Schedule I - Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2022

Schedule I - Condensed Financial Information of Registrant

Condensed Financial Information of Registrant

Schedule I: Condensed Financial Information of Registrant

Camping World Holdings, Inc.

Condensed Balance Sheets

(Parent Company Only)

(In Thousands Except Share Amounts)

	December 31,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	70,262	$	70,998
Prepaid income taxes and other		5,577		6,677
Total current assets		75,839		77,675
Deferred tax asset		141,807		183,272
Investment in subsidiaries		100,800		79,505
Total assets	$	318,446	$	340,452
Liabilities and stockholders' equity
Current liabilities:
Current portion of liabilities under Tax Receivable Agreement		10,873		11,322
Total current liabilities		10,873		11,322
Liabilities under Tax Receivable Agreement, net of current portion		159,743		171,073
Total liabilities		170,616		182,395
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of December 31, 2022 and 2021		—		—
Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 47,571,087 issued and 42,440,940 outstanding as of December 31, 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; 41,466,964 issued and outstanding as of December 31, 2022; 69,066,445 issued and 41,466,964 outstanding as of December 31, 2021		4		4
Class C common stock, par value $0.0001 per share – one share authorized, issued and outstanding as of December 31, 2022 and 2021		—		—
Additional paid-in capital		106,051		98,113
Treasury stock, at cost; 5,130,147 and 3,390,131 shares as of December 31, 2022 and 2021, respectively		(179,732)		(130,006)
Retained earnings		221,031		189,471
Total stockholders' equity		147,830		158,057
Total liabilities and stockholders' equity	$	318,446	$	340,452

See accompanying Notes to Condensed Financial Information

Schedule I: Condensed Financial Information of Registrant (continued)

Camping World Holdings, Inc.

Condensed Statements of Operations

(Parent Company Only)

(In Thousands)

	Year Ended December 31,
	2022		2021		2020
Revenue:
Intercompany revenue	$	10,069	$	9,551	$	9,660
Total revenue		10,069		9,551		9,660
Operating expenses:
Selling, general, and administrative		10,069		9,551		9,660
Total operating expenses		10,069		9,551		9,660
Income from operations		—		—		—
Interest income, net		477		46		103
Tax Receivable Agreement liability adjustment		114		(2,813)		141
Other income, net		139		402		—
Equity in net income of subsidiaries		215,271		378,657		173,618
Income before income taxes		216,001		376,292		173,862
Income tax expense		(79,054)		(97,831)		(51,517)
Net income	$	136,947	$	278,461	$	122,345

See accompanying Notes to Condensed Financial Information

Schedule I: Condensed Financial Information of Registrant (continued)

Camping World Holdings, Inc.

Condensed Statements of Cash Flows

(Parent Company Only)

(In Thousands)

	For the Year Ended December 31,
	2022		2021		2020
Operating activities
Net income	$	136,947	$	278,461	$	122,345
Adjustments to reconcile net income to net cash used in operating activities:
Equity in net income of subsidiaries		(215,271)		(378,657)		(173,618)
Deferred tax expense		28,672		8,210		6,534
Tax Receivable Agreement liability adjustment		(114)		2,813		(141)
Change in assets and liabilities, net of acquisitions:
Prepaid income taxes and other assets		2,914		(57)		(2,685)
Payment pursuant to Tax Receivable Agreement		(11,322)		(8,089)		(6,563)
Net cash used in operating activities		(58,174)		(97,319)		(54,128)
Investing activities
Purchases of LLC Interest from CWGS, LLC		(541)		(4,111)		(4,635)
Return of LLC Interest to CWGS, LLC for funding of treasury stock purchases		79,757		156,256		21,522
Distributions received from CWGS, LLC		162,767		198,138		107,517
Net cash provided by investing activities		241,983		350,283		124,404
Financing activities
Dividends paid to Class A common stockholders		(105,387)		(67,176)		(61,025)
Proceeds from exercise of stock options		541		4,111		4,635
Repurchases of Class A common stock to treasury		(79,757)		(156,256)		(21,522)
Disgorgement of short-swing profits by Section 16 officer		58		—		—
Net cash used in financing activities		(184,545)		(219,321)		(77,912)
(Decrease) increase in cash and cash equivalents		(736)		33,643		(7,636)
Cash and cash equivalents at beginning of year		70,998		37,355		44,991
Cash and cash equivalents at end of the year	$	70,262	$	70,998	$	37,355

See accompanying Notes to Condensed Financial Information

Schedule I: Condensed Financial Information of Registrant (continued)

Camping World Holdings, Inc.

Notes to Condensed Financial Information

(Parent Company Only)

December 31, 2022

1. Organization

Camping World Holdings, Inc. (the “Parent Company”) was formed on March 8, 2016 as a Delaware corporation and is a holding company with no direct operations. The Parent Company's assets consist primarily of cash and cash equivalents, its equity interest in CWGS Enterprises, LLC ("CWGS, LLC”), and certain deferred tax assets.

The Parent Company's cash inflows are primarily from cash dividends or distributions and other transfers from CWGS, LLC. The amounts available to the Parent Company to fulfill cash commitments and pay cash dividends on its common stock are subject to certain restrictions in CWGS, LLC’s Senior Secured Credit Facilities. See Note 9 to the consolidated financial statements.

2. Basis of Presentation

These condensed parent company financial statements should be read in conjunction with the consolidated financial statements of Camping World Holdings, Inc. and the accompanying notes thereto, included in this Form 10-K. For purposes of this condensed financial information, the Parent Company's interest in CWGS, LLC is recorded based upon its proportionate share of CWGS, LLC's net assets (similar to presenting them on the equity method).

The Parent Company is the sole managing member of CWGS, LLC, and pursuant to the Amended and Restated LLC Agreement of CWGS, LLC (the “LLC Agreement”), receives compensation in the form of reimbursements for all costs associated with being a public company. Intercompany revenue consists of these reimbursement payments and is recognized when the corresponding expense to which it relates is recognized.

Certain intercompany balances presented in these condensed Parent Company financial statements are eliminated in the consolidated financial statements. For the years ended December 31, 2022, 2021, and 2020, the full amounts of intercompany revenue and equity in net income of subsidiaries in the accompanying Parent Company Statements of Operations were eliminated in consolidation. No intercompany receivable was owed to the Parent Company by CWGS, LLC at December 31, 2022 and 2021. Related party amounts that were not eliminated in the consolidated financial statements include the Parent Company's liabilities under the tax receivable agreement, which totaled $170.6 million and $182.4 million as of December 31, 2022 and 2021, respectively.

3. Commitments and Contingencies

The Parent Company is party to a tax receivable agreement with certain holders of common units in CWGS, LLC (the "Continuing Equity Owners") that provides for the payment by the Parent Company to the Continuing Equity Owners of 85% of the amount of any tax benefits that the Parent Company actually realizes, or in some cases are deemed to realize, as a result of certain transactions. See Note 11 to the consolidated financial statements for more information regarding the Parent Company's tax receivable agreement. As described in Note 11 to the consolidated financial statements, amounts payable under the tax receivable agreement are contingent upon, among other things, (i) generation of future taxable income of Camping World Holdings, Inc. over the term of the tax receivable agreement and (ii) future changes in tax laws. As of December 31, 2022 and 2021, liabilities under the tax receivable agreement totaled $170.6 million and $182.4 million, respectively.

See Note 13 to the consolidated financial statements for information regarding pending and threatened litigation and Note 1 to the consolidated financial statements for information about the February 2022 cybersecurity incident. Pursuant to the LLC Agreement, the Parent Company receives reimbursements for all costs associated with being a public company, which includes costs of litigation and cybersecurity incidents.

4. Income Taxes

CWGS, LLC completed the steps necessary to convert Camping World, Inc. (“CW”) and certain of its subsidiaries from Subchapter C Corporations to limited liability companies (“LLCs”) with an effective date of January 2, 2023 (the “LLC Conversion”). All required filings for conversion to LLC were made by December 31, 2022. Accordingly, the effect of the LLC Conversion was recorded during the year ended December 31, 2022, as the filings were perfunctory pursuant to the rules prescribed under ASC 740, Income Taxes. Beginning with the year ending December 31, 2023, the operating losses of CW and its subsidiaries will offset taxable income generated by CWGS, LLC’s other LLC businesses. As a result, both income tax expense recognized by the Parent Company and the amount of required tax distributions paid to holders of common units in CWGS, LLC, under the CWGS LLC Agreement, will decrease. The LLC Conversion will allow CWGS, LLC to more easily integrate its retail and dealership operations and more seamlessly share resources within the RV and Outdoor Retail segment, while providing an expected future cash flow benefit for the operating companies.

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

5. Stock Repurchase Program

During the year ended December 31, 2022 and 2021, the Parent Company repurchased 2,592,524 and 3,988,881 shares of Class A common stock, respectively, under this program for approximately $79.8 million and $156.3 million, respectively, including commissions paid, at a weighted average price per share of $30.76 and $39.17, respectively, which is recorded as treasury stock on the Parent Company’s balance sheet. During the years ended December 31, 2022 and 2021, the $79.8 million and $156.3 million, respectively, was concurrently funded by CWGS, LLC in exchange for the return of 2,592,524 and 3,988,881 common units in CWGS, LLC, respectively, which reduced the Parent Company’s ownership interest in CWGS, LLC. Class A common stock held as treasury stock is not considered outstanding. During the years ended December 31, 2022 and 2021, the Parent Company reissued 852,508 and 1,171,197 shares of Class A common stock, respectively, from treasury stock to settle the exercises of stock options, vesting of restricted stock units, and settlement of other equity-based awards under the Parent Company’s 2016 Plan. As of December 31, 2022, the remaining approved amount for repurchases of Class A common stock under the share repurchase program was approximately $120.2 million.

6. Statements of Cash Flows

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

	Year Ended December 31,
	2022		2021		2020
Cash paid during the period for:
Interest	$	—	$	—	$	—
Income taxes		47,601		87,588		47,668
Non-cash financing activities:
Par value of Class A common stock issued for redemption of common units in CWGS, LLC		1		47		48
Par value of Class A common stock issued for vested restricted stock units		—		—		3
Cost of treasury stock issued for vested restricted stock units		42,640		34,756		8,556
Cost of treasury stock issued for stock award to employee		—		19,586		—