2022, the Company announced that it had experienced a cybersecurity incident that resulted in the encryption of certain IT Systems and theft of certain data and information (the “Cybersecurity Incident”). The Cybersecurity Incident resulted in the Company’s temporary inability to access certain of its IT Systems, caused by the disabling of some of its IT Systems by the threat actor and the Company temporarily taking certain other IT Systems offline as a precautionary measure. The Company engaged leading outside forensics and cybersecurity experts, launched containment and remediation efforts and a forensic investigation. The forensic investigation is now complete and the Company has restored and is taking measures to enhance its IT Systems. The Company has identified that personal information of approximately 30,000 individuals was acquired without authorization, including, depending on the individual, dates of birth, Social Security numbers, and driver’s license numbers. The Company is in the process of complying with notification obligations in accordance with relevant law and is continuing to coordinate with law enforcement.

The Company has incurred costs related to investigation, containment, and remediation and expects to continue to incur incremental costs for the investigation and remediation of the Cybersecurity Incident, including legal and other professional fees, and investments to enhance the security of its IT Systems. Other actual and potential consequences include, but are not limited to, negative publicity, reputational damage, lost trust with customers, regulatory enforcement action, and litigation that could result in financial judgments or the payment of settlement amounts and disputes with insurance carriers concerning coverage. The Company does not expect that the Cybersecurity Incident will cause future disruptions to its business or that the Cybersecurity Incident will have a material impact on its business, results of operations or financial condition.

Description of the Business

Camping World Holdings, Inc., together with its subsidiaries, is America’s largest retailer of RVs and related products and services. As noted above, CWGS, LLC is a holding company and operates through its subsidiaries. The ~~operations of~~Company has the ~~Company consist of~~following two ~~primary businesses:~~reportable segments: (i) ~~Consumer~~Good Sam Services and Plans and (ii) RV and Outdoor Retail. ~~The Company provides consumer services and plans offerings through its~~See Note 18 – Segments Information to the condensed consolidated financial statements for further information about the Company’s segments. Within the Good Sam ~~brand and the Company primarily provides its retail offerings through its Camping World brand. Within the Consumer~~ Services and Plans segment, the Company primarily derives revenue from the sale of the following offerings: emergency roadside ~~assistance;~~assistance plans; commissions on property and casualty insurance programs; travel assist programs; extended vehicle service contracts; ~~co-branded credit cards;~~ vehicle financing and ~~refinancing; club memberships;~~refinancing assistance; consumer shows and events; and consumer publications and directories. Within the RV and Outdoor Retail segment, the Company primarily derives ~~revenues~~revenue from the sale of ~~the following products:~~ new and used ~~recreational vehicles (“RV”);~~RVs; commissions on the finance and insurance contracts related to the sale of RVs; the sale of RV service and collision work; the sale of RV parts, ~~and service, including RV~~ accessories, and supplies; ~~camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding, marine and~~

~~Table~~the sale of ~~Contents~~

~~watersport~~outdoor products, equipment, gear and supplies; business to business distribution of RV furniture; and ~~finance~~the sale of Good Sam Club memberships and ~~insurance.~~co-branded credit cards. The Company operates a national network of RV dealerships and service centers as well as a comprehensive e-commerce platform primarily ~~operates in various regions throughout~~under the ~~United States~~Camping World brand, and markets its products and services primarily to RV ~~owners~~ and outdoor enthusiasts. ~~At September 30, 2017,~~

In 2019, the Company ~~operated 137 Camping World retail~~made a strategic decision to refocus its business around its core RV competencies, and on September 3, 2019, the board of directors approved a strategic plan to shift the business

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away from locations that did not have the ability or where it was not feasible to sell and/or service RVs (the “2019 Strategic Shift”) (see Note 4 – Restructuring and Long-lived Asset Impairment).

Seasonality

The Company has experienced, and expects to continue to experience, variability in revenue, net income, and cash flows as a result of ~~which 121 locations sell new~~annual seasonality in its business. Because RVs are used primarily by vacationers and ~~used RVs, and offer financing, ancillary~~campers, demand for services, protection plans, products, and ~~other~~resources generally declines during the winter season, while sales and profits are generally highest during the spring and summer months. In addition, unusually severe weather conditions in some geographic areas may impact demand.

The Company generates a disproportionately higher amount of its annual revenue in its second and third fiscal quarters, which include the spring and summer months. The Company incurs additional expenses in the second and third fiscal quarters due to higher purchase volumes, increased staffing in its retail locations and program costs. If, for any reason, the Company miscalculates the demand for its products or its product mix during the second and third fiscal quarters, its sales in these quarters could decline, resulting in higher labor costs as a percentage of gross profit, lower margins and excess inventory, which could cause the Company’s annual results of operations to suffer and its stock price to decline.

Additionally, selling, general, and administrative (“SG&A”) expenses as a percentage of gross profit tend to be higher in the first and fourth quarters due to the timing of acquisitions and the seasonality of the Company’s business. The Company prefers to acquire new retail locations in the first and fourth quarters of each year in order to provide time for the ~~RV purchaser~~location to be remodeled and ~~outdoor enthusiasts; two Overton’s locations offering marine~~to ramp up operations ahead of the spring and ~~watersports products; two TheHouse.com locations offering skiing, snowboarding, bicycling,~~summer months. The timing of the Company’s acquisitions in the first and ~~skateboarding products;~~fourth quarters, coupled with generally lower revenue in these quarters has historically resulted in SG&A expenses as a percentage of gross profit being higher in these quarters.

Due to the Company’s seasonality, the possible adverse impact from other risks associated with its business, including atypical weather, consumer spending levels and ~~one W82 location offering skiing, snowboarding,~~general business conditions, is potentially greater if any such risks occur during the Company’s peak sales seasons.

Reclassifications of Prior Period Amounts

Certain prior-period amounts have been reclassified to conform to the current period presentation. Specifically, for the three and ~~skateboarding products.~~nine months ended September 30, 2021, the equity-based compensation and non-controlling interest adjustment line items in the accompanying condensed consolidated statements of stockholders' equity have been reclassified to present the equity-based compensation allocated to the non-controlling interest in the non-controlling interest column with an offsetting reclassification to the non-controlling interest adjustment line item.

Use of Estimates

The preparation of these ~~unaudited~~ condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. The Company bases its estimates and judgments on historical experience and other assumptions that management believes are reasonable. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties, including those uncertainties arising from COVID-19, and, as a result, actual results could differ materially from these estimates. The Company periodically evaluates estimates and assumptions used in the preparation of the financial statements and makes changes on a prospective basis when adjustments are necessary. Significant estimates made in the accompanying ~~unaudited~~ condensed consolidated financial statements include certain assumptions related to accounts receivable, inventory, goodwill, intangible assets, long lived assets, ~~assets held for sale,~~long-lived asset impairments, program cancellation reserves, ~~and~~chargebacks, accruals related to ~~self-insurance programs,~~ estimated tax liabilities, product return reserves, and other liabilities.

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Recently Adopted Accounting Pronouncements

In ~~July 2015,~~October 2021, the ~~Financial~~FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). This standard requires contract assets and contract liabilities, such as certain receivables and deferred revenue, acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with Accounting Standards ~~Board~~Codification (“~~FASB”~~ASC”) ~~issued Accounting Standards Update (“ASU”) No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). The amendments~~606, Revenue from Contracts with Customers. Generally, this new guidance will result in the ~~accounting~~acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree instead of recording those balances at fair value. This standard ~~replace the lower of cost or market test with a lower of cost and net realizable value test. The amendments in this ASU~~ should be applied prospectively ~~and are~~to acquisitions occurring after the effective date. The standard will be effective for fiscal years, and interim ~~and annual~~ periods within those fiscal years, beginning after December 15, ~~2016.~~2022, with early adoption permitted. The Company early adopted ~~the amendments of this~~ ASU 2021-08 as of January 1, ~~2017~~2022 and the adoption did not materially impact its consolidated financial ~~statements or results of operations.~~statements.

Recently Issued Accounting Pronouncements

In ~~January 2016,~~June 2022, the FASB issued ASU ~~No. 2016-01, Recognition and~~2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of ~~Financial Assets and Financial Liabilities~~Equity Securities Subject to Contractual Sale Restrictions (“ASU ~~2016-01”~~2022-03”). This ~~ASU amends~~standard clarifies the guidance ~~on the classification and measurement of financial instruments. Although ASU 2016-01 retains many current requirements, it significantly revises an entity’s accounting related to investments~~ in equity securities, excluding those accounted for under the equity method of accounting or those that result in the consolidation of the investee. The guidance also amends certain disclosure requirements associated withASC 820 on the fair value measurement of ~~financial instruments. One of the amendments eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value~~an equity security that is ~~required~~subject to ~~be disclosed for financial instruments measured at amortized cost on~~a contractual sale restriction that prohibits the ~~balance sheet.~~sale of an equity security, and requires specific disclosures related to such an equity security. The standard ~~will~~should be applied prospectively. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, ~~2017, and interim periods within those fiscal years.~~2023, with early adoption permitted. The Company ~~early adopted the amendments of this ASU as of January 1, 2017, which eliminated the disclosure requirements discussed above, and the adoption did~~does not ~~materially impact its consolidated financial statements or results of operations.~~

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, a consensus of the FASB Emerging Issues Task Force (“ASU 2016-18”). The amendments require that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this ASU do not provide a definition of restricted cash or

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restricted cash equivalents. The standard will be effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company early adopted the amendments of this ASU as of January 1, 2017 and the adoption did not materially impact its consolidated financial statements or results of operations.

In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”). This ASU clarifies the definition of a business to exclude gross assets acquired (or disposed of) that have substantially all of their fair value concentrated in a single identifiable asset or group of similar identifiable assets. The ASU also updates the definition of the term “output” to be consistent with Accounting Standards Codification (“ASC”) Topic No. 606. The ASU is effective for annual reporting periods beginning after December 15, 2017 and interim periods within those annual periods. The Company early adopted the amendments of this ASU as of January 1, 2017 and the adoption did not materially impact its consolidated financial statements or results of operations.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”). This ASU eliminates Step 2 of the goodwill impairment test and requires a goodwill impairment to be measured as the amount by which a reporting unit’s carrying amount exceeds its fair value, not to exceed the carrying amount of its goodwill. The ASU is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and must be applied prospectively. The Company early adopted the amendments of this ASU as of January 1, 2017 and the adoption did not materially impact its consolidated financial statements or results of operations.

~~Recently Issued Accounting Pronouncements~~

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). The FASB has subsequently issued several related ASUs that clarified the implementation guidance for certain aspects of ASU 2014-09, which are effective upon the adoption of ASU 2014-09. This ASU sets forth a five-step model for determining when and how revenue is recognized. Under the model, an entity will be required to recognize revenue to depict the transfer of goods or services to a customer at an amount reflecting the consideration it expects to receive in exchange for those goods or services. The amendments in this accounting standard update are effective for interim and annual reporting periods beginning after December 15, 2017. The standard can be adopted either retrospectively to each reporting period presented or as a cumulative effect adjustment as of the date of adoption. To assess the impact of the ASU, the Company established an internal implementation team to review its current accounting policies and practices, identify all material revenue streams, assess the impact of the ASU on its material revenue streams and identify potential differences with current policies and practices. The Company’s internal implementation team is in the process of performing its initial review of the likely impacts that the application of the amendments in this ASU will have on its consolidated financial statements. The team has identified the Company’s material revenue streams to be the sale of new and used vehicles; the sale of parts, RV accessories, and supplies; the performance of vehicle maintenance and repair services; the arrangement of associated vehicle financing; the sale of insurance and emergency roadside assistance contracts; and the sale of club memberships. The team has continued to review a sample of associated contracts and other related documents, but currently, has not quantified and estimated impact of changes, if any, to its current revenue recognition policies and practices. The Company’s implementation team is continuing to evaluate the additional disclosure requirements of the ASU, as well as the change, if any, to the Company’s underlying accounting and financial reporting systems and processes necessary to support the recognition and disclosure requirements. The Company expects to identify and implement the necessary changes, if any, during 2017. The Company currently expects to adopt the amendments of this ASU as of January 1, 2018, as a cumulative effect adjustment as of the date of adoption, but will not make a final decision on the adoption method until later in 2017.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”). The amendments in this ASU relate to the accounting for leasing transactions. This standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than 12 months. In addition, this standard requires both lessees and lessors to disclose certain key information about lease transactions. This standard will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is in the process of

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~~evaluating the impact that adoption will have on its consolidated balance sheet and statement of income. However, the Company expects~~expect that the adoption of the provisions of ~~the ASU will have a significant impact on its consolidated balance sheet, as currently most of its real estate is leased via operating leases. Adoption of~~ this ASU ~~is required to be done using a modified retrospective approach.~~

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The amendment addresses several specific cash flow issues with the objective of reducing the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The standard will be effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company is currently evaluating the impact that the adoption of the provisions of the ASU will have on its consolidated financial statements.

In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”). The amendments in ASU 2017-09 require entities to apply modification accounting in Topic 718 only when changes to the terms or conditions of a share-based payment award result in changes to fair value, vesting conditions or the classification of the award as equity or liability. The standard will be effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. The guidance will be applied prospectively upon adoption. The Company does not expect the adoption will have a material impact on its consolidated financial ~~statements or results~~statements.

In September 2022, the FASB issued ASU 2022-04, Liabilities―Supplier Finance Programs (Subtopic 405-50): Disclosure of ~~operations; however,~~Supplier Finance Program Obligations (“ASU 2022-04”). This standard requires a buyer in a supplier finance program to disclose qualitative and quantitative information about the program to allow users to understand the program’s nature, activity during the period, changes from period to period and potential magnitude. Most of the disclosures are required only in annual reporting periods, except for the amount of obligation outstanding to be disclosed at each interim reporting period. The standard should be applied retrospectively to each period in which a balance sheet is presented, except for the ~~impact~~amendment on rollforward information, which should be applied prospectively. The standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, except for the disclosure of rollforward information, which is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. As this standard relates to ~~equity-based compensation expense will depend on~~additional disclosure requirements, the ~~terms specified in any new changes to~~Company does not expect that the ~~equity-based payment awards, if any. The Company plans to adopt~~adoption of the provisions of this ASU will have a material impact on ~~October 1, 2017.~~its consolidated financial statements.

2. Revenue

Contract Assets

As of September 30, 2022 and December 31, 2021, a contract asset of $19.5 million and $16.2 million, respectively, relating to RV service revenues was included in accounts receivable in the accompanying condensed consolidated balance sheets.

Deferred Revenues

As of September 30, 2022, the Company has unsatisfied performance obligations primarily relating to plans for its roadside assistance, Good Sam Club memberships, Coast to Coast memberships, the annual campground guide, and magazine publication revenue streams. The total unsatisfied performance obligations

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for these revenue streams at September 30, 2022 and the periods during which the Company expects to recognize the amounts as revenue are presented as follows (in thousands):


	As of
	September 30, 2022
2022	$	39,780
2023		72,047
2024		30,055
2025		15,858
2026		8,964
Thereafter		8,507
Total	$	175,211

3. Inventories ~~Net~~ and Floor Plan ~~Payable~~Payables

Inventories consisted of the following (in thousands):

September 30,

December 31,

2017

2016
New RV vehicles

$
931,016

$
727,634
Used RV vehicles

96,911

78,787
Parts, accessories and miscellaneous

176,211

102,833

$
1,204,138

$
909,254


	September 30,		December 31,
	2022		2021
Good Sam services and plans	$	351	$	—
New RVs		1,180,364		1,108,836
Used RVs		425,824		406,398
Products, parts, accessories and other		293,588		277,631
	$	1,900,127	$	1,792,865

~~New~~Substantially all of the Company’s new RV inventory and certain of its used ~~vehicles~~RV inventory, included in ~~retail inventories are primarily~~the RV and Outdoor Retail segment, is financed by a floor plan ~~arrangements through~~credit agreement with a syndication of banks. ~~The~~As of September 30, 2022, no used RV inventory was financed by the floor plan ~~notes~~credit agreement. The borrowings under the floor plan credit agreement are collateralized by substantially all of the assets of FreedomRoads, LLC (“FR”), a ~~wholly owned~~wholly-owned subsidiary of FreedomRoads, which operates the ~~Camping World dealerships,~~RV dealerships. The floor plan borrowings are tied to specific vehicles and bear interest at one-month London Interbank Offered Rate (“LIBOR”) plus 2.05% as of September 30, 2017 and 2.05% as of December 31, 2016. LIBOR, as defined, was 1.24% at September 30, 2017 and 0.62% as of December 31, 2016. Principalprincipal is due upon the sale of the related ~~vehicle.~~vehicle or upon reaching certain aging criteria.

~~In August 2015,~~As of September 30, 2022 and December 31, 2021, FR ~~entered into a Sixth~~maintained floor plan financing through the Eighth Amended and Restated Credit Agreement ~~for floor plan financing~~ (“Floor Plan Facility”) ~~to extend the maturity date to August 2018. On July 1, 2016, FR entered into Amendment No. 1 to the Sixth Amended and Restated Credit Agreement for the~~. The Floor Plan Facility at September 30, 2022 allowed FR to ~~among other things,~~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 ~~available~~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 ~~from $880.0 million~~are not under any obligation to $1.18 billion, amend the applicable borrowing rate margin on LIBOR and base rate loans ranging from 2.05% to 2.50% and 0.55% and 1.00%, respectively, based on the consolidated current ratio at FR, and extend theprovide commitments in respect of any such increase. The maturity date ~~to June 30, 2019. The letter~~ of ~~credit commitment within~~ the Floor Plan Facility ~~remained~~is September 30, 2026.

As of September 30, 2022 and December 31, 2021, the applicable interest rate for the floor plan notes payable under the Floor Plan Facility was 4.30% and 1.96%, respectively. Under the Floor Plan Facility, at ~~$15.0 million.~~ the Company’s option, the floor plan notes payable, and borrowings for letters of credit, in each case, bear interest at a rate per annum equal to (a) the floating Bloomberg Short-Term Bank Yield Index rate (“BSBY”) plus the applicable rate of 1.90% to 2.50% determined based on FR’s consolidated current ratio, or, (b) the base rate (as described below) plus the applicable rate of 0.40% to 1.00% determined based on FR’s consolidated current ratio.

As of September 30, 2022 and December 31, 2021 the applicable interest rate for revolving line of credit borrowings under the Floor Plan Facility was 4.65% and 2.31%, respectively. Under the Floor Plan Facility, revolving line of credit borrowings bear interest at a rate per annum equal to, at the Company’s option, either: (a) a floating BSBY rate, plus 2.25%, in the case of floating BSBY rate loans, or (b) a base rate determined by reference to the greatest of: (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 September 30, 2022 and December 31, 2021.

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The Floor Plan Facility includes ana flooring line aggregate interest reduction (“FLAIR”) offset account that allows the Company to transfer cash as an offset to the ~~payable~~payables under the Floor Plan Facility. These transfers reduce the amount of liability outstanding under the floor plan ~~notes payable~~borrowings that would otherwise accrue interest, while retaining the ability to ~~transfer~~withdraw amounts from the FLAIR offset account ~~into~~subject to the ~~Company’s operating cash accounts. When~~financial covenants under the ~~Company uses~~Floor Plan Facility. As a result of using the ~~floor plan~~FLAIR offset account, the Company experiences a reduction in floor plan interest expense in its consolidated statements of ~~income.~~operations. As of September 30, 2022 and December 31, 2021, FR had $218.6 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.

Management has determined that the credit ~~agreement~~agreements governing the Floor Plan Facility ~~contains~~include subjective acceleration clauses, which could impact debt classification. Management believes that no events have occurred at September 30, 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 September 30, ~~2017~~2022 and December 31, ~~2016.~~2021.

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~~At September 30, 2017~~The following table details the outstanding amounts and ~~December 31, 2016, the principal amount outstanding~~available borrowings under the Floor Plan Facility ~~was $799.7 million~~as of September 30, 2022 and ~~$625.2 million, respectively, which was~~December 31, 2021 (in thousands):


	September 30,		December 31,
	2022		2021
Floor Plan Facility
Notes payable - floor plan:
Total commitment	$	1,700,000	$	1,700,000
Less: borrowings, net		(899,568)		(1,011,345)
Less: flooring line aggregate interest reduction account		(218,575)		(92,108)
Additional borrowing capacity		581,857		596,547
Less: short-term payable for sold inventory⁽¹⁾		(40,011)		(28,036)
Less: purchase commitments		(37,671)		(34,612)
Unencumbered borrowing capacity	$	504,175	$	533,899

Revolving line of credit:	$	70,000	$	70,000
Less: borrowings		(20,885)		(20,885)
Additional borrowing capacity	$	49,115	$	49,115

Letters of credit:
Total commitment	$	30,000	$	30,000
Less: outstanding letters of credit		(11,371)		(11,500)
Additional letters of credit capacity	$	18,629	$	18,500

(1)

The short-term payable represents the amount due for sold inventory. A payment for any floor plan units sold is due within three to ten business days of sale. Due to the short term nature of these payables, the Company reclassifies the amounts from notes payable‒floor plan, net to accounts payable in the Condensed Consolidated Balance Sheets.

4. Restructuring and Long-Lived Asset Impairment

Restructuring

On September 3, 2019, the board of directors of CWH approved a plan to strategically shift its business away from locations where the Company does not have the ability or where it is not feasible to sell and/or service RVs at a sufficient capacity (the “Outdoor Lifestyle Locations”). Of the Outdoor Lifestyle Locations in the RV and Outdoor Retail segment operating at September 3, 2019, the Company has closed or divested 39 Outdoor Lifestyle Locations, two distribution centers, and 20 specialty retail locations relating to the 2019 Strategic Shift. As of December 31, 2020, the Company had completed the store closures and divestitures relating to the 2019 Strategic Shift. As part of the ~~floor plan~~2019 Strategic Shift, the Company evaluated the impact on

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its supporting infrastructure and operations, which included rationalizing inventory levels and composition, closing certain distribution centers, and realigning other resources. The Company had a reduction of headcount and labor costs for those locations that were closed or divested, and the Company incurred material charges associated with the activities contemplated under the 2019 Strategic Shift.

During the year ended December 31, 2021, the Company completed its analysis of its retail product offerings that are not RV related. The information available at the inception of the 2019 Strategic Shift relating to these product categories was incomplete based on the relative immaturity of the locations offering these products and was further delayed by the impact of COVID-19 on consumer buying behavior (see Note 1 — Summary of Significant Accounting Policies — COVID-19).

As of December 31, 2021, the Company had effectively finalized its 2019 Strategic Shift as it relates to closing locations, one-time termination benefits, and incremental reserve charges. The remaining potential ongoing charges under the 2019 Strategic Shift relate to lease termination costs and other associated costs relating to the leases of previously closed locations under the 2019 Strategic Shift. The process of identifying subtenants and negotiating lease terminations has been delayed in part due to the COVID-19 pandemic and is expected to continue. The timing of these negotiations will vary as both subleases and terminations are contingent on landlord approvals.

The Company currently estimates the total restructuring costs associated with the 2019 Strategic Shift to be in the range of $116.2 million to $132.6 million. The breakdown of the estimated restructuring costs are as follows:

●

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

●

lease termination costs of $20.0 million to $34.0 million, of which $15.4 million has been incurred through September 30, 2022;

●

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

●

other associated costs of $37.6 million to $40.0 million, of which $37.4 million has been incurred through September 30, 2022.

Through September 30, 2022, the Company has incurred $37.4 million of such other associated costs primarily representing labor, lease, and other operating expenses incurred during the post-close wind-down period for the locations related to the 2019 Strategic Shift. The additional amount of $0.2 million to $2.6 million represents similar costs that may be incurred through the year ending December 31, 2022 for locations that continue in a wind-down period, primarily comprised of lease costs accounted for under ASC 842, Leases, prior to lease termination. The Company intends to negotiate terminations of these leases where prudent and pursue sublease arrangements for the remaining leases. Lease costs may continue to be incurred after December 31, 2022 on these leases if the Company is unable to terminate the leases under acceptable terms or offset ~~account~~the lease costs through sublease arrangements. The foregoing lease termination cost estimate represents the expected cash payments to terminate certain leases but does not include the gain or loss from derecognition of ~~$91.1 million~~the related operating lease assets and ~~$68.5~~liabilities, which is dependent on the particular leases that will be terminated.

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The following table details the costs incurred during the three and nine months ended September 30, 2022 and 2021 associated with the 2019 Strategic Shift (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Restructuring costs:
Lease termination costs⁽¹⁾	$	—	$	—	$	1,122	$	1,431
Incremental inventory reserve charges⁽²⁾		—		15,017		—		15,017
Other associated costs⁽³⁾		1,671		2,345		5,548		8,422
Total restructuring costs	$	1,671	$	17,362	$	6,670	$	24,870

(1)	These costs were included in lease termination charges in the condensed consolidated statements of operations. This reflects termination fees paid, net of any gain from derecognition of the related operating lease assets and liabilities.

(2)	These costs were included in costs applicable to revenue – products, service and other in the condensed consolidated statements of operations.

(3)

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 and were included in selling, general, and administrative expenses in the condensed consolidated statements of operations.

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


	One-time		Lease		Other
	Termination		Termination		Associated
	Benefits		Costs⁽¹⁾		Costs		Total
Balance at June 30, 2019	$	—	$	—	$	—	$	—
Charged to expense		1,008		1,350		4,321		6,679
Paid or otherwise settled		(286)		(1,350)		(4,036)		(5,672)
Balance at December 31, 2019		722		—		285		1,007
Charged to expense		231		10,532		16,835		27,598
Paid or otherwise settled		(953)		(10,532)		(16,346)		(27,831)
Balance at December 31, 2020		—		—		774		774
Charged to expense		—		1,650		10,684		12,334
Paid or otherwise settled		—		(1,650)		(10,532)		(12,182)
Balance as of December 31, 2021		—		—		926		926
Charged to expense		—		2,023		5,548		7,571
Paid or otherwise settled		—		(2,023)		(5,639)		(7,662)
Balance at September 30, 2022	$	—	$	—	$	835	$	835

(1)

Lease termination costs exclude the $1.3 million, $6.1 million, $0.2 million and $0.9 million of gains from the derecognition of the operating lease assets and liabilities relating to the terminated leases as part of the 2019 Strategic Shift for the six months ended December 31, 2019, for the years ended December 31, 2020 and 2021, and for the nine months ended September 30, 2022, respectively.

The Company evaluated the requirements of ASC No. 205-20, Presentation of Financial Statements – Discontinued Operations relative to the 2019 Strategic Shift and determined that discontinued operations treatment is not applicable. Accordingly, the results of operations of the locations impacted by the 2019 Strategic Shift are reported as part of continuing operations in the accompanying condensed consolidated financial statements.

3.Long-Lived Asset Impairment

During the three and nine months ended September 30, 2022, the Company had indicators of impairment of the long-lived assets for certain locations based on the Company’s review of location performance in the normal course of business. During the three and nine months ended September 30, 2021, the Company had indicators of impairment of the long-lived assets for certain of its closed locations relating to the 2019 Strategic Shift. As a result of updating certain assumptions in the long-lived asset impairment analysis for these locations, the Company determined that the fair value of certain long-lived assets were below their carrying value and were impaired. The long-lived asset impairment charge was calculated as the amount that

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the carrying value of these locations exceeded the estimated fair value, except that individual assets cannot be impaired below their individual fair values when that fair value can be determined without undue cost and effort.

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


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Long-lived asset impairment charges:
Leasehold improvements	$	—	$	—	$	2,557	$	—
Furniture and equipment		—		—		61		—
Operating lease right-of-use assets		887		316		887		1,398
Total long-lived asset impairment charges		887		316		3,505		1,398
Less: portion unrelated to 2019 Strategic Shift		—		—		(2,618)		—
2019 Strategic Shift long-lived asset impairment charges	$	887	$	316	$	887	$	1,398

5. Goodwill and Intangible Assets

Goodwill

The following is a summary of changes in the Company’s goodwill by ~~reportable segments~~segment for the nine months ended September 30, ~~2017~~2022 (in thousands):

Consumer

Services and


Plans

Retail

Consolidated
Balance as of December 31, 2016

$
49,944

$
103,161

$
153,105
Acquisitions (1)

—

175,297

175,297
Balance as of September 30, 2017

$
49,944

$
278,458

$
328,402

⁽¹⁾

~~See Note 9 — Acquisitions.~~


	Good Sam
	Services and		RV and
	Plans		Outdoor Retail		Consolidated
Balance as of December 31, 2021 (excluding impairment charges)	$	70,713	$	654,758	$	725,471
Accumulated impairment charges		(46,884)		(194,953)		(241,837)
Balance as of December 31, 2021		23,829		459,805		483,634
Acquisitions		405		49,178		49,583
Balance as of September 30, 2022	$	24,234	$	508,983	$	533,217

~~The Company evaluates goodwill for impairment on an annual basis during~~For the fourth quarter, or more frequently if events or changes in circumstances indicate that the Company’s goodwill or indefinite-lived intangible assets might be impaired. The Company assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. Ifnine months ended September 30, 2022 and 2021, the Company ~~determines it is more likely than not~~determined that ~~the fair value of a reporting unit is less than its carrying amount, then it is required to perform the quantitative~~there were no triggering events for an interim goodwill impairment test ~~by calculating the fair value~~ of ~~the~~its reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the Company records an impairment of goodwill equal to the amount that the carrying amount of a reporting unit exceeds its fair value.units.

Intangible Assets

Finite-lived intangible assets and related accumulated amortization consisted of the following at September 30, ~~2017~~2022 and December 31, ~~2016~~2021 (in thousands):


	September 30, 2022
	Cost or		Accumulated
	Fair Value		Amortization		Net
Good Sam Services and Plans:
Membership, customer lists and other	$	9,640		(8,901)	$	739
Trademarks and trade names		2,132		(59)		2,073
Websites		3,050		(573)		2,477
RV and Outdoor Retail:
Customer lists and domain names		5,626		(2,735)		2,891
Supplier lists		1,696		(678)		1,018
Trademarks and trade names		29,564		(19,335)		10,229
Websites		7,486		(5,094)		2,392
	$	59,194	$	(37,375)	$	21,819

September 30, 2017

Cost or

Accumulated


Fair Value

Amortization

Net
Trademarks and trade names

$
28,839

$
(420)

$
28,419
Membership and customer lists

10,778

(7,118)

3,660
Websites

5,990

(97)

5,893

$
45,607

$
(7,635)

$
37,972

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December 31, 2016

Cost or

Accumulated


Fair Value

Amortization

Net
Membership and customer lists

$
9,485

$
(6,099)

$
3,386

$
9,485

$
(6,099)

$
3,386

	December 31, 2021
	Cost or		Accumulated
	Fair Value		Amortization		Net
Good Sam Services and Plans:
Membership, customer lists and other	$	9,140	$	(8,748)	$	392
Websites		2,500		(253)		2,247
RV and Outdoor Retail:
Customer lists and domain names		5,626		(2,298)		3,328
Supplier lists		1,696		(424)		1,272
Trademarks and trade names		29,564		(9,465)		20,099
Websites		7,185		(3,553)		3,632
	$	55,711	$	(24,741)	$	30,970

~~The trademarks and trade names have~~During the first quarter of 2022, the Company recorded $8.8 million of incremental accelerated amortization from the adjustment of the useful lives of ~~fifteen years. The membership~~certain trademark and ~~customer lists have weighted-average useful lives of approximately five years. The websites have useful lives of ten years.~~trade name intangible assets relating to brands not traditionally associated with RVs that the Company is phasing out.

6. Long-Term Debt

~~Long-term~~Outstanding long-term debt ~~consists~~consisted of the following (in thousands):

September 30,

December 31,

2017

2016
Term Loan Facility (1)

$
716,907

$
626,753
Less: current portion

(7,400)

(6,450)

$
709,507

$
620,303


	September 30,		December 31,
	2022		2021
Term Loan Facility ⁽¹⁾	$	1,359,230	$	1,367,277
Real Estate Facilities ⁽²⁾		21,666		22,896
Other Long-Term Debt		3,311		3,400
Subtotal		1,384,207		1,393,573
Less: current portion		(15,827)		(15,822)
Total	$	1,368,380	$	1,377,751

(1)

⁽¹⁾

Net of ~~$5.9~~$15.2 million and ~~$6.3~~$16.8 million of original issue discount at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively, and ~~$11.7~~$6.1 million and ~~$11.9~~$6.9 million of finance costs at September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, respectively.

(2)	Net of $0.2 million of finance costs at each of September 30, 2022 and December 31, 2021.

~~Existing~~

Senior Secured Credit Facilities

~~On November 8, 2016,~~As of September 30, 2022 and December 31, 2021, CWGS Group, LLC (the “Borrower”), a ~~wholly owned~~wholly-owned subsidiary of CWGS, LLC, ~~entered into~~was party to a ~~new $680.0 million~~credit agreement (the “Credit Agreement”) for a senior secured credit facility ~~(“Existing Senior Secured Credit Facilities”) and used the proceeds to repay its previous senior secured credit facilities (“Previous Senior~~(the “Senior Secured Credit Facilities”). The ~~Existing~~ Senior Secured Credit Facilities ~~consists~~consist of a ~~seven-year $645.0 million Term Loan Facility (“Existing Term~~$1.4 billion term loan facility (the “Term Loan Facility”) and a ~~five-year $35.0~~$65.0 million revolving credit facility ~~(“Existing Revolving~~(the “Revolving Credit Facility”). On March 17, 2017, CWGS Group, LLC entered into an amendment to the Existing Senior Secured Credit Facilities to increase the Existing Term Loan Facility by $95.0 million to $740.0 million. The net proceeds from the additional borrowings were intended to be used by FreedomRoads to purchase dealerships. No other terms of the credit agreement governing our Existing Senior Secured Credit Facilities were amended in connection with the amendment. The Existing Term Loan Facility includes mandatory amortization at 1% per annum in equal quarterly installments.

Interest on the Existing Term Loan Facility floats at the Company’s option at a) LIBOR multiplied by the statutory reserve rate (such product, the “Adjusted LIBOR Rate”), subject to a 0.75% floor, plus an applicable margin of 3.75%, or b) an Alternate Base Rate (“ABR”) equal to 2.75% per annum plus the greater of: (i) the prime rate published by The Wall Street Journal (the “WSJ Prime Rate”), (ii) federal funds effective rate plus 0.50%, or (iii) one-month Adjusted LIBOR Rate plus 1.00%, subject to a 1.75% floor. Interest on borrowings under the Existing Revolving Credit Facility is at the Company’s option of a) 3.25% to 3.50% per annum subject to a 0.75% floor in the case of a Eurocurrency loan, or b) 2.25% to 2.50% per annum plus the greater of the WSJ Prime Rate, federal funds effective rate plus 0.50%, or one-month Adjusted LIBOR Rate plus 1.00% in the case of an ABR loan, based on the Company’s total leverage ratio as defined in the Existing Senior Secured Credit Facilities. The Company also pays a commitment fee of 0.5% per annum on the unused amount of the Existing Senior Secured Credit Facility. Reborrowings under the Existing Term Loan Facility are not permitted.

Following the end of each fiscal year, commencing with the fiscal year ending December 31, 2017, the Company is required to prepay the term loan borrowings in an aggregate amount equal to 50% of excess cash flow, as defined in the Existing Senior Secured Credit Facilities, for such fiscal year. The required percentage prepayment of excess cash flow is reduced to 25% if the total leverage ratio, as defined, is 1.50 to 1.00 or greater but less than 2.00 to 1.00. If the total leverage ratio is less than 1.50 to 1.00, no prepayment of excess cash flow is required.

~~The Existing Revolving Credit Facility matures on November 8, 2021, and the Existing Term Loan Facility matures on November 8, 2023.~~ The funds available under the ~~Existing~~ Revolving Credit Facility may be utilized for borrowings or letters of credit; however, a maximum of ~~$15.0~~$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, the Company is required to prepay the term loan borrowings in an aggregate amount up to 50% of excess cash flow, as defined in the Credit Agreement, for such fiscal year depending on the Total Leverage Ratio (as defined by the Credit Agreement) beginning with the year ended December 31, 2022. The Company does not expect that an additional excess cash flow payment will be required relating to 2022.

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

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As of September 30, ~~2017,~~2022 and December 31, 2021, the average interest rate on the term debt was 4.98%. As of September 30, 2017 and December 31, 2016, the Company had available borrowings of $31.8 million and $31.8 million, respectively, and letters of credit in the aggregate amount of $3.2 million and $3.2 million outstanding, respectively, under the Existing Revolving Credit Facility. As of September 30, 2017 and December 31, 2016, the principal balance of $734.5 million and $645.0 million, respectively, was outstanding

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~~under the Existing~~ Term Loan Facility was 5.34% and no3.25%, respectively. The following table details the outstanding amounts ~~were outstanding on~~and available borrowings under the ~~Existing Revolving Credit Facility in either period.~~

~~CWGS, LLC and CWGS Group, LLC have no revenue-generating operations of their own. Their ability to meet the financial obligations associated with the Existing~~ Senior Secured Credit Facilities ~~is dependent on the earnings and cash flows~~as of ~~its operating subsidiaries, primarily Good Sam Enterprises, LLC and FR, and their ability to upstream dividends.~~ (in thousands):


	September 30,		December 31,
	2022		2021
Senior Secured Credit Facilities:
Term Loan Facility:
Principal amount of borrowings	$	1,400,000	$	1,400,000
Less: cumulative principal payments		(19,515)		(9,004)
Less: unamortized original issue discount		(15,177)		(16,826)
Less: unamortized finance costs		(6,078)		(6,893)
		1,359,230		1,367,277
Less: current portion		(14,015)		(14,015)
Long-term debt, net of current portion	$	1,345,215	$	1,353,262
Revolving Credit Facility:
Total commitment	$	65,000	$	65,000
Less: outstanding letters of credit		(4,930)		(4,930)
Additional borrowing capacity	$	60,070	$	60,070

The ~~Existing~~ Senior Secured Credit Facilities are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by each of the Company’s existing and future domestic restricted subsidiaries with the exception of FreedomRoads Intermediate Holdco, LLC, the direct parent of FR, and FR, and its subsidiaries. The ~~Existing Senior Secured~~ Credit ~~Facilities contain~~Agreement contains certain restrictive covenants ~~including,~~pertaining to, but not limited to, mergers, changes in the nature of the business, acquisitions, additional indebtedness, sales of assets, investments, and the ~~prepayment~~payment of dividends subject to certain limitations and minimum operating covenants. Additionally, management has determined that the Senior Secured Credit Facilities include subjective acceleration clauses, which could impact debt classification. Management believes that no events have occurred at September 30, 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 September 30, 2022, the Company was not subject to this covenant as borrowings under the Revolving Credit Facility did not exceed the 35% threshold. The Company was in compliance with all applicable debt covenants at September 30, 2022 and December 31, 2021.

Real Estate Facilities

In November 2018, September 2021 and December 2021, Camping World Property, Inc. (the ‘‘Real Estate Borrower’’), an indirect wholly-owned subsidiary of CWGS, LLC, and CIBC Bank USA (“Lender”), entered into loan and security agreements for real estate credit facilities (as amended from time to time, the “First Real Estate Facility”, the “Second Real Estate Facility”, and the “Third Real Estate Facility”, respectively, and collectively the “Real Estate Facilities”) with aggregate maximum principal capacities of $21.5 million, $9.0 million, and $10.1 million for the First Real Estate Facility, Second Real Estate Facility, and Third Real Estate Facility, respectively.

Borrowings under the Real Estate Facilities are guaranteed by CWGS Group, LLC, a wholly-owned subsidiary of CWGS, LLC. The Real Estate Facilities may be used to finance the acquisition of real estate assets. The Real Estate Facilities are secured by a first priority security interest on the real estate assets acquired with the proceeds of the Real Estate Facilities (“Real Estate Facility Properties”). The First Real Estate Facility, Second Real Estate Facility, and Third Real Estate Facility mature in October 2023, September 2026, and December 2026, respectively.

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As of September 30, 2022, the First Real Estate Facility, Second Real Estate Facility, and the Third Real Estate Facility had outstanding principal balances of $4.0 million and $8.1 million, and $9.7 million, respectively, net of unamortized finance costs, and a weighted average interest rate of 4.84%. As of September 30, 2022, the Company had no available capacity under the Real Estate Facilities, since repaid amounts cannot be reborrowed under the Real Estate Facilities.

Management has determined that the credit agreements governing the Real Estate Facilities include subjective acceleration clauses, which could impact debt classification. Management believes that no events have occurred at September 30, 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. The Company was in compliance with all debt covenants at September 30, ~~2017~~2022 and December 31, ~~2016.~~2021.

~~5. Right~~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 “2022 Real Estate Facility”) with aggregate maximum principal capacity of $250.0 million with an option that allows FRHP to ~~Use Liabilities~~request an additional $100.0 million of principal capacity. The lenders under the 2022 Real Estate Facility are not under any obligation to provide commitments in respect of any such increase. The 2022 Real Estate Facility bears interest at FRHP’s option of either (as defined in the credit agreement for the 2022 Real Estate Facility): (a) the Secured Overnight Financing Rate (“SOFR”) plus the applicable rate of 2.30% or (b) the highest of (i) the Federal Funds Rate plus 1.80%, (ii) the Prime Rate plus 1.30%, or (iii) SOFR plus 2.30%. The 2022 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 2022 Real Estate Facility is subject to a debt service coverage ratio covenant (as defined in the credit agreement for the 2022 Real Estate Facility) and management has determined that the 2022 Real Estate Facility includes subjective acceleration clauses, which could impact debt classification. All obligations under the 2022 Real Estate Facility and the guarantees of those obligations, are secured, subject to certain exceptions, by the mortgaged real property assets. No amounts were borrowed as of the closing of the 2022 Real Estate Facility and the Company expects to borrow between $100.0 million and $150.0 under the 2022 Real Estate Facility during the fourth quarter of 2022.

Other Long-Term Debt

In December 2021, FRHP Lincolnshire, LLC, an indirect wholly-owned subsidiary of CWGS, LLC, assumed a mortgage as part of a real estate acquisition. This mortgage is secured by the acquired property and is guaranteed by CWGS Group, LLC, a wholly-owned subsidiary of CWGS, LLC. As of September 30, 2022, the outstanding principal balance of the mortgage was $3.3 million with an interest rate of 3.50%. The mortgage matures in December 2026.

7. Lease Obligations

The following presents certain information related to the costs for leases where the Company ~~leases operating facilities throughout~~is the ~~United States. The Company analyzes all leases in accordance with Accounting Standards Codification (“ASC”) 840 — Leases. The Company has~~lessee (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Operating lease cost	$	27,824	$	29,116	$	84,401	$	87,249
Finance lease cost:
Amortization of finance lease assets		3,165		1,776		8,830		3,717
Interest on finance lease liabilities		1,441		575		3,580		1,638
Short-term lease cost		392		478		1,410		1,437
Variable lease cost		5,878		5,749		17,674		17,582
Sublease income		(432)		(467)		(1,131)		(1,401)
Net lease costs	$	38,268	$	37,227	$	114,764	$	110,222

As of September 30, 2022 and December 31, 2021, finance lease assets of $91.2 million and $75.7 million, respectively, were included ~~the right to use assets~~ in property and equipment, net ~~as follows~~in the accompanying condensed consolidated balance sheets.

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The following presents supplemental cash flow information related to leases (in thousands):

September 30,

December 31,

2017

2016
Right to use assets

$
10,673

$
10,673
Accumulated depreciation

(861)

(667)

$
9,812

$
10,006


	Nine Months Ended September 30,
	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	85,175	$	87,812
Operating cash flows for finance leases		3,508		1,588
Financing cash flows for finance leases		4,541		2,188
Lease assets obtained in exchange for lease liabilities:
New, remeasured and terminated operating leases		14,433		55,330
New, remeasured and terminated finance leases		24,440		15,362

Sale-Leaseback Arrangement Recorded as Financing Transaction

On February 8, 2022, FRHP Lincolnshire, LLC sold three properties for a total sale price of $28.0 million. Concurrent with the sale of these properties, the Company entered into three separate twenty-year lease agreements, whereby the Company will lease back the properties from the acquiring company. Under each lease agreement, FR has four consecutive options to extend the lease term for additional periods of five years for each option. This transaction is accounted for as a financing transaction. The ~~following is~~Company recorded a ~~schedule by year~~liability for the amount received, will continue to depreciate the non-land portion of the ~~future changes~~assets, and has imputed an interest rate so that the net carrying amount of the financial liability and remaining non-land assets will be zero at the end of the initial lease terms. The financial liability is included in other long-term liabilities in the ~~right to use liabilities~~condensed consolidated balance sheet as of September 30, ~~2017 (in thousands):~~2022.

2017

$
218
2018

583
2019

486
2020

486
2021

487
Thereafter (1)

13,813
Total minimum lease payments

16,073
Amounts representing interest

(5,842)
Present value of net minimum right to use liability payments

$
10,231

⁽¹⁾

~~Includes $5.0 million of scheduled derecognition of right to use liabilities upon the reduction in lease deposits to less than two months’ rent.~~

8. Fair Value Measurements

Accounting guidance for fair value measurements establishes a ~~three tier~~three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

For cash and cash equivalents; accounts receivable; other current assets; accounts payable; notes payable — floor plan, net; and other current liabilities the amounts reported in the accompanying Unaudited Condensed Consolidated Balance Sheets approximate fair value due to their short-term nature or the existence of variable interest rates that approximate prevailing market rates.

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There have been no transfers of assets or liabilities between the fair value measurement levels and there were no material re-measurements to fair value during ~~2017~~2022 and ~~2016~~2021 of assets and liabilities that are not measured at fair value on a recurring basis.

The following table presents the reported carrying value and fair value information for the Company’s debt instruments. The fair values shown below for the ~~Existing Term Loan Facility and Previous~~ Term Loan Facility, as applicable, are based on quoted prices in the inactive market for identical assets (Level 2).

Fair Value

9/30/2017

12/31/2016
($ in thousands)

Measurement

Carrying Value

Fair Value

Carrying Value

Fair Value
Term Loan Facility

Level 2

$
716,907

$
740,876

$
626,753

$
649,838

, and the fair values shown below for the Floor Plan Facility, the Revolving Line of Credit, and the Real Estate Facilities are estimated by discounting the future contractual cash flows at the current market interest rate that is available based on similar financial instruments.


	Fair Value	September 30, 2022				December 31, 2021
($ in thousands)	Measurement	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Loan Facility	Level 2	$	1,359,230	$	1,394,290	$	1,367,277	$	1,382,372
Floor Plan Facility Revolving Line of Credit	Level 2		20,885		18,191		20,885		20,885
Real Estate Facilities	Level 2		21,666		20,153		22,896		22,981
Other Long-Term Debt	Level 2		3,311		2,926		3,400		3,400

7.9. Commitments and Contingencies

Litigation

Hunnewell Complaint

On March 5, 2019, a shareholder derivative suit styled Hunnewell v. Camping World Holdings, Inc., et al., was filed in the Court of Chancery of the State of Delaware, alleging breaches of fiduciary duty for alleged

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failure to implement effective disclosure controls and internal controls over financial reporting and to properly oversee certain acquisitions and for alleged insider trading (the “Hunnewell Complaint”).

On April 17, 2019, a shareholder derivative suit styled Lincolnshire Police Pension Fund v. Camping World Holdings, Inc., et al., was filed in the Court of Chancery of the State of Delaware, alleging breaches of fiduciary duty for alleged failure to implement effective disclosure controls and internal controls over financial reporting and to properly oversee certain acquisitions and for alleged insider trading and unjust enrichment for compensation received during that time (the “LPPF Complaint”). The LPPF Complaint names the Company as nominal defendant, and names certain of the Company’s officers and directors, among others, as defendants and seeks compensatory damages, extraordinary equitable and/or injunctive relief, restitution and disgorgement, attorneys’ fees and costs, and any other and further relief the court deems just and proper. On May 30, 2019, the Court granted the parties’ joint motion to consolidate the Hunnewell and LPPF Complaints (as well as any future filed actions relating to the subject matter). On January 31, 2022, the Court granted in full Defendants’ motion to dismiss the Plaintiffs’ Amended Complaint with prejudice. On February 14, 2022, Plaintiff filed a notice of appeal, appealing the Court’s order dismissing the Amended Complaint. Plaintiffs’ appeal was fully briefed and oral arguments were held on September 21, 2022. On October 13, 2022, the Supreme Court of the State of Delaware affirmed the Court’s order dismissing the Amended Complaint, resolving this matter.

Janssen and Sandler Complaints

On August 6, 2019, two shareholder derivative suits, styled Janssen v. Camping World Holdings, Inc., et al., and Sandler v. Camping World Holdings, Inc. et al., were filed in the U.S. District Court for the District of Delaware. Both actions name the Company as a nominal defendant, and name certain of the Company’s officers and directors, Crestview Partners II GP, L.P. and Crestview Advisors, L.L.C. as defendants, and allege: (i) violations of Section 14(a) of the Securities Exchange Act for issuing proxy statements that allegedly omitted material information and allegedly included materially false and misleading financial statements; (ii) violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934, seeking contribution for causing the Company to issue allegedly false and misleading statements and/or allegedly omit material information in public statements and/or the Company’s filings concerning the Company’s financial performance, the effectiveness of internal controls to ensure accurate financial reporting, and the success and profitability of the integration and rollout of Gander Outdoors (now Gander RV) stores; (iii) breaches of fiduciary duty, unjust enrichment, abuse of control, and gross mismanagement for allegedly causing or allowing the Company to disseminate to Camping World shareholders materially misleading and inaccurate information through the Company’s SEC filings; and (iv) breach of fiduciary duties for alleged insider selling and misappropriation of information (together, the “Janssen and Sandler Complaints”). The Janssen and Sandler Complaints seek restitutionary and/or compensatory damages, injunctive relief, disgorgement of all profits, benefits, and other compensation obtained by certain of the Company’s officers and directors, attorneys’ fees and costs, and any other and further relief the court deems just and proper. The case is stayed while the parties confer regarding the schedule for further proceedings in the action.

Weissmann Complaint

On June 22, 2021, CWH filed a one-count complaint captioned FreedomRoads Holding Company, LLC v. Steve Weissmann in the Circuit Court of Cook County, Illinois against Steve Weissmann (“Weissmann”) for breach of contractual obligation under note guarantee (the “Note”) (the “Weissmann Complaint”). On October 8, 2021, Weissmann brought a counterclaim against FreedomRoads and Third-Party Defendants Marcus Lemonis, NBCUniversal Media, LLC, the Consumer National Broadcasting Company, Camping World, Inc., and Machete Productions (“Machete”) (the “Weissmann Counterclaim”), in which he alleges claims in connection with the Note and his appearance on the reality television show The Profit. Weissmann alleges the following causes of action against FreedomRoads and all third-party defendants, including Camping World, Inc.: (i) fraud; (ii) fraud in the inducement; (iii) fraudulent concealment; (iv) breach of fiduciary duty; (v) defamation; (vi) defamation per se; (vii) false light; (viii) intentional infliction of emotional distress; (ix) negligence; (v) unjust enrichment; and (vi) RICO § 1962. Weissmann seeks costs and damages in an amount to be proven at trial but no less than the amount in the Note (approximately $2.5 million); in connection with his RICO claim, Weissmann asserts he is entitled to damages in the amount of three times the Note. On February 18, 2022, NBCUniversal, CNBC, and Machete filed a motion to compel arbitration (the “NBC Arbitration

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Motion”). On May 5, 2022, an agreed order was filed staying the litigation in favor of arbitration. On May 31, 2022, CWH filed an arbitration demand against Weissmann for collection on the Note. Weissmann filed his response and counterclaims, and third-party claims against FreedomRoads Holding Company, LLC, Camping World, Inc., Marcus Lemonis, NBCUniversal, and Machete on July 7, 2022. On or about July 21, 2022, CWH and the other respondents filed their responses and affirmative defenses.

Tumbleweed Complaint

On November 10, 2021, Tumbleweed Tiny House Company, Inc. filed a complaint against FreedomRoads, Marcus Lemonis, NBCUniversal Media, LLC, and Machete Productions in which Tumbleweed alleges claims in connection with the Note and its appearance on the reality television show The Profit (the “Tumbleweed Complaint”). Tumbleweed alleges the following claims against the defendants, including FreedomRoads and CWH: (i) fraud; (ii) false promise; (iii) breach of fiduciary duty (and aiding and abetting the same); (iv) breach of contract; (v) breach of oral contract; (vi) tortious interference with prospective economic advantage; (vii) fraud in the inducement; (viii) negligent misrepresentation; (ix) fraudulent concealment; (x) conspiracy; (xi) unlawful business practices; (xii) defamation; and (xiii) declaratory judgment. On April 21, 2022, the Court granted a motion to compel arbitration filed by NBCUniversal and joined by all defendants, including FreedomRoads, CWH, and Marcus Lemonis, compelling Tumbleweed’s claims to arbitration. Tumbleweed served its arbitration demand on FreedomRoads, Camping World, Inc., and Marcus Lemonis on May 17, 2022. CWH and Marcus Lemonis filed responses and affirmative defenses on May 31, 2022. On July 20, 2022, pursuant to the JAMS streamlined arbitration rules, the Tumbleweed Complaint was consolidated together with the Weissmann Complaint. The parties have exchanged initial discovery, but the Arbitrator has not yet set a schedule in the case.

Precise Complaint

On May 3, 2022, Lynn E. Feldman, Esquire, in her capacity as the Chapter 7 Trustee for the Estate of Precise Graphix, LLC filed a complaint against NBCUniversal Media, LLC, Machete Corporation, and Camping World, Inc. in which Trustee Feldman alleges claims on behalf of Precise Graphix in connection with its appearance on The Profit and subsequent commercial relationship with CWH(the “Precise Complaint”). Trustee Feldman alleges the following claims against defendants, including CWH: (i) Fraud; (ii) False Promise; (iii) Breach of Fiduciary Duty; (iv) Breach of Contract; (v) Breach of Oral Contract; (vi) Fraud in the Inducement; (vii) Fraud in the Inducement; (viii) Negligent Misrepresentation; (ix) Fraudulent Concealment; (x) Conspiracy; (xi) Unlawful Business Practices in Violation of California Business and Professions Code §17200; (xii) Aiding and Abetting Breach of Fiduciary Duty; and (xiii) Declaratory Judgment. Precise did not serve the Precise Complaint on CWH. On July 3, 2022, Precise Graphix filed its arbitration demand against CWH, NBCUniversal, and Machete alleging substantially similar claims as the Precise Complaint. On or about July 19, 2022, CWH and the other respondents filed their responses and affirmative defenses. The parties have exchanged initial discovery, but the Arbitrator has not yet set a schedule in the case.

General

While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial statements. The Company ~~holds certain property~~does not have sufficient information to estimate a possible loss or range of possible loss for the matters discussed above. No assurance can be made that these or similar suits will not result in a material financial exposure in excess of insurance coverage, which could have a material adverse effect upon the Company’s financial condition and ~~equipment under rental agreements and operating leases that have varying expiration dates. A majority~~results of ~~its operating facilities are leased from unrelated parties throughout the United States.~~operations.

From time to time, the Company is involved in other litigation arising in the normal course of business operations. ~~The~~

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Financial Assurances

In the normal course of business, the Company obtains standby letters of credit and surety bonds from financial institutions and other third parties. These instruments guarantee the Company’s own future performance and provide third parties with financial and performance assurance in the event that the Company does not ~~believe it~~perform. These instruments support a wide variety of the Company’s business activities. As of September 30, 2022 and December 31, 2021, outstanding standby letters of credit issued through our Floor Plan Facility were $11.4 million and $11.5 million, respectively, and outstanding standby letters of credit issued through the Senior Secured Credit Facilities were $4.9 million and $4.9 million, respectively (see Note 4 — Inventories and Floor Plan Payables and Note 9 — Long-Term Debt). As of September 30, 2022 and December 31, 2021, outstanding surety bonds were $20.7 million and $19.1 million, respectively. The underlying liabilities insured by these instruments are reflected on the Company’s accompanying consolidated balance sheets, where applicable. Therefore, no additional liability is ~~involved in any litigation that requires disclosure or will have a material adverse effect on its results~~reflected for the letters of ~~operations or financial position.~~credit and surety bonds themselves.

10. Statement of Cash Flows

Supplemental disclosures of cash flow information for the following periods (in thousands): were as follows:

Nine Months Ended

September 30,

September 30,

2017

2016
Cash paid (received) during the period for:

Interest

$
47,374

$
50,705
Income taxes

25,660

1,354
Non-cash investing activities:

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

—

(19,958)
Property and equipment acquired through third-party capital lease arrangements

2,007
Leasehold improvements paid by lessor

857

—
Vehicles transferred to property and equipment from inventory

1,605

530
Portion of acquisition purchase price paid through issuance of Class A common stock

5,720

—
Non-cash financing activities:

Derecognized right to use liabilities for leases that qualified as operating leases after completion of construction

—

(20,056)
Third-party capital lease arrangements to acquire property and equipment

2,007
Non-cash distribution of equity interest in AutoMatch USA, LLC, an indirect wholly-owned subsidiary of the Company

(38,838)
Par value of Class A common stock issued in exchange for common units in CWGS, LLC

66

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

—

—
Par value of Class A common stock issued for acquisition

1

—



	Nine Months Ended September 30,
	2022		2021
Cash paid during the period for:
Interest	$	69,007	$	44,287
Income taxes		40,925		88,339
Non-cash investing activities:
Leasehold improvements paid by lessor		—		91
Vehicles transferred to property and equipment from inventory		945		829
Capital expenditures in accounts payable and accrued liabilities		12,834		10,347
Non-cash financing activities:
Par value of Class A common stock issued for redemption of common units in CWGS, LLC		1		42
Cost of treasury stock issued for vested restricted stock units		26,165		22,917

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9.11. Acquisitions

~~Dealerships and Consumer Shows~~

During the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, subsidiaries of the Company acquired the assets of multiple ~~dealership locations and consumer shows.~~RV dealerships, as well as an outdoor publication during the nine months ended September 30, 2022, that constituted businesses under accounting rules. The Company used ~~a combination of~~ cash floor plan financing, proceeds from the May 2017 Public Offering (defined and described in Note 13 — Stockholders’ Equity), and additional borrowing on the Existing Term Loan Facility in March 2017 (see Note 4 — Long-term Debt) to complete the acquisitions. The Company considers acquisitions of independent dealerships to be a fast and capital efficient alternative to opening new retail locations to expand its business and grow its customer base. Additionally, the Company considers the acquisition of the outdoor publication as a furtherance of its strategy to target a younger demographic of RV enthusiasts. The acquired businesses were recorded at their estimated fair values under the acquisition method of accounting. The balance of the purchase prices in excess of the fair values of net assets acquired were recorded as goodwill.

~~For~~During the nine months ended September 30, ~~2017~~2022, the RV and ~~2016, concurrent with~~Outdoor Retail segment acquired the ~~acquisition~~assets of ~~dealership businesses,~~various RV dealerships comprised of five locations for an aggregate purchase price of approximately $79.8 million. Additionally, during the nine months ended September 30, 2022, the Company purchased real ~~properties~~estate property for ~~$12.2~~$41.7 million, ~~and $12.9~~of which $19.7 million ~~respectively, from parties~~ related to the sellers of the ~~dealership~~acquired businesses. ~~For~~Also, during the nine months ended September 30, ~~2017~~2022, the Good Sam Services and ~~2016,~~Plans segment acquired the assets of the outdoor publication for $3.4 million.

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During the nine months ended September 30, 2021, the RV and Outdoor Retail segment acquired the assets of various RV dealerships comprised of twelve locations for an aggregate purchase price of approximately $99.7 million. Additionally, during the nine months ended September 30, 2021, the Company ~~sold other~~purchased real ~~properties~~estate property for $61.1 million, of which $31.4 million related to ~~a third party in sale-leaseback transactions for $6.0 million and $7.3 million, respectively.~~the sellers of the acquired businesses.

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions ~~of dealerships and consumer shows~~discussed above consist of the ~~following:~~following, net of measurement period adjustments relating to acquisitions from the respective previous year:

Nine Months Ended September 30,

Estimated
($ in thousands)

2017

2016

Life
Tangible assets (liabilities) acquired (assumed):

Accounts receivable

$
1,306

$
944

Inventory

98,869

29,713

Property and equipment

835

635

Other assets

72

142

Accrued liabilities

(3,019)

(2,231)

Other liabilities

(75)

Total tangible net assets acquired

98,063

29,128

Intangible assets acquired:

Membership and customer lists

793

2,774

4-7 years
Total intangible assets acquired

793

2,774

Goodwill

143,788

35,786

Purchase price

242,644

67,688

Inventory purchases financed via floor plan

(79,321)

(22,265)

Cash payment net of floor plan financing

$
163,323

$
45,423


	Nine Months Ended September 30,
($ in thousands)	2022		2021
Tangible assets (liabilities) acquired (assumed):
Accounts receivable, net	$	(68)	$	615
Inventories, net		30,828		27,386
Prepaid expenses and other assets		48		126
Property and equipment, net		206		1,348
Operating lease assets		739		1,222
Customer deposits		(77)		(1,437)
Accrued liabilities		75		1,281
Current portion of operating lease liabilities		(235)		(195)
Operating lease liabilities, net of current portion		(504)		(1,027)
Total tangible net assets acquired		31,012		29,319
Total intangible assets acquired		2,632		—
Goodwill		49,583		70,430
Cash paid for acquisitions, net of cash acquired		83,227		99,749
Inventory purchases financed via floor plan		(19,971)		(19,537)
Cash payment net of floor plan financing	$	63,256	$	80,212

The fair values above for the nine months ended September 30, 2022 are preliminary as they are subject to measurement period adjustments for up to one year from the date of acquisition as new information is obtained about facts and circumstances that existed as of the acquisition ~~date. All~~date relating to the valuation of the acquired ~~goodwill for~~assets, primarily the acquired inventories. For the nine months ended September 30, ~~2017~~2022, the fair values above include measurement period adjustments for valuation of acquired inventories, accounts receivable, accrued liabilities, and ~~2016~~other current liabilities relating to dealership acquisitions during the year ended December 31, 2021. For the nine months ended September 30, 2021, the fair values above include measurement period adjustments for valuation of acquired inventories, property and equipment, and accrued liabilities relating to dealership acquisitions during the year ended December 31, 2020.The primary items that generated the goodwill are the value of the expected synergies between the acquired businesses and the Company and the acquired assembled workforce, neither of which qualify for recognition as a separately identified intangible asset. For the nine months ended September 30, 2022 and 2021, acquired goodwill of $49.6 million and $70.4 million, respectively, is expected to be deductible for tax purposes. Included in the condensed consolidated financial statements for the nine months ended September 30, ~~2017 and 2016 consolidated financial results~~2022 were ~~$210.7 million and $55.3~~$39.4 million of revenue, and $1.4 million of pre-tax income, respectively from the acquisitions as of their applicable acquisition dates. Included in the condensed consolidated financial statements for the nine months ended September 30, 2021 were $100.6 million of revenue, and ~~$13.8 million and $1.7~~$10.8 million of pre-tax income, respectively of the acquired dealerships from the applicable acquisition dates.

~~Gander Mountain and Overton’s~~

~~On May 26, 2017, CWI, Inc. (“CWI”), an indirect subsidiary of~~ Pro forma information on these acquisitions has not been included, because the Company ~~completed~~has deemed them to not be individually or cumulatively material.

In October 2022, the ~~acquisition of certain assets of the Gander Mountain Company (“Gander Mountain”)~~RV and its Overton’s, Inc. (“Overton’s”) boating business through a bankruptcy auction that took place in April 2017 for $35.4 million in cash and $1.1 million of contingent consideration. Prior to the acquisition, Gander Mountain operated 160 retail locations and an e-commerce business that serviced the hunting, camping, fishing, shooting sports, and outdoor markets. Overton’s operates two retail locations and an e-commerce business that services the marine and watersports markets. The Company believes these businesses are complementary to its existing

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~~businesses and will allow for cross marketing of the Company’s consumer services and plans to a wider customer base.~~

~~The assets~~Outdoor Retail segment acquired included the right to designate any real estate leases for assignment to CWI or other third parties (the “Designation Rights”), other agreements CWI could elect to assume, intellectual property rights, operating systems and platforms, certain distribution center equipment, Overton’s inventory, the Gander Mountain and Overton’s e-commerce businesses, and fixtures and equipment for Overton’s two retail locations and corporate operations. Furthermore, CWI had committed to exercise Designation Rights and take an assignment of no fewer than 15 Gander Mountain retail leases on or before October 6, 2017, in addition to the two Overton’s retail leases assumed at the closing of the acquisition. The Designation Rights expired on October 6, 2017, immediately after CWI assumed the minimum 15 additional Gander Mountain retail leases. CWI also assumed certain liabilities, such as cure costs for leases and other agreements it elected to assume, accrued time off for employees retained by CWI and retention bonuses payable to certain key Gander Mountain employees retained by CWI. The cure costs for the minimum 15 Gander Mountain leases assumed under the Designation Rights were $1.1 million and recorded as contingent consideration.

~~The estimated fair values of the assets acquired and liabilities assumed for the acquisition of Gander Mountain and Overton’s consist of the following:~~

Estimated

Estimated
($ in thousands)

Fair Value

Life
Tangible assets (liabilities) acquired (assumed):

Inventory

$
9,965

Prepaid expenses and other assets

42

Property and equipment

8,436

Accrued liabilities

(373)

Total tangible net assets acquired

18,070

Intangible assets acquired:

Trademarks and trade names

14,800

15 years
Membership and customer lists

500

6 years
Websites

1,900

10 years
Total intangible assets acquired

17,200

Goodwill

1,329

Purchase price

36,599

Contingent consideration unpaid at September 30, 2017

(1,021)

Cash paid for acquisition

$
35,578

The fair values above are preliminary as they are subject to measurement period adjustments for up to one year from the date of acquisition as new information is obtained about facts and circumstances that existed as of the acquisition date. All of the acquired goodwill from this acquisition is expected to be deductible for tax purposes. Included in the nine months ended September 30, 2017 consolidated financial results were $22.3 million of revenue and $11.3 million of pre-tax loss of Gander Mountain and Overton’s from the acquisition date.

~~TheHouse.com~~

On August 17, 2017, Camping World, Inc. (“CW”), an indirect subsidiary of the Company, completed the acquisition of all of the outstanding capital stock and outstanding debt of Active Sports, Inc. (“TheHouse.com”), which specializes in bikes, sailboards, skateboards, wakeboards, snowboards, and outdoor gear. TheHouse.com is primarily an online retailer and operates two retail locations. The Company believes this business is complementary to its existing businesses and enhances the product offerings from its earlier acquisition of Gander Mountain. The purchase price consisted of $30.0 million in cash, $5.7 million in restricted shares of Class A common stock of the Company, and the purchase or extinguishment of $35.3 million of TheHouse.com’s debt, including accrued interest.

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~~The estimated fair values of the assets acquired and liabilities assumed for the acquisition of TheHouse.com consist of the following:~~

Estimated

Estimated
($ in thousands)

Fair Value

Life
Tangible assets (liabilities) acquired (assumed):

Cash and cash equivalents

$
501

Accounts receivable

159

Inventory

36,317

Prepaid expenses and other assets

1,120

Property and equipment

548

Accounts payable

(7,582)

Accrued liabilities

(827)

Deferred tax liabilities

(6,016)

Total tangible net assets acquired

24,220

Intangible assets acquired:

Trademarks and trade names

14,039

15 years
Websites

4,090

10 years
Total intangible assets acquired

18,129

Goodwill

28,683

Purchase price

71,032

Cash and cash equivalents acquired

(501)

Non-cash consideration - Class A shares issued

(5,720)

Cash paid for acquisition, net of cash acquired

$
64,811

The fair values above are preliminary as they are subject to measurement period adjustments for up to one year from the date of acquisition as new information is obtained about facts and circumstances that existed as of the acquisition date. The amount of acquired goodwill that is expected to be deductible for tax purposes is $3.4 million. Included in the nine months ended September 30, 2017 consolidated financial results were $3.7 million of revenue and $0.2 million of pre-tax loss of TheHouse.com from the acquisition date.

~~W82~~

~~On September 22, 2017, W82, LLC, an indirect subsidiary of the Company, completed the acquisition of substantially all of~~ the assets of ~~EIGHTEEN0THREE LLC, dba W82 (“W82”), which specializes in snowboarding, skateboarding, longboarding, swimwear, footwear, apparel~~a consortium of five RV dealerships and ~~accessories.~~one RV service center. The ~~Company believes~~reasons for this ~~business is complementary to its existing businesses and enhances the product offerings from its earlier~~ acquisition ~~of Gander Mountain. The purchase price consisted in $0.6 million in cash~~ and the ~~extinguishment of $1.5 million of W82’s debt, including accrued interest.~~primary items generating the goodwill are consistent with the previous RV dealership acquisitions discussed above.

~~The estimated fair values of the assets acquired and liabilities assumed for the acquisition of W82 consist of the following:~~

Estimated
($ in thousands)

Fair Value
Tangible assets (liabilities) acquired (assumed):

Inventory

$
847
Prepaid expenses and other assets

7
Property and equipment

546
Accrued liabilities

(790)
Total tangible net assets acquired

610
Goodwill

1,497
Purchase price

$
2,107

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existed as of the acquisition date. All of the acquired goodwill from this acquisition is expected to be deductible for tax purposes. Included in the nine months ended September 30, 2017 consolidated financial results were $34,000 of revenue and $8,000 of pre-tax loss of W82 from the acquisition date.

~~10. Exit Activities~~

The Company closed certain retail locations in previous periods and, in March 2017, the Company subleased a portion of a lease that is adjacent to an existing retail location. The Company remains obligated under the terms of these leases for rent and other costs associated with these leases, and has no plan to occupy them in the future. In accordance with ASC 420, Accounting for Costs Associated with Exit or Disposal Activities, the Company recorded a charge to rent expense to recognize the costs of exiting the space. The liability was equal to the fair value of rent less the fair value of the amount of rent received by the Company from a tenant under a sublease over the remainder of the lease terms, which expire on various dates through 2032. The change in the estimated fair value of these amounts was recognized in income as part of income from operations. The current portion of the liability was $0.3 million and $0.3 million as of September 30, 2017 and December 31, 2016, respectively, and is included in other current liabilities. The liability outstanding was $2.7 million and $2.8 million as of September 30, 2017 and December 31, 2016, respectively.

~~11.~~12. Income Taxes

CWH is organized as a Subchapter C corporation and, ~~on October 6, 2016,~~ as ~~part~~ of ~~the Company’s IPO, became~~September 30, 2022, is a ~~22.6%~~50.1% owner of CWGS, LLC (see Note 1314 — Stockholders’ ~~Equity)~~Equity and Note 15 — Non-Controlling Interests). CWGS, LLC is

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organized as a limited liability company and treated as a partnership for U.S. federal and most applicable state and local income tax purposes ~~with the exception of~~and as such, is generally not subject to any U.S. federal entity-level income taxes. However, certain CWGS, LLC subsidiaries, including Americas Road and Travel Club, Inc., ~~CW,~~Camping World, Inc. (“CW”), and FreedomRoads RV, Inc. ~~(“FRRV”)~~ and their wholly-owned subsidiaries, ~~which~~are subject to entity-level taxes as they are Subchapter C corporations.

As further described in Note 1 — Summary of Significant Accounting Policies — COVID-19, in response to the COVID-19 pandemic, many governments enacted measures to provide aid and economic stimulus. These measures included deferring the due dates of income tax and payroll tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws. For the ~~three~~nine months ended September 30, ~~2017~~2022, there were no material tax impacts to the Company’s condensed consolidated financial statements as it relates to COVID-19 measures other than the deferral of non-income-based payroll taxes under the CARES Act of $14.6 million as of September 30, 2022 and ~~2016,~~December 31, 2021, which were included in accrued liabilities in the condensed consolidated balance sheets and must be paid by December 31, 2022. The Company will continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others. Furthermore, on March 11, 2021 the American Rescue Plan Act, a $1.9 trillion tax-and-spending package aimed at addressing the continuing economic and health impacts of the coronavirus pandemic, was enacted. The American Rescue Plan Act provisions do not have a material impact on the Company’s income tax expense and effective tax rate.

On August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law. The IRA contains several revisions to the Internal Revenue Code, including a 15% corporate minimum income tax and a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022 with certain exclusions for (a) repurchased shares for withholding taxes on vested restricted stock units (“RSUs”) and (b) treasury shares reissued in the same tax year for settlement of stock option exercises or vesting of RSUs. While these tax law changes have no immediate effect and are not expected to have a material adverse effect on our results of operations going forward, we will continue to evaluate its impact as further information becomes available.

For the nine months ended September 30, 2022, the Company's effective income tax rate was 15.7%, which differed from the federal statutory rate of 21.0% primarily due to a portion of the Company’s earnings being attributable to non-controlling interests in limited liability companies, which are not subject to corporate level taxes, and a $2.8 million increase in the accrual for uncertain tax positions, net of income tax benefits of $0.8 million related to current state combined unitary losses. For the nine months ended September 30, 2021, the Company’s effective income tax rate was ~~8.9% and 3.2%, respectively. For~~12.5% primarily due to a portion of the Company’s earnings being attributable to non-controlling interests in limited liability companies, which are not subject to corporate level taxes, income tax benefits of $14.5 million recorded in the nine months ended September 30, ~~2017 and 2016,~~2021 related to the ~~Company’s effective~~release of the valuation allowance on deferred tax assets at CW that can now be included in state combined unitary income tax ~~rate was 10.5%~~returns and ~~2.4%, respectively. The amount~~$4.1 million for the revaluation of ~~income~~deferred tax ~~expense and~~assets as a result of increased state tax rates. Additionally, for the ~~effective income~~nine months ended September 30, 2022, the Company reduced its deferred tax ~~rate increased~~asset by $9.4 million relating to CWH’s investment in ~~2017 primarily because CWH was also subject to U.S. federal, state and local taxes on its allocable share of taxable income or loss generated by~~ CWGS, LLC subsequent to the Company’s IPO, and also partially to the increased profitability of FRRV. The Company's effective tax rate is significantly less than the federal statutory rate of 35.0% primarily because no federal income taxes are payable by the Company for the ~~non-controlling interests' share~~change in ownership of CWGS, ~~LLC’s taxable income due to~~LLC from the treasury stock repurchase of 2.6 million shares of Class A common stock during the three months ended March 31, 2022 (see Note 14 — Stockholders’ Equity). These treasury stock repurchases result in a commensurate reduction in common units in CWGS, ~~LLC’s pass-through structure for federal and most state and local income tax reporting, with the exception of the Subchapter C corporations noted above.~~LLC held by CWH.

The Company evaluates its deferred tax assets on a quarterly basis to determine if they can be realized and establishes valuation allowances when it is more likely than not that all or a portion of the deferred tax assets may not be realized. At September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, the Company determined that all of its deferred tax assets ~~except~~(except those of CW and the Outside Basis Deferred Tax Asset discussed below) are more likely than not to be realized. The Company maintains a ~~full~~ valuation allowance against the deferred tax assets of CW, excluding certain state deferred tax assets included in the state combined unitary income tax returns, since it was determined that it is more likely than not, based on available objective evidence, that CW would have insufficient taxable income in the current or carryforward periods under the tax laws to realize the future tax benefits for this portion of its deferred tax assets. ~~During~~The Company maintains a valuation allowance against the ~~three months ended September 30, 2017, TheHouse.com was acquired by CW (see Note 9 — Acquisitions) and~~Outside Basis Deferred Tax Asset pertaining to the ~~related deferred~~portion that is not amortizable for tax ~~liabilities acquired reduced~~purposes,

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since the ~~amount~~Company would likely only realize the non-amortizable portion of the ~~valuation allowance necessary for~~Outside Basis Deferred Tax Asset if the deferred tax assets of CW by $6.0 million. The deferred taxes on TheHouse.com acquisition are preliminary as they are subject to measurement period adjustments for up to one year from the date of acquisition as new information is obtained about facts and circumstances that existed as of the acquisition date.

~~The provision for income tax for the entities subject to federal income tax has been included~~investment in the consolidated financial statements. The income tax is based on the amount of taxes due on their tax returns plus deferred taxes computed based on the expected future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities, using expected tax rates.

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CWGS, LLC was divested.

The Company ~~recognizes~~is party to the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements on a particular tax position are measured based on the largest benefit that has a greater than a 50% likelihood of being realized upon settlement. The amount of unrecognized tax benefits is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to existing tax law, new regulations or interpretations by the taxing authorities, new information obtained during a tax examination, or resolution of an examination. As of September 30, 2017 and December 31, 2016, the Company had no uncertain tax positions. The Company did not recognize any interest or penalties relating to income taxes for the three and nine months ended September 30, 2017 and 2016.

~~On October 6, 2016, the Company entered into a tax receivable agreement (the “Tax~~Tax Receivable ~~Agreement”)~~Agreement that provides for the payment by the Company to the Continuing Equity Owners and Crestview Partners II GP, L.P. of 85% of the amount of tax benefits, if any, the Company actually realizes, or in some circumstances is deemed to realize, as a result of (i) increases in the tax basis from the purchase of common units from Crestview Partners II GP, L.P. in exchange for Class A common stock in connection with the consummation of the IPO and the related transactions and any future redemptions that are funded by the Company and any future redemptions ~~or exchanges~~ of common units by Continuing Equity Owners as described above and (ii) certain other tax benefits attributable to payments made under the Tax Receivable Agreement. CWGS intends to make an election under Section 754 of the Internal Revenue Code effective for each tax year in which a redemption or exchange (including a deemed exchange) of common units for cash or stock occur. These tax benefit payments are not conditioned upon one or more of the Continuing Equity Owners or Crestview Partners II GP, L.P. maintaining a continued ownership interest in CWGS, LLC. In general, the Continuing Equity Owners’ or Crestview Partners II GP, L.P.’s rights under the Tax Receivable Agreement are assignable, including to transferees of its common units in CWGS, LLC (other than the Company as transferee pursuant to a redemption or exchange of common units in CWGS, LLC). The Company expects to benefit from the remaining 15% of the tax benefits, if any, which may be realized. As part of the IPO, 1,698,763 common units in CWGS, LLC were exchanged for Class A common stock by Crestview Partners II GP, L.P., subject to the provisions of the Tax Receivable Agreement. During the ~~three and~~ nine months ended September 30, ~~2017, 1,001,248~~2022 and ~~6,526,610~~2021, 50,000 and 4,181,552 common units in CWGS, LLC, respectively, were ~~exchanged~~redeemed for Class A common stock subject to the provisions of the Tax Receivable ~~Agreement.~~Agreement (see Note 14 — Stockholders’ Equity). The Company recognized a liability for the Tax Receivable Agreement payments due to those parties that redeemed common units, representing 85% of the aggregate tax benefits the Company expects to realize from the tax basis increases related to the ~~exchange,~~redemption, after concluding it was probable that the Tax Receivable Agreement payments would be paid based on estimates of future taxable income. As of September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, the amount of Tax Receivable Agreement payments due under the Tax Receivable Agreement was ~~$109.9~~$171.5 million and ~~$19.2~~$182.4 million, respectively, of which ~~$7.4~~$11.7 million and ~~$1.0~~$11.3 million at September 30, 2022 and December 31, 2021, respectively, ~~were~~was included in the current portion of the Tax Receivable Agreement liability in the ~~Consolidated Balance Sheets.~~condensed consolidated balance sheets.

~~Table~~The Tax Receivable Agreement liability and Deferred Tax Assets increased $0.4 million and $0.5 million, respectively, as a result of ~~Contents~~

~~12. Related Party Transactions~~

~~Monitoring Agreement~~

~~Crestview Advisors, L.L.C. and Stephen Adams (together, the “Managers” and each,~~ a ~~“Manager”) and the Company were parties to a monitoring agreement relating to each Manager’s monitoring~~Continuing Equity Owner’s redemption of ~~its (or its affiliate’s) investment~~50,000 common units in CWGS, ~~LLC. Pursuant to the monitoring agreement, CWGS,~~ LLC ~~agreed to pay each~~for 50,000 shares of the ~~Managers an aggregate per annum monitoring fee equal to $1.0 million, payable in quarterly installments of $250,000. In addition,~~Company’s Class A common stock during the Company agreed to reimburse each Manager and its affiliates, employees and agents for up to an aggregate per annum amount of $250,000 for all reasonable fees and expenses incurred in connection with such Manager’s monitoring of its (or its affiliate’s) investment in CWGS, LLC. CWGS, LLC also agreed to indemnify each Manager and its respective affiliates from and against all losses, claims, damages and liabilities arising out of the performance by such Managers’ monitoring of its (or its affiliate’s) investment in CWGS, LLC. For the three and nine months ended September 30, ~~2016,~~2022 and were recorded to additional paid-in capital (see the condensed consolidated statements of stockholders’ equity). Payments pursuant to the ~~monitoring agreement,~~Tax Receivable Agreement relating to this redemption will begin during the ~~Company incurred monitoring fees of $0.5~~year ending December 31, 2023.

The Tax Receivable Agreement liability and Deferred Tax Assets increased $38.5 million and ~~$1.5~~$45.3 million, respectively, ~~and reimbursed fees and expenses~~as a result of ~~$0.1 and $0.4~~Continuing Equity Owner’s, primarily Crestview Partners II GP, L.P., combined redemption of 4.0 million ~~respectively. The monitoring agreement was terminated upon the consummation~~common units in CWGS, LLC for 4.0 million shares of the Company’s ~~IPO.~~Class A common stock during the nine months ended September 30, 2021 and were recorded to additional paid-in capital (see the condensed consolidated statements of stockholders’ equity). Payments pursuant to the Tax Receivable Agreement relating to these redemptions began during the year ending December 31, 2022.

13. Related Party Transactions

Transactions with Directors, Equity Holders and Executive Officers

FreedomRoads leases various retail locations from managers and officers. During the three months ended September 30, ~~2017~~2022 and ~~2016,~~2021, the related party lease expense for these locations ~~was $0.5~~were $0.6 million and ~~$0.3~~$0.5 million, respectively. During the nine months ended September 30, ~~2017~~2022 and ~~2016,~~2021, the related party lease expense for these locations ~~was $1.4~~were $1.9 million and ~~$1.0~~$1.6 million, respectively.

In January 2012, FreedomRoads entered into a lease ~~(the “Original Lease”) with respect to~~for the ~~Company’s~~offices in Lincolnshire, Illinois, ~~offices,~~ which was amended in March 2013, ~~in connection with the Company’s leasing of additional premises within the same office building~~November 2019, October 2020, and October 2021 (the ~~“Expansion~~“Lincolnshire Lease”). ~~The Original~~For the three months ended September 30, 2022 and 2021, rental payments for the Lincolnshire Lease, ~~is payable in 132 monthly~~including common area maintenance charges, were each $0.2 million. For the nine months ended September 30, 2022 and 2021, rental payments ~~of base rent equal to approximately $29,000, commencing April 2013, subject to annual increases.~~for the Lincolnshire Lease, including common area maintenance charges, were $0.7 million and $0.6 million, respectively. The ~~Expansion Lease is payable in 132 monthly payments of base rent equal to approximately $2,500, commencing May 2013, subject to annual increases. Marcus Lemonis, the~~ Company’s Chairman and Chief Executive Officer has personally guaranteed ~~both leases. During~~ the ~~three months ended~~Lincolnshire Lease.

As of September 30, ~~2017~~2022 and ~~2016, we made payments~~December 31, 2021, the Company had an expense reimbursement payable to Mr. Lemonis of approximately $193,000 and $211,000, respectively, in connection with the Original Lease, which includes approximately $94,000 and $113,000, respectively, for common area maintenance charges on the Original Lease, and we made payments of approximately $8,000 and $8,000, respectively, in connection with the Expansion Lease. During the nine months ended September 30, 2017 and 2016, we made payments of approximately $546,000 and $546,000, respectively, in connection with the Original Lease, which includes approximately $252,000 and $258,000, respectively, for common area maintenance charges on the Original Lease, and we made payments of approximately $25,000 and $25,000, respectively, in connection with the Expansion Lease.

~~The Company paid Kaplan, Strangis and Kaplan, P.A., of which Andris A. Baltins is a member, $0.3 million during the three and nine months ended September 30, 2017~~$0 and $0.1 million, respectively, relating primarily to advertising expenses for the Company that were processed through Mr. Lemonis’ social media accounts.

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In October 2022, the Company purchased a property to be used as office space in Lincolnshire, Illinois, for $4.5 million from the Company’s Chairman and ~~$0.2 million during the three and nine months ended September 30, 2016, respectively.~~Chief Executive Officer.

Other Transactions

The Company does business with certain companies in which Mr. Lemonis has a direct or indirect material interest. The Company purchased fixtures for interior store sets at the Company’s retail locations from Precise ~~Graphix, LLC (“Precise Graphix”).~~Graphix. Mr. Lemonis ~~has a 33%~~exited his economic interest in Precise ~~Graphix and the~~Graphix. The Company ~~paid~~received refunds from Precise Graphix ~~$0.5~~totaling $0.2 million ~~and $1.1 million for the three months ended September 30, 2017 and 2016, respectively, and the Company paid Precise Graphix $1.7 million and $2.5 million for~~in the nine months ended September 30, ~~2017~~2021.

The Company paid Kaplan, Strangis and ~~2016, respectively.~~

~~Cumulus Media Inc. (“Cumulus Media”) has provided radio advertising~~Kaplan, P.A., of which Andris A. Baltins is a member, and a member of the Company’s board of directors, $0.2 million for both the Company through Cumulus Media’s subsidiary, Westwood One, Inc. Crestview Partners II GP, L.P., an affiliate of CVRV, is the beneficial owner of approximately 30% of Cumulus Media’s Class A common stock, according to Crestview

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~~Partners II GP, L.P.’s most recently filed Schedule 13D amendment with respect to the company. For the three and~~ nine months ended September 30, ~~2017,~~2022 and 2021, for legal services.

14. Stockholders’ Equity

CWH has authorized preferred stock and three classes of common stock. The Class A common stock entitles the holders to receive dividends; distributions upon the liquidation, dissolution, or winding up of the Company; and have voting rights. The Class B common stock and Class C common stock entitles the holders to voting rights, which in certain cases are disproportionate to the voting rights of the Class A common stock; however, the holders of Class B common stock and Class C common stock are not entitled to receive dividends or distributions upon the liquidation, dissolution, or winding up of the Company.

CWH is the sole managing member of CWGS, LLC and CWH has had and continues to have the sole voting power in, and controls the management of, CWGS, LLC. CWH’s position as sole managing member of CWGS, LLC includes periods where CWH held a minority economic interest in CWGS, LLC. Accordingly, the Company ~~incurred expense from Cumulus Media~~consolidated the financial results of ~~$0.4 million for~~CWGS, LLC and reported a non-controlling interest in its consolidated financial statements.

In accordance with the ~~aforementioned advertising services. The Company did not use~~amended and restated limited liability company agreement of CWGS, LLC (the “LLC Agreement”), the ~~advertising services~~Continuing Equity Owners with common units in ~~2016.~~

~~On September 22, 2017, W82,~~CWGS, LLC an indirect subsidiary of the Company, completed the acquisition of substantially all of the assets (the “W82 Acquisition”) of W82. The purchase price consisted in $0.6 million in cash and the extinguishment of $1.5 million of W82’s debt, including accrued interest. ML Fashion, LLC, a company in which Marcus Lemonis, our Chairman and Chief Executive Officer, has a 100% economic interest, was the holder of a secured convertible promissory note (the “Note”) issued by W82. Approximately $1.1 million of the proceeds from the W82 Acquisition were usedmay elect to redeem the ~~Note. The W82 Acquisition was approved by our audit committee~~common units for newly-issued shares of the Company’s Class A common stock or cash at the Company’s election, subject to certain restrictions. If the redeeming or exchanging party also holds Class B common stock, then simultaneously with the payment of cash or newly-issued shares of Class A common stock, as applicable, in ~~accordance with our related person transaction policy and procedures.~~

~~13. Stockholders’ Equity~~

~~Reorganization Transactions~~

In connection with a redemption of common units, a number of shares of the ~~IPO~~Company’s Class B common stock will be cancelled for no consideration on ~~October 6, 2016,~~a one-for-one basis with the ~~Company completed~~number of common units so redeemed. As required by the ~~following Reorganization Transactions:~~

~~The Company amended and restated its certificate of incorporation which, among other things, authorized preferred stock and three classes of common stock. The Class A common stock entitles~~LLC Agreement, the holders to receive dividends; distributions upon the liquidation, dissolution, or winding up of the Company; and have voting rights. The Class B common stock and Class C common stock entitles the holders to voting rights, which in certain cases are disproportionate to the voting rights of the Class A common stock; however, the holders of Class B common stock and Class C common stock are not entitled to receive dividends or distributions upon the liquidation, dissolution, or winding up of the Company;

CWGS, LLC amended and restated the limited liability company agreement of CWGS, LLC (the “LLC Agreement” and the “Recapitalization”), which among other things, (i) provided for a new single class of common membership interests in CWGS, LLC, the common units, and (ii) exchanged all of the then-existing membership interests in CWGS, LLC to common units. The holders of the common units may elect to exchange or redeem the common units for newly-issued shares of the Company’s Class A common stock or cash at the Company’s election, subject to certain restrictions. If the redeeming or exchanging party also holds Class B common stock, then simultaneously with the payment of cash or newly-issued shares of Class A common stock, as applicable, in connection with a redemption or exchange of common units, a number of shares of the Company’s Class B common stock will be cancelled for no consideration on a one-for-one basis with the number of common units so redeemed or exchanged; and

The Company acquired, by merger, an entity that was owned by former indirect members of CWGS, LLC (the “Former Equity Owners”), for which the Company issued 7,063,716 shares of Class A common stock as merger consideration (the “CWH BR Merger”). The only significant asset held by the merged entity prior to the CWH BR Merger was 7,063,716 common units of CWGS, LLC and a corresponding number of shares of CWH Class B common stock. Upon consummation of the CWH BR Merger, the Company canceled the 7,063,716 shares of Class B common stock and recognized the 7,063,716 of common units of CWGS, LLC at carrying value, as the CWH BR Merger was considered to be a transaction between entities under common control.

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

Immediately following the completion of the Reorganization Transactions and IPO, CWH owned 22.6% of CWGS, LLC and the remaining 77.4% of CWGS, LLC was owned by the Continuing Equity Owners (see Note 14 — Non-Controlling Interests). As a result of the Reorganization Transactions, CWH became the

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sole managing member of CWGS, LLC and, although CWH had a minority economic interest in CWGS, LLC, CWH had the sole voting power in, and controlled the management of, CWGS, LLC. Accordingly, the Company consolidated the financial results of CWGS, LLC and reported a non-controlling interest in its consolidated financial statements.Stock Repurchase Program

As the Reorganization Transactions are considered transactions between entities under common control, the financial statements for periods prior to the IPO and Reorganization Transactions have been adjusted to combine the previously separate entities for presentation purposes. SeeIn October 2020, the Company’s ~~Annual Report~~Board of Directors initially authorized a stock repurchase program for ~~further details.~~

~~May 2017 Public Offering~~

~~On May 31, 2017,~~ the ~~Company completed a public offering (the “May 2017 Public Offering”) in which the Company sold 4,000,000 shares~~repurchase of up to $100.0 million of the Company’s Class A common stock, ~~at a public offering price~~expiring on October 31, 2022. In August 2021 and January 2022, the Company’s Board of $27.75 per share. The Company received $106.6 million in proceeds, net of underwriting discounts and commissions, which were used to purchase 4,000,000 newly-issued common units from CWGS, LLC at a price per unit equalDirectors authorized increases to the ~~public offering price per share~~stock repurchase program for the repurchase of ~~Class A common stock in the May 2017 Public Offering, less underwriting discounts and commissions. In addition, on June 5, 2017, the underwriters exercised their option~~up to ~~purchase~~ an additional ~~600,000 shares of Class A common stock. On June 9, 2017, the Company closed on the purchase of the additional 600,000 shares of Class A common stock~~$125.0 million and ~~received $16.0~~$152.7 million, in additional proceeds, net of underwriting discounts and commissions, which were used to purchase 600,000 newly-issued common units from CWGS, LLC at a price per unit equal to the public offering price per share of Class A common stock in the May 2017 Public Offering, less underwriting discounts and commissions.

~~In connection with the May 2017 Public Offering, CVRV Acquisition LLC and CVRV Acquisition II LLC (“May 2017 Selling Stockholders”), each affiliates of Crestview, sold 5,500,000 shares~~respectively, of the Company’s Class A common stock and extended the stock repurchase program to expire on August 31, 2023 and December 31, 2025, respectively. Repurchases under the program are subject to any applicable limitations on the availability of funds to be distributed to the Company by CWGS, LLC to fund repurchases and may be made in the open market, in privately negotiated transactions or otherwise, with the amount and timing of repurchases to be determined at the ~~same public offering price~~Company’s 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 ~~$27.75 per share. CVRV Acquisition LLC redeemed 4,323,083~~Rule 10b-18 under the Securities Exchange Act of 1934, as amended. The Company may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. This program does not obligate the Company to acquire any

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particular amount of Class A common ~~units of CWGS, LLC for 4,323,083~~stock and the program may be extended, modified, suspended or discontinued at any time at the Board’s discretion. The Company expects to fund the repurchases using cash on hand.

During the three months ended September 30, 2022, the Company did not repurchase Class A common stock under the stock repurchase program. During the nine months ended September 30, 2022, the Company repurchased 2,592,524 shares of Class A common stock under this program for approximately $79.8 million, including commissions paid, at a weighted average price per share of $30.76, which ~~it sold in~~is recorded as treasury stock on the ~~May 2017 Public Offering along with 1,176,917 shares of~~condensed consolidated balance sheets. Class A ~~shares that CVRV Acquisition II LLC already~~common stock held as ~~a result of~~treasury stock is not considered outstanding. During the ~~Reorganization Transactions. Pursuant to~~nine months ended September 30, 2022, the terms of the LLC Agreement, 4,323,083 shares of the Company’s Class B common stock registered in the name of CVRV Acquisition LLC were cancelled for no consideration on a one-for-one basis with the number of common units redeemed. In addition, on June 5, 2017, the underwriters exercised their option to purchase an additional 825,000Company reissued 540,646 shares of Class A common stock from treasury stock to settle the ~~May 2017 Selling Stockholders, in conjunction with their exercise~~exercises of ~~their option to purchase~~stock options and vesting of restricted stock units. As of September 30, 2022, the additional 600,000 shares from the Company as described above. On June 9, 2017, the May 2017 Selling Stockholders closed on the sale of the additional 825,000 shares of Class A common stock. CVRV Acquisition LLC redeemed 648,462 common units of CWGS, LLCremaining approved amount for ~~648,462 shares~~repurchases of Class A common stock ~~which it sold in~~under the May 2017 Public Offering along with 176,538 shares of Class A shares that CVRV Acquisition II LLC already held as a result of the Reorganization Transactions. Pursuant to the terms of the LLC Agreement, 648,462 shares of the Company’s Class B common stock registered in the name of CVRV Acquisition LLC were cancelled for no consideration on a one-for-one basis with the number of common units redeemed. The Company did not receive any proceeds relating to the sale of the May 2017 Selling Stockholders’ shares.share repurchase program was approximately $120.2 million.

~~14. Non-Controlling Interests~~

~~In connection with the Reorganization Transactions,~~As described in Note 1312 — Income Taxes, the IRA imposes a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022 with certain exclusions for (a) repurchased shares for withholding taxes on vested RSUs and (b) treasury shares reissued in the same tax year for settlement of stock option exercises or vesting of RSUs.

15. Non-Controlling Interests

As described in Note 14 — Stockholders’ Equity, CWH ~~became~~is the sole managing member of CWGS, LLC and, as a result, consolidates the financial results of CWGS, LLC. The Company reports a non-controlling interest representing the common units of CWGS, LLC held by Continuing Equity Owners. Changes in CWH’s ownership interest in CWGS, LLC while CWH retains its controlling interest in CWGS, LLC will be accounted for as equity transactions. As such, future redemptions ~~or direct exchanges~~ of common units of CWGS, LLC by the Continuing Equity Owners will result in a change in ownership and reduce or increase the amount recorded as non-controlling interest and increase or decrease additional paid-in capital when CWGS, LLC has positive or negative net assets, respectively. At ~~September 30, 2017 and December 31, 2016,~~the end of each period, the Company will record a non-controlling interest adjustment to additional paid-in capital such that the non-controlling interest on the condensed consolidated balance sheet is equal to the non-controlling interest’s ownership share of the underlying CWGS, LLC ~~had positive and negative~~ net

~~Table~~ assets (see the condensed consolidated statement of ~~Contents~~

~~assets, respectively, which resulted in positive and negative non-controlling interest amounts, respectively, on the Unaudited Condensed Consolidated Balance Sheets.~~stockholders’ equity).

~~As of September 30, 2017 and December 31, 2016, there were 88,536,365 and 83,771,830 common units of~~The following table summarizes the CWGS, LLC ~~outstanding, respectively, of which~~common unit ownership by CWH ~~owned 30,227,061 and 18,935,916 common units of CWGS, LLC, respectively, representing 34.1% and 22.6% ownership interests in CWGS, LLC, respectively,~~ and the Continuing Equity ~~Owners owned 58,309,304 and 64,835,914 common units~~Owners:


	As of September 30, 2022				As of December 31, 2021
	Common Units		Ownership %		Common Units		Ownership %
CWH		42,129,078		50.1%		44,130,956		51.2%
Continuing Equity Owners		42,044,536		49.9%		42,094,536		48.8%
Total		84,173,614		100.0%		86,225,492		100.0%

Table of ~~CWGS, LLC, respectively, representing 65.9% and 77.4% ownership interests in CWGS, LLC, respectively.~~Contents

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

Three Months Ended

Nine Months Ended

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
Net income attributable to Camping World Holdings, Inc.

$
20,127

$
68,416

$
46,985

$
189,602
Transfers to non-controlling interests:

Decrease in additional paid-in capital as a result of the purchase of common units from CWGS, LLC

—

—

(53,648)

—
Decrease in additional paid-in capital as a result of the contribution of Class A common stock to CWGS, LLC for an acquisition by a subsidiary

(2,261)

—

(2,261)

—
Decrease in additional paid-in capital as a result of the vesting of restricted stock units

—

—

—

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

13,468

—

69,091

—
Change from net income attributable to Camping World Holdings, Inc. and transfers to non-controlling interests

$
31,334

$
68,416

$
60,167

$
189,602


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2022		2021		2022		2021
Net income attributable to Camping World Holdings, Inc.	$	41,126	$	79,703	$	170,167	$	251,213
Transfers to non-controlling interests:
Decrease in additional paid-in capital as a result of the purchase of common units from CWGS, LLC with proceeds from the exercise of stock options		(20)		(592)		(149)		(1,861)
Decrease in additional paid-in capital as a result of the vesting of restricted stock units		(14,713)		(16,376)		(22,342)		(19,241)
Increase (decrease) in additional paid-in capital as a result of repurchases of Class A common stock for withholding taxes on vested RSUs		829		(411)		1,120		(467)
Increase in additional paid-in capital as a result of repurchases of Class A common stock for treasury stock		—		19,623		28,398		41,750
Increase in additional paid-in capital as a result of the redemption of common units of CWGS, LLC		—		—		416		34,711
Change from net income attributable to Camping World Holdings, Inc. and transfers to non-controlling interests	$	27,222	$	81,947	$	177,610	$	306,105

~~15. Equity-based~~16. Equity-Based Compensation Plans

The following table summarizes the equity-based compensation that has been included in the following line items within the consolidated statements of operations during:

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
Equity-based compensation expense:

Costs applicable to revenue

$
81

$
—

$
254

$
—
Selling, general, and administrative

1,123

60

2,538

60
Total equity-based compensation expense

$
1,204

$
60

$
2,792

$
60


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2022		2021		2022		2021
Equity-based compensation expense:
Costs applicable to revenue	$	196	$	252	$	559	$	575
Selling, general, and administrative		6,596		6,661		26,875		18,494
Total equity-based compensation expense	$	6,792	$	6,913	$	27,434	$	19,069

The following table summarizes stock option activity for the nine months ended September 30, ~~2017:~~2022:



	~~Stock Options~~
	Stock Options
	(in thousands)
Outstanding at December 31, ~~2016~~2021		~~1,118~~
~~Granted~~		—272
Exercised		—(14)
Forfeited		~~(62)~~
~~Cancelled~~		—(7)
Outstanding and exercisable at September 30, ~~2017~~2022		~~1,056~~251

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The following table summarizes restricted stock unit activity for the nine months ended September 30, ~~2017:~~2022:


			Restricted
	~~Restricted~~Stock Units
	~~Stock Units~~
	(in thousands)
Outstanding at December 31, ~~2016~~2021		~~144~~4,177
Granted		~~292~~195
Vested		—(741)
Forfeited		~~(6)~~
~~Cancelled~~		—(475)
Outstanding at September 30, ~~2017~~2022		~~430~~3,156

During the nine months ended September 30, 2022, the Company granted 162,333 RSUs to employees with an aggregate grant date fair value of $3.6 million and weighted-average grant date fair value of $22.43 per RSU, which will be recognized, net of forfeitures, over a vesting period of five years. In accordance with the Company’s non-employee director compensation policy, six members of the Company’s board of

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directors each received grants of 5,478 RSUs on the date of the Company’s annual shareholders’ meeting in May 2022 with a grant date fair value of $27.38 per RSU, which will be recognized, net of forfeitures, over a vesting period of one year.

~~16.~~

17. Earnings Per Share

Basic earnings per share of Class A common stock is computed by dividing net income available to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income available to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

As described in Note 13 — Stockholders’ Equity, on October 6, 2016, the LLC Agreement was amended and restated to, among other things, (i) provide for a new single class of common membership interests, the common units of CWGS, LLC, and (ii) exchange all of the then-existing membership interests of the Original Equity Owners for common units of CWGS, LLC. This Recapitalization changed the relative membership rights of the Original Equity Owners such that retroactive application of the Recapitalization to periods prior to the IPO for the purposes of calculating earnings per share would not be appropriate.

Prior to the IPO, the CWGS, LLC membership structure included membership units, preferred units, and Profits Units. During the period of September 30, 2014 to October 6, 2016, there were 70,000 preferred units outstanding that received a total preferred return of $2.1 million per quarter in addition to their proportionate share of distributions made to all members of CWGS, LLC. The Company analyzed the calculation of earnings per unit for periods prior to the IPO using the two-class method and determined that it resulted in values that would not be meaningful to the users of these consolidated financial statements. Therefore, earnings per share information has not been presented for periods prior to the IPO on October 6, 2016.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock:

Three Months

Nine Months

Ended

Ended

September 30,

September 30,
(In thousands except per share amounts)

2017

2017
Numerator:

Net income

$
85,258

$
240,021
Less: net income attributable to non-controlling interests

(65,131)

(193,036)
Net income attributable to Camping World Holdings, Inc. — basic

20,127

46,985
Add: Reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of CWGS, LLC for Class A common stock

39,917

118,110
Net income attributable to Camping World Holdings, Inc. — diluted

$
60,044

$
165,095
Denominator:

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

29,522

23,854
Dilutive common units of CWGS, LLC that are convertible into Class A common stock

58,930

62,093
Weighted-average shares of Class A common stock outstanding — diluted

88,452

85,947

Earnings per share of Class A common stock — basic

$
0.68

$
1.97
Earnings per share of Class A common stock — diluted

$
0.68

$
1.92


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands except per share amounts)	2022		2021		2022		2021
Numerator:
Net income	$	102,948	$	189,308	$	408,232	$	582,809
Less: net income attributable to non-controlling interests		(61,822)		(109,605)		(238,065)		(331,596)
Net income attributable to Camping World Holdings, Inc. — basic	$	41,126	$	79,703		170,167		251,213
Add: reallocation of net income attributable to non-controlling interests from the assumed dilutive effect of stock options and RSUs		281		1,226		1,019		3,793
Net income attributable to Camping World Holdings, Inc. — diluted	$	41,407	$	80,929	$	171,186	$	255,006
Denominator:
Weighted-average shares of Class A common stock outstanding — basic		41,985		45,628		42,419		45,072
Dilutive options to purchase Class A common stock		53		138		62		157
Dilutive restricted stock units		467		1,256		466		1,204
Weighted-average shares of Class A common stock outstanding — diluted		42,505		47,022		42,947		46,433

Earnings per share of Class A common stock — basic	$	0.98	$	1.75	$	4.01	$	5.57
Earnings per share of Class A common stock — diluted	$	0.97	$	1.72	$	3.99	$	5.49

Weighted-average anti-dilutive securities excluded from the computation of diluted earnings per share of Class A common stock:
Restricted stock units		1,396		10		2,094		9
Common units of CWGS, LLC that are convertible into Class A common stock		42,045		42,635		42,045		43,731

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For the three and nine months ended September 30, 2017, 1.1 million stock options and 0.4 million and 0.2 million restricted stock units, respectively, were excluded from the weighted-average in the computation of diluted earnings per share of Class A common stock because the effect would have been anti-dilutive.

Shares of the Company’s Class B common stock and Class C common stock do not share in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock or Class C common stock under the two-class method has not been presented.

~~17.~~

18. Segments Information

~~We have~~The Company has the following two reportable segments: ~~(1) Consumer~~(i) Good Sam Services and Plans, and ~~(2)~~(ii) RV and Outdoor Retail. ~~The Company’s Consumer~~Within the Good Sam Services and Plans segment, ~~is comprised~~the Company primarily derives revenue from the sale of the following offerings: emergency roadside ~~assistance;~~assistance plans; property and casualty insurance programs; travel assist programs; extended vehicle service contracts; ~~co-branded credit cards;~~ vehicle ~~financing~~refinancing and ~~refinancing; membership clubs;~~refinancing assistance; consumer shows and events; and consumer publications and directories. ~~The Company’s~~Within the RV and Outdoor Retail segment, ~~is comprised~~the Company primarily derives revenue from the sale of new and used RVs; ~~parts and service;~~commissions on the finance and ~~insurance;~~insurance contracts related to the sale of RVs; the sale of RV service and ~~skiing, snowboarding, bicycling, skateboarding, marine~~collision work; the sale of RV parts, accessories, and ~~watersports products. Corporate~~supplies; the sale of outdoor products, equipment, gear and ~~other is comprised~~supplies; business to business distribution of RV furniture; and the ~~corporate operations~~sale of ~~the Company.~~Good Sam Club memberships and co-branded credit cards.

The reportable segments identified above are the business activities of the Company for which discrete financial information is available and for which operating results are regularly reviewed by the Company’s chief operating decision maker to allocate resources and assess performance. The Company’s chief operating

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decision maker is ~~its~~a group comprised of the Chief Executive ~~Officer.~~Officer and the President. Segment revenue includes intersegment revenue. Segment income includes intersegment allocations for subsidiaries and shared resources.

Reportable segment ~~revenue,~~revenue; segment ~~income,~~income; floor plan interest ~~expense,~~expense; depreciation and ~~amortization,~~amortization; other interest expense, net; and total assets ~~and capital expenditures~~ are as follows:

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
Revenue:

Consumer Services and Plans

$
46,169

$
45,442

$
144,518

$
135,868
Retail

1,192,833

945,629

3,260,966

2,720,806
Total consolidated revenue

$
1,239,002

$
991,071

$
3,405,484

$
2,856,674

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
Segment income (1):

Consumer Services and Plans

$
21,675

$
19,847

$
71,887

$
63,948
Retail

93,446

70,882

256,713

188,898
Total segment income

115,121

90,729

328,600

252,846
Corporate & other

(2,037)

(1,091)

(6,461)

(2,420)
Depreciation and amortization

(8,382)

(6,219)

(22,819)

(18,144)
Other interest expense, net

(11,012)

(12,715)

(30,973)

(38,040)
Other expense, net

(96)

—

(79)

(2)
Income from operations before income taxes

$
93,594

$
70,704

$
268,268

$
194,240


	Three Months Ended September 30, 2022								Three Months Ended September 30, 2021
	Good Sam		RV and						Good Sam		RV and
	Services		Outdoor		Intersegment				Services		Outdoor		Intersegment
($ in thousands)	and Plans		Retail		Eliminations		Total		and Plans		Retail		Eliminations		Total
Revenue:
Good Sam services and plans	$	50,413	$	—	$	(61)	$	50,352	$	46,632	$	—	$	(51)	$	46,581
New vehicles		—		835,596		(1,484)		834,112		—		865,886		(1,583)		864,303
Used vehicles		—		527,078		(1,090)		525,988		—		520,565		(1,015)		519,550
Products, service and other		—		269,177		(237)		268,940		—		306,241		(359)		305,882
Finance and insurance, net		—		169,825		(4,689)		165,136		—		171,861		(4,082)		167,779
Good Sam Club		—		11,154		—		11,154		—		12,479		—		12,479
Total consolidated revenue	$	50,413	$	1,812,830	$	(7,561)	$	1,855,682	$	46,632	$	1,877,032	$	(7,090)	$	1,916,574

	Nine Months Ended September 30, 2022								Nine Months Ended September 30, 2021
	Good Sam		RV and						Good Sam		RV and
	Services		Outdoor		Intersegment				Services		Outdoor		Intersegment
($ in thousands)	and Plans		Retail		Eliminations		Total		and Plans		Retail		Eliminations		Total
Revenue:
Good Sam services and plans	$	144,914	$	—	$	(410)	$	144,504	$	134,499	$	—	$	(145)	$	134,354
New vehicles		—		2,751,391		(5,068)		2,746,323		—		2,750,643		(5,586)		2,745,057
Used vehicles		—		1,488,078		(3,100)		1,484,978		—		1,276,811		(2,867)		1,273,944
Products, service and other		—		762,724		(810)		761,914		—		863,958		(1,252)		862,706
Finance and insurance, net		—		528,798		(14,877)		513,921		—		495,786		(12,068)		483,718
Good Sam Club		—		35,070		—		35,070		—		36,383		—		36,383
Total consolidated revenue	$	144,914	$	5,566,061	$	(24,265)	$	5,686,710	$	134,499	$	5,423,581	$	(21,918)	$	5,536,162


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2022		2021		2022		2021
Segment income:⁽¹⁾
Good Sam Services and Plans	$	23,946	$	18,030	$	67,242	$	62,415
RV and Outdoor Retail		143,098		247,762		538,082		709,411
Total segment income		167,044		265,792		605,324		771,826
Corporate & other		(2,789)		(2,667)		(9,681)		(7,157)
Depreciation and amortization		(18,207)		(23,552)		(61,369)		(49,297)
Other interest expense, net		(20,526)		(11,250)		(49,762)		(35,262)
Tax Receivable Agreement liability adjustment		—		—		—		(3,520)
Loss and expense on debt restructure		—		(24)		—		(10,445)
Other expense, net		(177)		(122)		(472)		(77)
Income before income taxes	$	125,345	$	228,177	$	484,040	$	666,068

⁽¹⁾

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


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2022		2021		2022		2021
Depreciation and amortization:
Good Sam Services and Plans	$	979	$	723	$	2,478	$	2,292
RV and Outdoor Retail		17,228		22,829		58,891		47,005
Total depreciation and amortization	$	18,207	$	23,552	$	61,369	$	49,297


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2022		2021		2022		2021
Other interest expense, net:
Good Sam Services and Plans	$	22	$	(1)	$	24	$	(1)
RV and Outdoor Retail		3,865		1,934		9,791		5,643
Subtotal		3,887		1,933		9,815		5,642
Corporate & other		16,639		9,317		39,947		29,620
Total other interest expense, net	$	20,526	$	11,250	$	49,762	$	35,262

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Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
Depreciation and amortization:

Consumer Services and Plans

$
888

$
926

$
2,889

2,777
Retail

7,266

5,293

19,587

15,367
Total

8,154

6,219

22,476

18,144
Corporate & other

228

—

343

—
Total depreciation and amortization

$
8,382

$
6,219

$
22,819

$
18,144

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
Other interest expense, net:

Consumer Services and Plans

$
1

$
4

$
5

$
12
Retail

1,423

1,482

4,375

4,250
Total

1,424

1,486

4,380

4,262
Corporate & other

9,588

11,229

26,593

33,778
Total interest expense

$
11,012

$
12,715

$
30,973

$
38,040


	September 30,		December 31,
($ in thousands)	2022		2021
Assets:
Good Sam Services and Plans	$	93,539	$	158,988
RV and Outdoor Retail		4,150,947		3,849,217
Subtotal		4,244,486		4,008,205
Corporate & other		266,900		364,724
Total assets	$	4,511,386	$	4,372,929

September 30,

December 31,
($ in thousands)

2017

2016
Assets:

Consumer Services and Plans

$
122,273

$
152,689
Retail

1,900,638

1,235,250
Total

2,022,911

1,387,939
Corporate & other

355,568

175,826
Total assets

$
2,378,479

$
1,563,765

~~18. Subsequent Events~~

On October 6, 2017, CWGS Group, LLC (the “Borrower”), an indirect subsidiary of the Company, entered into a Second Amendment (the “Second Amendment”) to the Credit Agreement dated as of November 8, 2016 (as amended by the First Amendment dated March 17, 2017 and as further amended, the "Credit Agreement"). The Second Amendment, among other things, (i) increased the Borrower’s term loan facility by $205.0 million to an outstanding principal amount of $939.5 million, (ii) amended the applicable margin to 2.00% from 2.75% per annum, in the case of base rate loans, and to 3.00% from 3.75% per annum, in the case of LIBOR loans, and (iii) increased the quarterly amortization payment to $2.4 million.

On October 30, 2017, the October 2017 Selling Stockholders (as defined below) completed a public secondary offering (the “October 2017 Public Offering”), in which CWGS Holding, LLC, a Delaware limited liability company, wholly-owned by ML Acquisition and CVRV Acquisition LLC, CVRV Acquisition II LLC, and Crestview Advisors, L.L.C., each affiliates of Crestview (collectively, the “October 2017 Selling Stockholders”) sold 6,700,000 shares of the Company’s Class A common stock at the public offering price of $40.50 per share. CWGS Holding, LLC and CVRV Acquisition LLC redeemed an aggregate of 5,415,529 common units of CWGS, LLC for 5,415,529 shares of Class A common stock, which they sold in the October 2017 Public Offering along with 1,284,471 shares of Class A shares sold by CVRV Acquisition II LLC and Crestview Advisors, L.L.C. that they already held as a result of the Reorganization Transactions and the previous vesting of RSUs held by certain members of the board of directors affiliated with Crestview, respectively. Pursuant to the terms of the LLC Agreement, an aggregate of 5,415,529 shares of the Company’s Class B common stock registered in the name of CWGS Holding, LLC and CVRV Acquisition LLC were cancelled for no consideration on a one-for-one basis with the number of common units redeemed. In addition, on October 27, 2017, the underwriters partially exercised their option to purchase up to an additional 1,005,000 shares of Class A common stock from the October 2017 Selling Stockholders. On November 1, 2017, the October 2017 Selling Stockholders closed on the sale of the additional 963,799 shares of Class A common stock. CWGS Holding, LLC and CVRV Acquisition LLC redeemed an additional aggregate 779,026 common units of CWGS, LLC for 779,026 shares of Class A common stock, which they sold in the October 2017 Public

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Offering along with 184,773 shares of Class A shares sold by CVRV Acquisition II LLC and Crestview Advisors, L.L.C. that they already held as a result of the Reorganization Transactions and the previous vesting of RSUs held by certain members of the board of directors affiliated with Crestview, respectively. Pursuant to the terms of the LLC Agreement, an additional aggregate of 779,026 shares of the Company’s Class B common stock registered in the name of CWGS Holding, LLC and CVRV Acquisition LLC were cancelled for no consideration on a one-for-one basis with the number of common units redeemed. The Company did not receive any proceeds relating to the sale of shares in the October 2017 Public Offering by the October 2017 Selling Stockholders. The impact from the Tax Receivable Agreement (see Note 11 — Income Taxes) of the redemption of common units described above relating to the October 2017 Public Offering is expected to increase the current portion of the Tax Receivable Agreement liability by approximately $5.7 million, increase the non-current portion of the Tax Receivable Agreement liability by approximately $106.0 million, increase deferred tax assets by approximately $143.0 million, and increase additional paid-in capital by approximately $31.3 million.

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Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 financial statements and related notes included in Part I, Item 1 of this Form 10-Q, as well as our Annual ~~Report.~~Report on Form 10-K for the year ended December 31, 2021 (the “Annual Report”). 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 forward-looking statements as a result of various important factors, including those set forth under “Risk Factors” included in Part I, Item 1A of our Annual Report, ~~and~~ Part II, Item 1A of this Form 10-Q, the “Cautionary Note Regarding Forward-Looking Statements” in this Form 10-Q and in other parts of this Form 10-Q. 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-Q, 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 September 30, ~~2017,~~2022, our most recently completed fiscal quarter. Additionally, references herein to the approximately 9 million U.S. households that own a recreational vehicle ("RV") are based on The RV Consumer in 2011, an industry report published by the University of Michigan in 2011 (the "RV Survey"), which we believe to be the most recent such survey.

Overview

We believe we are the only provider of a comprehensive portfolio of services, protection plans, products, and resources for RV enthusiasts. Approximately 9 million households in the United States own an RV, and of that installed base, we had approximately 3.6 million Active Customers at September 30, 2017, excluding the impact of the acquisition of Gander Mountain and Overton’s in May 2017 (“Gander Mountain Acquisition”). In addition, as of the date of consummation of the Gander Mountain Acquisition, Gander Mountain and Overton’s had 2.5 million unique Active Customers related to the Gander Mountain Acquisition that do not overlap with the 3.6 million Active Customers noted above. We expect to operate significantly fewer retail locations than Gander Mountain operated prior to its bankruptcy. Therefore, we would anticipate that the favorable impact on our Active Customer count from the Gander Mountain Acquisition over time would be approximately 0.7 million to 1.5 million. We generate recurring revenue by providing RV owners and outdoor enthusiasts the full spectrum of services, protection plans, products, and resources that we believe are essential to operate, maintain, and protect their RV and to enjoy the RV and outdoor lifestyles. We provide these offerings through our two iconic brands, Good Sam and Camping World Holdings, Inc. (together with its subsidiaries) is America’s largest retailer of recreational RVs and ~~following the Gander Mountain Acquisition, Gander Mountain, which will be rebranded as Gander Outdoors, and Overton’s.~~

We believe our Good Sam branded offerings provide the industry’s broadest and deepest range of services, protection plans, products, and resources, including: extended vehicle service contracts and insurance protection plans, roadside assistance, membership clubs, and financing products. A majority of these programs are on a multi‑year or annually renewable basis.

Our Camping World brand operates the largest national network of RV‑centric retail locations in the United States through our 137 retail locations in 36 states, as of September 30, 2017, and through our e‑commerce platforms. We believe we are significantly larger in scale than our next largest competitor. We provide new and used RVs, repair parts, RV accessories and supplies, RV repair and maintenance services, protection plans, travel assistance plans, RV financing, and lifestyle products and services for new and existing RV owners. Our retail locations are staffed with knowledgeable local team members, providing customers access to extensive RV expertise. Our Camping World retail locations are strategically located in key national RV markets. Additionally, our Overton’s brand operates two stores in one state and provides marine and watersport accessories and supplies; TheHouse.com, which is primarily an online retailer with two retail locations, offers skiing, snowboarding, bicycling, and skateboarding products; and our one W82 location offers skiing, snowboarding, and skateboarding products.

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We attract new customers primarily through our retail locations, e‑commerce platforms, and direct marketing. Once we acquire our customers through a transaction, they become part of our customer database where we leverage customized customer relationship management (“CRM”) tools and analytics to actively engage, market, and sell multiplerelated products and services. Our ~~goal~~vision is to ~~consistently grow~~build a long-term legacy business that makes RVing fun and easy, and our ~~customer database through~~Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our ~~various channels to increasingly cross‑sell our~~customers, employees, and shareholders by combining a unique and comprehensive assortment of RV products and ~~services.~~

~~Segments~~

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 identify our reporting segments based on the organizational units used by management to monitor performance and make operating decisions. We have identified two reporting segments: (a) Consumer Services and Plans and (b) Retail. We provide our consumer services and plans offerings throughalso believe that our Good Sam ~~brand~~organization and ~~we provide~~family of programs and services uniquely enables us to connect with our ~~retail offerings primarily through our Camping World brand. Within the Consumer Services and Plans segment, we primarily derive revenue from the sale~~customers as stewards of the following offerings: emergency roadside assistance; property and casualty insurance programs; travel assist programs; extended vehicle service contracts; co‑branded credit cards; vehicle financing and refinancing; club memberships; and publications and directories. Within the Retail segment,RV lifestyle. On September 30, 2022, we ~~primarily derive revenue from the sale~~operated a total of the following products: new vehicles; used vehicles; parts and service, including RV accessories and supplies; finance and insurance; and skiing, snowboarding, bicycling, skateboarding, marine and watersports products.193 retail locations, with 192 of these selling and/or servicing RVs. See Note ~~17 — Segment Information~~1 – Summary of Significant Accounting Policies to our ~~unaudited~~ condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

~~Growth Strategies and Outlook~~

~~We believe~~Good Sam Rentals, which is a peer-to-peer RV rental marketplace that can be accessed at RVRentals.com, was launched during the ~~savings RVs offer on a variety~~third quarter of ~~vacation costs, an increase in the pool of potential RV customers due to an aging baby boomer demographic,~~2021 and the ~~increased~~financial results and cash needs to date were immaterial. Our previously announced mobile RV ~~ownership among younger consumers should continue~~technician marketplace is expected to ~~grow~~launch in 2022, with nominal further investment. We executed a limited rollout of our online RV sales process on our RVs.com domain in one state during the ~~installed base of RV owners, and will have a positive impact on RV usage.~~

quarter ended June 30, 2022. We plan to ~~take advantage~~expand RVs.com to additional markets after implementing enhancements, with limited additional investment, based on data gathered during the test rollout.

Table of ~~these positive trends~~Contents

A summary of the changes in ~~RV usage~~quantities and types of retail stores and changes in same stores from September 30, 2021 to ~~pursue~~September 30, 2022, are in the ~~following strategies to continue to grow our revenue and profits:~~table below:


	RV		RV Service &		Other			Same
	Dealerships		Retail Centers		Retail Stores		Total	Store⁽²⁾
Number of store locations as of September 30, 2021		176		10		1	187	158
Opened		9		—		—	9	—
Re-opened		1		—		—	1	—
Converted ⁽¹⁾		(1)		—		1	—	—
Temporarily closed		—		(1)		—	(1)	(1)
Closed ⁽¹⁾		(1)		(1)		(1)	(3)	(1)
Achieved designation of same store ⁽²⁾		—		—		—	—	12
Number of store locations as of September 30, 2022		184		8		1	193	168

(1)

Grow our Active Base of Customers. We believe our strong brands, leading market position, ongoing investment in our service platform, broad product portfolio, and full suite of resources will continue to provide us with competitive advantages in targeting and capturing a larger share of consumers with whom we do not currently transact, in addition to the growing number of new RV and outdoor enthusiasts that are expected to enter the market. We expect to continue to grow the Active Customer base primarily through three strategies:

~~Targeted Marketing:~~ We continuously work to attract new customers to our existing retail and online locations through targeted marketing, attractive introductory offerings, and access to our wide array of resources for RV and outdoor enthusiasts.

~~Greenfield Retail Locations:~~ ~~We establish retail locations in new and existing markets to expand our customer base. Target markets and locations are identified by employing proprietary data and analytical tools.~~

~~Retail Location Acquisitions:~~ ~~The~~One RV dealership ~~industry is highly fragmented with~~was converted to a ~~large number of independent RV dealers. We use acquisitions of independent dealers as~~retail clearance center, which was subsequently closed.

(2)	Our same store revenue and units calculations for a ~~fast and capital efficient alternative to new retail location openings to expand our business and grow our customer base.~~

~~Cross‑Sell Products and Services.~~ ~~We believe our customer database of over 18 million unique contacts, including~~given period include only those stores that were open both at the ~~impact~~end of the ~~Gander Mountain Acquisition, provides us with~~corresponding period and at the ~~opportunity to continue our growth through~~beginning of the cross‑selling of our products and services. We use our customized CRM system and database analytics to proactively market and cross‑sell to Active Customers. We also seek to increase the penetration of our products to customers who exhibit higher multi‑product attachment rates.

preceding fiscal year.

COVID-19

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~~New Products and Vertical Acquisitions.~~ Introduction of new products enhances our cross‑selling effort, both by catering to evolving customer demands and by bringing in new customers. Through relationships with existing suppliers and through acquisitions, we look to increase the new products we can offer to our customers. Similarly, an opportunistic vertical acquisition strategy allows us to earn an increased margin on our services, protection plans, and products, and we evaluate such acquisitions that can allow us to capture additional sales from our customers at attractive risk‑adjusted returns.

As discussed in Note 91 — ~~Acquisitions~~Summary of Significant Accounting Policies — COVID-19 to our ~~unaudited~~condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q, 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 ~~have exercised the Designation Rights~~experienced elevated demand for RVs and ~~assumed 15 Gander Mountain retail leases on October 6, 2017,~~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 ~~two Overton’s retail leases assumed~~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, while still elevated, has not remained at the ~~closing~~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 one in-person consumer show in 2021, compared to 37 in-person consumer shows held prior to the pandemic in 2019, and we plan to hold fewer than five in-person consumer shows in 2022. Moving forward, we have shifted our consumer show strategy to focus on shows which 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 beginning in 2020 and have continued these virtual shows in 2022.

Cybersecurity Incident

We rely on the integrity, security and successful functioning of our information technology systems and network infrastructure (collectively, “IT Systems”) across our operations. In February 2022, we announced that we had experienced 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. The forensic investigation is now complete and we have restored and are taking measures to enhance our IT Systems. We have 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 are in the process of complying with notification obligations in accordance with relevant law and are continuing to coordinate with law enforcement.

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We have incurred costs related to investigation, containment, and remediation and expect to continue to incur incremental costs for the investigation and remediation of the Gander Mountain Acquisition. The Designation Rights expired on October 6, 2017. Contingent on our final lease negotiations, our current plan is to open the initial 15 to 20 Gander Mountain stores, which will be rebranded as Gander Outdoors, by the end of the first quarter of 2018 and another 40 to 45 stores during the second and third quarters of 2018, with measured growth thereafter. Outside of the 15 Gander Mountain retail leases assumed under the Designation Rights, we expect to enter into new leases directly with the lessors for the other locations. As a result, we will begin to incur meaningful incremental expenses without the benefit of the full revenue as we begin to ramp the Gander Outdoors business and open stores. We believe Gander Mountain’s and Overton’s consumers’ affinity to the outdoor lifestyle complements our businesses with potential opportunities to build on our Good Sam strategy of selling clubs, warranties, insuranceCybersecurity Incident, including legal and other ~~related products.~~

~~As discussed below under “— Liquidity~~professional fees, and ~~Capital Resources,” we believe that our sources of liquidity and capital will be sufficient~~investments to ~~take advantage of these positive trends in RV usage and finance our growth strategy, including~~enhance the ~~Gander Mountain Acquisition. However, the operation~~security of our ~~business,~~IT Systems. Other actual and potential consequences include, but are not limited to, negative publicity, reputational damage, lost trust with customers, regulatory enforcement action, and litigation that could result in financial judgments or the ~~rate~~payment of ~~our expansion~~settlement amounts and ~~our ability~~disputes with insurance carriers concerning coverage. We do not expect that the Cybersecurity Incident will cause future disruptions to ~~respond to changing business and economic conditions depend on the availability of adequate capital, which in turn typically depends on cash flow generated by~~ our business ~~and, if necessary,~~or that the ~~availability of equity or debt capital. In addition, as we grow, we~~Cybersecurity Incident will face the risk that our existing resources and systems, including management resources, accounting and finance personnel, and operating systems, may be inadequate to support our growth. Any inability to generate sufficient cash flows from operations or raise additional equity or debt capital or retain the personnel or make the other changes in our systems that may be required to support our growth could have a material ~~adverse effect~~impact on our business, ~~financial condition and~~ results of ~~operations. See “Risk Factors — Risks Related~~operations or financial condition.

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 the nine months ended September 2022 were 8.2% less than the comparable period in 2021, primarily driven by reduced travel trailer shipments.

Thor Industries, our largest supplier of RVs, disclosed in their Form 10-K for the year ended July 31, 2022 filed with the Securities and Exchange Commission on September 28, 2022 that their North American RV order backlog as of July 31, 2022 had declined 45% from April 30, 2022 and declined 55% from July 31, 2021. Thor Industries also disclosed that they believe their North American backlog is generally more in line with their historical levels given improved dealer stocking inventory levels and their anticipated future consumer demand.

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 three and nine months ended September 30, 2022 as a result of these higher costs. We expect average selling prices to decrease 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 have 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 ~~Business — Our ability~~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. Additionally, our leases require us to ~~operate~~pay taxes, maintenance, repairs, insurance and ~~expand our business~~utilities, all of which are generally subject to inflationary increases. Further, the cost of remodeling acquired retail locations and to respond to changing business and economic conditions will depend on the availability of adequate capital” and “Risk Factors — Risks Related to our Business — Our expansion into new, unfamiliar markets presents increased risks that may prevent us from being profitable in these new markets. Delays in opening or acquiringconstructing new retail locations ~~could~~is subject to inflationary increases in the costs of labor and material, which results in higher rent expense on new retail locations. Finally, we finance substantially all of our new vehicle inventory and certain of our used vehicle inventory through revolving floor plan arrangements with interest rates that vary based on various benchmarks. Such rates have historically increased during periods of increasing inflation.

Strategic Shift

In 2019, we made a ~~material adverse effect on~~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

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COVID-19 in Part I, Item 2 of this Form 10-Q). The Company does not expect to close additional locations or incur further one-time termination benefits or incremental reserve charges in connection with the 2019 Strategic Shift. The remaining potential ongoing charges under the 2019 Strategic Shift relate to lease termination costs and other associated costs relating to the leases of previously closed locations under the 2019 Strategic Shift. The process of identifying subtenants and negotiating lease terminations has been delayed in part due to the ongoing COVID-19 pandemic and is expected to continue. The timing of these negotiations will vary as both subleases and terminations are contingent on landlord approvals. See Note 4 — Restructuring and Long-Lived Asset Impairment to our condensed consolidated financial ~~condition and results of operations”~~statements included in Part I, Item 1A1 of this Form 10-Q.

Our Corporate Structure Impact on Income Taxes

Our corporate structure is commonly referred to as an “Up-C” structure and typically results in a different relationship between income (loss) before income taxes and income tax expense than would be experienced by most public companies with a more traditional corporate structure. More traditional structures are typically comprised predominately of Subchapter C corporations and/or lacking significant non-controlling interests with holdings through limited liability companies or partnerships. Typically, most of our ~~Annual Report.~~income tax expense is recorded at the CWH level, our public holding company, based on its allocation of taxable income from CWGS, LLC.

~~How We Generate Revenue~~

~~Revenue across each~~More specifically, as discussed in Note 12 — Income Taxes to our condensed consolidated financial statements included in Part I, Item 1 of ~~our two reporting segments~~this Form 10-Q, CWH is ~~impacted by the following key revenue drivers:~~

~~Number of Active Customers.~~ Asorganized as a Subchapter C corporation and, as of September 30, ~~2017~~2022, is a 50.1% owner of CWGS, LLC (see Note 14 — Stockholders’ Equity and December 31, 2016, we had approximately 3.6 million and 3.3 million Active Customers, respectively, excluding the impact of the Gander Mountain Acquisition. As discussed above, we estimate that the favorable impact on our Active Customer count from the Gander Mountain Acquisition over time will be approximately 0.7 million to 1.5 million. Our Active Customer base is an integral part of our business model and has a significant effect on our revenue. We attract new customersNote 15 — Non-Controlling Interests to our business primarily through our retail locations, e-commerce platforms, and direct marketing. Once we acquire our customers through a transaction, they become part of our customer database where we use CRM tools to cross‑sell Active Customers additional products and services.

~~Consumer Services and Plans.~~ The majority of our consumer services and plans, such as our roadside assistance, extended service contracts, insurance programs, travel assist, and our Good Sam and Coast to Coast clubs, are built on a recurring revenue model. A majority of these programs are on a

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multi‑year or annually renewable basis and have annualized fees typically ranging from $20 to $5,200. We believe that many of these products and services are essential for our customers to operate, maintain and protect their RVs, and to enjoy the RV lifestyle, resulting in attractive annual retention rates. As we continue to grow our consumer services and plans business, we expect to further enhance our visibility with respect to revenue and cash flow, and increase our overall profitability. As of September 30, 2017 and December 31, 2016, we had 1.8 million club members in our Good Sam and Coast to Coast clubs.

~~Retail Locations.~~ We open new retail locations through organic growth and acquisitions. Our new retail locations are one of the primary ways in which we attract new customers to our business. Our retail locations typically offer our full array of products and services, including new and used RVs, RV financing, protection plans, a selection of OEM and aftermarket repair parts, RV accessories, RV maintenance products, supplies, and other outdoor lifestyle products. For the three months ended September 30, 2017 and 2016, we opened one and zero acquired retail locations, respectively, opened zero greenfield locations in both periods, and opened zero acquired Overton’s locations in both periods. For the nine months ended September 30, 2017 and 2016, we opened fifteen and four acquired retail locations, opened one and one greenfield locations, and opened two and zero acquired Overton’s locations, respectively. In addition, during the three months ended September 30, 2017, as a result of the acquisitions of TheHouse.com and W82, we acquired two TheHouse.com and one W82 retail locations (see Note 9 — Acquisitions to our unauditedcondensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q). CWGS, LLC is organized as a limited liability company and treated as a partnership for U.S. federal and most applicable state and local income tax purposes and, as such is generally not subject to any U.S. federal entity-level income taxes (“Pass-Through”), with the exception of Americas Road and Travel Club, Inc., Camping World, Inc. (“CW”), and FreedomRoads RV, Inc. and their wholly-owned subsidiaries, which are Subchapter C corporations (“C-Corp”) embedded within the CWGS, LLC structure.

~~Same store sales.~~ ~~Same store sales measure the performance~~CWH receives an allocation of ~~a retail location during the current reporting period against the performance~~its share of the ~~same retail location~~net income (loss) of CWGS, LLC based on CWH’s weighted-average ownership of CWGS, LLC for the period. CWH recognizes income tax expense on its pre-tax income including its portion of this income allocation from CWGS, LLC primarily relating to Pass-Through entities. The income tax relating to the net income (loss) of CWGS, LLC allocated to CWH that relates to separately taxed C-Corp entities is recorded within the consolidated results of CWGS, LLC. No income tax expense is recognized by the Company for the portion of net income (loss) of CWGS, LLC allocated to non-controlling interest other than income tax expense recorded by CWGS, LLC. Rather, tax distributions are paid to the non-controlling interest holders which are recorded as distributions to holders of LLC common units in the ~~corresponding period~~condensed consolidated statements of ~~the previous year. Same store sales calculations for a given period include only those stores that were open both~~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 ~~end of the corresponding period and at the beginning of the preceding fiscal year.~~

Same store sales growth is driven by increases in the number of transactions and the average transaction price. In addition to attracting new customers and cross‑selling our consumer services and plans, we also drive our sales through new product introductions, including our private label offerings. Although growth in same store sales drives our overall revenue, we have and will continue to experience volatility in same store sales from period to period, mainly due to changes in our product sales mix. Our product mix in any period is principally impacted by the number and mix of new or used RVs that we sell due to the high price points of these products compared to our other retail products and the range of price points among the types of RVs sold.

As of September 30, 2017 and 2016, we had, respectively, a base of 115 and 107 same stores, of which 17 of those same stores did not include dealerships. For the three months ended September 30, 2017 and 2016, our aggregate same store sales were $982.2 million and $897.9 million, respectively.prevailing corporate tax rates. For the nine months ended September 30, ~~2017~~2022 and ~~2016, our aggregate same store sales were $2.8 billion~~2021, the Company used effective income tax rate assumptions of 25.4% and ~~$2.6 billion, respectively. As of September 30, 2017 and 2016, we had, respectively, a total of 137 and 120 Camping World retail locations, and two and zero Overton’s locations.~~

~~Other Key Performance Indicators~~

~~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. Gross margin is gross profit as a percentage of revenue.

Our gross profit is variable in nature and generally follows changes in our revenue. While gross margins for our Retail segment are lower than our gross margins for our Consumer Services and Plans segment, our Retail segment generates significant gross profit and is a primary means of acquiring new customers, to which we then cross‑sell our higher margin products and services with recurring revenue. We believe the overall growth of our Retail segment will allow us to continue to drive growth in gross profits due to our ability to cross‑sell our consumer services and plans to our increasing Active Customer base. For the three months ended September 30, 2017 and 2016, gross profit was $26.1 million and $25.5 million, respectively, and gross margin was 56.5% and 56.1%25.5%, respectively, for ~~our Consumer Services and Plans segment, and gross profit was $330.6 million and $254.7 million, respectively, and gross margin was 27.7% and 26.9%, respectively, for our Retail segment. For~~income adjustments applicable to CWH when calculating the ~~nine months ended September 30, 2017 and 2016,~~

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gross profit was $82.7 million and $76.8 million, respectively, and gross margin was 57.2% and 56.5%, respectively, for our Consumer Services and Plans segment, and gross profit was $898.5 million and $725.2 million, respectively, and gross margin was 27.6% and 26.7%, respectively, for our Retail segment.

~~SG&A as a percentage of Gross Profit.~~ Selling, general and administrative (“SG&A”) expenses as a percentage of gross profit allows us to monitor our expense control over a period of time. SG&A consists primarily of wage‑related expenses, selling expenses related to commissions and advertising, lease expenses and corporate overhead expenses. We calculate SG&A expenses as a percentage of gross profit by dividing SG&A expenses for the period by total gross profit. For the three months ended September 30, 2017 and 2016, SG&A as a percentage of gross profit was 66.2% and 66.5%, respectively. For the nine months ended September 30, 2017 and 2016, SG&A as a percentage of gross profit was 65.2% and 67.0%, respectively. We expect SG&A expenses to increase as we open new retail locations through organic growth and acquisitions, which we also expect will drive increases in revenue and gross profit. Additionally, we expect that our SG&A expenses will increase in future periods in part due to additional legal, accounting, insurance and other expenses that we expect to incur as a result of being a public company, including compliance with the Sarbanes‑Oxley Act and the related rules and regulations.

~~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. 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;~~

~~to evaluate the performance and effectiveness of our operational strategies; and~~

~~to evaluate our capacity to fund capital expenditures and expand our business.~~

~~We define Adjusted EBITDA as~~adjusted net income before other interest expense (excluding floor plan interest expense), provision for income taxes, depreciation and amortization, loss (gain) and expense on debt restructure, loss (gain) on sale of assets and disposition of stores, monitoring fees, equity-based compensation, an adjustment to rent on right to use assets, loss (gain) on remeasurement of Tax Receivable Agreement, certain acquisition related transaction expenses and pre-opening costs, and other unusual or one‑time items. We calculate Adjusted EBITDA Margin by dividing Adjusted EBITDA by total revenue for the period. Adjusted EBITDA and Adjusted EBITDA Margin are not GAAP measures of our financial performance and should not be considered as alternatives to net income or net income margin, respectively, as measures of financial performance, or any other performance measure derived in accordance with GAAP. Adjusted EBITDA and Adjusted EBITDA Margin should not be construed as an inference that our future results will be unaffected by unusual or non‑recurring items. Additionally, Adjusted EBITDA and Adjusted EBITDA Margin are not intended to be a measure of discretionary cash to invest in the growth of our business, as it does not reflect tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur in the future, including, among other things, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. Management compensates for these limitations by relying on our GAAP results in addition to using Adjusted EBITDA and Adjusted EBITDA Margin supplementally. Our measure of Adjusted EBITDA is not necessarily comparable to similarly titled captions of other companies due to different methods of calculation. For 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 this non-GAAP financial measure, see “Non-GAAP Financial Measures” below.

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~~Non-GAAP Financial Measures~~

To supplement our consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”), we use the following non-GAAP financial measures: EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Pro Forma Net Income, and Adjusted Pro Forma Earnings Per Fully Exchanged and Diluted Share (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 measures are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry. The presentation of 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, and 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 measures. In evaluating these non-GAAP measures, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of those adjusted in this presentation. 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 (excluding floor plan interest expense), provision for income taxes and depreciation and amortization. We define “Adjusted EBITDA” as EBITDA further 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 (gain) and expense on debt restructure, loss (gain) on sale of assets and disposition of stores, monitoring fees, equity-based compensation, an adjustment to rent on right to use assets, loss (gain) on remeasurement of Tax Receivable Agreement, certain acquisition related transaction expenses and pre-opening costs, 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, which are net income, net income, and net income margin, respectively:

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
($ in thousands)

2017

2016

2017

2016
EBITDA:

Net income

$
85,258

$
68,416

$
240,021

$
189,602
Other interest expense, net

11,012

12,715

30,973

38,040
Depreciation and amortization

8,382

6,219

22,819

18,144
Income tax expense

8,336

2,288

28,247

4,638
Subtotal EBITDA

112,988

89,638

322,060

250,424
Loss (gain) on sale of assets (a)

(5)

21

(292)

(225)
Monitoring fee (b)

—

625

—

1,875
Equity-based compensation (c)

1,204

—

2,792

60
Loss on remeasurement of Tax Receivable Agreement (d)

96

—

79

—
Acquisitions - transaction expense (e)

453

—

2,553

—
Acquisitions - pre-opening costs (f)

7,318

—

8,669

—
Adjusted EBITDA

$
122,054

$
90,284

$
335,861

$
252,134

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Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
(as percentage of total revenue)

2017

2016

2017

2016
EBITDA margin:

Net income margin

6.9%

6.9%

7.0%

6.6%
Other interest expense, net

0.9%

1.3%

0.9%

1.3%
Depreciation and amortization

0.7%

0.6%

0.7%

0.6%
Income tax expense

0.7%

0.2%

0.8%

0.2%
Subtotal EBITDA margin

9.1%

9.0%

9.5%

8.8%
Loss (gain) on sale of assets (a)

(0.0%)

0.0%

(0.0%)

(0.0%)
Monitoring fee (b)

—

0.1%

—

0.1%
Equity-based compensation (c)

0.1%

—

0.1%

0.0%
Loss on remeasurement of Tax Receivable Agreement (d)

0.0%

—

0.0%

—
Acquisition transaction expense (e)

0.0%

—

0.1%

—
Acquisitions - pre-opening costs (f)

0.6%

—

0.3%

—
Adjusted EBITDA margin

9.9%

9.1%

9.9%

8.8%

~~(a)~~

~~Represents an adjustment to eliminate the losses and gains on sales of various assets.~~

~~(b)~~

Represents monitoring fees paid pursuant to a monitoring agreement to Crestview and Stephen Adams. The monitoring agreement was terminated on October 6, 2016 in connection with our initial public offering (our “IPO”).

~~(c)~~

~~Represents non-cash equity-based compensation expense relating to employees and directors of the Company.~~

~~(d)~~

~~Represents an adjustment to eliminate the loss on remeasurement of the Tax Receivable Agreement primarily due to changes in our effective income tax rate.~~

~~(e)~~

Represents transaction expenses, primarily legal costs, associated with acquisitions into new or complimentary markets, including the Gander Mountain Acquisition. This amount excludes transaction expenses relating to the acquisition of RV dealerships, consumer shows, TheHouse.com, and W82.

~~(f)~~

~~Represents pre-opening store costs, including payroll costs, associated with the Gander Mountain Acquisition.~~

~~Adjusted Pro Forma Net Income and Adjusted Pro Forma Earnings Per Fully Exchanged and Diluted Share~~

~~We define “Adjusted Pro Forma Net Income” as net income~~(loss) attributable to Camping World Holdings, Inc. ~~adjusted~~─ basic and diluted (see “Non-GAAP Financial Measures” in Part I, Item 2 of this Form 10-Q). CWGS, LLC may be liable for various other state and local taxes.

Table of Contents

The following table presents the ~~reallocation~~allocation of CWGS, LLC’s C-Corp and Pass-Through net income ~~attributable~~to CWH, the allocation of CWGS, LLC’s net income to non-controlling interests, from the assumed exchange of all outstanding common units in CWGS, LLC (or the common unit equivalent of membership interests in CWGS, LLC for periods prior to the IPO) for shares of newly-issued Class A common stock of Camping World Holdings, Inc. and further 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 (gain) on debt restructure, loss (gain) and expense on sale of assets and disposition of stores, gain on derivative instruments, monitoring fees, equity-based compensation, an adjustment to rent on right to use assets, loss (gain) on remeasurement of Tax Receivable Agreement, interest expense on our Series B notes, acquisition related transaction expenses and pre-opening costs, other unusual or one‑time items, and the income tax expense ~~effect of (i) these adjustments~~recognized by CWH, and (ii) the pass-through entity taxable income as if the parent company was a subchapter C corporation in periods prior to the IPO. We define “Adjusted Pro Forma Earnings Per Fully Exchanged and Diluted Share” as Adjusted Pro Forma Net Income divided by the weighted-average shares of Class A common stock outstanding, assuming (i) the full exchange of all outstanding common units in CWGS, LLC (or the common unit equivalent of membership interests in CWGS, LLC for periods prior to the IPO) for newly-issued shares of Class A common stock of Camping World Holdings, Inc., (ii) the Class A common stock issued in connection with the IPO was outstanding as of January 1 of each year presented, and (iii) the dilutive effect of stock options and restricted stock units, if any. We present Adjusted Pro Forma Net Income and Adjusted Pro Forma Earnings Per Fully Exchanged and Diluted Share 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.other items:

~~Table of Contents~~


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2022		2021		2022		2021
C-Corp portion of CWGS, LLC net loss allocated to CWH	$	(1,701)	$	(11,625)	$	(14,852)	$	(7,219)
Pass-Through portion of CWGS, LLC net income allocated to CWH		63,435		128,922		254,243		352,165
CWGS, LLC net income allocated to CWH		61,734		117,297		239,391		344,946
CWGS, LLC net income allocated to noncontrolling interests		61,822		109,605		238,065		331,596
CWGS, LLC net income		123,556		226,902		477,456		676,542
Tax Receivable Agreement liability adjustment		—		—		—		(3,520)
Income tax expense recorded by CWH		(20,811)		(37,608)		(69,582)		(90,296)
Other incremental CWH net income		203		14		358		83
Net income	$	102,948	$	189,308	$	408,232	$	582,809

The following table reconciles Adjusted Pro Forma Net Income and Adjusted Pro Forma Earnings Per Fully Exchanged and Diluted Share to the most directly comparable GAAP financial performance measure, which is net income attributable to Camping World Holdings, Inc. and weighted-average shares of Class A common stock outstanding — diluted:

Three Months Ended

Nine Months Ended

September 30,

September 30,

September 30,

September 30,
(In thousands except per share amounts)

2017

2016

2017

2016
Numerator:

Net income attributable to Camping World Holdings, Inc.

$
20,127

$
68,416

$
46,985

$
189,602
Adjustments:

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

65,131

—

193,036

—
Loss (gain) on sale of assets (b)

(5)

21

(292)

(225)
Monitoring fee (c)

—

625

—

1,875
Equity-based compensation (d)

1,204

—

2,792

60
Loss on remeasurement of Tax Receivable Agreement (e)

96

—

79

—
Acquisitions - transaction expense (f)

453

—

2,553

—
Acquisitions - pre-opening costs (g)

7,318

—

8,669

—
Income tax expense (h)

(25,676)

(24,300)

(75,888)

(70,078)
Adjusted pro forma net income

$
68,648

$
44,762

$
177,934

$
121,234
Denominator:

Weighted-average Class A common shares outstanding - diluted

88,452

—

85,947

—
Adjustments:

Assumed exchange of pre-IPO common unit equivalent of membership interests in CWGS, LLC (i)

—

71,900

—

72,157
Assumed issuance of Class A common stock in connection with IPO (j)

—

11,872

—

11,872
Dilutive options to purchase Class A common stock

219

—

140

—
Dilutive restricted stock units

128

—

82

—
Adjusted pro forma fully exchanged weighted average Class A common shares outstanding - diluted

88,799

83,772

86,169

84,029
Adjusted pro forma earnings per fully exchanged and diluted share

$
0.77

$
0.53

$
2.06

$
1.44

~~(a)~~

Represents the reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of CWGS, LLC in periods where income was attributable to non-controlling interests.

~~(b)~~

~~Represents an adjustment to eliminate the losses and gains~~presents further information on ~~sales of various assets.~~

~~(c)~~

~~Represents monitoring fees paid pursuant to a monitoring agreement to Crestview and Stephen Adams. The monitoring agreement was terminated on October 6, 2016 in connection with our IPO.~~

~~(d)~~

~~Represents non-cash equity-based compensation expense relating to employees and directors of the Company.~~

~~(e)~~

~~Represents an adjustment to eliminate the loss on remeasurement of the Tax Receivable Agreement primarily due to changes in our effective income tax rate.~~

~~(f)~~

~~(g)~~

~~Represents pre-opening store costs, including payroll costs, associated with the Gander Mountain Acquisition.~~

~~(h)~~

Represents the income tax expense effect of (i) the above adjustments and (ii) the pass-through entity taxable income as if the parent company was a subchapter C corporation in periods prior to the IPO. This assumption uses an effective tax rate of 38.5% for the adjustments and the pass-through entity taxable income in periods prior to the IPO.

~~(i)~~

~~Represents the assumed exchange of pre-IPO membership interests in CWGS, LLC at their common unit equivalent amount.~~

~~(j)~~

~~Represents the assumption that the shares of Class A common stock issued in connection with the IPO were outstanding as of January 1 of each period.~~

~~Uses and Limitations of Non-GAAP Financial Measures~~

~~Management and our board of directors use the Non-GAAP Financial Measures:~~

as a measurement of operating performance because they assist us in comparing the operating performance of our business on a consistent basis, as they remove the impact of items not directly resulting from our core operations;

~~Table of Contents~~

~~for planning purposes, including the preparation of our internal annual operating budget and financial projections;~~

~~to evaluate the performance and effectiveness of our operational strategies; and~~

~~to evaluate our capacity to fund capital expenditures and expand our business.~~

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 Existing Senior Secured Credit Facilities use EBITDA to measure our compliance with covenants such as consolidated leverage ratio. The Non-GAAP Financial Measures have limitations as analytical tools, and should not be considered in isolation, or as an alternative to or a substitute for, net income or other financial statement data presented in our unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q as indicators of financial performance. Some of the limitations are:

~~such measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;~~

~~such measures do not reflect changes in, or cash requirements for, our working capital needs;~~

~~some of such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;~~

~~some of such measures do not reflect our tax expense or the cash requirements to pay our taxes;~~

although depreciation and amortization are non‑cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and

~~other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures.~~

Due to these limitations, the Non-GAAP Financial Measures should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these Non‑GAAP Financial Measures only supplementally. As noted in the tables above, certain of the Non-GAAP Financial Measures include adjustments for loss (gain) on debt restructure, loss (gain) on sale of assets and disposition of stores, gain on derivative instruments, monitoring fees, equity-based compensation, an adjustment to rent on right to use assets, loss (gain) on remeasurement of Tax Receivable Agreement, acquisition related transaction expenses and pre-opening costs, other unusual or one‑time items, and the income tax expense effect described above, as applicable. It is reasonable to expect that certain of these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results and operating results of other companies over time. In addition, these certain Non-GAAP Financial Measures adjust for other items that we do not expect to regularly record in periods after the IPO, including monitoring fees. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation tables above help management with a measure of our core operating performance over time by removing items that are not related to day‑to‑day operations.(expense) benefit:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2022		2021		2022		2021
Income tax expense recorded by CWH	$	(20,811)	$	(37,608)	$	(69,582)	$	(90,296)
Income tax (expense) benefit recorded by CWGS, LLC		(1,586)		(1,261)		(6,226)		7,037
Income tax expense	$	(22,397)	$	(38,869)	$	(75,808)	$	(83,259)

Table of Contents

Results of Operations

Three ~~and Nine~~ Months Ended September 30, ~~2017~~2022 Compared to Three ~~and Nine~~ Months Ended September 30, ~~2016~~2021

The following table sets forth information comparing the components of net income for the three ~~and nine~~ months ended September 30, ~~2017~~2022 and ~~2016:~~2021:


	Three Months Ended									Nine Months Ended
	September 30, 2017			September 30, 2016						September 30, 2017			September 30, 2016
			Percent of			Percent of	Favorable/ (Unfavorable)					Percent of			Percent of	Favorable/ (Unfavorable)

																			Three Months Ended
																			September 30, 2022			September 30, 2021
																					Percent of			Percent of	Favorable/ (Unfavorable)
($ in thousands)	Amount		Revenue	Amount		Revenue	$		%	Amount		Revenue	Amount		Revenue	$		%	Amount		Revenue	Amount		Revenue	$		%

Revenue:
Consumer Services and Plans	$	46,169	3.7%	$	45,442	4.6%	$	727	1.6%	$	144,518	4.2%	$	135,868	4.8%	$	8,650	6.4%
Retail
Good Sam Services and Plans																			$	50,352	2.7%	$	46,581	2.4%	$	3,771	8.1%
RV and Outdoor Retail:
New vehicles		715,182	57.7%		545,154	55.0%		170,028	31.2%		1,982,644	58.2%		1,532,919	53.7%		449,725	29.3%		834,112	44.9%		864,303	45.1%		(30,191)	(3.5%)
Used vehicles		188,331	15.2%		181,675	18.3%		6,656	3.7%		531,324	15.6%		576,964	20.2%		(45,640)	-7.9%		525,988	28.3%		519,550	27.1%		6,438	1.2%
Parts, services and other		187,750	15.2%		151,090	15.2%		36,660	24.3%		478,169	14.0%		422,316	14.8%		55,853	13.2%
Products, service and other																				268,940	14.5%		305,882	16.0%		(36,942)	(12.1%)
Finance and insurance, net		101,570	8.2%		67,710	6.8%		33,860	50.0%		268,829	7.9%		188,607	6.6%		80,222	42.5%		165,136	8.9%		167,779	8.8%		(2,643)	(1.6%)
Good Sam Club																				11,154	0.6%		12,479	0.7%		(1,325)	(10.6%)
Subtotal		1,192,833	96.3%		945,629	95.4%		247,204	26.1%		3,260,966	95.8%		2,720,806	95.2%		540,160	19.9%		1,805,330	97.3%		1,869,993	97.6%		(64,663)	(3.5%)
Total revenue		1,239,002	100.0%		991,071	100.0%		247,931	25.0%		3,405,484	100.0%		2,856,674	100.0%		548,810	19.2%		1,855,682	100.0%		1,916,574	100.0%		(60,892)	(3.2%)


Gross profit (exclusive of depreciation and amortization shown separately below):
Consumer Services and Plans		26,084	2.1%		25,489	2.6%		595	2.3%		82,726	2.4%		76,797	2.7%		5,929	7.7%
Retail
Good Sam Services and Plans																				31,481	1.7%		24,944	1.3%		6,537	26.2%
RV and Outdoor Retail:
New vehicles		100,558	8.1%		74,014	7.5%		26,544	35.9%		279,022	8.2%		215,772	7.6%		63,250	29.3%		158,993	8.6%		251,885	13.1%		(92,892)	(36.9%)
Used vehicles		49,535	4.0%		43,038	4.3%		6,497	15.1%		137,888	4.0%		122,305	4.3%		15,583	12.7%		127,106	6.8%		142,698	7.4%		(15,592)	(10.9%)
Parts, services and other		78,920	6.4%		69,985	7.1%		8,935	12.8%		212,793	6.2%		198,535	6.9%		14,258	7.2%
Products, service and other																				101,642	5.5%		93,438	4.9%		8,204	8.8%
Finance and insurance, net		101,570	8.2%		67,710	6.8%		33,860	50.0%		268,829	7.9%		188,607	6.6%		80,222	42.5%		165,136	8.9%		167,779	8.8%		(2,643)	(1.6%)
Good Sam Club																				9,330	0.5%		10,632	0.6%		(1,302)	(12.2%)
Subtotal		330,583	26.7%		254,747	25.7%		75,836	29.8%		898,532	26.4%		725,219	25.4%		173,313	23.9%		562,207	30.3%		666,432	34.8%		(104,225)	(15.6%)
Total gross profit		356,667	28.8%		280,236	28.3%		76,431	27.3%		981,258	28.8%		802,016	28.1%		179,242	22.3%		593,688	32.0%		691,376	36.1%		(97,688)	(14.1%)


Operating expenses:
Selling, general and administrative expenses		236,174	19.1%		186,255	18.8%		(49,919)	-26.8%		640,108	18.8%		536,966	18.8%		(103,142)	-19.2%		419,102	22.6%		424,385	22.1%		5,283	1.2%
Debt restructure expense																				—	—		24	0.0%		24	n/m
Depreciation and amortization		8,382	0.7%		6,219	0.6%		(2,163)	-34.8%		22,819	0.7%		18,144	0.6%		(4,675)	-25.8%		18,207	1.0%		23,552	1.2%		5,345	22.7%
Gain on asset sales		(5)	0.0%		21	0.0%		26	-123.8%		(292)	0.0%		(227)	0.0%		65	28.6%
Long-lived asset impairment																				887	0.0%		316	0.0%		(571)	(180.7%)
Lease termination																				—	—		329	0.0%		329	n/m
(Gain) loss on sale or disposal of assets																				(40)	(0.0%)		96	0.0%		136	n/m
Total operating expenses																				438,156	23.6%		448,702	23.4%		10,546	2.4%
Income from operations		112,116	9.0%		87,741	8.9%		24,375	27.8%		318,623	9.4%		247,133	8.7%		71,490	28.9%		155,532	8.4%		242,674	12.7%		(87,142)	(35.9%)
Other income (expense):
Other expense:
Floor plan interest expense		(7,414)	-0.6%		(4,322)	-0.4%		(3,092)	-71.5%		(19,303)	-0.6%		(14,851)	-0.5%		(4,452)	-30.0%		(9,484)	(0.5%)		(3,125)	(0.2%)		(6,359)	(203.5%)
Other interest expense, net		(11,012)	-0.9%		(12,715)	-1.3%		1,703	13.4%		(30,973)	-0.9%		(38,040)	-1.3%		7,067	18.6%		(20,526)	(1.1%)		(11,250)	(0.6%)		(9,276)	(82.5%)
Other expense, net		(96)	0.0%		—	0.0%		(96)	-100.0%		(79)	0.0%		(2)	0.0%		(77)	3850.0%		(177)	(0.0%)		(122)	(0.0%)		(55)	(45.1%)
		(18,522)	-1.5%		(17,037)	-1.7%		(1,485)	-8.7%		(50,355)	-1.5%		(52,893)	-1.9%		2,538	4.8%
Total other expense																				(30,187)	(1.6%)		(14,497)	(0.8%)		(15,690)	(108.2%)
Income before income taxes		93,594	7.6%		70,704	7.1%		22,890	32.4%		268,268	7.9%		194,240	6.8%		74,028	38.1%		125,345	6.8%		228,177	11.9%		(102,832)	(45.1%)
Income tax expense		(8,336)	-0.7%		(2,288)	-0.2%		(6,048)	-264.3%		(28,247)	-0.8%		(4,638)	-0.2%		(23,609)	-509.0%		(22,397)	(1.2%)		(38,869)	(2.0%)		16,472	42.4%
Net income		85,258	6.9%		68,416	6.9%		16,842	24.6%		240,021	7.0%		189,602	6.6%		50,419	26.6%		102,948	5.5%		189,308	9.9%		(86,360)	(45.6%)
Less: net income attributable to non-controlling interests		(65,131)	-5.3%		—	0.0%		(65,131)	-100.0%		(193,036)	-5.7%		—	0.0%		(193,036)	-100.0%		(61,822)	(3.3%)		(109,605)	(5.7%)		47,783	43.6%
Net income attributable to Camping World Holdings, Inc.	$	20,127	1.6%	$	68,416	6.9%	$	(48,289)	-70.6%	$	46,985	1.4%	$	189,602	6.6%	$	(142,617)	-75.2%	$	41,126	2.2%	$	79,703	4.2%	$	(38,577)	(48.4%)

n/m – not meaningful

Table of Contents

Supplemental Data


	Three Months Ended September 30,				Increase			Percent
	2022		2021		(decrease)			Change
Unit sales
New vehicles		17,616		18,748		(1,132)			(6.0%)
Used vehicles		14,460		13,631		829			6.1%
Total		32,076		32,379		(303)			(0.9%)

Average selling price
New vehicles	$	47,350	$	46,101	$	1,249			2.7%
Used vehicles	$	36,375	$	38,115	$	(1,740)			(4.6%)

Same store unit sales⁽¹⁾
New vehicles		16,045		17,293		(1,248)			(7.2%)
Used vehicles		13,114		12,852		262			2.0%
Total		29,159		30,145		(986)			(3.3%)

Same store revenue⁽¹⁾ ($ in 000's)
New vehicles	$	764,144	$	801,412	$	(37,268)			(4.7%)
Used vehicles		482,329		493,914		(11,585)			(2.3%)
Products, service and other		186,260		211,591		(25,331)			(12.0%)
Finance and insurance, net		151,039		156,870		(5,831)			(3.7%)
Total	$	1,583,772	$	1,663,787	$	(80,015)			(4.8%)

Average gross profit per unit
New vehicles	$	9,025	$	13,435	$	(4,410)			(32.8%)
Used vehicles	$	8,790		10,469	$	(1,679)			(16.0%)
Finance and insurance, net per vehicle unit	$	5,148		5,182	$	(34)			(0.7%)
Total vehicle front-end yield⁽²⁾	$	14,068		17,368	$	(3,300)			(19.0%)

Gross margin
Good Sam Services and Plans		62.5%		53.5%		897	bps
New vehicles		19.1%		29.1%		(1,008)	bps
Used vehicles		24.2%		27.5%		(330)	bps
Products, service and other		37.8%		30.5%		725	bps
Finance and insurance, net		100.0%		100.0%		unch.	bps
Good Sam Club		83.6%		85.2%		(155)	bps
Subtotal RV and Outdoor Retail		31.1%		35.6%		(450)	bps
Total gross margin		32.0%		36.1%		(408)	bps

Inventories ($ in 000's)
New vehicles	$	1,180,364	$	723,593	$	456,771			63.1%
Used vehicles		425,824		391,466		34,358			8.8%
Products, parts, accessories and misc.		293,588		246,900		46,688			18.9%
Total RV and Outdoor Retail inventories	$	1,899,776	$	1,361,959	$	537,817			39.5%

Vehicle inventory per location ($ in 000's)
New vehicle inventory per dealer location	$	6,415	$	4,111	$	2,304			56.0%
Used vehicle inventory per dealer location	$	2,314		2,224	$	90			4.0%

Vehicle inventory turnover⁽³⁾
New vehicle inventory turnover		2.0		3.6		(1.5)			(42.9%)
Used vehicle inventory turnover		3.5		4.4		(0.8)			(18.8%)
			��
Retail locations
RV dealerships		184		176		8			4.5%
RV service & retail centers		8		10		(2)			(20.0%)
Subtotal		192		186		6			3.2%
Other retail stores		1		1		—			0.0%
Total		193		187		6			3.2%

Other data
Active Customers⁽⁴⁾		5,366,558		5,458,531		(91,973)			(1.7%)
Good Sam Club members		2,038,826		2,185,100		(146,274)			(6.7%)
Service bays ⁽⁵⁾		2,639		2,599		40			1.5%
Finance and insurance gross profit as a % of total vehicle revenue		12.1%		12.1%		2	bps		n/a
Same store locations		168		n/a		n/a			n/a

Table of Contents

(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.

(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 collision offerings.

Revenue and Gross Profit

Good Sam Services and Plans

~~Three Months Ended September 30, 2017 compared~~Good Sam Services and Plans revenue increased primarily due to ~~Three Months Ended September 30, 2016~~

~~Total~~a $2.9 million increase from the roadside assistance programs primarily resulting from increased contracts in force and favorable updates to assumptions for cancellations, a $0.7 million increase from the extended vehicle warranty programs revenue ~~was $1.2 billion~~primarily resulting from increased contracts in force, and a $0.6 million increase from the Good Sam Insurance Agency primarily resulting from increased contracts in force, partially offset by a decrease of $0.3 million from our RV financing programs and a $0.1 million decrease from other programs.

Good Sam Services and Plans gross profit increased primarily due to a $6.6 million increase from the roadside assistance programs resulting from increased contracts in force, favorable updates to assumptions for cancellations and reduced marketing costs; a $0.6 million increase from the extended vehicle warranty programs; and a $0.5 million increase from Good Sam Insurance Agency; partially offset by a $0.5 million reduction from other services and plans; a $0.4 million reduction from our RV financing products; and a $0.3 million increase in overhead support expenses. Gross margin increased in the three months ended September 30, ~~2017, an increase of $247.9 million, or 25.0%, as~~2022 compared to ~~$991.1 million for~~ the three months ended September 30, 2016. The increase was primarily driven by the 33.3% increase in new vehicle unit sales in our Retail segment, and corresponding revenue increases from variable products such as parts, services and other, and finance and insurance.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Total revenue was $3.4 billion for the nine months ended September 30, 2017, an increase of $548.8 million, or 19.2%, as compared to $2.9 billion for the nine months ended September 30, 2016. The increase was primarily driven by the 34.6% increase in new vehicle unit sales in our Retail segment, and a corresponding revenue increase from our variable finance and insurance products.

~~Consumer Services and Plans~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Consumer Services and Plans revenue was $46.2 million for the three months ended September 30, 2017, an increase of $0.7 million, or 1.6%, as compared to $45.4 million for the three months ended September 30, 2016. The increased revenue was attributable to a $1.1 million increase from our extended vehicle warranty and the Good Sam TravelAssist programs2021, primarily due to ~~increased policies in force, partially offset by $0.4 million of other decreases.~~

~~Consumer Services and Plans gross profit was $26.1 million for~~ the three months ended September 30, 2017, an increase of $0.6 million, or 2.3%, as compared to $25.5 million for the three months ended September 30, 2016. This increase was primarily due to increased policies in forceincreases from our Good Sam TravelAssist and roadside assistance programs and reduced roadside assistance program costs. Gross margin increased 41 basis points to 56.5% primarily resulting from increased policies in force for the Good Sam TravelAssist programs, and reduced program costs for the roadside assistance programs.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

~~Consumer Services~~RV and Plans revenue was $144.5 million for the nine months ended September 30, 2017, an increase of $8.7 million, or 6.4%, as compared to $135.9 million for the nine months ended September 30, 2016. The increased revenue was attributable to a$2.7 million increase from our vehicle insurance and Good Sam TravelAssist programs primarily due to increased policies in force; a $2.1 million increase from our clubs and roadside assistance programs primarily due to increased file size; a $1.7 million increase from consumer show exhibit and admissions revenue resulting from the acquisition of five consumer shows in the fourth quarter of 2016 and our new Good Sam RV Super Show introduced in February 2017; and $2.2 million of other increases.Outdoor Retail

Consumer Services and Plans gross profit was $82.7 million for the nine months ended September 30, 2017, an increase of $5.9 million, or 7.7%, as compared to $76.8 million for the nine months ended September 30, 2016. This increase was primarily due to increased policies in force from our vehicle insurance and Good Sam TravelAssist programs of $3.0 million; increased roadside assistance contracts in force and reduced claims, together resulting in a gross profit increase of $2.0 million; an increase from our consumer shows of $0.8 million resulting from the five acquired shows and the new Good Sam RV Super Show introduced in February 2017; and a $0.1 million increase from other ancillary products. Gross margin increased 72 basis points to 57.2% primarily due to increased contracts in force with reduced program costs for the roadside assistance programs, and increased policies in force from the Good Sam TravelAssist programs.

~~Table of Contents~~

~~Retail:~~

New Vehicles

Three Months Ended

Nine Months Ended

September 30, 2017

September 30, 2016

Favorable/

September 30, 2017

September 30, 2016

Favorable/
($ in thousands,

Percent of

Percent of

(Unfavorable)

Percent of

Percent of

(Unfavorable)
except per vehicle data)

Amount

Revenue

Amount

Revenue

$

%

Amount

Revenue

Amount

Revenue

$

%

Revenue

$
715,182

100.0%

$
545,154

100.0%

$
170,028

31.2%

$
1,982,644

100.0%

$
1,532,919

100.0%

$
449,725

29.3%

Gross profit

100,558

14.1%

74,014

13.6%

26,544

35.9%

279,022

14.1%

215,772

14.1%

63,250

29.3%

New vehicle unit sales

19,107

14,333

4,774

33.3%

54,800

40,718

14,082

34.6%

~~Three Months Ended September 30, 2017 compared~~New vehicles revenue decreased primarily due to ~~Three Months Ended September 30, 2016~~a 6.0% decrease in vehicles sold partially offset by a 2.7% increase in the average selling price per vehicle sold. On a same store basis, new vehicles revenue decreased 4.7% to $764.1 million, and vehicles sold decreased 7.2%.

New ~~vehicle revenue was $715.2 million for~~vehicles gross profit decreased primarily due to a 17.3% increase in the ~~three months ended September 30, 2017, an increase~~average cost of ~~$170.0 million, or 31.2%, as compared to $545.2 million for the three months ended September 30, 2016.~~new vehicles sold and a 6.0% decrease in new vehicles sold. The ~~increase~~decrease in new vehicles gross margin was primarily due to ~~a 33.3% increase in new vehicle~~compression from higher cost per unit sales primarily attributable to a same store sales increase of 14.5% driven by increases in travel trailers, Class C and fifth wheel units. The balance of the increase was from acquired locations and the greenfield location opened in June 2017. These increases weresold, partially offset by ~~a 1.6% decrease~~the 2.7% increase in the average ~~sales~~selling price ~~per unit resulting from a product mix shift toward lower priced towable units.~~

~~New vehicle gross profit was $100.6 million for the three months ended September 30, 2017, an increase~~ of ~~$26.5 million, or 35.9%, as compared to $74.0 million for the three months ended September 30, 2016. The increase was primarily due to the 33.3% increase in~~ new ~~vehicle unit sales and a 1.9% increase in average gross profit per unit. Gross margin increased to 14.1% from 13.6% in the three months ended September 30, 2016.~~vehicles.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

New vehicle revenue was $1,982.6 million for the nine months ended September 30, 2017, an increase of $449.7 million, or 29.3%, as compared to $1,532.9 million for the nine months ended September 30, 2016. The increase was primarily due to a 34.6% increase in new vehicle unit sales primarily attributable to a same store sales increase of 17.0% driven by increases in travel trailers, Class C and fifth wheel units. The balance of the increase was from acquired locations and the greenfield location opened in June 2017. These increases were partially offset by a 3.9% decrease in the average sales price per unit resulting from a product mix shift toward lower priced towable units.

New vehicle gross profit was $279.0 million for the nine months ended September 30, 2017, an increase of $63.3 million, or 29.3%, as compared to $215.8 million for the nine months ended September 30, 2016. The increase was primarily due to the 34.6% increase in new vehicle unit sales partially offset by a 3.9% decrease in average gross profit per unit resulting from a product mix shift toward lower priced towable units. Gross margin remained unchanged versus prior year at 14.1% for the nine months ended September 30, 2016.

Used Vehicles

Three Months Ended

Nine Months Ended

September 30, 2017

September 30, 2016

Favorable/

September 30, 2017

September 30, 2016

Favorable/
($ in thousands,

Percent of

Percent of

(Unfavorable)

Percent of

Percent of

(Unfavorable)
except per vehicle data)

Amount

Revenue

Amount

Revenue

$

%

Amount

Revenue

Amount

Revenue

$

%

Revenue

$
188,331

100.0%

$
181,675

100.0%

$
6,656

3.7%

$
531,324

100.0%

$
576,964

100.0%

$
(45,640)

-7.9%

Gross profit

49,535

26.3%

43,038

23.7%

6,497

15.1%

137,888

26.0%

122,305

21.2%

15,583

12.7%

Used vehicle unit sales

8,557

7,986

571

7.2%

24,146

25,918

(1,772)

-6.8%

~~Table of Contents~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Used ~~vehicle~~vehicles revenue ~~was $188.3 million for the three months ended September 30, 2017, an increase of $6.7 million, or 3.7%, as compared to $181.7 million for the three months ended September 30, 2016. The increase was~~increased primarily due to a ~~7.2%~~6.1% increase in ~~the volume of~~vehicles sold, driven by an increase in demand for used ~~units sold, mostly travel trailers at our~~vehicles, as they are a lower-cost alternative to new ~~stores,~~vehicles, partially offset by a 4.6% decrease in average selling price per vehicle sold. On a same store ~~sales decrease of 7.9%~~basis, used vehicles revenue decreased 2.3% to $482.3 million and vehicles sold increased 2.0%.

Used ~~vehicle~~vehicles gross profit was $49.5 million for the three months ended September 30, 2017, an increase of $6.5 million, or 15.1%, as compared to $43.0 million for the three months ended September 30, 2016. This increase primarily resulted from the 7.2% increase in unit volume consisting of increases for nearly all product types, and ~~a shift towards higher-margined towable units, resulting in a 7.4% increase in~~ gross ~~profit per unit. Gross~~ margin ~~increased to 26.3% from 23.7% in the three months ended September 30, 2016.~~

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Used vehicle revenue was $531.3 million for the nine months ended September 30, 2017, a decrease of $45.6 million, or 7.9%, as compared to $577.0 million for the nine months ended September 30, 2016. The decrease wasdecreased primarily due to ~~reduced inventory availability, resulting from fewer trades on new vehicle unit sales, and the elimination of the automobile unit business as~~ a ~~result of the distribution of the AutoMatch business during the nine months ended September 30, 2016, driving a 6.8%~~4.6% decrease in ~~used~~the average selling price per vehicle ~~unit sales. Same store sales decreased by 9.6% with the remaining decrease driven by the disposition of the AutoMatch business.~~sold.

Used vehicle gross profit was $137.9 million for the nine months ended September 30, 2017, an increase of $15.6 million, or 12.7%, as compared to $122.3 million for the nine months ended September 30, 2016. The increase was primarily attributable to increases for nearly all product typesProducts, service and elimination of lower margin auto sales upon the disposition of the AutoMatch business during the second quarter of 2016, resulting in a 21.0% increase in gross profit per unit and a gross margin increase of 475 basis points, partially offset by a 6.8% decrease in vehicle unit sales.other

~~Parts, Services and Other~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

~~Parts, services~~Products, service and other revenue was $187.8 million for the three months ended September 30, 2017, an increase of $36.7 million, or 24.3%, as compared to $151.1 million for the three months ended September 30, 2016. The increase was primarily attributable to increased revenue from the new stores, the Overton’s and Active Sports acquisitions, and an increase from the wholesale channel. Same store sales increased 1.4% for the three months ended September 30, 2017 versus the comparable period in 2016.

Parts, services and other gross profit was $78.9 million for the three months ended September 30, 2017, an increase of $8.9 million, or 12.8%, as compared to $70.0 million for the three months ended September 30, 2016. The gross profit increase wasdecreased primarily due to ~~increased revenue. Gross margin decreased 429 basis points to 42.0% primarily due to merchandise markdowns~~our exit from certain non-RV product categories that were sold in the ~~e-commerce business, and increased distribution and supply costs.~~2021 period, but not in the 2022 period. On a same store basis, products,

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~42

~~Parts, services~~Table of Contents

service and other revenue ~~was $478.2 million for the nine months ended September 30, 2017, an increase of $55.9 million, or 13.2%, as compared to $422.3 million for the nine months ended~~

~~Table of Contents~~

~~September 30, 2016. The increase was primarily attributable to the new stores added; the Overton’s acquisition; and the wholesale channel; partially offset by a 0.7% decrease in same store sales.~~

Parts, services and other gross profit was $212.8 million for the nine months ended September 30, 2017, an increase of $14.3 million, or 7.2%, as compared to $198.5 million for the nine months ended September 30, 2016. The gross profit increase was primarily due to increased revenue and the Overton’s acquisition. Gross margin decreased ~~251 basis points to 44.5% primarily due to merchandise markdowns in the e-commerce business, and increased distribution and supply costs.~~

~~Finance and Insurance, net~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Finance and insurance, net revenue and gross profit were each $101.6 million for the three months ended September 30, 2017, an increase of $33.9 million, or 50.0%, as compared to $67.7 million for the three months ended September 30, 2016. The increase was primarily due to incremental vehicle finance contracts assigned due to higher vehicle unit sales and higher finance and insurance sales penetration rates resulting from a 30.5% increase in same store sales and the remainder from acquired locations and the greenfield location opened in June 2017. Finance and insurance, net revenue as a percentage of total new and used vehicle revenue increased to 11.2% for the three months ended September 30, 2017 from 9.3% for the comparable period in 2016.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Finance and insurance, net revenue and gross profit were each $268.8 million for the nine months ended September 30, 2017, an increase of $80.2 million, or 42.5%, as compared to $188.6 million for the nine months ended September 30, 2016. The increase was primarily due to incremental vehicle finance contracts assigned due to higher vehicle unit sales, higher finance and insurance sales penetration rates, a 29.7% increase in same store sales, and the remainder from acquired locations and the greenfield location opened in June 2017. Finance and insurance, net revenue as a percentage of total new and used vehicle revenue increased to 10.7% for the nine months ended September 30, 2017 from 8.9% for the comparable period in 2016.

~~Selling, general and administrative expenses~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

~~Selling, general and administrative expenses were $236.2 million for the three months ended September 30, 2017, an increase~~ ~~of $49.9 million, or 26.8%, as compared~~12.0% to $186.3 million for the three months ended September 30, ~~2016.~~2022 from $211.6 million in the three months ended September 30, 2021.

Products, service and other gross profit increased primarily due to increased labor billing rates and the absence of lower margined revenue 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 ~~increases~~the shift in mix to higher margin products and services, such as our RV service revenues, after our exit of ~~$25.1 million~~certain lower margin, non-RV product categories during the second half of ~~wage-related expenses,~~2021, partially offset by increased compression from higher costs.

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 decreased primarily ~~attributable~~due to ~~increased vehicle unit sales;~~ the ~~acquired locations~~0.9% decrease in total vehicles sold. Finance and ~~the greenfield location opened in June 2017~~; $7.3 million of pre-opening and payroll costs associated with the Gander Mountain acquisition; $6.7 million of store and corporate overhead expenses; $6.5 million of additional variable selling expense; $2.2 million of additional lease expense; $1.6 million of additional professional and service fees; and $0.5 million of transaction expenses associated with the acquisitions into new or complementary markets, including the Gander Mountain Acquisition. Selling, general and administrative expensesinsurance, net as a percentage of ~~total gross~~ ~~profit~~new and used vehicle revenue was ~~66.2%~~12.1% for the three months ended September 30, ~~2017, compared to 66.5%~~2022 and for the three months ended September 30, ~~2016,~~2021. On a ~~decrease of 25~~same store basis, ~~points.~~

~~Table of Contents~~

~~Nine Months Ended~~finance and insurance, net decreased 3.7%, or $5.8 million, to $151.0 million versus the three months ended September 30, ~~2017 compared~~2021.

Good Sam Club

Good Sam Club revenue decreased primarily from reduced revenue related to ~~Nine Months Ended September 30, 2016~~decreased Club file size and reduced marketing fee revenue from the Good Sam Club co-branded credit cards due to lower transaction count at retail locations driven mainly by the exit from certain non-RV product categories.

Good Sam Club gross profit and gross margin decreased primarily due to the revenue reduction items noted above.

Operating Expenses and Other

Selling, general and administrative expenses

Selling, general and administrative expenses ~~were $640.1 million for the nine months ended September 30, 2017, an increase of $103.1 million, or 19.2%, as compared to $537.0 million for the nine months ended September 30, 2016. The increase was~~decreased primarily due to ~~increases of $54.4~~a $25.7 million ~~of wage-related~~decrease in labor expenses ~~primarily~~ attributable, in large part, to ~~increased vehicle sales,~~a reduction in variable compensation based on the ~~acquired locations~~decrease in gross profit, and ~~the greenfield location opened~~a $1.4 million reduction in ~~June 2017; $15.5~~real property expense, partially offset by a $10.9 increase in selling and advertising expenses, a $4.0 million ~~of additional variable selling expense; $8.7~~increase in dealer open lot insurance and other insurance costs, a $2.8 million ~~of pre-opening~~increase in occupancy costs and ~~payroll costs associated with the Gander Mountain acquisition; $14.2~~a $4.0 million ofincrease in other store and corporate overhead expenses; $5.4 million of additional lease expense; $2.6 million of transaction expenses associated with the acquisitions into new or complementary markets, including the Gander Mountain Acquisition; and $2.3 million of additional professional and service fees. Selling, general and administrative expenses as a percentage of total gross profit was 65.2% for the nine months ended September 30, 2017, compared to 67.0% for the nine months ended September 30, 2016, a decrease of 172 basis points.expenses.

Depreciation and amortization

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Depreciation and amortization decreased due primarily to $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, partially offset by increased depreciation from the higher average property and equipment balance that has been driven primarily by our expansion of RV dealership locations.

Long-Lived Asset Impairment

Long-lived asset impairment was ~~$8.4~~$0.9 million for the three months ended September 30, ~~2017, an increase of $2.2 million, or 34.8%, as compared to $6.2~~2022 and $0.3 million for the three months ended September 30, ~~2016 primarily due~~2021. See Note 4 – Restructuring and Long-Lived Asset Impairment to ~~acquired locations, the greenfield location opened~~our condensed consolidated financial statements included in ~~June 2017, and acquired businesses.~~Part I, Item 1 of this Form 10-Q.

Table of Contents

Lease termination

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

~~Depreciation and amortization was $22.8~~Lease termination expense of $0.3 million for the nine months ended September 30, 2017, an increase of $4.7 million, or 25.8%, as compared to $18.1 million for the nine months ended September 30, 2016 primarily due to the addition of acquired locations, and the greenfield location opened in ~~June 2017.~~

~~Floor plan interest expense~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

~~Floor plan interest expense was $7.4 million for~~ the three months ended September 30, ~~2017, an increase of $3.1~~2021, was related primarily to the 2019 Strategic Shift discussed above.

Floor plan interest expense

Floor plan interest expense increased 203.5%, or $6.4 million, ~~or 71.5%, as compared~~ to ~~$4.3~~$9.5 million ~~for~~in the three months ended September 30, ~~2016.~~2022 from $3.1 million in the three months ended September 30, 2021. The increase was primarily due to ~~increased~~a 64.2% increase in average ~~outstanding amount payable under our Floor Plan Facility for~~floor plan borrowings driven by higher new vehicle inventory quantities from the ~~three months ended September 30, 2017 compared to~~normalization of the ~~three months ended September 30, 2016, primarily resulting from an increased inventory level due to~~ new ~~dealership locations~~travel trailer supply chain, increases in average new unit costs, and ~~locations expecting higher unit sales, and a 68~~186 basis point increase in the average floor plan borrowing rate.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

~~Floor~~ We expect higher floor plan interest expense ~~was $19.3 million~~to continue through the end of 2022 as the floor plan borrowings are expected to be higher in 2022 compared to 2021. Since we do not expect the same new vehicle supply chain constraints that existed in 2021 to be experienced for the ~~nine months ended September 30, 2017, an~~remainder of 2022, we expect to have higher average new vehicle inventory levels in 2022. We also expect that interest rates will continue to increase during the remainder of ~~$4.5 million, or 30.0%, as compared to $14.9 million for the nine months ended September 30, 2016. The increase was~~2022.

Other interest expense, net

Other interest expense increased primarily due to increased average outstanding amount payable under our Floor Plan Facility for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016, primarily resulting from an increased inventory level due to new dealership locations and locations expecting higher unit sales, and a 35141 basis point increase in the Term Loan Facility average ~~floor plan borrowing rate.~~

~~Other~~ interest ~~expense, net~~

~~Three Months Ended~~rate, and to a lesser extent, increased average debt outstanding. The interest rate at September 30, ~~2017 compared~~2022 was 5.34%, which is above the interest rate floor. We expect that interest rates will continue to ~~Three Months Ended September 30, 2016~~increase during the remainder of 2022.

~~Other interest~~Income tax expense ~~net was $11.0 million for the three months ended September 30, 2017, a decrease of $1.7 million, or 13.4%, as compared to $12.7 million for the three months ended September 30, 2016. The decrease was~~

Income tax expense decreased primarily due to both lower income generated and a decrease in ownership interest ~~expense attributable~~in CWGS, LLC for which the Company is subject to ~~a decrease in average debt outstanding,~~U.S. federal and ~~an 86 basis point decrease in the average interest rate.~~

~~Table of Contents~~

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Other interest expense, net was $31.0 million for the nine months ended September 30, 2017, a decrease of $7.1 million, or 18.6%, as compared to $38.0 million for the nine months ended September 30, 2016. The decrease was primarily due to a decrease in interest expense attributable to a decrease in average debt outstanding, and a 100 basis point decrease in the average interest rate.state taxes on its allocable share.

Segment results

The following ~~table~~tables sets forth a reconciliation of total segment income to consolidated income ~~from operations~~ before income taxes for each of our segments for the ~~period~~periods presented:

Three Months Ended

Nine Months Ended

September 30, 2017

September 30, 2016

Favorable/

September 30, 2017

September 30, 2016

Favorable/

Percent of

Percent of

(Unfavorable)

Percent of

Percent of

(Unfavorable)
($ in thousands)

Amount

Revenue

Amount

Revenue

$

%

Amount

Revenue

Amount

Revenue

$

%
Revenue:

Consumer Services and Plans

$
46,169

3.7%

$
45,442

4.6%

$
727

1.6%

$
144,518

4.2%

$
135,868

4.8%

$
8,650

6.4%
Retail

1,192,833

96.3%

945,629

95.4%

247,204

26.1%

3,260,966

95.8%

2,720,806

95.2%

540,160

19.9%
Total consolidated revenue

1,239,002

100.0%

991,071

100.0%

247,931

25.0%

3,405,484

100.0%

2,856,674

100.0%

548,810

19.2%
Segment income:(1)

Consumer Services and Plans

21,675

1.7%

19,847

2.0%

1,828

9.2%

71,887

2.1%

63,948

2.2%

7,939

12.4%
Retail

93,446

7.5%

70,882

7.2%

22,564

31.8%

256,713

7.5%

188,898

6.6%

67,815

35.9%
Total segment income

115,121

9.3%

90,729

9.2%

24,392

26.9%

328,600

9.6%

252,846

8.9%

75,754

30.0%
Corporate & other

(2,037)

-0.2%

(1,091)

-0.1%

(946)

-86.7%

(6,461)

-0.2%

(2,420)

-0.1%

(4,041)

-167.0%
Depreciation and amortization

(8,382)

-0.7%

(6,219)

-0.6%

(2,163)

-34.8%

(22,819)

-0.7%

(18,144)

-0.6%

(4,675)

-25.8%
Other interest expense, net

(11,012)

-0.9%

(12,715)

-1.3%

1,703

13.4%

(30,973)

-0.9%

(38,040)

-1.3%

7,067

18.6%
Other non-operating expense, net

(96)

0.0%

—

0.0%

(96)

-100.0%

(79)

0.0%

(2)

0.0%

(77)

-100.0%
Income from operations before income taxes

$
93,594

7.6%

$
70,704

7.1%

$
22,890

32.4%

$
268,268

7.9%

$
194,240

6.8%

$
74,028

38.1%


	Three Months Ended
	September 30, 2022			September 30, 2021			Favorable/
			Percent of			Percent of	(Unfavorable)
($ in thousands)	Amount		Revenue	Amount		Revenue	$		%
Revenue:
Good Sam Services and Plans	$	50,413	2.7%	$	46,632	2.4%	$	3,781	8.1%
RV and Outdoor Retail		1,812,830	97.7%		1,877,032	97.9%		(64,202)	(3.4%)
Elimination of intersegment revenue		(7,561)	(0.4%)		(7,090)	(0.4%)		(471)	(6.6%)
Total consolidated revenue		1,855,682	100.0%		1,916,574	100.0%		(60,892)	(3.2%)
Segment income:⁽¹⁾
Good Sam Services and Plans		23,946	1.3%		18,030	0.9%		5,916	32.8%
RV and Outdoor Retail		143,098	7.7%		247,762	12.9%		(104,664)	(42.2%)
Total segment income		167,044	9.0%		265,792	13.9%		(98,748)	(37.2%)
Corporate & other		(2,789)	(0.2%)		(2,667)	(0.1%)		(122)	(4.6%)
Depreciation and amortization		(18,207)	(1.0%)		(23,552)	(1.2%)		5,345	22.7%
Other interest expense, net		(20,526)	(1.1%)		(11,250)	(0.6%)		(9,276)	(82.5%)
Loss and expense on debt restructure		—	—		(24)	(0.0%)		24	n/m
Other (expense) income, net		(177)	(0.0%)		(122)	(0.0%)		(55)	(45.1%)
Income before income taxes	$	125,345	6.8%	$	228,177	11.9%	$	(102,832)	45.1%

Same store revenue- RV and Outdoor Retail⁽²⁾	$	1,583,772		$	1,663,787		$	(80,015)	(4.8%)

n/m – not meaningful

(1)

⁽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.

~~Consumer~~44

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Good Sam Services and Plans

Good Sam Services and Plans segment revenue

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Consumer Services and Plans segment revenue was $46.2 million for the three months ended September 30, 2017, an increase of $0.7 million, or 1.6%, as compared to $45.4 million for the three months ended September 30, 2016. The increased ~~revenue was attributable~~primarily due to a ~~$1.1~~$2.9 million increase from ~~our~~the roadside assistance programs primarily resulting from increased contracts in force and favorable updates to assumptions for cancellations, a $0.7 million increase from the extended vehicle warranty programs revenue primarily resulting from increased contracts in force, and a $0.6 million increase from the Good Sam ~~TravelAssist programs~~Insurance Agency primarily ~~due to increased policies in force, partially offset by $0.4 million of other decreases.~~

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Consumer Services and Plans segment revenue was $144.5 million for the nine months ended September 30, 2017, an increase of $8.7 million, or 6.4%, as compared to $135.9 million for the nine months ended September 30, 2016. The increased revenue was attributable to a$2.7 million increase from our vehicle insurance and Good Sam TravelAssist programs primarily due to increased policies in force; a $2.1 million increase from our clubs and roadside assistance programs; a $1.7 million increase from consumer show exhibit and admissions revenue resulting from ~~the acquisition of five consumer shows~~increased contracts in ~~the fourth quarter of 2016 and our new Good Sam RV Super Show introduced in February 2017; and $2.2 million of other increases.~~

~~Retail segment revenue~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Retail segment revenue was $1.2 billion for the three months ended September 30, 2017, an increase of $247.2 million, or 26.1%, as compared to $945.6 million for the three months ended September 30, 2016. The increase was primarily due to the 33.3% increase in new vehicle unit volume which resulted from a 9.4% increase in same store sales, as described below, and the acquired locations.

~~Table of Contents~~

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Retail segment revenue was $3.3 billion for the nine months ended September 30, 2017, an increase of $540.2 million, or 19.9%, as compared to $2.7 billion for the nine months ended September 30, 2016. The increase was primarily due to the 34.6% increase in new vehicle unit volume which resulted from a 9.9% increase in same store sales, as described below, the acquired locations, and the greenfield location opened in June 2017.

~~Same store sales~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Same store sales were $982.2 million for the three months ended September 30, 2017, an increase of $84.3 million, or 9.4%, as compared to $897.9 million for the three months ended September 30, 2016. The increase was primarily due to the increased volume of new towable and Class C motorhome units sold and the revenue increase from finance and insurance, partially offset by a decrease in same store sales from used vehicle units sold.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Same store sales were $2.8 billion for the nine months ended September 30, 2017, an increase of $253.5 million, or 9.9%, as compared to $2.6 billion for the nine months ended September 30, 2016. The increase was primarily due to the increased volume of new towable and Class C motorhome units sold and the revenue increase from finance and insurance, partially offset by a decrease in same store sales from used vehicle units sold.

~~Total segment income~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Total segment income was $115.1 million for the three months ended September 30, 2017, an increase of $24.4 million, or 26.9%, as compared to $90.7 million for the three months ended September 30, 2016. The increase was primarily due to gross profit increases from finance and insurance and new vehicles, partially offset by increases in variable selling, general and administrative expenses. Total segment income margin increased 14 basis points to 9.3%.

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

Total segment income was $328.6 million for the nine months ended September 30, 2017, an increase of $75.8 million, or 30.0%, as compared to $252.8 million for the nine months ended September 30, 2016. The increase was primarily due to gross profit increases from finance and insurance and new vehicles, partially offset by increases in variable selling, general and administrative expenses. Total segment income margin increased 80 basis points to 9.6%.

~~Consumer Services and Plans segment income~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Consumer Services and Plans segment income was $21.7 million for the three months ended September 30, 2017, an increase of $1.8 million, or 9.2%, as compared to $19.8 million for the three months ended September 30, 2016. The segment income increase was attributable to an increase from our Good Sam TravelAssist and roadside assistance programs of $0.9 million primarily due to increased policies in force; and a $1.2 million reduction in selling, general and administrative expenses;force, partially offset by a decrease of $0.3 million from our RV financing programs and a $0.1 million decrease from other ~~ancillary products. Consumer~~programs.

Good Sam Services and Plans segment income ~~margin~~ increased ~~327 basis points to 46.9%, which was~~ primarily due to a ~~387 basis point~~$6.6 million increase from the roadside assistance programs resulting from increased contracts in ~~segment gross margin~~force, favorable updates to assumptions for cancellations, and reduced marketing costs, a $0.6 million increase from the extended vehicle warranty programs; and a $0.5 million increase from Good Sam Insurance Agency; partially offset by a $0.6 million increase in selling, general and administrative expenses ~~that~~primarily consisting of increases in compensation and professional fees; a $0.5 million reduction from other services and plans; a $0.4 million reduction from our RV financing products; and a $0.3 million increase in overhead support expenses. Segment income margin net of intersegment revenue elimination increased 885 basis points to 47.6% primarily due to increased margin from the roadside assistance programs and a reduced rate of selling, general and administrative expenses as a percent of gross profit for the three months ended September 30, 2022 versus the comparable period in 2021.

RV and Outdoor Retail

RV and Outdoor Retail segment revenue decreased primarily due a $37.1 million, or 12.1%, decrease in products, service and other revenue, a $30.3 million, or 3.5%, decrease in new vehicle revenue, a $2.0 million, or 1.2%, decrease in finance and insurance, net revenue, and a $1.3 million, or 10.6%, decrease in Good Sam Club revenue, partially offset by a $6.5 million, or 1.3%, increase in used vehicle revenue,

RV and Outdoor Retail segment income decreased primarily due to decreased segment gross profit of $104.2 million primarily relating to increased unit costs and reduced average sales prices per unit, a $6.4 million increase in floor plan interest expense, a $0.6 million increase in long-lived asset impairment, partially offset by a $6.0 million decrease in selling, general and administrative expenses (see discussion of selling, general and administrative expenses above for the similar drivers of this change), a $0.3 million decrease in lease termination expense, and a $0.1 million reduction in loss on sale or disposal of assets. RV and Outdoor Retail segment margin decreased to 7.9% in the three months ended September 30, 2022 from 13.2% in the three months ended September 30, 2021 primarily due to increased vehicle costs and a lower average sales price per unit sold.

Corporate and other expenses

The increase in corporate and other expenses was ~~largely from reduced wages.~~primarily due to increased professional fees.

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Nine Months Ended September 30, ~~2017 compared~~2022 Compared to Nine Months Ended September 30, ~~2016~~2021

~~Consumer~~The following table sets forth information comparing the components of net income for the nine months ended September 30, 2022 and 2021:


	Nine Months Ended
	September 30, 2022			September 30, 2021
			Percent of			Percent of	Favorable/ (Unfavorable)
($ in thousands)	Amount		Revenue	Amount		Revenue	$		%
Revenue:
Good Sam Services and Plans	$	144,504	2.5%	$	134,354	2.4%	$	10,150	7.6%
RV and Outdoor Retail:
New vehicles		2,746,323	48.3%		2,745,057	49.6%		1,266	0.0%
Used vehicles		1,484,978	26.1%		1,273,944	23.0%		211,034	16.6%
Products, service and other		761,914	13.4%		862,706	15.6%		(100,792)	(11.7%)
Finance and insurance, net		513,921	9.0%		483,718	8.7%		30,203	6.2%
Good Sam Club		35,070	0.6%		36,383	0.7%		(1,313)	(3.6%)
Subtotal		5,542,206	97.5%		5,401,808	97.6%		140,398	2.6%
Total revenue		5,686,710	100.0%		5,536,162	100.0%		150,548	2.7%

Gross profit (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans		89,972	1.6%		81,113	1.5%		8,859	10.9%
RV and Outdoor Retail:
New vehicles		574,663	10.1%		730,851	13.2%		(156,188)	(21.4%)
Used vehicles		369,102	6.5%		339,070	6.1%		30,032	8.9%
Products, service and other		294,234	5.2%		306,164	5.5%		(11,930)	(3.9%)
Finance and insurance, net		513,921	9.0%		483,718	8.7%		30,203	6.2%
Good Sam Club		28,791	0.5%		30,797	0.6%		(2,006)	(6.5%)
Subtotal		1,780,711	31.3%		1,890,600	34.2%		(109,889)	(5.8%)
Total gross profit		1,870,683	32.9%		1,971,713	35.6%		(101,030)	(5.1%)

Operating expenses:
Selling, general and administrative expenses		1,245,540	21.9%		1,193,668	21.6%		(51,872)	(4.3%)
Debt restructure expense		—	—		9,055	0.2%		9,055	n/m
Depreciation and amortization		61,369	1.1%		49,297	0.9%		(12,072)	(24.5%)
Long-lived asset impairment		3,505	0.1%		1,398	0.0%		(2,107)	(150.7%)
Lease termination		1,122	0.0%		2,085	0.0%		963	46.2%
Loss on sale or disposal of assets		390	0.0%		7	0.0%		(383)	n/m
Total operating expenses		1,311,926	23.1%		1,255,510	22.7%		(56,416)	(4.5%)
Income from operations		558,757	9.8%		716,203	12.9%		(157,446)	(22.0%)
Other expense:
Floor plan interest expense		(24,483)	(0.4%)		(9,886)	(0.2%)		(14,597)	(147.7%)
Other interest expense, net		(49,762)	(0.9%)		(35,262)	(0.6%)		(14,500)	(41.1%)
Loss on debt restructure		—	—		(1,390)	(0.0%)		1,390	n/m
Tax Receivable Agreement liability adjustment		—	—		(3,520)	(0.1%)		3,520	n/m
Other expense, net		(472)	(0.0%)		(77)	(0.0%)		(395)	(513.0%)
Total other expense		(74,717)	(1.3%)		(50,135)	(0.9%)		(24,582)	(49.0%)
Income before income taxes		484,040	8.5%		666,068	12.0%		(182,028)	(27.3%)
Income tax expense		(75,808)	(1.3%)		(83,259)	(1.5%)		7,451	8.9%
Net income		408,232	7.2%		582,809	10.5%		(174,577)	(30.0%)
Less: net income attributable to non-controlling interests		(238,065)	(4.2%)		(331,596)	(6.0%)		93,531	28.2%
Net income attributable to Camping World Holdings, Inc.	$	170,167	3.0%	$	251,213	4.5%	$	(81,046)	(32.3%)

n/m – not meaningful

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Supplemental Data


	Nine Months Ended September 30,				Increase			Percent
	2022		2021		(decrease)			Change
Unit sales
New vehicles		60,040		66,362		(6,322)			(9.5%)
Used vehicles		40,991		38,269		2,722			7.1%
Total		101,031		104,631		(3,600)			(3.4%)

Average selling price
New vehicles	$	45,742	$	41,365	$	4,377	��		10.6%
Used vehicles	$	36,227	$	33,289	$	2,938			8.8%

Same store unit sales⁽¹⁾
New vehicles		54,831		63,436		(8,605)			(13.6%)
Used vehicles		37,670		36,870		800			2.2%
Total		92,501		100,306		(7,805)			(7.8%)

Same store revenue⁽¹⁾ ($ in 000's)
New vehicles	$	2,524,359	$	2,628,952	$	(104,593)			(4.0%)
Used vehicles		1,379,819		1,233,022		146,797			11.9%
Products, service and other		553,833		650,283		(96,450)			(14.8%)
Finance and insurance, net		473,898		465,100		8,798			1.9%
Total	$	4,931,909	$	4,977,357	$	(45,448)			(0.9%)

Average gross profit per unit
New vehicles	$	9,571	$	11,013	$	(1,442)			(13.1%)
Used vehicles		9,004		8,860		144			1.6%
Finance and insurance, net per vehicle unit		5,087		4,623		464			10.0%
Total vehicle front-end yield⁽²⁾		14,428		14,849		(421)			(2.8%)

Gross margin
Good Sam Services and Plans		62.3%		60.4%		189	bps
New vehicles		20.9%		26.6%		(570)	bps
Used vehicles		24.9%		26.6%		(176)	bps
Products, service and other		38.6%		35.5%		313	bps
Finance and insurance, net		100.0%		100.0%		unch.	bps
Good Sam Club		82.1%		84.6%		(255)	bps
Subtotal RV and Outdoor Retail		32.1%		35.0%		(287)	bps
Total gross margin		32.9%		35.6%		(272)	bps

Inventories ($ in 000's)
New vehicles	$	1,180,364	$	723,593	$	456,771			63.1%
Used vehicles		425,824		391,466		34,358			8.8%
Products, parts, accessories and misc.		293,588		246,900		46,688			18.9%
Total RV and Outdoor Retail inventories	$	1,899,776	$	1,361,959	$	537,817			39.5%

Vehicle inventory per location ($ in 000's)
New vehicle inventory per dealer location	$	6,415	$	4,111	$	2,304			56.0%
Used vehicle inventory per dealer location		2,314		2,224		90			4.0%

Vehicle inventory turnover⁽³⁾
New vehicle inventory turnover		2.0		3.6		(1.5)			(42.9%)
Used vehicle inventory turnover		3.5		4.4		(0.8)			(18.8%)

Retail locations
RV dealerships		184		176		8			4.5%
RV service & retail centers		8		10		(2)			(20.0%)
Subtotal		192		186		6			3.2%
Other retail stores		1		1		—			0.0%
Total		193		187		6			3.2%

Other data
Active Customers⁽⁴⁾		5,366,558		5,458,531		(91,973)			(1.7%)
Good Sam Club members		2,038,826		2,185,100		(146,274)			(6.7%)
Service bays ⁽⁵⁾		2,639		2,599		40			1.5%
Finance and insurance gross profit as a % of total vehicle revenue		12.1%		12.0%		11	bps		n/a
Same store locations		168		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.

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(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 collision offerings.

Revenue and Gross Profit

Good Sam Services and Plans ~~segment income~~

Good Sam Services and Plans revenue increased primarily due to a $6.1 million increase from the roadside assistance programs primarily resulting from increased contracts in force and favorable updates to assumptions for cancellations; a $1.5 million increase in Good Sam TravelAssist revenue primarily resulting from increased contracts in force; a $1.3 million increase from the Good Sam Insurance Agency primarily resulting from increased contracts in force; a $1.3 million increase from the extended vehicle warranty programs; and an $0.8 million increase from the consumer shows due to no shows produced in 2021 and one show produced in 2022; partially offset by an $0.8 million reduction from the RV financing programs.

Good Sam Services and Plans gross profit increased primarily due to a $7.6 million increase from the roadside assistance programs resulting from increased contracts in force, favorable updates to assumptions for cancellations, and reduced marketing costs; a $1.6 million increase from the Good Sam TravelAssist programs; a $1.4 million increase from the Good Sam Insurance Agency; a $1.0 million increase from the extended warranty insurance programs; and a $0.7 million increase from consumer shows; partially offset by a $1.8 million increase in overhead support expenses; an $0.8 million reduction from the RV financing programs; and an $0.8 million reduction from other services and plans. The gross margin increase in Good Sam Services and Plans was ~~$71.9~~primarily due to increases from the roadside assistance programs.

RV and Outdoor Retail

New Vehicles

New vehicle revenue increased primarily due to a 10.6% increase in average selling price per vehicle sold partially offset by an 9.5% decrease in vehicles sold. On a same store basis, new vehicle revenue decreased 4.0% to $2.5 billion, and new vehicle units decreased 13.6%.

New vehicle gross profit decreased primarily due to a 19.2% increase in the average cost of new units sold and a 9.5% decrease in vehicles sold, partially offset by a 10.6% increase in the average selling price per new vehicle sold. New vehicle gross margin decreased primarily due to the 19.2% higher average cost of new units sold, partially offset by the 10.6% increase in the average selling price of new vehicles.

Used Vehicles

Used vehicle revenue increased primarily due to a 7.1% increase in vehicles sold and an 8.8% 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 11.9% to $1.4 billion and used vehicle units increased 2.2%.

Used vehicle gross profit increased due to a 7.1% increase in vehicles sold, and an 8.8% increase in the average sales price per vehicle sold. The decrease in used vehicle gross margin was the result of compression from a 11.4% higher average cost per unit sold, partially offset by the 8.8% increase in average selling price per vehicle sold.

Products, service and other

Products, service and other revenue decreased primarily due to our exit from certain non-RV product categories that were sold in the 2021 period, but not in the 2022 period. On a same store basis, products, service and other revenue decreased 14.8% to $553.8 million for the nine months ended September 30, ~~2017,~~2022 from $650.3 million in the nine months ended September 30, 2021.

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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

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 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 expenses

Selling, general and administrative expenses increased primarily due to a $19.5 million increase in selling expenses, an $11.5 million increase in insurance costs due to increased inventory levels, a $8.9 million increase in occupancy expenses due to net increase of six store locations over the prior year, a $5.9 million increase in professional fees, a $4.4 million increase in personal property expenses, and $1.8 million of costs associated with the February 2022 Cybersecurity Incident, net of insurance recoveries, partially offset by a $0.1 million decrease in other store and corporate overhead expenses.

Equity-based compensation expenses increased $8.4 million for the nine months ended September 30, ~~2016. The segment income increase was attributable~~2022 (See Note 16 — Equity-Based Compensation to ~~an increase from~~ our ~~vehicle insurance and Good Sam TravelAssist programs~~condensed consolidated financial statements included in Part I, Item 1 of $3.0 million primarily due to increased policies in force; increased roadside assistance contracts in force and reduced claims, together resulting in a gross profit increase of $2.0 million; an increase from our consumer shows of $0.8 million resulting from the five acquired consumer shows and one new show; a $0.1 million increase from other ancillary products, and a $2.0 million reduction in selling, general and administrative expenses primarily from reduced wages. Consumer Services and Plans segment income margin increased 268 basis points to 49.7%this Form 10-Q), which was primarily due to a $2.0 million decrease in selling, general and administrative expenses that was largely from reduced wages and a 72 basis point increase in Consumer Services and Plans gross margin.

~~Retail segment income~~

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

~~Retail segment income was $93.4 million for the three months ended September 30, 2017,~~included an increase of ~~$22.6 million, or 31.8%, as compared to $70.9~~$3.8 million for the three months ended September 30, 2016. The increase was primarily due to increased segment gross profit of $75.8 million primarily due to higher revenue and sales penetration of finance and insurance products, an increase of $26.5 million primarily from increased new vehicle unit volume of 4,774 units for the three months ended September 30, 2017 comparedexpense related to the ~~three months ended September 30, 2016, an~~modification of restricted stock units to accelerate and/or continue vesting under employee separation agreements and/or post-termination consulting arrangements. The remaining increase in equity-based compensation expense was a result of ~~$8.9~~more 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 due primarily to $8.8 million of incremental accelerated amortization during the first quarter of 2022 from ~~parts, services~~the adjustment of the useful lives of certain trademark and ~~other,~~trade name intangible assets, associated with brands not traditionally associated with RVs, that we are phasing out and ~~an increase~~increased depreciation from the higher average property and equipment balance that has been driven primarily by our expansion of ~~$6.5 million from used vehicles;~~RV dealership locations. The trademark and trade name intangible assets were fully amortized as of March 31, 2022. These increases were partially offset by ~~increased selling, general and administrative expenses~~$7.4 million of $50.2 million primarily due to increased variable wages relating to increased revenue, increased variable selling expenses; and an increase of approximately $3.0 million in floor plan interest expense relating to an increaseaccelerated depreciation on store fixtures in the ~~average floor plan balance. Retail segment income margin increased 34 basis points~~third quarter of 2021 related to ~~7.8%, primarily due to increased penetration~~categories exited as part of the ~~finance and insurance revenue to 11.2%~~2019 Strategic Shift.

Table of total new and used revenue, from 9.3% for the comparable prior year period, increased used vehicle gross margin of 261 basis points, and decreased selling, general and administrative expenses as a percentage of segment gross profit of 98 basis points, partially offset by a reduction of 429 basis points in parts, services and other gross margin.Contents

Long-lived asset impairment

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

~~Retail segment income~~Long-lived asset impairment was ~~$256.7~~$3.5 million for the nine months ended September 30, ~~2017, an increase of $67.8 million, or 35.9%, as compared to $188.9~~2022 and $1.4 million for the nine months ended September 30, ~~2016. The~~2021. See Note 4 – Restructuring and Long-Lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

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 90.2% increase ~~was~~in average floor plan borrowings driven by higher new vehicle inventory quantities from the normalization of the new travel trailer supply chain and increases in average new unit costs, and a 66 basis point increase in the average floor plan borrowing rate. We expect higher floor plan interest expense to continue to increase during the remainder of 2022 as the floor plan borrowings are expected to be higher in 2022 compared to 2021. Since we do not expect the same new vehicle supply chain constraints that existed in 2021 to be experienced for the remainder of 2022, we expect to continue to have higher average new vehicle inventory levels in 2022. We also expect that interest rates will continue to increase during the remainder of 2022.

Other interest expense, net

Other interest expense increased primarily due to increased ~~segment gross profit~~average debt outstanding, and to a lesser extent, a 39 basis point increase in the Term Loan Facility average interest rate. The increase in interest rates during the nine months ended September 30, 2022 did not have a proportionate impact on the increase in other interest expense, since the refinance of ~~$173.3~~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 6 – Long-Term Debt to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q)) 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 September 30, 2022 is 5.34%. For the Term Loan Facility, if the 5.34% interest rate was applicable for the entirety of the nine months ended September 30, 2022, other interest expense would have increased an additional $16.2 million. We expect that interest rates will continue to increase during the remainder of 2022.

Loss and expense on debt restructure

Loss and expense on debt restructure of $10.4 million in the nine months ended September 30, 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 $9.0 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 of $3.5 million in the nine months ended September 30, 2021 related to a remeasurement during the nine months ended September 30, 2021 to reflect an increase in state tax rates.

Income tax expense

Income tax expense decreased primarily due to ~~higher revenue~~a $14.5 million release of valuation allowance and ~~sales penetration~~a $4.1 million benefit for the revaluation of ~~finance and insurance products, an increase~~deferred tax assets as a result of ~~$63.3 million primarily from~~ increased ~~new vehicle unit volume of 14,082 units~~state tax rates that were both recorded for the nine months ended September 30, ~~2017 compared to~~2021. For the nine months ended September 30, ~~2016,~~2022 there was also lower income generated for which the Company is subject to U.S. federal and state taxes on its allocable share and the benefit from higher losses at CW that are available to offset state combined income in

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certain unitary states for the nine months ended September 30, 2022. The valuation allowance release during 2021 was attributable to the change in the entities within state combined filing groups due to unitary relationships, which provide additional taxable income sources to utilize CW’s deferred tax assets. CWH’s increased ownership in CWGS, LLC and other qualitative unity factors impacted the unitary relationships.

Segment results

The following tables sets forth a reconciliation of total segment income to consolidated income before income taxes for each of our segments for the periods presented:


	Nine Months Ended
	September 30, 2022			September 30, 2021			Favorable/
			Percent of			Percent of	(Unfavorable)
($ in thousands)	Amount		Revenue	Amount		Revenue	$		%
Revenue:
Good Sam Services and Plans	$	144,914	2.5%	$	134,499	2.4%	$	10,415	7.7%
RV and Outdoor Retail		5,566,061	97.9%		5,423,581	98.0%		142,480	2.6%
Elimination of intersegment revenue		(24,265)	(0.4%)		(21,918)	(0.4%)		(2,347)	(10.7%)
Total consolidated revenue		5,686,710	100.0%		5,536,162	100.0%		150,548	2.7%
Segment income:⁽¹⁾
Good Sam Services and Plans		67,242	1.2%		62,415	1.1%		4,827	7.7%
RV and Outdoor Retail		538,082	9.5%		709,411	12.8%		(171,329)	(24.2%)
Total segment income		605,324	10.6%		771,826	13.9%		(166,502)	(21.6%)
Corporate & other		(9,681)	(0.2%)		(7,157)	(0.1%)		(2,524)	(35.3%)
Depreciation and amortization		(61,369)	(1.1%)		(49,297)	(0.9%)		(12,072)	(24.5%)
Tax Receivable Agreement liability adjustment		—	—		(3,520)	(0.1%)		3,520	n/m
Other interest expense, net		(49,762)	(0.9%)		(35,262)	(0.6%)		(14,500)	(41.1%)
Loss and expense on debt restructure		—	—		(10,445)	(0.2%)		10,445	n/m
Other (expense) income, net		(472)	(0.0%)		(77)	(0.0%)		(395)	(513.0%)
Income before income taxes	$	484,040	8.5%	$	666,068	12.0%	$	(182,028)	(27.3%)

Same store revenue- RV and Outdoor Retail⁽²⁾	$	4,931,909		$	4,977,357		$	(45,448)	(0.9%)

n/m – 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 segment revenue increased primarily due to a $6.1 million increase from the roadside assistance programs primarily resulting from increased contracts in force and favorable updates to assumptions for cancellations; a $1.5 million increase in Good Sam TravelAssist revenue primarily resulting from increased contracts in force, a $1.3 million increase from the Good Sam Insurance Agency primarily resulting from increased contracts in force, a $1.3 million increase from the extended vehicle warranty programs, a $1.0 million increase from the consumer shows due to no shows produced in 2021 and one show produced in 2022, partially offset by a $0.8 million reduction from the RV financing programs.

Good Sam Services and Plans segment income increased primarily due to a $7.6 million increase from the roadside assistance programs resulting from increased contracts in force, favorable updates to assumptions for cancellations, and reduced marketing expenses, a $1.6 million increase from the Good Sam TravelAssist programs; a $1.4 million increase from the Good Sam Insurance Agency; a $1.0 million increase from the extended warranty insurance programs; and a $0.7 million increase from consumer shows; partially offset by a $4.0 million increase in selling, general and administrative expenses consisting mostly of increases in wages and professional fees; a $1.8 million increase in overhead support expenses; an ~~increase of $15.6~~$0.8 million reduction from ~~used vehicles,~~the RV financing programs; and an ~~increase of $14.3~~$0.9 million reduction from ~~parts,~~other services and ~~other; partially~~plans. Segment income margin net of intersegment revenue elimination of 46.0% remained unchanged from the prior year and reflected increases from the roadside assistance programs offset by increased selling, general and administrative ~~expenses~~expenses.

RV and Outdoor Retail

RV and Outdoor Retail segment revenue increased primarily due to a $211.3 million, or 16.5%, increase in used vehicle revenue, a $33.0 million,or 6.7%, increase in finance and insurance, net revenue, and a $0.7

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million increase in new vehicle revenue, partially offset by a $101.2 million, or 11.7%, decrease in products, service and other revenue, and a $1.3 million reduction in Good Sam Club revenue.

RV and Outdoor Retail segment income decreased primarily due to decreased segment gross profit of $109.9 million primarily ~~relating~~due to increased ~~variable wages relating to increased revenue, increased variable~~average cost per vehicle sold and reduced vehicles sold, a $45.4 million increase in selling, ~~expense~~general and ~~increased rent relating to new stores;~~administrative expenses (see discussion of selling, general and anadministrative expenses above), a $14.6 million increase in floor plan interest expense, ~~of approximately $4.5~~a $2.1 million ~~relating to an~~ increase in ~~the average floor plan balance.~~long-lived asset impairment, and a $0.3 million increase in loss on sale or disposal of assets, partially offset by a $1.0 million decrease in lease termination expense. RV and Outdoor Retail segment ~~income~~ margin ~~increased 93~~decreased 342 basis points to ~~7.9%,~~9.7% primarily due to ~~increased penetration of the finance~~higher vehicle costs and ~~insurance revenue to 10.7% of total new and used revenue, from 8.9% for the comparable prior year period,~~ increased ~~used vehicle gross margin of 475 basis points, and decreased~~ selling, general and administrative ~~expenses as a percentage of segment gross profit of 262 basis points.~~

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expenses.

Corporate and other expenses

~~Three Months Ended September 30, 2017 compared to Three Months Ended September 30, 2016~~

Corporate and other expenses ~~were $2.0 million for the three months ended September 30, 2017, an increase of 86.7%, as compared to $1.1 million for the three months ended September 30, 2016. The $0.9 million increase was~~increased primarily due to ~~$0.5~~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 2021 was an expense of $3.5 million, which represented an adjustment for higher state income tax rates.

Non-GAAP Financial Measures

To supplement our condensed 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 ~~transaction expenses associated~~past financial performance and future prospects, and allow for greater transparency with ~~acquisitions into new~~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, liquidity and capital resources, 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 this financial information is not intended to be considered in isolation or ~~complementary markets, including~~as a substitute for, or superior to, the ~~Gander Mountain Acquisition;~~financial information prepared and ~~$0.4 million~~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 ~~professional fees.~~

~~Nine Months Ended September 30, 2017 compared to Nine Months Ended September 30, 2016~~

~~Corporate~~companies over time. Each of the normal recurring adjustments and other ~~expenses were $6.5 million~~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.

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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 ~~nine months ended September 30, 2017, an increase~~impact of ~~167.0%,~~certain noncash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, long-lived asset impairment, lease termination costs, 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 ~~compared~~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 ~~$2.4~~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:


	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2022		2021		2022		2021
EBITDA and Adjusted EBITDA:
Net income	$	102,948	$	189,308	$	408,232	$	582,809
Other interest expense, net		20,526		11,250		49,762		35,262
Depreciation and amortization		18,207		23,552		61,369		49,297
Income tax expense		22,397		38,869		75,808		83,259
Subtotal EBITDA		164,078		262,979		595,171		750,627
Long-lived asset impairment (a)		887		316		3,505		1,398
Lease termination (b)		—		329		1,122		2,085
(Gain) loss on sale or disposal of assets, net (c)		(40)		96		390		7
Equity-based compensation (d)		6,792		6,913		27,434		19,069
Tax Receivable Agreement liability adjustment (e)		—		—		—		3,520
Restructuring costs (f)		1,671		17,362		5,548		23,439
Loss and expense on debt restructure (g)		—		24		—		10,445
Adjusted EBITDA	$	173,388	$	288,019	$	633,170	$	810,590


	Three Months Ended September 30,				Nine Months Ended September 30,
(as percentage of total revenue)	2022		2021		2022		2021
Adjusted EBITDA margin:
Net income margin		5.5%		9.9%		7.2%		10.5%
Other interest expense, net		1.1%		0.6%		0.9%		0.6%
Depreciation and amortization		1.0%		1.2%		1.1%		0.9%
Income tax expense		1.2%		2.0%		1.3%		1.5%
Subtotal EBITDA margin		8.8%		13.7%		10.5%		13.6%
Long-lived asset impairment (a)		0.0%		0.0%		0.1%		0.0%
Lease termination (b)		—		0.0%		0.0%		0.0%
(Gain) loss on sale or disposal of assets, net (c)		(0.0%)		0.0%		0.0%		0.0%
Equity-based compensation (d)		0.4%		0.4%		0.5%		0.3%
Tax Receivable Agreement liability adjustment (e)		—		—		—		0.1%
Restructuring costs (f)		0.1%		0.9%		0.1%		0.4%
Loss and expense on debt restructure (g)		—		0.0%		—		0.2%
Adjusted EBITDA margin		9.3%		15.0%		11.1%		14.6%

(a)

Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which relate to locations affected by the 2019 Strategic Shift. See Note 4 – Restructuring and Long-Lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for additional information.

(b)

Represents the loss on the termination of operating leases, relating primarily to the 2019 Strategic Shift, resulting from the lease termination fees and the derecognition of the operating lease assets and liabilities. See Note 4– Restructuring and Long-Lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for additional information.

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(c)

Represents an adjustment to eliminate the losses and gains on disposals 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 loss on remeasurement of the Tax Receivable Agreement primarily due to changes in our blended statutory income tax rate. See Note 12 — Income Taxes to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

(f)

Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include other associated costs. These costs exclude lease termination costs, which are presented separately above. See Note 4 – Restructuring and Long-Lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q 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 of extinguishment of capitalized finance costs related to the Previous Term Loan Facility, and $9.0 million in legal and other expenses related to the New Term Loan Facility.

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 ~~nine months ended September 30, 2016.~~ impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, long-lived asset impairment, lease termination costs, 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, 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.

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.

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The ~~approximately $4.0 million increase was primarily due~~following table reconciles Adjusted Net Income Attributable to ~~$2.6 million~~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:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands except per share amounts)	2022		2021		2022		2021
Numerator:
Net income attributable to Camping World Holdings, Inc.	$	41,126	$	79,703	$	170,167	$	251,213
Adjustments related to basic calculation:
Loss and expense on debt restructure (a):
Gross adjustment		—		24		—		10,445
Income tax expense for above adjustment (b)		—		(3)		—		(1,376)
Long-lived asset impairment (c):
Gross adjustment		887		316		3,505		1,398
Income tax expense for above adjustment (b)		—		—		(99)		—
Lease termination (d):
Gross adjustment		—		329		1,122		2,085
Income tax expense for above adjustment (b)		—		1		—		(38)
(Gain) loss on sale or disposal of assets (e):
Gross adjustment		(40)		96		390		7
Income tax expense for above adjustment (b)		(12)		3		(15)		5
Equity-based compensation (f):
Gross adjustment		6,792		6,913		27,434		19,069
Income tax expense for above adjustment (b)		(792)		(820)		(3,080)		(2,181)
Tax Receivable Agreement liability adjustment (g):
Gross adjustment		—		—		—		3,520
Income tax expense for above adjustment (b)		—		—		—		(898)
Restructuring costs (h)
Gross adjustment		1,671		17,362		5,548		23,439
Income tax expense for above adjustment (b)		—		23		—		(42)
Adjustment to net income attributable to non-controlling interests resulting from the above adjustments (i)		(4,642)		(12,091)		(18,866)		(27,580)
Adjusted net income attributable to Camping World Holdings, Inc. – basic		44,990		91,856		186,106		279,066
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 (j)		409		1,892		1,519		—
Income tax on reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (k)		(104)		(489)		(404)		—
Reallocation of net income attributable to non-controlling interests from the dilutive redemption of common units in CWGS, LLC (j)		—		—		—		359,176
Income tax on reallocation of net income attributable to non-controlling interests from the dilutive redemption of common units in CWGS, LLC (k)		—		—		—		(89,668)
Assumed income tax expense of combining C-corporations with full or partial valuation allowances with the income of other consolidated entities after the dilutive redemption of common units in CWGS, LLC (l)		—		—		—		(11,227)
Adjusted net income attributable to Camping World Holdings, Inc. – diluted	$	45,295	$	93,259	$	187,221	$	537,347
Denominator:
Weighted-average Class A common shares outstanding – basic		41,985		45,628		42,419		45,072
Adjustments related to diluted calculation:
Dilutive redemption of common units in CWGS, LLC for shares of Class A common stock (m)		—		—		—		43,731
Dilutive options to purchase Class A common stock (m)		53		138		62		157
Dilutive restricted stock units (m)		467		1,256		466		1,204
Adjusted weighted average Class A common shares outstanding – diluted		42,505		47,022		42,947		90,164

Adjusted earnings per share - basic	$	1.07	$	2.01	$	4.39	$	6.19
Adjusted earnings per share - diluted	$	1.07	$	1.98	$	4.36	$	5.96

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	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands except per share amounts)	2022		2021		2022		2021
Anti-dilutive amounts (n):
Numerator:
Reallocation of net income attributable to non-controlling interests from the anti-dilutive redemption of common units in CWGS, LLC (j)	$	66,055	$	119,804	$	255,412	$	—
Income tax on reallocation of net income attributable to non-controlling interests from the anti-dilutive redemption of common units in CWGS, LLC (k)	$	(16,804)	$	(30,965)	$	(66,789)	$	—
Assumed income tax benefit of combining C-corporations with full or partial valuation allowances with the income of other consolidated entities after the anti-dilutive redemption of common units in CWGS, LLC (l)	$	627	$	1,466	$	6,464	$	—
Denominator:
Anti-dilutive redemption of common units in CWGS, LLC for shares of Class A common stock (m)		42,045		42,635		42,045		—

Reconciliation of per share amounts:
Earnings per share of Class A common stock — basic	$	0.98	$	1.75	$	4.01	$	5.57
Non-GAAP Adjustments (o)		0.09		0.26		0.38		0.62
Adjusted earnings per share - basic	$	1.07	$	2.01	$	4.39	$	6.19

Earnings per share of Class A common stock — diluted	$	0.97	$	1.72	$	3.99	$	5.49
Non-GAAP Adjustments (o)		0.10		0.26		0.37		0.62
Dilutive redemption of common units in CWGS, LLC for shares of Class A common stock (p)		—		—		—		(0.14)
Dilutive options to purchase Class A common stock and/or restricted stock units (p)		—		—		—		(0.01)
Adjusted earnings per share - diluted	$	1.07	$	1.98	$	4.36	$	5.96

(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 $9.0 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 an effective tax rate of 25.4% and 25.5% for the adjustments for the 2022 and 2021 periods, respectively, which represents the estimated tax rate that would apply had the above adjustments been included in the determination of our non-GAAP metric.

(c)

(d)

Represents the loss on termination of operating leases, relating primarily to the 2019 Strategic Shift, resulting from the lease termination fees and the derecognition of the operating lease assets and liabilities. See Note 4 – Restructuring and Long-Lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for additional information.

(e)	Represents an adjustment to eliminate the gains and losses on disposals 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 loss on remeasurement of the Tax Receivable Agreement primarily due to changes in our blended statutory income tax rate. See Note 12 — Income Taxes to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

(h)

(i)

Represents the adjustment to net income 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 50.0% and 48.3% for the three months ended September 30, 2022 and 2021, respectively, and 49.8% and 49.2% for the nine months ended September 30, 2022 and 2021, respectively.

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

(k)	Represents the income tax expense effect of the above adjustment for reallocation of net income attributable to non-controlling interests. This assumption uses an effective tax rate of 25.4% and 25.5% for the adjustments for the 2022 and 2021 periods, respectively.

(l)

Typically represents adjustments to reflect the income tax benefit of losses of consolidated C-corporations that under the Company’s current equity structure cannot be used against the income of other consolidated subsidiaries of CWGS, LLC. However, for the three and nine months ended September 30, 2021, this adjustment included the reversal of the $0.3 million expense and $14.5 million benefit, respectively, from changes in the valuation allowance for Camping World, Inc. Subsequent to the redemption of all common units in CWGS, LLC, the Company believes certain actions could be taken such that the C-corporations’ losses could offset income of other consolidated subsidiaries. The adjustment reflects the income tax benefit assuming effective tax rate of 25.4% and 25.5% during the 2022 and 2021 periods,

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respectively, for the losses experienced by the consolidated C-corporations for which valuation allowances have been recorded. No assumed release of valuation allowance established for previous periods were included in these amounts and the $0.3 million and $14.5 million release of valuation allowance during the three and nine months ended September 30, 2021, respectively, was considered to be reversed and excluded from adjusted net income attributable to Camping World Holdings, Inc. – diluted for purposes of this calculation.

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

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

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

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

As discussed under “Our Corporate Structure Impact on Income Taxes” in Part I, Item 2 of this Form 10-Q , 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 ~~acquisitions into new~~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 ~~complementary markets, including~~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 ~~Gander Mountain Acquisition;~~full redemption of common units in CWGS, LLC for all periods, even when those common units would be anti-dilutive. The relevant numerator and ~~$1.4 million of other professional fees.~~denominator adjustments have been provided under “Anti-dilutive amounts” in the table above (see (n) 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, ~~including pre-opening expenses,~~ 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 ~~IPO, proceeds from the May 2017 Public Offering,~~Class A common stock, borrowings under our ~~Existing~~ Senior Secured Credit Facilities ~~or previously under our Previous Senior Secured Credit Facilities, and~~(as defined in Part I, Item 1 of this Form 10-Q), borrowings under our Floor Plan ~~Facility.~~Facility (as defined in Part I, Item 1 of this Form 10-Q), borrowings under our Real Estate Facilities (as defined in Part I, Item 1 of this Form 10-Q), and borrowings under our 2022 Real Estate Facility (as defined in Part I, Item 1 of this Form 10-Q).

As a public company, our additional liquidity needs include public company costs, payment of regular and special cash dividends, any exercise of the redemption right by the Continuing Equity Owners from time to time (should we elect to ~~exchange~~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 ~~sheltered~~reduced 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 1112 — Income Taxes to our ~~unaudited~~condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

~~CWGS, LLC intends~~Stock Repurchase Program

In January 2022, our board of directors authorized an increase to ~~make a regular quarterly cash distribution~~the existing stock repurchase program for the repurchase of up to ~~its common unit holders, including us,~~an additional $152.7 million of ~~approximately $0.08 per common unit and we intend to use all of the proceeds from such distribution on our common units to pay a regular quarterly cash dividend of approximately $0.08 per share on~~ our Class A common stock ~~subject~~and an extension of the stock repurchase program to expire on December 31, 2025. During the three months ended September 30,

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2022, we did not repurchase Class A common stock under our ~~discretion as the sole managing member of CWGS, LLC and the discretion of our board of directors.~~stock repurchase program. During the nine months ended September 30, ~~2017,~~2022, we ~~paid three regular quarterly cash dividends of $0.08 per share~~repurchased 2,592,524 shares of our Class A common ~~stock. CWGS, LLC is required~~stock for $79.8 million, including broker commissions. As of September 30, 2022, $120.2 million was available under the stock repurchase program to ~~make cash distributions~~repurchase additional shares of our Class A common stock.

As described in ~~accordance~~Note 12 — Income Taxes to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q, the Inflation Reduction Act of 2022 imposes a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022 with certain exclusions for (a) repurchased shares for withholding taxes on vested RSUs and (b) treasury shares reissued in the ~~CWGS LLC Agreement in an amount sufficient~~same tax year for ~~us to pay any expenses incurred by us in connection with~~settlement of stock option exercises or vesting of RSUs.

Dividends

On February 18, 2022, our board of directors approved the ~~regular~~increase of the portion of the quarterly cash dividend ~~along with any of our other operating expenses and other obligations. In addition, we currently intend~~relating to ~~pay a special cash dividend of~~ all or a portion of the Excess Tax Distribution (as defined under “Dividend Policy” included in Part II, Item 5 of

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our Annual Report) to $0.475 per share of Class A common stock from $0.35 per share, which increased the ~~holders~~total quarterly cash dividend to $0.625 per share of Class A common stock from $0.50 per share beginning in March 2022. For the three and nine months ended September 30, 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 ~~time~~CWGS, LLC and the remainder funded with all or a portion of the Excess Tax Distribution.

Our dividend policy has certain risks and limitations particularly with respect to ~~time~~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 our Annual Report 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 ~~as described under “Dividend Policy.”~~ and may be limited by our structure and statutory restrictions” included in Part I, Item 1A of our Annual Report.

Acquisitions and Capital Expenditures

During the nine months ended September 30, ~~2017,~~2022, the RV and Outdoor Retail segment acquired the assets of various RV dealerships comprised of five locations for an aggregate purchase price of approximately $79.8 million (see Note 11 – Acquisitions to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q) and purchased real property of $41.7 million.

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

For the three months ended December 31, 2022, our expansion of dealerships through acquisition and construction is expected to cost between $160.0 million and $190.0 million through a combination of business acquisitions and capital expenditures relating to land, buildings, and improvements. This amount includes the acquisition completed in October 2022 (see Note 11 – Acquisitions to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q). Factors that could impact the quantity of future locations or the cost to acquire or open those locations include, but are not limited to, our ability to locate potential acquisition targets or greenfield locations in a geographic area and at a cost that meets our success criteria; continued strong cash flow generation from our operations to fund these acquisitions and new locations; and availability of financing on our Floor Plan Facility. We expect the additional cash requirements of the other announced initiatives to be immaterial. In 2023, we expect to invest between $70.0 million and $100 million on additional business acquisitions and capital expenditures relating to real estate and improvements, but we expect to increase or decrease this range as market conditions and expansion opportunities evolve throughout the year.

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2019 Strategic Shift

In connection with the 2019 Strategic Shift during the nine months ended September 30, 2022, we have paid ~~three special~~or otherwise settled $2.0 million of lease termination costs and $5.6 million of other associated costs. We expect that approximately $0.2 million to $2.6 million of other associated costs and $4.6 million to $18.6 million of lease termination costs will result in future cash ~~dividends~~expenditures. For a discussion of ~~$0.0732 per share~~the 2019 Strategic Shift, see Note 4 — Restructuring and Long-Lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

Other Cash Requirements or Commitments

Substantially all of our ~~Class A common stock.~~new RV inventory and, at times, certain of our used RV inventory is financed under our Floor Plan Facility (defined in Note 3 – Inventories and Floor Plan Payables to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q). As of September 30, 2022, no used RV inventory was financed by our Floor Plan Facility. See “Summary of Credit Facilities, Other Long-Term Debt, and Finance Lease Arrangements” for a summary of the cash requirements related to our indebtedness.

~~Notwithstanding our obligations under~~Cash requirements relating to the Tax Receivable Agreement weliability, operating and finance lease obligations, and service and marketing sponsorship agreements have not materially changed since our Annual Report.

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 — Summary of Credit Facilities, Other Long-Term Debt, and Finance Lease Arrangements in Part I, Item 2 of this Form 10-Q), including additional borrowing capacity where applicable, will be sufficient to finance our continued operations, growth strategy, including the ~~Gander Mountain Acquisition,~~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 ~~as a public company~~ for at least the next twelve months. However, we cannot assure you that our cash provided by operating activities, cash and cash equivalents or cash available under our ~~Existing~~ Revolving Credit Facility, or our Floor Plan Facility, our Real Estate Facilities, and our 2022 Real Estate Facility, including the potential additional borrowings noted above, will be sufficient to meet our future needs. If we are unable to generate sufficient cash flows from operations in the future and if availability under our ~~Existing~~ Revolving Credit Facility, or our Floor Plan Facility, our Real Estate Facilities, and our 2022 Real Estate Facility is not sufficient, we may have to obtain additional financing. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. 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.~~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 our Annual Report.

As of September 30, ~~2017~~2022 and December 31, ~~2016,~~2021, we had working capital of ~~$343.7~~$675.5 million and ~~$266.8~~$685.6 million, respectively, including ~~$163.2~~$148.2 million and ~~$114.2~~$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 ~~$78.9~~$101.9 million and ~~$68.6~~$95.5 million as of September 30, ~~2017~~2022 and December 31, ~~2016, respectively, which reduces working capital.~~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.~~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. The FLAIR offset account at September 30, 2022 was $218.6 million, all of which could have been withdrawn while remaining in compliance with the financial covenants of the Floor Plan Facility.

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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. Because RVs are used primarily by vacationers and campers, demand for services, protection plans, products, and resources generally declines during the winter season, while sales and profits are generally highest during the spring and summer months. In addition, unusually severe weather conditionsbusiness (see Note 1 — Summary of Significant Accounting Policies — Seasonality to our condensed consolidated financial statements included in ~~some geographic areas may impact demand.~~Part I, Item 1 of this Form 10-Q).

We generate a disproportionately higher amount of our annual revenue in our second and third fiscal quarters, respectively, which include the spring and summer months. We incur additional expenses in the second and third fiscal quarters due to higher purchase volumes, increased staffing in our retail locations and program costs. If, for any reason, we miscalculate the demand for our products or our product mix during the second and third fiscal quarters, our sales in these quarters could decline, resulting in higher labor costs as a percentage of sales, lower margins and excess inventory, which could cause our annual results of operations to suffer and our stock price to decline.

Additionally, SG&A expenses as a percentage of gross profit tend to be higher in the first and fourth quarters due to the timing of acquisitions and the seasonality of our business. We prefer to acquire new retail locations in the first and fourth quarters of each year in order to provide time for the location to be re‑modeled and to ramp up operations ahead of the spring and summer months. The timing of our acquisitions in the first and fourth quarters, coupled with generally lower revenue in these quarters has resulted in SG&A expenses as a percentage of gross profit being higher in these quarters.

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Cash Flow

The following table shows summary cash ~~flows~~flow information for the nine months ended September 30, ~~2017~~2022 and ~~2016:~~2021:


	Nine Months Ended
	September 30,


					Nine Months Ended September 30,
(In thousands)	2017		2016		2022		2021
Net cash provided by operating activities	$	208,099	$	316,027	$	523,919	$	571,876
Net cash used in investing activities		(405,116)		(98,987)		(239,305)		(256,315)
Net cash provided by (used in) financing activities		246,046		(193,999)
Net increase in cash and cash equivalents	$	49,029	$	23,041
Net cash used in financing activities						(403,711)		(348,838)
Net decrease in cash and cash equivalents					$	(119,097)	$	(33,277)

Operating activities.Our cash flows from operating activities are primarily collections from contracts in transit and customers following the sale of new and used vehicles, as well as from the sale of retail ~~parts,~~products and services and ~~consumer~~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 and program costs.

Net cash provided by operating activities was ~~$208.1~~$523.9 million ~~for~~in the nine months ended September 30, ~~2017,~~2022, a decrease of ~~$107.9~~$48.0 million from ~~$316.0~~$571.9 million of net cash provided by operating activities ~~for~~in the nine months ended September 30, ~~2016.~~2021. The decrease was primarily due to ~~$219.0~~a $174.6 million ~~from increases~~reduction in ~~inventory balances,~~net income, a $52.5 million decrease in the working capital adjustment for accounts payable and other accrued expenses, a $13.0 million decrease in the working capital adjustment for deferred revenue and a $2.5 million reduction in other operating activities, partially offset by a ~~$37.2~~$120.9 million decrease in the working capital adjustment for inventory, a $41.9 million decrease in the working capital adjustment for accounts receivable and contracts in transit, a $19.7 million increase in ~~accounts payable and accrued liabilities, $23.5 million of other net favorable changes,~~deferred income taxes, and a ~~$50.4~~$12.1 million increase in ~~net income.~~ depreciation and amortization.

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 ~~Existing Senior Secured~~various credit facilities, other long-term debt, and finance lease arrangements, as applicable (see Liquidity and Capital Resources — Summary of Credit ~~Facilities.~~Facilities, Other Long-Term Debt, and Finance Lease Arrangements in Part I, Item 2 of this Form 10-Q).

The table below summarizes our capital expenditures for the nine months ended September 30, ~~2017~~2022 and ~~2016:~~2021:



	Nine Months Ended September 30,
(In thousands)	2022		2021
IT hardware and software	$	9,454	$	5,383
Greenfield and acquired retail locations		49,079		37,489
Existing retail locations		55,445		45,419
Corporate and other		4,467		269
Total capital expenditures	$	118,445	$	88,560

Nine Months Ended

September 30,
(In thousands)

2017

2016
IT hardware and software

$
11,570

$
5,546
Greenfield and acquired retail locations

24,896

5,708
Existing retail locations

11,483

14,278
Corporate and other

1,810

3,671
Total capital expenditures

$
49,759

$
29,203

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Our capital expenditures consist primarily of investing in acquired and greenfield retail and ~~acquired retail~~RV dealership locations, existing retail locations, information technology, hardware, and software. The expected minimum capital expenditures relating to new dealerships and real estate purchases through December 31, 2023 are discussed above. As of September 30, 2022, we had entered into contracts for construction of new dealership buildings for an aggregate future commitment of capital expenditures of $60.9 million. There were no other material commitments for capital expenditures as of September 30, ~~2017.~~2022.

Net cash used in investing activities was ~~$405.1~~$239.3 million for the nine months ended September 30, ~~2017.~~2022. The ~~$405.1~~$239.3 million of cash used in investing activities was comprised of $118.4 million of capital expenditures primarily ~~composed of $345.1~~related to retail locations, $83.2 million for the ~~acquisition~~purchase of ~~fifteen~~RV and outdoor retail ~~locations, three consumer shows, Gander Mountain~~businesses and ~~Overton’s, TheHouse.com,~~a publication business, $41.7 million for the purchase of real property, $3.0 million for purchase of other investments, and ~~W82 (see~~$0.9 million for the purchase of intangible assets, partially offset by proceeds from the sale of real property of $6.8 million and proceeds of $1.1 million from the sale of property and equipment. See Note ~~9 —~~11 – Acquisitions to our ~~unaudited~~condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q). The remaining cash used in investing activities was composed of approximately $49.8 million of capital expenditures and $16.8 for the purchase of real property, partially offset by proceeds of $6.0 million from the sale of real property and $0.6 million from the sale of property and equipment.10-Q.

Net cash used in investing activities was ~~$99.0~~$256.3 million for the nine months ended September 30, ~~2016.~~2021. The ~~$99.0~~$256.3 million of cash used in investing activities ~~included $67.7~~was comprised of $99.7 million for the ~~acquisition~~purchase of ~~five~~

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RV and outdoor retail ~~locations, of which four were opened and one was scheduled to open in the fourth quarter of 2016, a wholesale parts dealer and six consumer shows, in addition to $29.2~~businesses, $88.6 million of capital expenditures ~~and $12.9~~primarily related to retail locations, $61.1 million for the purchase of real property, $8.0 million of investment in businesses, and $2.6 million for the purchase of intangible assets, partially offset by proceeds of $2.3 million from the sale ~~and leaseback~~ of ~~real property and~~ property and equipment and $1.4 million from the sale of ~~approximately $7.3 million and $3.5 million, respectively.~~real property.

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

Our net cash ~~provided by~~used in financing activities was ~~$246.0~~$403.7 million for the nine months ended September 30, ~~2017.~~2022. The $246.0 million of cash provided by financing activities was primarily due to $174.5 million of borrowings under the Floor Plan Facility, $121.4 million of proceeds we received from the May 2017 Public Offering, and $94.8 million of net proceeds from long-term debt, partially offset by $125.0 million of non-controlling interest member distributions, $11.9 million of dividends paid on Class A common stock, $5.6 million of principal payments under the Existing Term Loan Facility, and other financing uses of $2.2 million during the nine months ended September 30, 2017.

~~Our net cash used in financing activities was $194.0 million for the nine months ended September 30, 2016. The $194.0~~$403.7 million of cash used in financing activities was primarily due to ~~$214.8~~$156.6 million of member distributions, ~~$66.0~~$99.8 million of ~~principal~~net payments ~~under the Floor Plan Facility, principal payments under the Previous Senior Secured Credit Facilities of $43.6 million, and other financing uses of $3.9 million, partially offset by $134.3 million of~~on borrowings under the Floor Plan Facility, ~~during~~$79.8 million for the repurchase of Class A common stock, $78.9 million of dividends paid on Class A common stock, $11.9 million of payments on long-term debt, $4.5 million for finance lease payments, $6.5 million of withholding taxes paid upon the vesting of restricted stock units (“RSUs”), and $0.1 million for sale-leaseback arrangement payments, partially offset by $28.0 million of net proceeds from a sale-leaseback arrangement, $6.0 million of proceeds from landlord funded construction on finance leases, and $0.3 million of proceeds from exercise of stock options.

Our net cash used in financing activities was $348.8 million for the nine months ended September 30, ~~2016.~~

~~Description~~2021. The $348.8 million of ~~Senior Secured~~cash used in financing activities was primarily due to $179.7 million of member distributions, $174.1 million of payments on long-term debt, $86.8 million for the repurchase of Class A common stock, $44.8 million of dividends paid on Class A common stock, $7.2 million of withholding taxes paid upon the vesting of RSUs, $2.2 million for finance lease payments, and $1.8 million of debt issuance costs, partially offset by $124.9 million of proceeds from long-term debt, $19.2 million of net proceeds from borrowings under the Floor Plan Facility, and $3.8 million of proceeds from exercise of stock options.

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Summary of Credit Facilities, Other Long-Term Debt, and ~~Floor Plan Facility~~

As of September 30, 2017 and December 31, 2016, we had outstanding debt in the form of our credit agreement that included a $734.5 million and $645.0 million term loan (the ‘‘Existing Term Loan Facility’’), respectively, and $35.0 million of commitments for revolving loans (the ‘‘Existing Revolving Credit Facility’’ and, together with the Existing Term Loan Facility, the ‘‘Existing Senior Secured Credit Facilities’’) and our floor plan financing facility with $1.165 billion in maximum borrowing availability and a letter of credit commitment of $15.0 million (the ‘‘Floor Plan Facility’’). 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. In the past, we have used interest rate swap derivatives to diversify our debt portfolio between fixed and variable rate instruments. For additional information regarding our interest rate risk and interest rate hedging instruments, see “Quantitative and Qualitative Disclosures About Market Risk” in Part I, Item 3 of this Form 10-Q.

~~Existing Senior Secured Credit Facilities~~Finance Lease Arrangements

The following table ~~details~~shows a summary of the outstanding ~~amounts~~balances, current portion, and remaining available borrowings under our ~~Existing Senior Secured Credit Facilities as of September 30, 2017~~credit facilities and ~~December 31, 2016 (in thousands):~~

September 30,

December 31,

2017

2016
Existing Senior Secured Credit Facilities:

Existing Term Loan Facility:

Principal amount of borrowings

$
740,000

$
645,000
Less: cumulative principal payments

(5,550)

—
Less: unamortized original issue discount

(5,880)

(6,349)
Less: finance costs

(11,663)

(11,898)

716,907

626,753
Less: current portion

(7,400)

(6,450)
Long-term debt, net of current portion

$
709,507

$
620,303
Existing Revolving Credit Facility:

Total commitment

$
35,000

$
35,000
Less: outstanding letters of credit

(3,237)

(3,237)
Additional borrowing capacity

$
31,763

$
31,763

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On March 17, 2017, CWGS Group, LLC (the “Borrower”), a wholly-owned subsidiary of CWGS, LLC, entered into a First Amendment (the “First Amendment”) to the Credit Agreement, dated as of November 8, 2016 (as amended, the "Existing Credit Agreement"). Per the terms of the First Amendment, the Borrower’s $645.0 million term loan facility was increased by $95.0 million to $740.0 million. The proceeds from the additional borrowings were used to purchase dealerships within FreedomRoads. No other ~~terms of the Credit Agreement were amended.~~

~~On October~~long-term debt and finance lease arrangements (see definitions and further details in Note 3 – Inventories and Floor Plan Payables, Note 6 2017, we further amended our Existing Credit Agreement. This amendment, among other things, (i) increased our Existing Term Loan Facility by $205.0 million to an outstanding principal amount of $939.5 million, (ii) amended the applicable margin to 2.00% from 2.75% per annum, in the case of base rate loans,– Long-Term Debt, and ~~to 3.00% from 3.75% per annum, in the case of LIBOR loans and, (iii) increased the quarterly amortization payment to $2.4 million. See~~ Note ~~18 — Subsequent Events~~7 – Leases to our ~~unaudited~~condensed consolidated financial statements included in Part I, Item 1 of this Form ~~10-Q.~~10-Q) at September 30, 2022:


			Current		Remaining
(In thousands)	Outstanding		Portion		Available
Floor Plan Facility:
Notes payable - floor plan	$	899,568	$	899,568	$	504,175	⁽¹⁾
Revolving line of credit		20,885		—		49,115	⁽²⁾
Senior Secured Credit Facility:
Term Loan Facility		1,359,230		14,015		—
Revolving Credit Facility		—		—		60,070	⁽³⁾
Other:
Real Estate Facilities		21,666		1,689		—
Other long-term debt		3,311		123		—
Finance lease obligations		105,893		10,397		—
	$	2,410,553	$	925,792	$	613,360

(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 limited by a borrowing base calculation.

(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 (Note 6 – Long-Term Debt to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q).

~~See~~In October 2022, we entered into a 2022 Real Estate Facility with a maximum principal capacity of $250.0 million (see definitions and further details in Note 6 – Long-Term Debt to our ~~Annual Report for a further discussion~~condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q). No amounts were borrowed as of the ~~terms~~closing of the ~~Existing Senior Secured Credit Facilities.~~2022 Real Estate Facility and we expect to borrow between $100.0 million and $150.0 under the 2022 Real Estate Facility during the fourth quarter of 2022.

~~Floor Plan Facility~~

~~The following table details the outstanding amounts and available borrowings under our Floor Plan Facility as of September 30, 2017 and December 31, 2016 (in thousands):~~

September 30,

December 31,

2017

2016
Floor Plan Facility:

Notes payable — floor plan:

Total commitment

$
1,165,000

$
1,165,000
Less: borrowings

(799,682)

(625,185)
Additional borrowing capacity

$
365,318

$
539,815
Letters of credits:

Total commitment

$
15,000

$
15,000
Less: outstanding letters of credit

(8,020)

(8,020)
Additional borrowing capacity

$
6,980

$
6,980

~~See our Annual Report for a further discussion of the terms of the Floor Plan Facility.~~

Sale/Leaseback Arrangements

We have in the past and may in the future enter into ~~sale‑leaseback~~sale-leaseback transactions to finance certain property acquisitions and capital expenditures, pursuant to which we sell property and/or leasehold 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, the Company entered into three separate twenty-year lease agreements, whereby the Company will lease back the properties from the acquiring company. Under each lease agreement, FR has four consecutive options to extend the lease term for additional periods of five years for each option. This transaction is accounted for as a financing transaction. The Company recorded a liability for the amount received, will continue to depreciate the non-land portion of the assets, and has imputed an interest rate so that the net carrying amount of the financial liability and remaining assets will be zero at the end of the initial lease terms. The financial liability is included in other long-term liabilities in the condensed consolidated balance sheet as of September 30, 2022.

Deferred Revenue ~~and Gains~~

Deferred revenue ~~and gains consist~~consists of our sales for products not yet recognized as revenue at the end of a given ~~period and deferred gains on sale-leaseback and derecognition of right to use asset transactions.~~period. Our deferred revenue ~~and deferred gains~~ as of September 30, 2017 were $124.2 million and $11.5 million, respectively. Deferred revenue is expected to be recognized as revenue and deferred gains are expected to be recognized ratably over the lease terms as an offset to rent expense.

~~Off-Balance Sheet Arrangements~~

~~As of September 30, 2017, we did not have any off-balance sheet arrangements, except for operating leases entered into in the normal course of business.~~

2022 was $175.2 million.

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Critical Accounting Policies and Estimates

We prepare our condensed consolidated financial statements in accordance with GAAP, and in doing so, we have to make estimates, assumptions and judgments affecting the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosure of contingent assets and liabilities. We base our estimates, assumptions and judgments on historical experience and on various other factors we believe to be reasonable under the circumstances. Different assumptions and judgments would change estimates used in the preparation of our condensed consolidated financial statements, which, in turn, could change our results from those reported. We evaluate our critical accounting estimates, assumptions and judgments on an ongoing basis.

There has been no material change in our critical accounting policies and estimates from those previously reported and disclosed in our Annual Report.

Recent Accounting Pronouncements

See Note 1 – Summary of Significant Accounting Policies to our ~~unaudited~~ condensed consolidated financial statements in Item 1, of Part I of this Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk from changes in ~~inflation and~~ interest rates. ~~All of these~~This market ~~risks arise~~risk arises in the normal course of business, as we do not engage in speculative trading activities. The following analysis provides quantitative information regarding ~~these risks.~~this risk.

~~Impact of Inflation~~

We believe that inflation over the last three fiscal years has not had a significant impact on our operations; however, we cannot assure you there will be no such effect in the future. Our leases require us to pay taxes, maintenance, repairs, insurance and utilities, all of which are generally subject to inflationary increases. Additionally, the cost of remodeling acquired retail locations and constructing new retail locations is subject to inflationary increase in the costs of labor and material, which results in higher rent expense on new retail locations. Finally, we finance substantially all of our inventory through various revolving floor plan arrangements with interest rates that vary based on various benchmarks. Such rates have historically increased during periods of increasing inflation.

Interest Rate Risk

Our operating results are subject to risk from interest rate fluctuations on our ~~Existing~~ Senior Secured Credit Facilities, ~~and~~ our Floor Plan Facility, our Real Estate Facilities, and our 2022 Real Estate Facility, which ~~carries~~carry variable interest rates. Interest rate risk is the exposure to loss resulting from changes in the level of interest rates and the spread between different interest rates. ~~Advances under~~Because our ~~Existing~~ Senior Secured Credit Facilities, ~~which include the Existing Term Loan Facility and the Existing Revolving Credit Facility, is tied to a borrowing base and bear interest at variable rates. Additionally, under our~~ Floor Plan ~~Facilities we have the ability to draw on revolving floor plan arrangements, which bear interest at variable rates. Because our Existing Senior Secured Credit~~Facility, Real Estate Facilities, and ~~Floor Plan~~2022 Real Estate Facility bear interest at variable rates, we are exposed to market risks relating to changes in interest rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control. As of September 30, 2017, we had no outstanding borrowings under our Existing Revolving Credit Facility aside from letters of credit in the aggregate amount of $3.2 million outstanding under the Existing Revolving Credit Facility, $717.0 million of variable rate debt outstanding under our Existing Term Loan Facility, net of $5.9 million of unamortized original issue discount and $11.7 million of finance costs, and $799.7 million in outstanding borrowings under our Floor Plan Facility.

Based on September 30, ~~2017~~2022 debt levels (see Liquidity and Capital Resources — Summary of Credit Facilities, Other Long-Term Debt, and Finance Lease Arrangements in Part I, Item 2 of this Form 10-Q), an increase or decrease of 1%100 basis points in the effective interest rate would cause an increase or decrease in interest ~~expense~~ expense:

•

under our ~~Existing~~ Term Loan Facility of $14.1 million over the next 12 months;

•

under our Floor Plan Facility of approximately $9.2 million over the next 12 months;

•

under our Floor Plan Facility revolving line of credit of approximately $0.2 million over the next 12 months;

•

under our Real Estate Facilities of approximately $0.2 million over the next 12 months;

•

under our Other Long-Term Debt would be immaterial; and

•

under our 2022 Real Estate Facilities would not be applicable, since there was no outstanding balance at September 30, 2022.

See “Results of ~~$7.4 million and $3.6 million, respectively, over the next 12 months and an increase or decrease~~Operations” in Part I, Item 2 of ~~1% in the effective rate would cause an increase or decrease in~~this Form 10-Q for a discussion of interest expense ~~under our Floor Plan Facility~~for the three and nine months ended September 30, 2022 compared to the three and nine months ended September 30, 2021, respectively.

Table of ~~approximately $8.0 million over the next 12 months.~~ Contents

We do not use derivative

~~Table of Contents~~

financial instruments for speculative or trading purposes, but this does not preclude our adoption of specific hedging strategies in the future.

Item 4. Controls and Procedures

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)). Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of September 30, ~~2017.~~2022.

Changes in Internal Control over Financial Reporting

During the three months ended September 30, 2022, we completed the implementation of a corporate performance management (“CPM”) system for performing the consolidation of the financial data from our disparate enterprise resource planning (“ERP”) systems. The new CPM system is intended to enhance operating efficiencies by automating certain manual procedures and providing more effective financial reporting to our management. As a result of this CPM implementation, certain internal controls over financial reporting have been automated, modified or implemented.

There ~~was~~were no ~~change~~other changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal control performed during the fiscal quarter ended September 30, ~~2017,~~2022, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1:1. Legal Proceedings

See Note 9 – Commitments and Contingencies to our condensed consolidated financial statements in Item 1, Part I of this Form 10-Q.

We are engaged in various legal actions, claims and proceedings arising in the ordinary course of business, including claims related to employment-related matters, breach of contracts, products liabilities, consumer protection and intellectual property matters resulting from our business activities. We do not believe that the ultimate resolution of these pending claims will have a material adverse effect on our business, financial condition or results of operations. However, litigation is subject to many uncertainties, and the outcome of certain individual litigated matters may not be reasonably predictable and any related damages may not be estimable. Some litigation matters could result in an adverse outcome to us, and any such adverse outcome could have a material adverse effect on our business, financial condition and results of operations.

Item 1A. Risk Factors

There have been no material changes to our risk factors as previously disclosed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2021 filed with the Securities and Exchange Commission on ~~March 13, 2017,~~February 24, 2022, other than with respect to the risk factors described below.

~~Risks Related to the Gander Mountain Acquisition~~

~~If we continue to open and operate existing Gander Mountain retail locations, we may be required to raise additional funds~~Unanticipated changes in ~~order to fund such openings. We cannot assure you that the terms of any additional debt~~effective tax rates or ~~equity financing we obtain to fund the openings will be favorable to us.~~

~~Table of Contents~~

another 40 to 45 stores during the second and third quarters of 2018, with measured growth thereafter. We assumed 15 Gander Mountain leases on October 6, 2017 through the exercise of Designation Rights and expect to enter into new leases for the other locations. As a result, we will begin to incur meaningful incremental expenses without the benefit of the full revenue as we begin to ramp the Gander Outdoors business and open stores.

~~Based on our current plans, we currently expect to fund the opening and initial working capital needs~~adverse outcomes resulting from examination of our current goal to operate Gander Mountain stores and certain liabilities that we will assume in connection therewith with available cash on hand and proceeds from the Second Amendment to our Senior Secured Credit Facilities. We may also be required to raise additional capital from equity or debt financing to finance the opening and operation of Gander Mountain stores. We cannot assure you that we will be able to obtain such additional equity or debt financing on favorable terms or at all. Moreover, the issuance by us of Class A common stock in any future offerings may result in substantial dilution to our existing stockholders and may have a material adverse effect on the market price of our Class A common stock. Furthermore, to the extent that we need to incur additional debt financing in connection with the opening and operation of any Gander Mountain retail locations, such debt financings may have an adverse effect on our financial condition and may limit our ability to obtain financing in the future.

Additionally, if we fail to realize the expected benefits from the Gander Mountain Acquisition or if the financial performance of Gander Mountain and Overton's do not meet our current expectations, it may make it more difficult for us to service our debt and our results of operations may fail to meet expectations.

~~We may not complete the opening of Gander Mountain retail locations within the time frame we anticipate or at all, which could have a negative effect on our business and our results of operations.~~

On May 26, 2017, CWI, an indirect subsidiary of the Company, completed the acquisition of certain assets of Gander Mountain and its Overton's boating business through a bankruptcy auction that took place in April 2017 for $35.4 million in cash and $1.1 million of contingent consideration, as described in Note 9 — Acquisitions to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

~~The assets acquired include the right to designate any real estate leases for assignment to CWI~~income or other third parties through the Designation Rights, other agreements CWI elects to assume, intellectual property rights, operating systems and platforms, certain distribution center equipment, Overton’s inventory, the Gander Mountain and Overton's e-commerce businesses and fixtures and equipment for Overton's two retail locations and corporate operations. Furthermore, CWI committed to exercise Designation Rights and take an assignment of no fewer than 15 Gander Mountain retail leases on or before October 6, 2017, in addition to the two Overton's retail leases assumed at the closing of the acquisition. The Designation Rights expired on October 6, 2017 after CWI elected to be designated 15 Gander Mountain retail leases. CWI also assumed certain liabilities, such as cure costs for leases and other agreements it elected to assume, accrued time off for employees retained by CWI and retention bonuses payable to certain key Gander Mountain employees retained by CWI. The cure costs for the 15 Gander Mountain leases assumed under the Designation Rights were approximately $1.1 million.

Contingent on our final lease negotiations, our current plan is to open the initial 15 to 20 Gander Mountain stores, which will be rebranded as Gander Outdoors, by the end of the first quarter of 2018 and another 40 to 45 stores during the second and third quarters of 2018, with measured growth thereafter. We assumed 15 Gander Mountain leases on October 6, 2017 through the exercise of Designation Rights and expect to enter into new leases for the other locations. As a result, we will begin to incur meaningful incremental expenses without the benefit of the full revenue as we begin to ramp the Gander Outdoors business and open stores. Additionally, given the current liquidation of the existing Gander Mountain inventory, we will need to continue to supply each retail location that we determine to operate with new inventory in a timely manner, which may also require us to raise additional capital from equity or debt financings. If we are unable to negotiate lease terms with the landlords acceptable to us, order new inventory or raise additional capital, in each case, within the expected time frame, or at all, it could have a negative effect on our financial performance and our ability to execute on our operating strategy for Gander Mountain.

~~Table of Contents~~

Combining Gander Mountain (including Overton's) with Camping World may be more difficult, costly or time consuming than expected and the anticipated benefits and cost savings of the transaction may not be fully realized.

The success of the Gander Mountain Acquisition, including the realization of anticipated benefits and cost savings, will depend, in part, on our ability to successfully combine the businesses of Gander Mountain (including Overton's) and Camping World. The integration may be more difficult, costly or time consuming than expected. It is possible that the integration process could result in the loss of key employees or the disruption of each company's ongoing businesses or that the alignment of standards, controls, procedures and policies may adversely affect the combined company's ability to maintain relationships with clients, customers, suppliers and employees or to fully achieve the anticipated benefits and cost savings of the transaction. The loss of key employeestax returns could adversely affect our ~~ability~~operating results and financial condition.

We are subject to ~~successfully conduct our existing business~~income taxes in the ~~markets in which Gander Mountain~~United States, and ~~Overton's operated prior~~our tax liabilities will be subject to the ~~Gander Mountain Acquisition, which~~allocation of expenses in differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a number of factors, including:

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●changes in the valuation of our deferred tax assets and liabilities;

●expected timing and amount of increases in or release of any tax valuation allowances;

●tax effects of equity-based compensation;

●costs related to intercompany restructurings; or

●changes in tax laws, regulations or interpretations thereof.

In addition, we may be subject to audits of our income, sales and other transaction taxes by U.S. federal and state authorities. Outcomes from these audits could have an adverse effect on our ~~financial~~operating results and ~~the market price~~financial condition.

CWH is able to benefit from certain state combined filing groups due to unitary relationships, which provide additional taxable income sources to utilize CW’s deferred tax assets. CWH’s annual weighted-average ownership in CWGS, LLC of our Class A common stock. Other potential difficulties of combining the businesses of Gander Mountain (including Overton's) and Camping World include unanticipated issues in integrating suppliers, logistics, distribution, retail operations, negotiation of lease terms with landlords on terms acceptable to us, information communicationsover 50% and other ~~systems. We also expect to continue to incur non-recurring charges, including transaction costs, directly attributable to the Gander Mountain Acquisition and the opening of these retail locations.~~

If we experience difficulties with the integration process, the anticipated benefits of the transaction may not be realized fully or at all, or may take longer to realize than expected. Integration efforts between the companies may also divert management attention and resources. These integration matters could have an adverse effect on each of Camping World and Gander Mountain (including Overton's) during this transition period and for an undetermined period after completion of the Gander Mountain Acquisition on the combined company.

Moreover, in connection with the opening of the Gander Mountain retail locations, we expect that we will continue to expand into numerous new markets and will be selling various new product lines or categories, including firearms. See "— We may incur costs from litigation relating to products that we currently sell as a result of the consummation of the Gander Mountain Acquisition and the opening of retail locations, particularly firearms and ammunition, which could adversely affect our total revenue and profitability." As a result, opening retail locations may be more costly or time consuming than expected. Additionally, our unfamiliarity with the Gander Mountain product lines and new markets may also impact our ability to operate these locations profitably once they are opened. Otherqualitative unity factors ~~that may~~ impact the profitability of these retail locations include our ability to retain existing store personnel or hire and train new store personnel, especially management personnel, our ability to provide a satisfactory mix of merchandise, our ability to negotiate favorable lease agreements, our ability to supply retail locations with inventoryunitary relationships. If changes in ~~a timely manner and the other~~unitary factors, ~~described under "— Risks Related to our Business — Our expansion into new, unfamiliar markets, products lines or categories presents increased risks~~such as treasury stock repurchases that ~~may prevent us from being profitable~~reduce CWH’s ownership in these new markets, products lines or categories. Delays in opening or acquiring new retail locations could have a material adverse effect on our business, financial condition and results of operations." under ‘‘Risk Factors’’ in Item 1A of Part I of our Annual Report. As a result, we cannot assure you that we will be successful in operating the Gander Mountain business on a profitable basis, and our failure to do so could have a material adverse effect on our business, financial condition and results of operations.

~~We and Gander Mountain (including Overton's) will be subject to business uncertainties while the liquidation sales are pending.~~

Uncertainty about the effect of the Gander Mountain Acquisition, the timing of the completion of liquidation sales at Gander Mountain's existing stores and the expected opening and operation of Gander Mountain and Overton's retail locations on employees, customers and suppliers may have an adverse effect on us. These uncertainties may impair our or Gander Mountain's (including Overton's) ability to attract, retain and motivate key personnel until the liquidation sales are completed, and could cause customers, suppliers and others that deal with Gander Mountain (including Overton's) or us to seek to change existing business relationships with Gander Mountain (including Overton's) or us. If key employees depart or current customers

~~Table of Contents~~

or suppliers terminate or modify their business relationships with us or Gander Mountain (including Overton's) because of issues relating to the uncertainty of the timing of the completion of liquidation sales at Gander Mountain's existing stores, the timing of the opening of retail locations and difficulty of integration or a desire not to remain with us or Gander Mountain (including Overton's), our business could be harmed.

The obligations and liabilities of Gander Mountain (including Overton's), some of which may be unanticipated or unknown, may be greater than we have anticipated which may diminish the value of Gander Mountain (including Overton's) to us.

Under the asset purchase agreement entered into in connection with the Gander Mountain Acquisition, we have assumed, and will continue to assume, certain liabilities associated with Gander Mountain, including cure costs for real property leases and other agreements we elect to assume, accrued time off for employees retained by us and retention bonuses payable to certain key Gander Mountain employees retained by us. These liabilities may be greater than we have anticipated. The obligations and liabilities of Gander Mountain (including Overton's) could have a material adverse effect on Gander Mountain's (including Overton's) business or Gander Mountain (including Overton's) value to us or on our business, financial condition or results of operations.

We may incur costs from litigation relating to products that we currently sell as a result of the Gander Mountain Acquisition and the opening of retail locations, particularly firearms and ammunition, which could adversely affect our total revenue and profitability.

We may incur damages due to lawsuits relating to products we currently sell as a result of the Gander Mountain Acquisition and the opening of Gander Mountain retail locations, including, but not limited to, lawsuits relating to firearms, ammunition, tree stands and archery equipment. We may incur losses due to lawsuits, including potential class actions, relating to our performance of background checks on firearms purchases and compliance with other sales laws as mandated by state and federal law. We may also incur losses from lawsuits relating to the improper use of firearms or ammunition sold by us, including lawsuits by municipalities or other organizations attempting to recover costs from manufacturers and retailers of firearms and ammunition. Our insurance coverage and the insurance provided by our vendors for certain products they sell to us may be inadequate to cover claims and liabilities related to products that we sell. In addition, claims or lawsuits related to products that we sell, or the unavailability of insurance for product liability claims, couldCWGS, LLC, result in the ~~elimination of these products from our product line, thereby reducing total revenue. If one or more successful claims~~inability for combined filing for certain states, then additional income tax expense would be recognized for recording an additional valuation allowance against us are not covered by or exceed our insurance coverage, or if insurance coverage is no longer available, our available working capital may be impaired and our operating results could be materially adversely affected. Even unsuccessful claims couldCW’s deferred tax assets. Additionally, this change in filing status would likely decrease CWH’s state tax rates applied against its current taxable income, which would also result in additional tax expense due to the ~~expenditure~~revaluation of ~~funds~~its deferred tax assets and ~~management time and could have a negative impact on our profitability and on future premiums we would be required~~other income from the adjustment to ~~pay on our insurance policies.~~the Tax Receivable Agreement liability.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table presents information related to our repurchases of Class A common stock for the periods indicated:


Period	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Programs⁽¹⁾	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs⁽¹⁾
July 1, 2022 to July 31, 2022	—	$—	—	$120,166,000
August 1, 2022 to August 31, 2022	—	—	—	120,166,000
September 1, 2022 to September 30, 2022	—	—	—	120,166,000
Total	—	$—	—	$120,166,000

(1)

On October 30, 2020, our board of directors authorized a stock repurchase program for the repurchase of up to $100.0 million of the Company’s Class A common stock, expiring on October 31, 2022. In August 2021 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 of the Company’s Class A common stock, respectively. Following these extensions, the stock repurchase program now expires on December 31, 2025. This program does not obligate the Company 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.

The table above excludes shares net settled by the Company in connection with tax withholdings associated with the vesting of restricted stock units as these shares were not issued and outstanding.

~~None.~~

Item 3:3. Defaults Upon Senior Securities

None.

Item 4:4. Mine Safety Disclosures

Not applicable.

Item 5:5. Other Information

~~None.~~

On October 27, 2022, certain subsidiaries of FRHP Lincolnshire, LLC (“FRHP”) and certain subsidiaries of FRHP (as borrowers) and CWGS Group, LLC (as guarantor), each indirect subsidiaries of CWGS, LLC,

~~Item 6: Exhibits~~

~~Exhibits Index~~

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

File No.

Exhibit

Filing
Date

Filed/
Furnished
Herewith
3.1

Amended and Restated Certificate of Incorporation of Camping World Holdings, Inc.

10-Q

001-37908

3.1

11/10/16

3.2

Amended and Restated Bylaws of Camping World Holdings, Inc.

10-Q

001-37908

3.2

11/10/16

4.1

Specimen Stock Certificate evidencing the shares of Class A common stock

S-1/A

333‑211977

4.1

9/13/16

10.1

Second Amendment to Credit Agreement, dated October 6, 2017, by and among CWGS Enterprises, LLC, as holdings, CWGS Group, LLC, as borrower, the lenders party thereto and Goldman Sachs Bank USA, as administrative agent

8-K

001-37908

10.1

10/10/17

31.1

Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer

*

31.2

Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer

*

32.1

Section 1350 Certification of Chief Executive Officer

**

32.2

Section 1350 Certification of Chief Financial Officer

**

101.INS

XBRL Instance Document

***

101.SCH

XBRL Taxonomy Extension Schema Document

***

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

***

101.DEF

XBRL Extension Definition Linkbase Document

***

101.LAB

XBRL Taxonomy Label Linkbase Document

***

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

***

entered into a credit agreement (the “FRHP Credit Agreement”) for a new $250.0 million senior secured mortgage facility (the ‘‘2022 Real Estate Facility’’) with Manufacturers and Traders Trust Company, as administrative agent, and the other lenders party thereto. No funds were drawn at closing; $250.0 million is available to be funded on a delayed draw basis on subsequent funding dates as determined by the borrowers. The Company anticipates an initial draw of between $100.0 million to $150.0 million by December 31, 2022. In addition, the borrowers have the ability to add one or more incremental facilities under the 2022 Real Estate Facility, up to a maximum of $100.0 million and subject to the satisfaction of certain customary conditions. The 2022 Real Estate Facility will mature on October 27, 2027.

59Borrowings under the 2022 Real Estate Facility bear interest at a rate per annum equal to, at the borrowers’ option, either: (a) SOFR Rate (as defined in the FRHP Credit Agreement) set for an elected interest period or (b) a Base Rate (as defined in the FRHP Credit Agreement) plus an applicable margin as set forth in the FRHP Credit Agreement. In addition to paying interest on outstanding principal under the 2022 Real Estate Facility, the borrowers are required to pay a commitment fee to the lenders under the 2022 Real Estate Facility in respect of the unused commitments thereunder at a rate set forth in the FRHP Credit Agreement.

All obligations under the 2022 Real Estate Facility and the guarantees of those obligations, are secured, subject to certain exceptions, by the mortgaged real property assets.

The 2022 Real Estate Facility contains a number of covenants that, among other things and subject to certain exceptions, restrict the ability of the borrowers and their restricted subsidiaries to:

•

incur additional indebtedness;

•

pay dividends, distributions, redemption of equity and other restricted payments;

•

make loans, advances and investments;

•

enter into agreements with negative pledge clauses or clauses restricting intercompany distributions;

•

engage in transactions with affiliates;

•

sell assets;

•

complete mergers, dissolutions, liquidations, consolidations, acquisitions, division transactions and other fundamental changes; and

•

create liens.

In addition, the 2022 Real Estate Facility requires the borrowers to comply with a minimum debt service coverage ratio of greater than 1.10 to 1.00 as of the last day of any fiscal quarter.

The 2022 Real Estate Facility includes customary representations and warranties of the Company and the borrowers, which must continue to be true and correct in all material respects as a condition to future draws. The 2022 Real Estate Facility also includes customary events of default in certain cases subject to customary notice or cure rights, following which, amounts outstanding under the 2022 Real Estate Facility may be accelerated.

This summary of the FRHP Credit Agreement does not purport to be a complete description and is qualified in its entirety by reference to the full text of the FRHP Credit Agreement, which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q.

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Item 6. Exhibits

Exhibits Index


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/ Furnished Herewith
3.1	Amended and Restated Certificate of Incorporation of Camping World Holdings, Inc.	10-Q	001-37908	3.1	11/10/16

3.2	Amended and Restated Bylaws of Camping World Holdings, Inc.	10-Q	001-37908	3.2	11/10/16

4.1	Specimen Stock Certificate evidencing the shares of Class A common stock	S-1/A	333-211977	4.1	9/13/16

10.1	Credit Agreement, dated as of October 27, 2022, by and among certain subsidiaries of FRHP Lincolnshire, LLC, as Holdings, certain subsidiaries of Holdings, as Borrowers, CWGS Group, LLC as Guarantor, Manufacturers and Traders Trust Company, as Administrative Agent, and the Financial Institutions Party thereto, as Lenders					*

31.1	Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer					*

31.2	Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer					*

32.1	Section 1350 Certification of Chief Executive Officer					**

32.2	Section 1350 Certification of Chief Financial Officer					**

101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.					***

101.SCH	Inline XBRL Taxonomy Extension Schema Document					***

Table of Contents


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/ Furnished Herewith
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document					***

101.DEF	Inline XBRL Extension Definition Linkbase Document					***

101.LAB	Inline XBRL Taxonomy Label Linkbase Document					***

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document					***

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)					***

* Filed herewith

** Furnished herewith

*** Submitted electronically herewith

SIGNATURE

~~SIGNATURE~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			Camping World Holdings, Inc.

Date: November ~~9, 2017~~2, 2022	By:	/s/ ~~Thomas F. Wolfe~~Karin L. Bell
		Karin L. Bell
		~~Thomas F. Wolfe~~
		Chief Financial Officer ~~and Secretary~~

		(Authorized Officer and Principal Financial Officer and Principal Accounting Officer)


		Page
			~~Page~~


PART I. FINANCIAL INFORMATION

Item 1	Financial Statements (unaudited)	5
	Unaudited Condensed Consolidated Balance Sheets – September 30, ~~2017~~2022 and December 31, ~~2016~~2021	5
	Unaudited Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, ~~2017~~2022 and ~~2016~~2021	6
	Unaudited Condensed Consolidated ~~Statement~~Statements of Stockholders’ Equity ~~(Deficit)~~ – Three and Nine Months Ended September 30, ~~2017~~2022 and 2021	7
	Unaudited Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, ~~2017~~2022 and ~~2016~~2021	89
	Notes to Unaudited Condensed Consolidated Financial Statements	1011
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3135
Item 3	Quantitative and Qualitative Disclosures About Market Risk	5463
Item 4	Controls and Procedures	5564

PART II. OTHER INFORMATION

Item 1	Legal Proceedings	5564
Item 1A	Risk Factors	5564
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	5865
Item 3	Defaults Upon Senior Securities	5865
Item 4	Mine Safety Disclosures	5865
Item 5	Other Information	5865
Item 6	Exhibits	5967

Signatures		6169


	September 30,		December 31,
	2017		2016
Assets
Current assets:
Cash and cash equivalents	$	163,225	$	114,196
Contracts in transit		79,499		29,012
Accounts receivable, net		73,700		58,488
Inventories, net		1,204,138		909,254
Prepaid expenses and other assets		27,685		21,755
Total current assets		1,548,247		1,132,705
Property and equipment, net		183,485		130,760
Deferred tax assets, net		262,433		125,878
Intangibles assets, net		37,972		3,386
Goodwill		328,402		153,105
Other assets		17,940		17,931
Total assets	$	2,378,479	$	1,563,765
Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable	$	158,026	$	68,655
Accrued liabilities		125,349		78,044
Deferred revenues and gains		78,934		68,643
Current portion of capital lease obligations		908		1,224
Current portion of tax receivable agreement liability		7,378		991
Current portion of long-term debt		7,400		6,450
Notes payable – floor plan, net		799,682		625,185
Other current liabilities		26,822		16,745
Total current liabilities		1,204,499		865,937
Capital lease obligations, net of current portion		207		841
Right to use liability		10,231		10,343
Tax receivable agreement liability, net of current portion		102,485		18,190
Long-term debt, net of current portion		709,507		620,303
Deferred revenues and gains		56,782		52,210
Deferred tax liabilities		49		—
Other long-term liabilities		35,775		24,156
Total liabilities		2,119,535		1,591,980
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of September 30, 2017 and December 31, 2016		—		—
Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 30,227,113 issued and 30,227,061 outstanding as of September 30, 2017 and 18,935,916 issued and outstanding as of December 31, 2016		302		189
Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445 issued; and 57,031,184 outstanding as of September 30, 2017 and 62,002,729 outstanding as of December 31, 2016		6		6
Class C common stock, par value $0.0001 per share – one share authorized, issued and outstanding as of September 30, 2017 and December 31, 2016		—		—
Additional paid-in capital		157,031		74,239
Retained earnings		35,655		544
Total stockholders' equity attributable to Camping World Holdings, Inc.		192,994		74,978
Non-controlling interests		65,950		(103,193)
Total stockholders' equity (deficit)		258,944		(28,215)
Total liabilities and stockholders' equity (deficit)	$	2,378,479	$	1,563,765


										Additional				Non-
	Class A Common Stock			Class B Common Stock			Class C Common Stock			Paid-In		Retained		Controlling
	Shares	Amounts		Shares	Amounts		Shares	Amounts		Capital		Earnings		Interest		Total
Balance at January 1, 2017	18,936		189	62,003		6	—		—		74,239		544		(103,193)		(28,215)
Issuance of Class A common stock sold in a public offering, net of underwriting discounts, commissions and offering costs	4,600		46	—		—	—		—		121,399		—		—		121,445
Non-controlling interest adjustment for purchase of common units from CWGS, LLC with proceeds from a public offering	—		—	—		—	—		—		(53,648)		—		87,203		33,555
Issuance of Class A common stock for an acquisition by a subsidiary	164		1	—		—	—		—		5,719		—		—		5,720
Non-controlling interest adjustment for capital contribution of Class A common stock for an acquisition by a subsidiary	—		—	—		—	—		—		(2,261)		—		3,678		1,417
Equity-based compensation	—		—	—		—	—		—		2,792		—		—		2,792
Vesting of restricted stock units	—		—	—		—	—		—		—		—		—		—
Repurchases of Class A common stock	—		—	—		—	—		—		—		—		—		—
Redemption of LLC common units for Class A common stock	6,526		66	(4,972)		—	—		—		69,091		—		5,191		74,348
Distributions to holders of LLC common units	—		—	—		—	—		—		—		—		(124,996)		(124,996)
Dividends	—		—	—		—	—		—		—		(11,874)		—		(11,874)
Deferred tax adjustments related to tax receivable agreement	—		—	—		—	—		—		(55,858)		—		—		(55,858)
Non-controlling interest adjustment	—		—	—		—	—		—		(4,442)		—		5,031		589
Net income	—		—	—		—	—		—		—		46,985		193,036		240,021
Balance at September 30, 2017	30,226	$	302	57,031	$	6	—	$	—	$	157,031	$	35,655	$	65,950	$	258,944


	Nine Months Ended September 30,
	2017		2016
Operating activities
Net income	$	240,021	$	189,602

Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		22,819		18,144
Equity-based compensation		2,792		60
Gain on sale of assets		(292)		(227)
Provision for (recovery of) losses on accounts receivable		(23)		1,701
Accretion of original issue discount		706		915
Non-cash interest expense		3,210		3,698
Deferred income taxes		3,256		3,089
Loss on remeasurement of tax receivable agreement		79		—
Change in assets and liabilities, net of acquisitions:
Receivables and contracts in transit		(64,211)		(38,415)
Inventories		(150,653)		68,316
Prepaid expenses and other assets		(6,381)		(8,324)
Checks in excess of bank balance		—		(7,478)
Accounts payable and other accrued expenses		105,154		67,935
Payment pursuant to tax receivable agreement		(203)		—
Accrued rent for cease-use locations		(91)		286
Deferred revenue and gains		14,863		12,849
Other, net		37,053		3,876
Net cash provided by operating activities		208,099		316,027

Investing activities
Purchases of property and equipment		(49,759)		(29,203)
Purchase of real property		(16,820)		(12,871)
Proceeds from the sale of real property		6,000		7,291
Purchases of businesses, net of cash acquired		(345,140)		(67,690)
Proceeds from sale of property and equipment		603		3,486
Net cash used in investing activities	$	(405,116)	$	(98,987)


	Consumer
	Services and
	Plans		Retail		Consolidated
Balance as of December 31, 2016	$	49,944	$	103,161	$	153,105
Acquisitions (1)		—		175,297		175,297
Balance as of September 30, 2017	$	49,944	$	278,458	$	328,402


	September 30, 2017
	Cost or		Accumulated
	Fair Value		Amortization		Net
Trademarks and trade names	$	28,839	$	(420)		$	28,419
Membership and customer lists		10,778		(7,118)			3,660
Websites		5,990		(97)			5,893
	$	45,607	$	(7,635)		$	37,972


	December 31, 2016
	Cost or		Accumulated
	Fair Value		Amortization		Net
Membership and customer lists	$	9,485	$	(6,099)	$	3,386
	$	9,485	$	(6,099)	$	3,386


2017	$	218
2018		583
2019		486
2020		486
2021		487
Thereafter (1)		13,813
Total minimum lease payments		16,073
Amounts representing interest		(5,842)
Present value of net minimum right to use liability payments	$	10,231


	Fair Value	9/30/2017				12/31/2016
($ in thousands)	Measurement	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Loan Facility	Level 2	$	716,907	$	740,876	$	626,753	$	649,838


	Nine Months Ended September 30,				Estimated
($ in thousands)	2017		2016		Life
Tangible assets (liabilities) acquired (assumed):
Accounts receivable	$	1,306	$	944
Inventory		98,869		29,713
Property and equipment		835		635
Other assets		72		142
Accrued liabilities		(3,019)		(2,231)
Other liabilities				(75)
Total tangible net assets acquired		98,063		29,128
Intangible assets acquired:
Membership and customer lists		793		2,774	4-7 years
Total intangible assets acquired		793		2,774
Goodwill		143,788		35,786
Purchase price		242,644		67,688
Inventory purchases financed via floor plan		(79,321)		(22,265)
Cash payment net of floor plan financing	$	163,323	$	45,423


	Three Months		Nine Months
	Ended		Ended
	September 30,		September 30,
(In thousands except per share amounts)	2017		2017
Numerator:
Net income	$	85,258	$	240,021
Less: net income attributable to non-controlling interests		(65,131)		(193,036)
Net income attributable to Camping World Holdings, Inc. — basic		20,127		46,985
Add: Reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of CWGS, LLC for Class A common stock		39,917		118,110
Net income attributable to Camping World Holdings, Inc. — diluted	$	60,044	$	165,095
Denominator:
Weighted-average shares of Class A common stock outstanding — basic		29,522		23,854
Dilutive common units of CWGS, LLC that are convertible into Class A common stock		58,930		62,093
Weighted-average shares of Class A common stock outstanding — diluted		88,452		85,947

Earnings per share of Class A common stock — basic	$	0.68	$	1.97
Earnings per share of Class A common stock — diluted	$	0.68	$	1.92