Income Taxes

9 Months Ended

Sep. 30, 2025

Income Taxes

Income Taxes

13. Income Taxes

CWH is organized as a Subchapter C corporation and, as of September 30, 2025, was a 61.2% owner of CWGS, LLC (see Note 15 — Non-Controlling Interests). 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. However, certain active CWGS, LLC subsidiaries, including CWFR Capital, LLC; Americas Road and Travel Club, Inc.; and FreedomRoads RV, Inc. and their wholly-owned subsidiaries, are subject to entity-level taxes as they are, or subject to income taxes as, Subchapter C corporations (“C-Corp”).

Effective Income Tax Rate

For the nine months ended September 30, 2025 and 2024, the Company's effective income tax rate was 98.5% and 14.0%, respectively. The increase in the tax rate for the nine months ended September 30, 2025, mainly reflects the establishment of a full valuation allowance on the net deferred tax assets of the public holding company, CWH. The deferred tax assets of C-Corp subsidiaries were not impacted by the establishment of this valuation allowance. The Company records a valuation allowance when it concludes that it is not more likely than not that a portion of deferred tax assets will not be realized based upon the evaluation of all available positive and negative evidence.

During the three months ended September 30, 2025, management evaluated both positive and negative evidence and concluded that a full valuation allowance was necessary to be recorded against CWH net deferred tax assets due to its expected cumulative historical operating results for income tax purposes over the past several years in each of the tax jurisdictions where it operates. Accordingly, the Company recorded a $175.4 million valuation allowance on its CWH net deferred tax assets during the nine months ended September 30, 2025. This valuation allowance will be maintained until sufficient positive evidence exists to justify its reversal. In addition, because of the full valuation allowance recorded against CWH’s investment in CWGS, LLC net deferred tax asset and certain other tax attribute carryforward deferred tax assets, full payment of the entire amount calculated related to the Tax Receivable Agreement (as defined below) liability was considered not probable. As a result, management reversed $149.2 million of the Tax Receivable Agreement liability and reduced the related deferred tax asset by $37.3 million, which were recorded to Tax Receivable Agreement liability adjustment and income tax (expense) benefit, respectively, in the condensed consolidated statements of operations for the three and nine months ended September 30, 2025.

The Company determines its quarterly income tax provision using an estimated annual effective tax rate that considers expected annual income, statutory tax rates, and available tax planning opportunities across the jurisdictions where it operates. Current income taxes are recorded based on statutory obligations for the current period for certain C-Corp taxable entities within the Company. Accordingly, income tax provisions for these jurisdictions were recorded for the three and nine months ended September 30, 2025.

On July 4, 2025, the U.S. federal legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”) was enacted into law, introducing significant changes to the U.S. tax code. The Company determined that the provisions of the OBBBA are not expected to have a material impact on its effective income tax rate or income tax accounts.

Tax Receivable Agreement

The Company is party to a tax receivable agreement (the “Tax Receivable Agreement”) that provides for the payment by the Company to the Continuing Equity Owners and Crestview Partners II GP, L.P. of 85% of the amount of tax benefits, if any, the Company actually realizes, or in some circumstances is deemed to realize, as a result of (i) increases in the tax basis from the purchase of common units from Crestview Partners II GP, L.P in exchange for Class A common stock in connection with the consummation of the IPO and the related transactions and any future redemptions that are funded by the Company and any further redemptions of common units by Continuing Equity Owners and (ii) certain other tax benefits attributable to payments made under the Tax Receivable Agreement. The above payments are predicated on CWGS, LLC making an election under Section 754 of the Internal Revenue Code effective for each tax year in which a redemption of common units for cash or stock occurs. 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 of common units in CWGS, LLC). The Company has determined it is more likely than not it will not benefit from the entirety of the remaining 15% of the tax benefits, and has remeasured the liability under the Tax Receivable Agreement. The Company has recorded a $149.2 million gain on the reduction in the associated liability, as described above. As of September 30, 2025, the remaining Tax Receivable Agreement liability after this adjustment was $1.2 million.

If utilization of the deferred tax assets subject to the Tax Receivable Agreement becomes more likely than not in the future, the Company expects to record additional liability related to the Tax Receivable Agreement which will be recognized as an expense and recorded to Tax Receivable Agreement liability adjustment in the condensed consolidated statements of operations.

During the nine months ended September 30, 2025 and 2024, there were no redemptions of common units by Continuing Equity Owners.