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LONG-LIVED ASSETS
12 Months Ended
Dec. 31, 2012
LONG-LIVED ASSETS  
LONG-LIVED ASSETS

4.                         LONG-LIVED ASSETS

 

In 2005, the Company’s immediate parent, Affinity Group Holding, LLC (“AGHI” or “Parent”) issued $88.2 million principal amount of its 10-7/8% Senior Notes due 2012 (the “AGHI Notes”) and contributed the net proceeds, approximately $81.0 million, to the Company and in turn, the Company made an equity contribution to Camping World.  Camping World then made an equity capital contribution in the same amount to its wholly-owned subsidiary, CWI, Inc. that created a new wholly-owned subsidiary named CWFR Capital Corp. (“CWFR”) which was an “unrestricted subsidiary” under the indenture governing the GSE Senior Notes (“GSE Senior Notes Indenture”) pursuant to which the Company issued the GSE Senior Notes (see Note 6 – Long-Term Debt), and made an equity capital contribution to CWFR in an equal amount to the capital contribution that it received from Camping World.  Since CWFR continues as an unrestricted subsidiary under the indenture governing the Senior Secured Notes (“Senior Secured Notes Indenture”) pursuant to which the Senior Secured Notes were issued on November 30, 2010 (see Note 6 – Long-Term Debt), its operations are not restricted by the Senior Secured Notes Indenture.  CWFR used the proceeds from the equity capital contribution to acquire the FreedomRoads Preferred Interest.  FreedomRoads Holding Company, LLC (FreedomRoads”) was then owned 90% by the Stephen Adams Living Trust, which also indirectly owned 100% of the outstanding capital stock of AGHC and indirectly AGHI.

 

In the third quarter of 2008, the Company recorded an impairment charge of $81.0 million that wrote down to zero the carrying value of the preferred interest (the “FreedomRoads Preferred Interest”) held by an indirect subsidiary of Camping World in FreedomRoads Holding Company, LLC (“FreedomRoads”), a holding company whose subsidiaries sell and service new and used recreational vehicles.  Management was assisted in determining the non-cash goodwill impairment charge by an independent third party valuation firm.  The $81.0 million impairment charge was recorded as a result of declining performance of the recreational vehicle industry driven by overall weakening of the economy and a significant decline in consumer confidence, in addition to limited credit available to consumers interested in purchasing recreational vehicles.