10-Q

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TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2015
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                             to

Commission File No. 1-34062

INTERVAL LEISURE GROUP, INC.
(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	26-2590997 (I.R.S. Employer Identification No.)
6262 Sunset Drive, Miami, FL (Address of Registrant's principal executive offices)	33143 (Zip Code)

(305) 666-1861
(Registrant's telephone number, including area code)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 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 ý    No o

        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 ý    No o

        Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of "accelerated filer," "large accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ý Accelerated filer o Non-accelerated filer o
(Do not check if a
smaller reporting company) Smaller reporting company o

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

        As of November 5, 2015, 57,490,609 shares of the registrant's common stock were outstanding.

TABLE OF CONTENTS

		Page
PART I
Item 1.	Financial Statements		3
	Condensed Consolidated Statements of Income		3
	Condensed Consolidated Statements of Comprehensive Income		4
	Condensed Consolidated Balance Sheets		5
	Condensed Consolidated Statement of Equity		6
	Condensed Consolidated Statements of Cash Flows		7
	Notes to Condensed Consolidated Financial Statements		8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		39
Item 3.	Quantitative and Qualitative Disclosures about Market Risk		69
Item 4.	Controls and Procedures		70
PART II
Item 1.	Legal Proceedings		72
Item 1A.	Risk Factors		72
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		74
Item 3.	Defaults Upon Senior Securities		74
Item 4.	Mine Safety Disclosures		74
Item 5.	Other Information		74
Item 6.	Exhibits		74

2

PART I—FINANCIAL STATEMENTS

Item 1.    Consolidated Financial Statements

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Revenue	$	174,040		$	146,683		$	532,337		$	447,252
Cost of sales (exclusive of depreciation and amortization shown separately below)		75,613			58,995			238,393			182,606
Gross profit		98,427			87,688			293,944			264,646
Selling and marketing expense		18,133			14,799			54,919			43,177
General and administrative expense		39,360			31,340			110,796			94,028
Amortization expense of intangibles		3,517			2,879			10,532			8,740
Depreciation expense		4,394			3,765			12,991			11,434
Operating income		33,023			34,905			104,706			107,267
Other income (expense):
Interest income		276			55			819			154
Interest expense		(6,386	)		(1,529	)		(15,113	)		(4,481	)
Other income, net		2,197			511			3,313			95
Equity in earnings from unconsolidated entities		1,322			—			3,771			—
Total other expense, net		(2,591	)		(963	)		(7,210	)		(4,232	)
Earnings before income taxes and noncontrolling interests		30,432			33,942			97,496			103,035
Income tax provision		(10,743	)		(11,838	)		(34,891	)		(36,843	)
Net income		19,689			22,104			62,605			66,192
Net income attributable to noncontrolling interests		(589	)		(809	)		(1,602	)		(2,822	)
Net income attributable to common stockholders	$	19,100		$	21,295		$	61,003		$	63,370
Earnings per share attributable to common stockholders:
Basic	$	0.33		$	0.37		$	1.06		$	1.10
Diluted	$	0.33		$	0.37		$	1.05		$	1.09
Weighted average number of shares of common stock outstanding:
Basic		57,477			57,098			57,369			57,424
Diluted		58,055			57,683			57,948			57,976
Dividends declared per share of common stock	$	0.12		$	0.11		$	0.36		$	0.33

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

3

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net income	$	19,689		$	22,104		$	62,605		$	66,192
Other comprehensive loss, net of tax:
Foreign currency translation adjustments		(6,710	)		(5,318	)		(6,821	)		(3,873	)
Total comprehensive income, net of tax		12,979			16,786			55,784			62,319
Less: Net income attributable to noncontrolling interests, net of tax		(589	)		(809	)		(1,602	)		(2,822	)
Less: Other comprehensive loss attributable to noncontrolling interests		496			1,153			899			733
Total comprehensive loss (income) attributable to noncontrolling interests		(93	)		344			(703	)		(2,089	)
Comprehensive income attributable to common stockholders	$	12,886		$	17,130		$	55,081		$	60,230

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

4

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	September 30, 2015			December 31, 2014
ASSETS
Cash and cash equivalents	$	101,417		$	80,493
Restricted cash and cash equivalents		15,636			19,984
Accounts receivable, net of allowance of $188 and $193, respectively		53,224			45,850
Vacation ownership mortgages receivable, net		6,093			7,169
Vacation ownership inventory		48,843			54,061
Deferred income taxes		16,586			16,441
Deferred membership costs		8,497			8,716
Prepaid income taxes		7,776			22,029
Prepaid expenses and other current assets		23,191			30,230
Total current assets		281,263			284,973
Vacation ownership mortgages receivable, net		26,180			29,333
Investments in unconsolidated entities		37,190			33,486
Property and equipment, net		86,211			86,601
Goodwill		561,817			562,250
Intangible assets, net		255,970			268,875
Deferred membership costs		10,082			10,948
Deferred income taxes		102			112
Other non-current assets		43,587			47,424
TOTAL ASSETS	$	1,302,402		$	1,324,002
LIABILITIES AND EQUITY
LIABILITIES:
Accounts payable, trade	$	23,798		$	39,082
Deferred revenue		95,786			89,850
Accrued compensation and benefits		28,506			28,891
Member deposits		8,108			8,222
Accrued expenses and other current liabilities		68,210			47,923
Total current liabilities		224,408			213,968
Long-term debt		415,260			484,383
Other long-term liabilities		17,936			18,247
Deferred revenue		90,017			93,730
Deferred income taxes		93,878			92,869
Total liabilities		841,499			903,197
Redeemable noncontrolling interest		707			457
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock—authorized 25,000,000 shares, of which 100,000 shares are designated Series A Junior Participating Preferred Stock; $0.01 par value; none issued and outstanding		—			—
Common stock—authorized 300,000,000 shares; $0.01 par value; issued 59,853,933 and 59,463,200 shares, respectively		599			595
Treasury stock—2,363,324 shares at cost		(35,034	)		(35,034	)
Additional paid-in capital		210,456			201,834
Retained earnings		275,436			235,945
Accumulated other comprehensive loss		(25,219	)		(19,297	)
Total ILG stockholders' equity		426,238			384,043
Noncontrolling interests		33,958			36,305
Total equity		460,196			420,348
TOTAL LIABILITIES AND EQUITY	$	1,302,402		$	1,324,002

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

5

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(In thousands, except share data)

(Unaudited)

										Common Stock				Treasury Stock											Accumulated Other Comprehensive Loss
	Total Equity			Noncontrolling Interest			Total ILG Stockholders' Equity												Additional Paid-in Capital			Retained Earnings
										Amount		Shares		Amount			Shares
Balance as of December 31, 2014	$	420,348		$	36,305		$	384,043		$	595		59,463,200	$	(35,034	)		2,363,324	$	201,834		$	235,945		$	(19,297	)
Net income		62,585			1,582			61,003			—		—		—			—		—			61,003			—
Other comprehensive loss, net of tax		(6,821	)		(899	)		(5,922	)		—		—		—			—		—			—			(5,922	)
Non-cash compensation expense		10,182			—			10,182			—		—		—			—		10,182			—			—
Dividends paid to noncontrolling interest		(3,030	)		(3,030	)		—			—		—		—			—		—			—			—
Issuance of common stock upon exercise of stock options		221			—			221			—		11,084		—			—		221			—			—
Issuance of common stock upon vesting of restricted stock units, net of withholding taxes		(4,333	)		—			(4,333	)		4		379,649		—			—		(4,337	)		—			—
Change in excess tax benefits from stock-based awards		1,845			—			1,845			—		—		—			—		1,845			—			—
Deferred stock compensation expense		117			—			117			—		—		—			—		117			—			—
Dividends declared on common stock		(20,687	)		—			(20,687	)		—		—		—			—		594			(21,281	)		—
Increase in redemption value of redeemable noncontrolling interest		(231	)		—			(231	)		—		—		—			—		—			(231	)		—
Balance as of September 30, 2015	$	460,196		$	33,958		$	426,238		$	599		59,853,933	$	(35,034	)		2,363,324	$	210,456		$	275,436		$	(25,219	)

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of this statement.

6

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2015			2014
	(In thousands)
Cash flows from operating activities:
Net income	$	62,605		$	66,192
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization expense of intangibles		10,532			8,740
Amortization of debt issuance costs		1,088			617
Depreciation expense		12,991			11,434
Provision for loan losses		1,713			—
Non-cash compensation expense		10,182			8,297
Non-cash interest expense		4			11
Deferred income taxes		795			140
Equity in earnings from unconsolidated entities		(3,771	)		—
Excess tax benefits from stock-based awards		(1,893	)		(1,912	)
Loss on disposal of property and equipment		217			17
Change in fair value of contingent consideration		—			(1,606	)
Changes in operating assets and liabilities:
Accounts receivable		(7,857	)		(304	)
Vacation ownership mortgages receivable		2,516			—
Vacation ownership inventory		5,218			—
Prepaid expenses and other current assets		7,705			230
Prepaid income taxes and income taxes payable		15,052			3,488
Accounts payable and other current liabilities		9,697			2,823
Payment of contingent consideration		—			(1,184	)
Deferred income		4,236			3,068
Other, net		4,328			(8,595	)
Net cash provided by operating activities		135,358			91,456
Cash flows from investing activities:
Capital expenditures		(13,243	)		(14,266	)
Investment in financing receivables		(250	)		(750	)
Other		(35	)		—
Net cash used in investing activities		(13,528	)		(15,016	)
Cash flows from financing activities:
Proceeds from issuance of senior notes		350,000			—
Borrowings (payments) on revolving credit facility, net		(413,000	)		5,000
Payments of debt issuance costs		(6,703	)		(1,711	)
Purchases of treasury stock		—			(14,120	)
Dividend payments to stockholders		(20,687	)		(18,961	)
Dividend payments to noncontrolling interest		(3,030	)		—
Payments of contingent consideration		—			(7,272	)
Withholding taxes on vesting of restricted stock units		(4,333	)		(3,948	)
Proceeds from the exercise of stock options		221			311
Excess tax benefits from stock-based awards		1,893			1,912
Net cash used in financing activities		(95,639	)		(38,789	)
Effect of exchange rate changes on cash and cash equivalents		(5,267	)		(2,166	)
Net increase in cash and cash equivalents		20,924			35,485
Cash and cash equivalents at beginning of period		80,493			48,462
Cash and cash equivalents at end of period	$	101,417		$	83,947
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized	$	4,533		$	3,768
Income taxes, net of refunds	$	19,007		$	33,215

The accompanying Notes to Condensed Consolidated Financial Statements are an integral part of these statements.

7

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2015

(Unaudited)

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION

Company Overview

        Interval Leisure Group, Inc., or ILG, is a leading global provider of non-traditional lodging, encompassing a portfolio of leisure businesses from exchange and vacation rental to vacation ownership. At the end of 2014, we re-aligned our operating segments to encompass the vacation ownership sales and marketing capabilities with the acquisition of the Hyatt Vacation Ownership business, or HVO, in October 2014. We operate in the following two segments: Exchange and Rental, and Vacation Ownership. Exchange and Rental offers access to vacation accommodations and other travel-related transactions and services to leisure travelers, by providing vacation exchange services and vacation rental, working with resort developers and operating vacation rental properties. Vacation Ownership engages in the management of vacation ownership resorts; sales, marketing, and financing of vacation ownership interests; and related services to owners and associations.

        The Exchange and Rental operating segment consists of Interval International (referred to as Interval), the Hyatt Residence Club (referred to as HRC), the Trading Places International (known as TPI) operated exchange business, Aqua-Aston Holdings, Inc. (referred to as Aqua-Aston), which owns Aston Hotels & Resorts LLC, Aqua Hospitality LLC and Aqua Hotels and Resorts, Inc. The Vacation Ownership operating segment consists of VRI Europe, HVO's management and vacation ownership interests (VOI) sales and financing businesses, and the management related lines of business of Vacation Resorts International (known as VRI) and TPI.

        ILG was incorporated as a Delaware corporation in May 2008 in connection with a plan by IAC/InterActiveCorp, or IAC, to separate into five publicly traded companies, referred to as the "spin-off." ILG commenced trading on The NASDAQ Stock Market in August 2008 under the symbol "IILG."

Basis of Presentation

        The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of ILG's management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not indicative of the results that may be expected for a full year.

        The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2014 Annual Report on Form 10-K.

Seasonality

        Revenue at ILG is influenced by the seasonal nature of travel. Within our Exchange and Rental segment, our vacation exchange businesses recognize exchange and Getaway revenue based on confirmation of the vacation, with the first quarter generally experiencing higher revenue and the

8

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION (Continued)

fourth quarter generally experiencing lower revenue. Our vacation rental businesses recognize rental revenue based on occupancy, with the first and third quarters generally generating higher revenue as a result of increased leisure travel to our Hawaii-based managed properties during these periods, and the second and fourth quarters generally generating lower revenue.

        Within our Vacation Ownership segment, our sales and financing business experiences a modest impact from seasonality, with higher sales volumes during the traditional vacation periods, largely the third quarter (summer months). Our vacation ownership management businesses by and large do not experience significant seasonality.

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

        Our significant accounting policies were described in Note 2 to our audited consolidated financial statements included in our 2014 Annual Report on Form 10-K. There have been no significant changes in our significant accounting policies for the nine months ended September 30, 2015.

Accounting Estimates

        ILG's management is required to make certain estimates and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates.

        Significant estimates underlying the accompanying condensed consolidated financial statements include: the recovery of long-lived assets as well as goodwill and other intangible assets; purchase price allocations of business combinations; the determination of deferred income taxes including related valuation allowances; the determination of deferred revenue and membership costs; and the determination of stock-based compensation. In the opinion of ILG's management, the assumptions underlying the historical condensed consolidated financial statements of ILG and its subsidiaries are reasonable.

Earnings per Share

        Basic earnings per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per share attributable to common stockholders is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are common stock equivalents that are freely exercisable into common stock at less than market prices or otherwise dilute earnings if converted. The net effect of common stock equivalents is based on the incremental common stock that would be issued upon the assumed exercise of common stock options and the vesting of restricted stock units ("RSUs") using the treasury stock method. Common stock equivalents are not included in diluted earnings per share when their inclusion is antidilutive. The computations of diluted earnings per share available to

9

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES (Continued)

common stockholders do not include approximately 0.4 million RSUs for the three months ended September 30, 2015 and 1.2 million stock options and RSUs for the three months ended September 30, 2014, and 0.5 million and 1.0 million stock options and RSUs for the nine months ended September 30, 2015 and 2014, respectively, as the effect of their inclusion would have been antidilutive to earnings per share.

        In connection with the spin-off, stock options to purchase ILG common stock were granted to non-ILG employees for which there is no future compensation expense to be recognized by ILG. As of September 30, 2015, there were no stock options outstanding, and as of September 30, 2014, 0.8 million remained outstanding.

        The computation of weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Basic weighted average shares of common stock outstanding		57,477		57,098		57,369		57,424
Net effect of common stock equivalents assumed to be vested related to RSUs		578		583		578		547
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees		—		2		1		5
Diluted weighted average shares of common stock outstanding		58,055		57,683		57,948		57,976

Recent Accounting Pronouncements

        With the exception of those discussed below, there are no recent accounting pronouncements or changes in accounting pronouncements since the recent accounting pronouncements described in our 2014 Annual Report on Form 10-K that are of significance, or potential significance, to ILG based on our current operations. The following summary of recent accounting pronouncements is not intended to be an exhaustive description of the respective pronouncement.

        In September 2015, the FASB issued ASU 2015-16, "Business Combinations Topic 805)." The purpose of the ASU is to simplify the accounting for measurement-period adjustments related to business combinations. ASU 2015-16 requires an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period, in the reporting period in which the adjustment amounts are determined. The amendments in this update are effective for fiscal years beginning after December 31, 2015, including interim periods within the fiscal year and should be applied prospectively. We are currently assessing the future impact of this new accounting standard update on our consolidated financial statements.

        In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which defers by one year the effective date of ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)" to annual reporting periods

10

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES (Continued)

beginning after December 15, 2016, including interim periods within that reporting period. ASU 2014-09 supersedes revenue recognition requirements in Topic 605, "Revenue Recognition." The purpose of the ASU is to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS that would remove inconsistencies and weaknesses in revenue requirement; provide a more robust framework for addressing revenue issues; improve comparability of revenue recognition practices across entities and industries; provide more useful information to users of financial statements through improved disclosure requirements and to simplify the preparation of financial statements. We are currently assessing the future impact of this new accounting standard update on our consolidated financial statements.

        In June 2015, the FASB issued ASU 2015-10, "Technical Corrections and Improvements" ("ASU 2015-10"). The purpose of this ASU is to clarify guidance, correct unintended application of guidance, or make minor improvements to guidance that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Additionally, some of the amendments are intended to simplify guidance by making it easier to understand and easier to apply by eliminating inconsistencies, providing needed clarifications, and improving the presentation of guidance in the Codification. Transition guidance varies based on the amendments in this update. The amendments in this update that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of this update. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial statements.

        In April 2015, the FASB issued ASU 2015-05, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement" ("ASU 2015-05"). The FASB amended its guidance on internal use software to clarify how customers in cloud computing arrangements should determine whether the arrangement includes a software license. The guidance also eliminates the existing requirement for customers to account for software licenses they acquire by analogizing to the guidance on leases. Instead, entities will account for these arrangements as licenses of intangible assets. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial statements.

        In February 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis" ("ASU 2015-02"). The amendments in this topic are intended to improve and simplify targeted areas of the consolidation guidance. ASU 2015-02 modifies the method for determining whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities. Further, it eliminates the presumption that a general partner should consolidate a limited partnership and impacts the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. The ASU is effective for fiscal years beginning after December 15, 2015 (and interim periods within those fiscal years). Early adoption is permitted. We are currently assessing the future impact, if any, this new accounting standard update may have on our consolidated financial statements.

11

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES (Continued)

Adopted Accounting Pronouncements

        In April 2015, the FASB issued ASU 2015-03, "Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" ("ASU 2015-03"). ASU 2015-03 simplifies presentation of debt issuance costs, requiring debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The guidance in the standard is limited to the presentation of debt issuance costs and does not affect the recognition and measurement of debt issuance costs. The amortization of such costs are to continue being calculated using the interest method and be reported as interest expense. The ASU is effective for fiscal years beginning after December 15, 2015 (and interim periods within those fiscal years). Early adoption is permitted for financial statements that have not been previously issued and will be applied on a retrospective basis. We adopted the provisions of the ASU as of June 30, 2015 retrospectively and the adoption did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures. Other non-current assets and long-term debt on our consolidated balance sheet as of December 31, 2014 has been retrospectively adjusted by $3.6 million to effectuate the adoption of this ASU as described above.

        In April 2014, the FASB issued ASU No. 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)" ("ASU 2014-08"). The amendments in ASU 2014-08 change the requirements for reporting and disclosing discontinued operations. Among other items, this new guidance defines a discontinued operation as a disposal of a component or group of components that is disposed of or is classified as held for sale and "represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results." The standard states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. The ASU is effective for fiscal years beginning after December 15, 2014 (and interim periods within those fiscal years), with early adoption permitted. The adoption of ASU 2014-08 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

        In January 2014, the FASB issued ASU No. 2014-04, "Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure" ("ASU 2014-04"). Current US GAAP requires a loan to be reclassified to Other Real Estate Owned ("OREO") upon a troubled debt restructuring that is "in substance a repossession or foreclosure," where the creditor receives "physical possession" of the debtor's assets regardless of whether formal foreclosure proceedings take place. The amendments in ASU 2014-04 clarify when an "in substance a repossession or foreclosure" and "physical possession" has occurred as these terms are not defined in US GAAP, in addition to requiring certain supplementary interim and annual disclosures. The ASU is effective for fiscal years beginning after December 15, 2014 (and interim periods within those fiscal years) and shall be applied prospectively, with early adoption permitted. The adoption of ASU 2014-04 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS

        Pursuant to FASB guidance as codified within ASC 350, "Intangibles—Goodwill and Other," goodwill acquired in business combinations is assigned to the reporting unit(s) expected to benefit from the combination as of the acquisition date.

        As discussed in Note 14, "Segment Information," ILG reorganized its management reporting structure in the fourth quarter of 2014 resulting in the following two operating and reportable segments: Exchange and Rental, and Vacation Ownership. As a result of the change in operating segments, ILG's reporting units were also reorganized. The Exchange and Rental, and Vacation Ownership segments now each contain two reporting units as follows:

OPERATING SEGMENTS
Exchange and Rental	Vacation Ownership
Exchange reporting unit	VO management reporting unit
Rental reporting unit	VO sales and financing reporting unit

        In accordance with ASC 350, we reassigned our existing goodwill to these new reporting units utilizing a relative fair value allocation approach as of December 31, 2014. With the assistance of a third party specialist, we allocated goodwill based on their relative fair values as of December 31, 2014 to each new reporting unit as follows (in thousands):

	Balance as of December 31, 2014
Exchange and Rental segment
Exchange reporting unit	$	495,748
Rental reporting unit		20,396
Vacation Ownership segment
VO management reporting unit		39,160
VO sales and financing reporting unit		6,946
Total goodwill	$	562,250

        As of December 31, 2014, as a result of the reorganization of our management reporting structure and reporting units (see Note 14), we assessed the carrying value of goodwill pursuant to the two-step impairment approach. The first step of the impairment test concluded the carrying value of each reporting unit did not exceed its fair value; consequently, the second step of the impairment test was not necessary and goodwill was not determined to be impaired. As of September 30, 2015, we did not identify any triggering events which required an interim impairment test subsequent to our most recent impairment test on December 31, 2014.

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INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

        The following tables present the balance of goodwill by reporting unit, including the changes in carrying amount of goodwill as of September 30, 2015 and December 31, 2014 (in thousands):

	Balance as of January 1, 2015		Additions		Deductions		Foreign Currency Translation			Goodwill Impairment		Balance as of September 30, 2015
Exchange	$	495,748	$	—	$	—	$	—		$	—	$	495,748
Rental		20,396		—		—		—			—		20,396
VO management		39,160		—		—		(433	)		—		38,727
VO sales and financing		6,946		—		—		—			—		6,946
Total	$	562,250	$	—	$	—	$	(433	)	$	—	$	561,817

	Balance as of January 1, 2014		Additions		Deductions		Foreign Currency Translation			Goodwill Impairment		Balance as of December 31, 2014
Exchange	$	483,462	$	12,286	$	—	$	—		$	—	$	495,748
Rental		20,396		—		—		—			—		20,396
VO management		36,981		3,307		—		(1,128	)		—		39,160
VO sales and financing		—		6,946		—		—			—		6,946
Total	$	540,839	$	22,539	$	—	$	(1,128	)	$	—	$	562,250

Other Intangible Assets

        The balance of other intangible assets, net as of September 30, 2015 and December 31, 2014 is as follows (in thousands):

	September 30, 2015		December 31, 2014
Intangible assets with indefinite lives	$	129,268	$	131,336
Intangible assets with definite lives, net		126,702		137,539
Total intangible assets, net	$	255,970	$	268,875

        The $2.1 million change in our indefinite-lived intangible assets during the nine months ended September 30, 2015 reflects the associated foreign currency translation of intangible assets carried on the books of an ILG entity whose functional currency is not the US dollar.

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INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

        At September 30, 2015 and December 31, 2014, intangible assets with indefinite lives relate to the following (in thousands):

	September 30, 2015		December 31, 2014
Resort management contracts	$	85,352	$	87,420
Trade names and trademarks		43,916		43,916
Total	$	129,268	$	131,336

        At September 30, 2015, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	168,400	$	(131,268	)	$	37,132
Purchase agreements		75,879		(75,799	)		80
Resort management contracts		129,503		(44,208	)		85,295
Technology		25,076		(25,076	)		—
Other		21,806		(17,611	)		4,195
Total	$	420,664	$	(293,962	)	$	126,702

        At December 31, 2014, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	168,400	$	(129,942	)	$	38,458
Purchase agreements		75,879		(75,443	)		436
Resort management contracts		129,864		(36,790	)		93,074
Technology		25,076		(25,076	)		—
Other		21,815		(16,244	)		5,571
Total	$	421,034	$	(283,495	)	$	137,539

        In accordance with our policy on the recoverability of long-lived assets, we review the carrying value of all long-lived assets, primarily property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of a long-lived asset (asset group) may be impaired. For the nine months ended September 30, 2015 and the year ended December 31, 2014, we did not identify any events or changes in circumstances indicating that the carrying value of a long lived asset (or asset group) may be impaired; accordingly, a recoverability test was not warranted.

        Amortization of intangible assets with definite lives is primarily computed on a straight-line basis. Total amortization expense for intangible assets with definite lives was $3.5 million and $2.9 million for the three months ended September 30, 2015 and 2014, respectively, and $10.5 million and $8.7 million for the nine months ended September 30, 2015 and 2014, respectively. Based on September 30, 2015

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INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

balances, amortization expense for the next five years and thereafter is estimated to be as follows (in thousands):

Twelve month period ending September 30,
2016	$	13,077
2017		11,662
2018		10,884
2019		10,216
2020		10,061
2021 and thereafter		70,802
	$	126,702

NOTE 4—VACATION OWNERSHIP INVENTORY

        As part of our acquisition of HVO on October 1, 2014, we acquired vacation ownership inventory which primarily consists of unsold vacation ownership intervals that are available for sale in their current form. As of September 30, 2015 and December 31, 2014, vacation ownership inventory is comprised of the following (in thousands):

	September 30, 2015		December 31, 2014
Completed unsold vacation ownership interests	$	48,216	$	53,434
Land held for development		627		627
Total inventory	$	48,843	$	54,061

NOTE 5—VACATION OWNERSHIP MORTGAGES RECEIVABLE

        Vacation ownership mortgages receivable is comprised of various mortgage loans related to our financing of vacation ownership interval sales. As part of our acquisition of HVO on October 1, 2014, we acquired an existing portfolio of vacation ownership mortgages receivable. These loans are accounted for using the expected cash flows method of recognizing discount accretion based on the acquired loans' expected cash flows pursuant to ASC 310-30, "Loans acquired with deteriorated credit quality." At acquisition, we recorded these acquired loans at fair value, including a credit discount which is accreted as an adjustment to yield over the loan pools' estimate life. Originated loans as of September 30, 2015 and December 31, 2014 represent vacation ownership mortgages receivable originated by ILG, or more specifically our Vacation Ownership segment, subsequent to the acquisition of HVO on October 1, 2014.

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INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 5—VACATION OWNERSHIP MORTGAGES RECEIVABLE (Continued)

        Vacation ownership mortgages receivable carrying amounts as of September 30, 2015 and December 31, 2014 were as follows (in thousands):

	September 30, 2015			December 31, 2014
Acquired vacation ownership mortgages receivable at various stated interest rates with varying payment through 2024 (see below)	$	25,210		$	33,953
Originated vacation ownership mortgages receivable at various stated interest rates with varying payment through 2025 (see below)		8,699			2,896
Less allowance for loan losses on originated loans		(1,636	)		(347	)
Net vacation ownership mortgages receivable	$	32,273		$	36,502

        The fair value of our acquired loans of $37.5 million as of the acquisition date was determined by use of a discounted cash flow approach which calculates a present value of expected future cash flows based on scheduled principal and interest payments over the term of the respective loans, while considering anticipated defaults and early repayments determined based on historical experience. Consequently, the fair value of these acquired loans recorded on our consolidated balance sheet as of the acquisition date includes an estimate for future loan losses which is reflected in the historical cost basis for that portfolio. As of September 30, 2015 and December 31, 2014, the contractual outstanding balance of the acquired loans, which represents contractually-owed future principal amounts and accrued interest, was $29.8 million and $38.0 million, respectively.

        The table below presents a rollforward from December 31, 2014 of the accretable yield (interest income) expected to be earned related to our acquired loans, as well as the amount of non-accretable difference at the end of the period. Nonaccretable difference represents estimated contractually required payments in excess of estimated cash flows expected to be collected. The accretable yield represents the excess of estimated cash flows expected to be collected over the carrying amount of the acquired loans.

Accretable Yield	Nine Months Ended September 30, 2015
Balance, beginning of period	$	15,406
Accretion		(3,267	)
Reclassification between nonaccretable difference		583
Balance, end of period	$	12,722
Nonaccretable difference, end of period balance	$	6,345

        The accretable yield is recognized into interest income (within consolidated revenue) over the estimated life of the acquired loans using the level yield method. The accretable yield may change in future periods due to changes in the anticipated remaining life of the acquired loans, which may alter the amount of future interest income expected to be collected, and changes in expected future principal and interest cash collections which impacts the nonaccretable difference.

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INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 5—VACATION OWNERSHIP MORTGAGES RECEIVABLE (Continued)

        Vacation ownership mortgages receivable as of September 30, 2015 are scheduled to mature as follows (in thousands):

	Vacation Ownership Mortgages Receivable
Twelve month period ending September 30,	Acquired loans	Originated loans	Total
2016	$5,600	$492	$	6,092
2017	4,874	565		5,439
2018	3,992	622		4,614
2019	3,267	690		3,957
2020	3,303	771		4,074
2021 and thereafter	8,715	5,559		14,274
Total	29,751	8,699		38,450
Less: discount on acquired loans(1)	(4,541)	—		(4,541	)
Less: allowance for losses	—	(1,636)		(1,636	)
Net vacation ownership mortgages receivable	$25,210	$7,063	$	32,273
Weighted average stated interest rate as of September 30, 2015	14.0%	13.9%
Range of stated interest rates as of September 30, 2015	12.5% to 17.9%	12.9% to 14.9%

(1)

The difference between the contractual principal amount of acquired loans of $29.8 million and the net carrying amount of $25.2 million as of September 30, 2015 is related to the application of ASC 310-30.

Collectability

        We assess our vacation ownership mortgages receivable portfolio of loans for collectability on an aggregate basis. Estimates of uncollectability pertaining to our originated loans are recorded as provisions in the vacation ownership mortgages receivable allowance for losses. For originated loans, we record an estimate of uncollectability as a reduction of sales of vacation ownership intervals in the accompanying condensed consolidated statements of income at the time revenue is recognized on a vacation ownership interval sale. We evaluate our originated loan portfolio collectively as they are largely homogeneous, smaller-balance, vacation ownership mortgages receivable. We use a technique referred to as static pool analysis, which tracks uncollectibles over the entire life of those mortgages receivable, as the basis for determining our general reserve requirements on our vacation ownership mortgages receivable. The adequacy of the related allowance is determined by management through analysis of several factors, such as current economic conditions and industry trends, as well as the specific risk characteristics of the portfolio, including defaults, aging, and historical write-offs of these receivables. The allowance is maintained at a level deemed adequate by management based on a periodic analysis of the mortgage portfolio. As of September 30, 2015, allowance for losses of $1.6 million for uncollectability was recorded to the vacation ownership mortgages receivable allowance for losses related solely to our originated loans.

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INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 5—VACATION OWNERSHIP MORTGAGES RECEIVABLE (Continued)

        Our acquired loans are remeasured at period end based on expected future cash flows which uses an estimated measure of anticipated defaults. We consider the loan loss provision on our originated loans and estimates of defaults used in the remeasurements of our acquired loans to be adequate and based on the economic environment and our assessment of the future collectability of the outstanding loans.

        At September 30, 2015, the weighted average FICO score within our acquired and originated loan pools was 703 and 716, respectively, based upon the outstanding loan balance at time of origination. The average estimated rate for all future defaults for our outstanding pool of loans as of September 30, 2015 was 11.1%.

        On an ongoing basis, we monitor credit quality of our vacation ownership mortgages receivable portfolio based on payment activity as follows:

•

Current—The consumer's note is in good standing as payments and reporting are current per the terms contractually stipulated in the agreement.

•

Past-due—We consider a vacation ownership mortgage receivable to be past-due based on the contractual terms of each individual financing agreement.

•

Non-performing—Vacation ownership mortgages receivable are considered non-performing if interest or principal is more than 120 days past due. All non-performing loans are placed on non-accrual status and we do not resume interest accrual until the receivable becomes contractually current. We apply payments we receive for vacation ownership notes receivable on non-performing status first to interest, then to principal, and any remainder to fees.

        Our aged analysis of past-due vacation ownership mortgages receivable and the gross balance of vacation ownership mortgages receivable greater than 90 days past-due as of September 30, 2015 is as follows (in thousands):

	Vacation Ownership Mortgages Receivable
	Acquired loans		Originated loans		Total
Receivables past due	$	752	$	28	$	780
Receivables greater than 90 days past due	$	114	$	—	$	114

NOTE 6—INVESTMENTS IN UNCONSOLIDATED ENTITIES

        Our investments in unconsolidated entities, recorded under the equity method of accounting in accordance with guidance in ASC 323, "Investments—Equity Method and Joint Ventures," primarily consist of an ownership interest in Maui Timeshare Venture, LLC, a joint venture to develop and operate a vacation ownership resort in the state of Hawaii. This joint venture was acquired in connection with our acquisition of HVO and our investment was recorded at fair value on the acquisition date. Our equity income from investments in unconsolidated entities, recorded in equity in earnings from unconsolidated entities in the accompanying condensed consolidated statement of

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INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 6—INVESTMENTS IN UNCONSOLIDATED ENTITIES (Continued)

income, was $1.3 million and $3.8 million for the three and nine months ended September 30, 2015, respectively.

        The ownership percentages and carrying value of our investments in unconsolidated entities as of September 30, 2015 were as follows:

	Ownership Interest	Carrying Value
		(in thousands)
Maui Timeshare Venture, LLC	33.0%	$	36,635
Other	25.0% - 43.3%		555
Total		$	37,190

NOTE 7—PROPERTY AND EQUIPMENT

        Property and equipment, net is as follows (in thousands):

	September 30, 2015			December 31, 2014
Computer equipment	$	22,945		$	21,389
Capitalized software (including internally developed software)		106,214			97,561
Land, buildings and leasehold improvements		50,916			50,685
Furniture and other equipment		15,841			16,638
Projects in progress		13,245			10,581
		209,161			196,854
Less: accumulated depreciation and amortization		(122,950	)		(110,253	)
Total property and equipment, net	$	86,211		$	86,601

NOTE 8—LONG-TERM DEBT

        Long-term debt is as follows (in thousands):

	September 30, 2015			December 31, 2014
Revolving credit facility (interest rate of 2.45% at September 30, 2015 and 1.92% at December 31, 2014)	$	75,000		$	488,000
5.625% senior notes		350,000			—
Unamortized debt issuance costs (revolving credit facility)		(3,246	)		(3,617	)
Unamortized debt issuance costs (senior notes)		(6,494	)		—
Total long-term debt, net of debt issuance costs	$	415,260		$	484,383

20

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 8—LONG-TERM DEBT (Continued)

Credit Facility

        In April 2014, we entered into the first amendment to the June 21, 2012 amended and restated credit agreement (the "Amended Credit Agreement") which increased the revolving credit facility from $500 million to $600 million, extended the maturity of the credit facility to April 8, 2019 and provided for certain other amendments to covenants. The terms related to interest rates and commitment fees remained unchanged. In November 2014, we entered into a second amendment which primarily provides for a second letter of credit issuer and certain other amendments to covenants. Under this amendment, the financial covenants, interest rates, commitment fees and other significant terms remain unchanged. On April 10, 2015, we entered into a third amendment which changed the leverage-based financial covenant from a maximum consolidated total leverage to EBITDA ratio of 3.5 to 1.0 to a maximum consolidated secured leverage to EBITDA ratio of 3.25 to 1.0. In addition, the amendment adds an incurrence test allowing a maximum consolidated total leverage to EBITDA ratio of 4.5 to 1.0 on a pro forma basis in certain circumstances in which we make acquisitions or investments, incur additional indebtedness or make restricted payments. Also, the amendment added a new pricing level to the pricing grid applicable when the consolidated total leverage to EBITDA ratio equals or exceeds 3.5 to 1.0. This pricing level is either LIBOR plus 2.5% or the base rate plus 1.5% and requires a commitment fee on undrawn amounts of 0.4% per annum. There were no other material changes under this amendment.

        Additionally, on May 5, 2015, we entered into a fourth amendment to the Amended Credit Agreement which changed the definition of change of control to remove the provision that certain changes in the composition of the board of directors would constitute a change of control and therefore be a default under the credit agreement. The amendment also included clarifying language regarding provisions that relate to our 5.625% senior notes due in 2023. There were no other material changes under this amendment.

        As of September 30, 2015, there was $75.0 million outstanding. Any principal amounts outstanding under the revolving credit facility are due at maturity. As of September 30, 2015, the interest rate on the Amended Credit Agreement is based on (at our election) either LIBOR plus a predetermined margin that ranged from 1.25% to 2.5%, or the Base Rate as defined in the Amended Credit Agreement plus a predetermined margin that ranged from 0.25% to 1.5%, in each case based on our consolidated total leverage ratio. As of September 30, 2015, the applicable margin was 2.25% per annum for LIBOR revolving loans and 1.25% per annum for Base Rate loans. As of September 30, 2015, the Amended Credit Agreement has a commitment fee on undrawn amounts that ranged from 0.25% to 0.40% per annum based on our leverage ratio and as of September 30, 2015 the commitment fee was 0.375%.

        Pursuant to the Amended Credit Agreement, all obligations under the revolving credit facility are unconditionally guaranteed by ILG and certain of its subsidiaries. Borrowings are further secured by (1) 100% of the voting equity securities of ILG's U.S. subsidiaries and 65% of the equity in our first-tier foreign subsidiaries and (2) substantially all of our domestic tangible and intangible property.

21

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 8—LONG-TERM DEBT (Continued)

Senior Notes

        On April 10, 2015, we completed a private offering of $350 million in aggregate principal amount of our 5.625% senior notes due in 2023. The net proceeds from the offering, after deducting offering related expenses, were $343.1 million. We used the proceeds to repay indebtedness outstanding on our revolving credit facility. As of September 30, 2015, total unamortized debt issuance costs relating to these senior notes were $6.5 million, which are presented as a direct deduction from the principal amount. Interest on the senior notes is paid semi-annually in arrears on April 15 and October 15 of each year and the senior notes are fully and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries that are required to guarantee the Amended Credit Facility. Additionally, the voting stock of the issuer and the subsidiary guarantors is 100% owned by ILG. The senior notes are redeemable from April 15, 2018 at a redemption price starting at 104.219% which declines over time.

Restrictions and Covenants

        The senior notes and Amended Credit Agreement have various financial and operating covenants that place significant restrictions on us, including our ability to incur additional indebtedness, incur additional liens, issue redeemable stock and preferred stock, pay dividends or distributions or redeem or repurchase capital stock, prepay, redeem or repurchase debt, make loans and investments, enter into agreements that restrict distributions from our subsidiaries, sell assets and capital stock of our subsidiaries, enter into certain transactions with affiliates and consolidate or merge with or into or sell substantially all of our assets to another person.

        The indenture governing the senior notes restricts our ability to issue additional debt in the event we are not in compliance with the minimum fixed charge coverage ratio of 2.0 to 1.0 and limits restricted payments and investments unless we are in compliance with the minimum fixed charge coverage ratio and the amount is within a bucket that grows with our consolidated net income. We are in compliance with this covenant as of September 30, 2015. In addition, the Amended Credit Agreement requires us to meet certain financial covenants regarding the maintenance of a maximum consolidated secured leverage ratio of consolidated secured debt, over consolidated Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as defined. We are also required to maintain a minimum consolidated interest coverage ratio of consolidated EBITDA over consolidated interest expense. As of September 30, 2015, the maximum consolidated secured leverage ratio was 3.25x and the minimum consolidated interest coverage ratio was 3.0x. As of September 30, 2015, ILG was in compliance in all material respects with the requirements of all applicable financial and operating covenants, and our consolidated secured leverage ratio and consolidated interest coverage ratio under the Amended Credit Agreement were 0.45 and 10.92, respectively.

Interest Expense and Debt Issuance Costs

        Interest expense for the three months ended September 30, 2015 and 2014 was $6.4 million and $1.5 million, respectively, and for the nine months ended September 30, 2015 and 2014 was $15.1 million and $4.5 million, respectively. Interest expense for these periods is net of negligible capitalized interest relating to internally-developed software.

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INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 8—LONG-TERM DEBT (Continued)

        As of September 30, 2015, total unamortized debt issuance costs were $9.7 million, net of $3.1 million of accumulated amortization, incurred in connection with the issuance and various amendments to our Amended Credit Agreement as well as the issuance of our senior notes in April 2015. As of December 31, 2014, total unamortized debt issuance costs were $3.6 million, net of $2.0 million of accumulated amortization. Unamortized debt issuance costs are presented as a reduction of long-term debt in the accompanying condensed consolidated balance sheets, pursuant to ASC 2015-03 as discussed in Note 2. Unamortized debt issuance costs are amortized to interest expense through the maturity date of our respective debt instruments using the effective interest method for those costs related to our senior notes, and on a straight-line basis for costs related to our Amended Credit Agreement.

NOTE 9—FAIR VALUE MEASUREMENTS

        In accordance with ASC Topic 820, "Fair Value Measurement," ("ASC 820") the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability's fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

Level 1—Observable inputs that reflect quoted prices in active markets

Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable

Level 3—Unobservable inputs in which little or no market data exists, therefore requiring the company to develop its own assumptions

Fair Value of Financial Instruments

        The estimated fair value of financial instruments below has been determined using available market information and appropriate valuation methodologies, as applicable. There have been no changes in the methods and significant assumptions used to estimate the fair value of financial

23

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 9—FAIR VALUE MEASUREMENTS (Continued)

instruments during the nine months ended September 30, 2015. Our financial instruments are detailed in the following table.

	September 30, 2015						December 31, 2014
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
	(In thousands)
Cash and cash equivalents	$	101,417		$	101,417		$	80,493		$	80,493
Restricted cash and cash equivalents		15,636			15,636			19,984			19,984
Financing receivables		16,134			16,134			15,896			15,896
Vacation ownership mortgages receivable		32,273			33,616			36,502			37,624
Investments in marketable securities		10,961			10,961			11,368			11,368
Revolving credit facility(1)		(71,754	)		(75,000	)		(484,383	)		(488,000	)
Senior notes(1)		(343,506	)		(344,750	)		—			—

(1)

The carrying value of our revolving credit facility and senior notes include $3.2 million and $6.5 million of debt issuance costs, which are presented as a direct reduction of the corresponding liability.

        The carrying amounts of cash and cash equivalents and restricted cash and cash equivalents reflected in the accompanying condensed consolidated balance sheets approximate fair value as they are redeemable at par upon notice or maintained with various high-quality financial institutions and have original maturities of three months or less. Under the fair value hierarchy established in ASC 820, cash and cash equivalents and restricted cash and cash equivalents are stated at fair value based on quoted prices in active markets for identical assets (Level 1).

        The financing receivables as of September 30, 2015 are presented in our consolidated balance sheet within other non-current assets and principally pertains to a convertible secured loan to CLC that matures five years subsequent to the funding date with interest payable monthly. The loan was funded in October of 2014. The outstanding loan is to be repaid in full at maturity either in cash or by means of a share option exercisable by ILG, at its sole discretion. The carrying value of this financing receivable approximates fair value through inputs inherent to the originating value of this loan, such as interest rates and ongoing credit risk accounted for through non-recurring adjustments for estimated credit losses as necessary (Level 2). The stated interest rate on this loan is comparable to market rate. Interest is recognized within our "Interest income" line item in our condensed consolidated statement of income for the three and nine months ended September 30, 2015.

        We estimate the fair value of vacation ownership mortgages receivable using a discounted cash flow model. We believe this is comparable to the model that an independent third party would use in the current market. Our model incorporates default rates, prepayment rates, coupon rates and loan terms respective to the portfolio based on current market assumptions for similar types of arrangements. Based upon the availability of market data, we have classified inputs used in the valuation of our vacation ownership mortgages receivable as Level 3. The primary sensitivity in these

24

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 9—FAIR VALUE MEASUREMENTS (Continued)

assumptions relates to forecasted defaults and projected prepayments which could cause the estimated fair value to vary.

        Investments in marketable securities consist of marketable securities (mutual funds) related to a deferred compensation plan that is funded in a Rabbi trust as of September 30, 2015 and classified as other noncurrent assets in the accompanying condensed consolidated balance sheets. This deferred compensation plan was created and funded in connection with the HVO acquisition. Participants in the deferred compensation plan unilaterally determine how their compensation deferrals are invested within the confines of the Rabbi trust which holds the marketable securities. Consequently, management has designated these marketable securities as trading investments, as allowed by applicable accounting guidance, even though there is no intent by ILG to actively buy or sell securities with the objective of generating profits on short-term differences in market prices. These marketable securities are recorded at a fair value of $11.0 million as of September 30, 2015 based on quoted market prices in active markets for identical assets (Level 1). Unrealized trading losses for the three and nine months ended September 30, 2015 were $0.8 million and $0.5 million, respectively, with an accompanying offsetting adjustment to employee compensation expense, and are each included within general and administrative expenses in the accompanying condensed consolidated statement of income. See Note 11 for further discussion in regards to this deferred compensation plan.

        Borrowings under our senior notes (issued April 2015) and revolving credit facility are carried at historical cost and adjusted for principal payments. The fair value of our senior notes was estimated at September 30, 2015 using an input of quoted prices from an inactive market due to the infrequency at which trades occur on our senior notes (Level 2). The carrying value of the outstanding balance under our revolving credit facility, exclusive of debt issuance costs, approximates fair value as of September 30, 2015 and December 31, 2014 through inputs inherent to the debt such as variable interest rates and credit risk (Level 2).

NOTE 10—EQUITY

        ILG has 300 million authorized shares of common stock, par value of $0.01 per share. At September 30, 2015, there were 59.9 million shares of ILG common stock issued, of which 57.5 million are outstanding with 2.4 million shares held as treasury stock. At December 31, 2014, there were 59.5 million shares of ILG common stock issued, of which 57.1 million were outstanding with 2.4 million shares held as treasury stock.

        ILG has 25 million authorized shares of preferred stock, par value of $0.01 per share, none of which are issued or outstanding as of September 30, 2015 and December 31, 2014. The Board of Directors has the authority to issue the preferred stock in one or more series and to establish the rights, preferences and dividends.

Dividend Declared

        In February, May and August of 2015, our Board of Directors declared a quarterly dividend payment of $0.12 per share paid in March, June and September of 2015, respectively, amounting to $6.9 million each.

        In November 2015, our Board of Directors declared a $0.12 per share dividend payable December 16, 2015 to shareholders of record on December 2, 2015.

25

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 10—EQUITY (Continued)

Stockholder Rights Plan

        In June 2009, ILG's Board of Directors approved the creation of a Series A Junior Participating Preferred Stock, adopted a stockholders rights plan and declared a dividend of one right for each outstanding share of common stock held by our stockholders of record as of the close of business on June 22, 2009. The rights attach to any additional shares of common stock issued after June 22, 2009. These rights, which trade with the shares of our common stock, currently are not exercisable. Under the rights plan, these rights will be exercisable if a person or group acquires or commences a tender or exchange offer for 15% or more of our common stock. The rights plan provides certain exceptions for acquisitions by Liberty Interactive Corporation (formerly known as Liberty Media Corporation) in accordance with an agreement entered into with ILG in connection with its spin-off from IAC/InterActiveCorp (IAC). If the rights become exercisable, each right will permit its holder, other than the "acquiring person," to purchase from us shares of common stock at a 50% discount to the then prevailing market price. As a result, the rights will cause substantial dilution to a person or group that becomes an "acquiring person" on terms not approved by our Board of Directors.

Share Repurchase Program

        In February 2015, ILG's Board of Directors increased the remaining share repurchase authorization to a total of $25 million. Acquired shares of our common stock are held as treasury shares carried at cost on our condensed consolidated financial statements. Common stock repurchases may be conducted in the open market or in privately negotiated transactions. The amount and timing of all repurchase transactions are contingent upon market conditions, applicable legal requirements and other factors. This program may be modified, suspended or terminated by us at any time without notice.

        During the year ended December 31, 2014, we repurchased 0.7 million shares of common stock for $14.1 million, including commissions. As of September 30, 2015, the remaining availability for future repurchases of our common stock was $25.0 million. There were no repurchases of common stock during the nine months ended September 30, 2015.

Accumulated Other Comprehensive Loss

        Pursuant to final guidance issued by the FASB in February of 2013, entities are required to disclose additional information about reclassification adjustments within accumulated other comprehensive income/loss, referred to as AOCL including (1) changes in AOCL balances by component and (2) significant items reclassified out of AOCL in the period. For the three and nine months ended September 30, 2015, there were no significant items reclassified out of AOCL, and the change in AOCL pertains to current period foreign currency translation adjustments as disclosed in our accompanying condensed consolidated statements of comprehensive income.

26

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 10—EQUITY (Continued)

Noncontrolling Interests

Noncontrolling Interest—VRI Europe

        In connection with the VRI Europe transaction on November 4, 2013, CLC was issued a noncontrolling interest in VRI Europe representing 24.5% of the business, which was determined based on the purchase price paid by ILG for its 75.5% ownership interest as of the acquisition date. As of September 30, 2015 and December 31, 2014, this noncontrolling interest amounts to $31.6 million and $33.3 million, respectively, and is presented on our condensed consolidated balance sheets as a component of equity. The change from December 31, 2014 to September 30, 2015 relates to the recognition of the noncontrolling interest holder's proportional share of VRI Europe's earnings and dividends, as well as the translation effect on the foreign currency based amount.

        The parties have agreed not to transfer their interests in VRI Europe or CLC's related development business for a period of five years from the acquisition. In addition, they have agreed to certain rights of first refusal, and customary drag along and tag along rights, including a right by CLC to drag along ILG's VRI Europe shares in connection with a sale of the entire CLC resort business subject to achieving minimum returns and a preemptive right by ILG. As of September 30, 2015, there have been no changes in ILG's ownership interest in VRI Europe.

        Additionally, in connection with this arrangement, ILG and CLC entered into a loan agreement whereby ILG made available to CLC a convertible secured loan facility of $15.1 million that matures five years subsequent to the funding date with interest payable monthly. This loan was funded during the fourth quarter of 2014. The outstanding loan is to be repaid in full at maturity either in cash or by means of a share option exercisable by ILG, at its sole discretion, which would allow for settlement of the loan in CLC's shares of VRI Europe for contractually determined equivalent value. ILG has the right to exercise this share option at any time prior to maturity of the loan; however, the equivalent value for these shares would be measured at a 20% premium to its acquisition date value. We have determined the value of this embedded derivative is not material to warrant bifurcating from the host instrument (loan) at this time.

Noncontrolling Interest—Hyatt Vacation Ownership

        In connection with the HVO acquisition on October 1, 2014, ILG assumed a noncontrolling interest in a joint venture entity, which we fully consolidate, formed for the purpose of developing and selling vacation ownership interests. The fair value of the noncontrolling interest at acquisition was determined based on the noncontrolling party's ownership interest applied against the fair value allocated to the respective joint venture entity. As of September 30, 2015 and December 31, 2014, this noncontrolling interest amounted to $2.3 million and $3.0 million, respectively, and is presented on our condensed consolidated balance sheets as a component of equity.

NOTE 11—BENEFIT PLANS

        Under a retirement savings plan sponsored by ILG, qualified under Section 401(k) of the Internal Revenue Code, participating employees may contribute up to 50.0% of their pre-tax earnings, but not more than statutory limits. ILG provides a discretionary match under the ILG plan of fifty cents for

27

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 11—BENEFIT PLANS (Continued)

each dollar a participant contributed into the plan with a maximum contribution of 3% of a participant's eligible earnings, subject to Internal Revenue Service ("IRS") restrictions. Matching contributions for the ILG plan were approximately $0.5 million and $0.4 million for the three months ended September 30, 2015 and 2014, respectively, and $1.7 million and $1.4 million for the nine months ended September 30, 2015 and 2014, respectively. Matching contributions were invested in the same manner as each participant's voluntary contributions in the investment options provided under the plan.

        Effective August 20, 2008, a deferred compensation plan (the "Director Plan") was established to provide non-employee directors of ILG an option to defer director fees on a tax-deferred basis. Participants in the Director Plan are allowed to defer a portion or all of their compensation and are 100% vested in their respective deferrals and earnings. With respect to director fees earned for services performed after the date of such election, participants may choose from receiving cash or stock at the end of the deferral period. ILG has reserved 100,000 shares of common stock for issuance pursuant to this plan, of which 50,920 share units were outstanding at September 30, 2015. ILG does not provide matching or discretionary contributions to participants in the Director Plan. Any deferred compensation elected to be received in stock is included in diluted earnings per share.

        Effective October 1, 2014, a non-qualified deferred compensation plan (the "DCP") was established to allow certain eligible employees of ILG an option to defer compensation on a tax-deferred basis. The establishment of the DCP was intended to receive a transfer of deferred compensation liabilities in connection with the acquisition of HVO. Participants in the DCP are currently limited to certain HVO employees. These participants make an election prior to the first of each year to defer an amount of compensation payable for services to be rendered beginning in the next calendar year, or to receive distributions. Participants are fully vested in all amounts held in their individual accounts. The DCP is fully funded in a Rabbi trust. The Rabbi trust is subject to creditor claims in the event of insolvency, but the assets held in the Rabbi trust are not available for general corporate purposes. Amounts in the Rabbi trust are invested in mutual funds, as selected by participants, which are designated as trading securities and carried at fair value. Subsequent to the acquisition of HVO, there was a net transfer of $10.6 million into the Rabbi trust related to participants acquired with the acquisition. As of September 30, 2015, the fair value of the investments in the Rabbi trust was $11.0 million which is recorded in other non-current assets with the corresponding deferred compensation liability recorded in other long-term liabilities in the condensed consolidated balance sheet. We recorded unrealized losses of $0.8 million and $0.5 million for the three and nine months ended September 30, 2015, respectively, to general and administrative expense related to the investment gains, and a charge to compensation expense also within general and administrative expense related to the increase in deferred compensation liabilities to reflect the DCP liability, in the condensed consolidated statement of income.

NOTE 12—STOCK-BASED COMPENSATION

        On May 21, 2013, ILG adopted the Interval Leisure Group, Inc. 2013 Stock and Incentive Plan and stopped granting awards under the ILG 2008 Stock and Annual Incentive Plan ("2008 Incentive Plan"). Both plans provide for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. RSUs are awards in the form of phantom shares

28

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 12—STOCK-BASED COMPENSATION (Continued)

or units, denominated in a hypothetical equivalent number of shares of ILG common stock and with the value of each award equal to the fair value of ILG common stock at the date of grant. Each RSU is subject to service-based vesting, where a specific period of continued employment must pass before an award vests. We grant awards subject to graded vesting (i.e., portions of the award vest at different times during the vesting period) or to cliff vesting (i.e., all awards vest at the end of the vesting period). In addition, certain RSUs are subject to attaining specific performance criteria.

        ILG recognizes non-cash compensation expense for all RSUs held by ILG's employees. For RSUs to be settled in stock, the accounting charge is measured at the grant date as the fair value of ILG common stock and expensed as non-cash compensation over the vesting term using the straight-line basis for service awards and the accelerated basis for performance-based awards with graded vesting. Certain cliff vesting awards contain performance criteria which are tied to anticipated future results of operations in determining the fair value of the award, while other cliff vesting awards with performance criteria are tied to the achievement of certain market conditions. This value is recognized as expense over the service period, net of estimated forfeitures, using the straight-line recognition method. The expense associated with RSU awards to be settled in cash is initially measured at fair value at the grant date and expensed ratably over the vesting term, recording a liability subject to mark-to-market adjustments for changes in the price of the respective common stock, as compensation expense.

        Shares underlying RSUs are not issued or outstanding until vested. In relation to our quarterly dividend, unvested RSUs are credited with dividend equivalents, in the form of additional RSUs, when dividends are paid on our shares of common stock. Such additional RSUs are forfeitable and will have the same vesting dates and will vest under the same terms as the RSUs in respect of which such additional RSUs are credited. Given such dividend equivalents are forfeitable, we do not consider them to be participating securities and, consequently, they are not subject to the two-class method of determining earnings per share.

        Under the ILG 2013 Stock and Incentive Compensation Plan, the maximum aggregate number of shares of common stock reserved for issuance as of adoption is 4.1 million shares, less one share for every share granted under any prior plan after December 31, 2012. As of September 30, 2015, ILG has 2.3 million shares available for future issuance under the 2013 Stock and Incentive Compensation Plan.

        During the first quarter of 2015 and 2014, the Compensation Committee granted approximately 423,000 and 390,000 RSUs, respectively, vesting over three to five years, to certain officers and employees of ILG and its subsidiaries. Of these RSUs granted in 2015 and 2014, approximately 105,000 and 116,000 cliff vest in three to five years and approximately 54,000 and 84,000 of these RSUs, respectively, are subject to performance criteria that could result between 0% and 200% of these awards being earned either based on defined adjusted EBITDA or relative total shareholder return targets over the respective performance period, as specified in the award document.

        For the 2015 and 2014 RSUs subject to relative total shareholder return performance criteria, the number of RSUs that may ultimately be awarded depends on whether the market condition is achieved. We used a Monte Carlo simulation analysis to estimate a per unit grant date fair value of $40.71 for 2015 and $36.90 for 2014 for these performance based RSUs. This analysis estimates the total shareholder return ranking of ILG as of the grant date relative to two peer groups approved by the

29

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 12—STOCK-BASED COMPENSATION (Continued)

Compensation Committee, over the remaining performance period. The expected volatility of ILG's common stock at the date of grant was estimated based on a historical average volatility rate for the approximate three-year performance period. The dividend yield assumption was based on historical and anticipated dividend payouts. The risk-free interest rate assumption was based on observed interest rates consistent with the approximate three-year performance measurement period.

        Non-cash compensation expense related to RSUs for the three months ended September 30, 2015 and 2014 was $3.2 million and $2.8 million, respectively, and $10.2 million and $8.3 million for the nine months ended September 30, 2015 and 2014, respectively. At September 30, 2015, there was approximately $20.7 million of unrecognized compensation cost, net of estimated forfeitures, related to RSUs, which is currently expected to be recognized over a weighted average period of approximately 1.9 years.

        The amount of stock-based compensation expense recognized in the condensed consolidated statements of income is reduced by estimated forfeitures, as the amount recorded is based on awards ultimately expected to vest. The forfeiture rate is estimated at the grant date based on historical experience and revised, if necessary, in subsequent periods for any changes to the estimated forfeiture rate from that previously estimated. For any vesting tranche of an award, the cumulative amount of compensation cost recognized is at least equal to the portion of the grant-date value of the award tranche that is actually vested at that date.

        Non-cash stock-based compensation expense related to equity awards is included in the following line items in the accompanying condensed consolidated statements of income for the three and nine months ended September 30, 2015 and 2014 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Cost of sales	$	192	$	189	$	625	$	572
Selling and marketing expense		356		301		1,237		998
General and administrative expense		2,700		2,327		8,320		6,727
Non-cash compensation expense	$	3,248	$	2,817	$	10,182	$	8,297

        The following table summarizes RSU activity during the nine months ended September 30, 2015:

	Shares			Weighted-Average Grant Date Fair Value
	(In thousands)
Non-vested RSUs at January 1, 2015		1,694		$	20.23
Granted		553			25.72
Vested		(547	)		17.34
Forfeited		(28	)		21.74
Non-vested RSUs at September 30, 2015		1,672		$	22.97

30

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 13—INCOME TAXES

        ILG calculates its interim income tax provision in accordance with ASC 740, "Income Taxes". At the end of each interim period, ILG makes its best estimate of the annual expected effective tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax or benefit related to significant, unusual, or extraordinary items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur. In addition, the effect of a change in enacted tax laws or rates, tax status, or judgment on the realizability of a beginning-of-the-year deferred tax asset in future years is recognized in the interim period in which the change occurs.

        The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income for the year, projections of the proportion of income (or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired, additional information is obtained or ILG's tax environment changes. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on prior quarters is included in tax expense for the current quarter.

        A valuation allowance for deferred tax assets is provided when it is more likely than not that certain deferred tax assets will not be realized. Realization is dependent upon the generation of future taxable income or the reversal of deferred tax liabilities during the periods in which those temporary differences become deductible. We consider the history of taxable income in recent years, the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies to make this assessment.

        For the three and nine months ended September 30, 2015, ILG recorded income tax provisions for continuing operations of $10.7 million and $34.9 million, respectively, which represent effective tax rates of 35.3% and 35.8% for the respective periods. These tax rates are higher than the federal statutory rate of 35% due principally to state and local income taxes partially offset by foreign income taxed at lower rates and the impact of favorable discrete items recorded during the current period related to tax credits and state taxes.

        For the three and nine months ended September 30, 2014, ILG recorded income tax provisions for continuing operations of $11.8 million and $36.8 million, respectively, which represent effective tax rates of 34.9% and 35.8% for the respective periods. These tax rates are different than the federal statutory rate of 35% due principally to state and local income taxes offset by foreign income taxed at lower rates. These tax rates include the effect of a shift in the projections of the proportion of income earned and taxed between the various jurisdictions and the impact of favorable discrete items recorded during the three months ended September 30, 2014.

        As of September 30, 2015, there were no material changes to ILG's unrecognized tax benefits and related interest. ILG recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense.

31

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 13—INCOME TAXES (Continued)

        ILG files income tax returns in the U.S. federal jurisdiction and various state, local, and foreign jurisdictions. As of September 30, 2015, no open tax years are currently under examination by the IRS or any material state and local jurisdictions.

NOTE 14—SEGMENT INFORMATION

        Pursuant to FASB guidance as codified in ASC 280, an operating segment is a component of a public entity (1) that engages in business activities that may earn revenues and incur expenses; (2) for which operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segments and assess its performance; and (3) for which discrete financial information is available. We also considered how the businesses are organized as to segment management, and the focus of the businesses with regards to the types of products or services offered. In the fourth quarter of 2014, as a result of the acquisition of HVO, ILG reorganized its management reporting structure resulting in the following operating and reportable segments: Exchange and Rental, and Vacation Ownership.

        Our Exchange and Rental segment offers access to vacation accommodations and other travel-related transactions and services to leisure travelers, by providing vacation exchange services and vacation rental, working with resort developers and managing vacation properties. Our Vacation Ownership segment engages in the management, sales, marketing, financing, and development of vacation ownership interests and related services to owners and associations.

        ILG provides certain corporate functions that benefit the organization as whole. Such corporate functions include corporate services relating to oversight, accounting, legal, treasury, tax, internal audit, human resources, and certain IT functions. Historically most of these costs have been borne by the Interval business. Beginning in the fourth quarter of 2014, costs relating to such corporate functions that are not directly cross-charged to individual businesses are being allocated to our two operating and reportable segments based on a pre-determined measure of profitability relative to total ILG. All such allocations relate only to general and administrative expenses. The condensed consolidated statements of income are not impacted by this cross-segment allocation. Consequently, for comparative purposes, we have recast our segment results for 2014 to include such corporate allocations.

32

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 14—SEGMENT INFORMATION (Continued)

        Information on reportable segments and reconciliation to consolidated operating income is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Exchange and Rental:
Transaction revenue	$	46,728	$	46,868	$	150,931	$	150,294
Membership fee revenue		31,326		32,017		94,453		95,437
Ancillary member revenue		1,689		1,896		4,490		5,228
Total member revenue		79,743		80,781		249,874		250,959
Other revenue		7,815		5,825		25,386		17,932
Rental management revenue		13,626		12,973		39,236		36,932
Pass-through revenue		23,704		20,638		70,625		61,284
Total revenues		124,888		120,217		385,121		367,107
Cost of sales		47,569		44,187		148,311		137,993
Gross profit		77,319		76,030		236,810		229,114
Selling and marketing expense		14,570		14,640		45,419		42,897
General and administrative expense		26,284		25,335		78,290		75,593
Amortization expense of intangibles		2,155		1,739		6,465		5,319
Depreciation expense		3,958		3,587		11,680		10,892
Segment operating income	$	30,352	$	30,729	$	94,956	$	94,413

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Vacation Ownership:
Management fee revenue	$	25,759	$	22,123	$	75,672	$	67,118
Vacation ownership sales and financing revenue		9,002		—		28,473		—
Pass-through revenue		14,391		4,343		43,071		13,027
Total revenue		49,152		26,466		147,216		80,145
Cost of sales		28,044		14,808		90,082		44,613
Gross profit		21,108		11,658		57,134		35,532
Selling and marketing expense		3,563		159		9,500		280
General and administrative expense		13,076		6,005		32,506		18,435
Amortization expense of intangibles		1,362		1,140		4,067		3,421
Depreciation expense		436		178		1,311		542
Segment operating income	$	2,671	$	4,176	$	9,750	$	12,854

33

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 14—SEGMENT INFORMATION (Continued)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Consolidated:
Revenue	$	174,040	$	146,683	$	532,337	$	447,252
Cost of sales		75,613		58,995		238,393		182,606
Gross profit		98,427		87,688		293,944		264,646
Direct segment operating expenses		65,404		52,783		189,238		157,379
Operating income	$	33,023	$	34,905	$	104,706	$	107,267

        Selected financial information by reporting segment is presented below (in thousands). Total assets for our Exchange and Rental segment as of December 31, 2014 have been recast pursuant to ASU 2015-03 with regards to the presentation of debt issuance costs as a contra long-term debt item. See Note 8 for additional discussion.

	September 30, 2015		December 31, 2014
Total Assets:
Exchange and Rental	$	934,860	$	928,081
Vacation Ownership		367,542		395,921
Total	$	1,302,402	$	1,324,002

Geographic Information

        We conduct operations through offices in the U.S. and 15 other countries. For the nine months ended September 30, 2015 and 2014 revenue is sourced from over 100 countries worldwide. Other than the United States and Europe, revenue sourced from any individual country or geographic region did not exceed 10% of consolidated revenue for the three and nine months ended September 30, 2015 and 2014.

34

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 14—SEGMENT INFORMATION (Continued)

        Geographic information on revenue, based on sourcing, and long-lived assets, based on physical location, is presented in the table below (in thousands).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Revenue:
United States	$	144,610	$	112,973	$	441,636	$	345,201
Europe		16,360		18,337		50,828		55,046
All other countries(1)		13,070		15,373		39,873		47,005
Total	$	174,040	$	146,683	$	532,337	$	447,252

(1)

Includes countries within the following continents: Africa, Asia, Australia, North America and South America.

	September 30, 2015		December 31, 2014
Long-lived assets (excluding goodwill and intangible assets):
United States	$	81,276	$	81,291
Europe		4,567		4,884
All other countries		368		426
Total	$	86,211	$	86,601

NOTE 15—COMMITMENTS AND CONTINGENCIES

        In the ordinary course of business, ILG is a party to various legal proceedings. ILG establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. ILG does not establish reserves for identified legal matters when ILG believes that the likelihood of an unfavorable outcome is not probable. Although management currently believes that an unfavorable resolution of claims against ILG, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of ILG, these matters are subject to inherent uncertainties and management's view of these matters may change in the future. ILG also evaluates other contingent matters, including tax contingencies, to assess the probability and estimated extent of potential loss. See Note 13 for a discussion of income tax contingencies.

        Other items, such as certain purchase commitments and guarantees are not recognized as liabilities in our condensed consolidated financial statements but are required to be disclosed in the footnotes to the financial statements. These funding commitments could potentially require our performance in the event of demands by third parties or contingent events. At September 30, 2015, guarantees, surety bonds and letters of credit totaled $88.6 million, with the highest annual amount of $64.7 million

35

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 15—COMMITMENTS AND CONTINGENCIES (Continued)

occurring in year one. The total includes a guarantee by us of up to $36.7 million of the construction loan for the Maui project. This amount represents the maximum exposure under guarantee related to this construction loan from a legal perspective; however, our reasonable expectation of our exposure under this guarantee based on the agreements among guarantors is proportionally reduced by our ownership percentage in the Maui project to $18.1 million as of September 30, 2015. Additionally, the total also includes maximum exposure under guarantees of $41.5 million primarily relating to our vacation rental business's hotel and resort management agreements, including those with guaranteed dollar amounts, and accommodation leases supporting the rental management activities that are entered into on behalf of the property owners for which either party generally may terminate such leases upon 60 to 90 days prior written notice to the other party.

        In addition, certain of our rental management agreements provide that owners receive specified percentages of the rental revenue generated under its management. In these cases, the operating expenses for the rental operations are paid from the revenue generated by the rentals, the owners are then paid their contractual percentages or guaranteed amounts, and our vacation rental business either retains the balance (if any) as its fee or makes up the deficit. Although such deficits are reasonably possible in a few of these agreements, as of September 30, 2015, future amounts are not expected to be significant either individually or in the aggregate.

        Additionally, as of September 30, 2015, our letters of credit totaled $8.3 million and were principally related to our Vacation Ownership sales and financing activities. More specifically, these letter of credits provide alternate assurance on amounts required to be held in escrow which enable our developer entities to access purchaser deposits prior to closings, as well as provide a guarantee of maintenance fees owed by our developer entities during subsidy periods at a particular vacation ownership resort, among other items.

        Our operating and purchase obligations primarily relate to future guaranteed purchases of rental inventory, operational support services, marketing related benefits and membership fulfillment benefits. Certain of our vacation rental businesses also enter into agreements, as principal, for services purchased on behalf of property owners for which it is subsequently reimbursed. As such, we are the primary obligor and may be liable for unreimbursed costs. As of September 30, 2015, amounts pending reimbursements are not significant.

European Union Value Added Tax Matter

        In 2009, the European Court of Justice issued a judgment related to Value Added Tax ("VAT") in Europe against an unrelated party. The judgment affects companies who transact within the European Union ("EU"), specifically providers of vacation interest exchange services, and altered the manner in which our Exchange and Rental segment accounts for VAT on its revenues as well as to which EU country VAT is owed.

        As of September 30, 2015 and December 31, 2014, ILG had an accrual of $1.4 million and $2.3 million, respectively, representing the net exposure of any VAT reclaim refund receivable and accrued VAT liabilities related to this matter. The net change in the accrual primarily relates to the resolution with the respective taxing authority of a specific methodology that is to be utilized, and to a

36

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 15—COMMITMENTS AND CONTINGENCIES (Continued)

decrease in the change in estimate primarily to update the periods for which the accrued VAT liabilities are due, as well as the effect of foreign currency remeasurements. The net impact resulted in favorable adjustments of less than $0.1 million and of $1.2 million for the three and nine months ended September 30, 2015 respectively, and $0.1 million and $0.7 million for the three and nine months ended September 30, 2014, respectively, to our condensed consolidated statements of income.

        Because of the uncertainty surrounding the ultimate outcome and settlement of these VAT liabilities, it is reasonably possible that future costs to settle these VAT liabilities as of September 30, 2015 may range from $1.4 million up to approximately $2.9 million based on quarter-end exchange rates. ILG believes that the $1.4 million accrual at September 30, 2015 is our best estimate of probable future obligations for the settlement of these VAT liabilities. The difference between the probable and reasonably possible amounts is primarily attributable to the assessment of certain potential penalties.

NOTE 16—SUBSEQUENT EVENTS

        On October 27, 2015, we entered into an Agreement and Plan of Merger, with Starwood Hotels & Resorts Worldwide, Inc. (Starwood), Vistana Signature Experiences, Inc. (Vistana) and our newly formed subsidiary, pursuant to which we will acquire Vistana, the vacation ownership business of Starwood. The acquisition will be effected through a "Reverse Morris Trust" structure, which means that Vistana will be spun-off to Starwood's shareholders pursuant to a Separation Agreement and then merged with our subsidiary with Vistana shareholders receiving stock of ILG. Vistana will be the surviving entity of the merger. Prior to the spin-off, Vistana will distribute approximately $132 million to Starwood, subject to adjustment. Prior to the merger, Starwood will transfer to Vistana the vacation ownership business and five hotels that are expected to be converted into vacation ownership properties over time. The combination will result in Starwood shareholders owning, at the closing, approximately 55% of the combined company on a fully diluted basis, with existing shareholders of ILG owning approximately 45% of the combined company. Completion of the merger is subject to customary closing conditions, including regulatory and ILG shareholder approvals. Liberty Interactive Corp and certain of ILG's senior executives have entered into Voting and Support Agreements, which provide for them to vote in favor of the issuance of ILG shares pursuant to the merger.

        The Merger Agreement contains certain termination rights including Starwood's right to terminate if ILG's board changes its recommendation regarding issuance of ILG common stock for the merger or ILG's termination in order to enter into an agreement for a superior proposal, in each case prior to stockholder approval. For these terminations, ILG would be required to pay Starwood a termination fee of $40 million, which could also be payable for certain other terminations if ILG enters into an agreement with respect to a competing proposal within 12 months of termination of the merger agreement.

        In connection with the transaction, Vistana will enter into an 80-year exclusive global license agreement for the use of the Westin and Sheraton brands in vacation ownership in addition to the non-exclusive license for the existing St. Regis and The Luxury Collection vacation ownership properties. Under the terms of the license agreement, Starwood will receive an annual base royalty fee of $30 million plus 2% of vacation ownership interest sales. Vistana will also enter into an agreement

37

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2015

(Unaudited)

NOTE 16—SUBSEQUENT EVENTS (Continued)

regarding its continued participation in the Starwood Preferred Guest loyalty program. Also, Starwood and ILG will enter into a Noncompetition Agreement that will restrict, for ten years, Starwood from competing with ILG's vacation ownership business and restrict ILG from competing with Starwood's hotel business, subject to specified exceptions.

        Additional transaction-related agreements include, among others:

•

an Employee Matters Agreement, which will govern, among other things, Starwood, Vistana and ILG's obligations with respect to current and former employees of the Vistana Business; and

•

a Tax Matters Agreement, which will govern, among other things, Starwood, Vistana and ILG's respective rights, responsibilities and obligations with respect to taxes, tax attributes, the preparation and filing of tax returns, responsibility for and preservation of the expected tax-free status of the transactions contemplated by the Separation Agreement and certain other tax matters.

        In connection with the transactions contemplated by the Merger Agreement and Separation Agreement, ILG and Liberty Interactive Corp. agreed to amend and restate that certain Spinco Agreement, dated May 13, 2008, by and among Liberty, certain affiliates of Liberty and IAC/InterActive Corp., as subsequently assigned to ILG on August 20, 2008. This amended agreement provides that, at the closing of the Merger, Liberty will be entitled to appoint two directors to the Board (rather than the three designees Liberty currently has the right to appoint). So long as Liberty continues to beneficially own at least 10% of ILG's common stock, Liberty will have the right to nominate a proportionate number of directors to ILG's board of directors. The amended agreement restricts Liberty and its affiliates from acquiring in excess of 35% of ILG's outstanding shares of common stock without ILG's consent.

        The amended agreement, and the respective rights and obligations thereunder, will terminate if Liberty's beneficial ownership falls below 10% of ILG's outstanding equity, unless Liberty's ownership was reduced below 10% not in conjunction with Liberty transferring its shares. In that event, Liberty's rights will terminate three years from the date of the amended agreement.

        Also in connection with the transactions contemplated by the Merger Agreement and Separation Agreement, ILG and Liberty agreed to amend and restate that certain registration rights agreement, dated as of August 20, 2008, by and among ILG, Liberty and an affiliate of Liberty. The Amended Registration Rights Agreement provides Liberty with four demand registration rights and sets the aggregate offering price threshold for any demand registration statement at $50 million. Pursuant to the Amended Registration Rights Agreement, ILG must prepare a demand registration statement requested by Liberty on the earlier of the termination of the Merger Agreement and sixty days following the consummation of the transactions contemplated by the Merger Agreement.

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Item 2.    Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Regarding Forward-Looking Information

        This quarterly report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as "anticipates," "estimates," "expects," "intends," "plans" and "believes," and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to: our future financial performance, our business prospects and strategy, anticipated financial position, liquidity and capital needs and other similar matters, as well as financial estimates and statements as to the expected timing, completion and effects of the proposed merger between a wholly-owned subsidiary of ILG and Vistana Signature Experiences, Inc., which will immediately follow the proposed spin-off of Vistana from Starwood Hotels & Resorts Worldwide, Inc. These forward-looking statements are based on management's current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.

        Actual results could differ materially from those contained in the forward-looking statements included in this quarterly report for a variety of reasons, including, among others: adverse trends in economic conditions generally or in the vacation ownership, vacation rental and travel industries; adverse changes to, or interruptions in, relationships with third parties; lack of available financing for, or insolvency of developers; consolidation of developers; decreased demand from prospective purchasers of vacation interests; travel related health concerns; changes in our senior management; regulatory changes; our ability to compete effectively and successfully add new products and services; our ability to successfully manage and integrate acquisitions; the occurrence of a termination event under the master license agreement with Hyatt; our ability to market vacation ownership interests successfully and efficiently; the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement with Starwood, the risk that ILG stockholders may not approve the issuance of ILG common stock in connection with the proposed merger, the risk that the necessary regulatory approvals may not be obtained or may be obtained subject to conditions that are not anticipated, risks that any of the closing conditions to the proposed merger, including Starwood's spin-off of Vistana, may not be satisfied in a timely manner, risks related to disruption of management time from ongoing business operations due to the proposed merger, failure to realize the benefits expected from the proposed merger, the effect of the announcement of the proposed merger on the ability of ILG and Starwood to retain and hire key personnel and maintain relationships with their key business partners, and on their operating results and businesses generally; impairment of assets; the restrictive covenants in our revolving credit facility and senior notes; adverse events or trends in key vacation destinations; business interruptions in connection with our technology systems; ability of managed homeowners' associations to collect sufficient maintenance fees; third parties not repaying advances or extensions of credit; fluctuations in currency exchange rates; and our ability to expand successfully in international markets and manage risks specific to international operations. Certain of these and other risks and uncertainties are discussed in our filings with the SEC, including in Item 1A "Risk Factors" of our 2014 Annual Report on Form 10-K and in Part II of this report. In light of these risks and uncertainties, the forward looking statements discussed in this report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward looking statements, which only reflect the views of our management as of the date of this report. Except as required by applicable law, we do not undertake to update these forward-looking statements.

GENERAL

        The following Management Discussion and Analysis provides a narrative of the results of operations and financial condition of ILG for the three and nine months ended September 30, 2015.

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This section should be read in conjunction with the consolidated financial statements and accompanying notes included in this report as well as our 2014 Annual Report on Form 10-K, which have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). This discussion includes the following sections:

•

Management Overview

•

Results of Operations

•

Financial Position, Liquidity and Capital Resources

•

Critical Accounting Policies and Estimates

•

ILG's Principles of Financial Reporting

•

Reconciliations of Non-GAAP Measures

MANAGEMENT OVERVIEW

Organization

        In the fourth quarter of 2014, as a result of the acquisition of HVO and its added sales and marketing capabilities, ILG reorganized its management structure. This realignment resulted in a change to our operating and reportable segments which are now Exchange and Rental, and Vacation Ownership. The Exchange and Rental operating segment consists of Interval, HRC, the TPI operated exchange business, and Aqua-Aston. The Vacation Ownership operating segment consists of VRI Europe, HVO's management and VOI sales and financing businesses, and the management related lines of business of VRI and TPI.

General Description of our Business

        ILG is a leading global provider of non-traditional lodging, encompassing a portfolio of leisure businesses from exchange and vacation rental to vacation ownership.

        Exchange and Rental offers access to vacation accommodations and other travel-related transactions and services to leisure travelers, by providing vacation exchange services and vacation rentals, working with resort developers and operating vacation rental properties. Vacation Ownership engages in the management of vacation ownership resorts; sales, marketing, and financing of vacation ownership interests; and related services to owners and associations.

Exchange & Rental Services

        Interval, the principal business in our Exchange and Rental segment, has been a leader in the vacation exchange services industry since its founding in 1976. As of September 30, 2015, Interval's primary operation is the Interval Network, a quality global vacation ownership membership exchange network with:

•

a large and diversified base of participating resorts consisting of more than 2,900 resorts located in over 80 countries, including both leading independent and branded resort developers; and

•

approximately 1.8 million vacation ownership interest owners enrolled as members of the Interval Network.

        Interval typically enters into multi-year contracts with developers of vacation ownership resorts, pursuant to which the resort developers agree to enroll all purchasers of vacation interests at the applicable resort as members of an Interval exchange program. In return, Interval provides enrolled purchasers with the ability to exchange the use and occupancy of their vacation interest at the home resort/club system for the right to occupy accommodations at a different resort participating in an

40

Interval exchange network. Through Interval's Getaways, members may rent resort accommodations for a fee without relinquishing the use of their vacation interest. In addition, Interval offers sales, marketing and operational support, consulting and back-office services, including reservation servicing, to certain resort developers participating in the Interval Network, upon their request and for additional consideration. We also operate additional exchange programs including the HRC, which currently encompasses 16 resorts, and TPI's operated exchange business.

        This segment also provides vacation rental through Aqua-Aston as part of a comprehensive package of rental, marketing and management services offered to vacation property owners, primarily of Hawaiian properties, as well as through the Interval Network. Revenue from our vacation rental business is derived principally from fees for rental services and related management of hotels, condominium resorts and homeowners' associations. Agreements with owners at many of vacation rental's managed hotel and condominium resorts provide that owners receive either specified percentages of the revenue generated under our management or, in limited instances, guaranteed dollar amounts. In these cases, the operating expenses for the rental operation are paid from the revenue generated by the rentals, the owners are then paid their contractual percentages or guaranteed amounts, and our vacation rental business either retains the balance (if any) as its fee or makes up the deficit. In other instances, fees for rental services generally consist of commissions earned on rentals. Management fees consist of a base management fee and, in some instances, an incentive management fee which is generally a percentage of operating profits or improvement in operating profits. Service fee revenue is based on the services provided to owners including reservations, sales and marketing, property accounting and information technology services either internally or through third party providers.

        The Exchange and Rental segment earns most of its revenue from (i) fees paid for membership in the Interval Network and the HRC and (ii) Interval Network and HRC transactional and service fees paid primarily for exchanges, Getaways, reservation servicing, and related transactions collectively referred to as "transaction revenue." Revenue is also derived from fees for ancillary products and services provided to members, fees from other exchange and rental programs and other products and services sold to developers.

Vacation Ownership Services

        Revenue from the Vacation Ownership segment is derived principally from fees for vacation ownership resort and homeowners' association management services, sales of Hyatt® branded vacation ownership interests, interest income earned for financing these sales, and licensing, sales and marketing, and other fees charged to non-controlled developers of HRC affiliated resorts.

        We provide management services to nearly 200 vacation ownership properties and/or their associations through HVO, TPI, VRI and VRI Europe. TPI and VRI provide property management, homeowners' association management and related services to timeshare resorts in the United States, Canada and Mexico. VRI Europe manages vacation ownership resorts in Spain and the Canary Islands, the United Kingdom, France and Portugal. HVO provides management services for luxury and upper upscale resorts throughout the United States participating in the HRC. Our management services are provided pursuant to agreements with terms generally ranging from one to ten years or more, many of which are automatically renewable. Management fees are negotiated amounts for management and other specified services, and at times are based on a cost-plus arrangement.

        HVO sells, markets, finances, develops and/or licenses the brand for 16 vacation ownership resorts that participate in the HRC. HVO sells traditional vacation ownership interests of weekly intervals and, at certain properties, fractional interests, as deeded real estate. These interests provide annual usage rights for a one-week or longer interval at a specific resort. Each purchaser is automatically enrolled in the HRC. In connection with the sales of vacation ownership interests, we provide financing to eligible

41

purchasers collateralized by the deeded interest. These loans generally bear interest at a fixed rate, have a term of up to 10 years and require a minimum 10% down payment. In addition, we receive fees for sales and marketing, brand licensing and other services provided to properties where the developer is not controlled by us. We have a global master license agreement with a subsidiary of Hyatt Hotels Corporation which provides us with an exclusive license for the use of Hyatt® brand with respect to shared ownership. The HRC resorts are able to use the Hyatt brand through agreements with us. Marketing efforts for TPI, VRI and VRI Europe are focused on homeowners' associations of vacation ownership resorts. VRI Europe has an agreement with CLC World Resorts to source additional management opportunities, while HVO focuses its management services on HRC resorts and associations.

        In December 2014, the newest HRC resort, Hyatt Ka'anapali Beach opened on Maui. This resort was developed through an unconsolidated joint venture with Host Hotels & Resorts and HVO is providing sales, marketing and management services and the license for the brand.

International Revenue

        International revenue decreased in the three and nine months ended September 30, 2015 by 14.6% and 13.2%, respectively compared to the same periods in 2014. As a percentage of our total revenue, international revenue decreased in the three and nine months ended September 30, 2015 to 16.9% and 17.0%, respectively, from 23.0% and 22.8% compared to the same periods in 2014. In constant currency, international revenue decreased 4.9% and 2.3% in the quarter and year-to-date 2015 period compared to last year, while as a percentage of our total revenue it decreased to 18.1% and 18.4%, respectively. The decrease in international revenue, and in constant currency, as a percentage of total revenue in 2015 is attributable to revenue from our HVO acquisition consummated in October 2014 which is entirely U.S. revenue.

        Constant currency represents current period results of operations determined by translating our functional currency results to U.S. dollars (our reporting currency) using the actual prior period blended rate of translation from the comparable prior period. We believe that the presentation of our results of operations excluding the effect of foreign currency translations serves to enhance the understanding of our performance, improves transparency of our disclosures, provides meaningful presentations of our results from our business operations by excluding this effect not related to our core business operations and improves the period to period comparability of results from business operations.

Other Factors Affecting Results

Exchange & Rental

        While fewer new projects have been constructed in the last several years, we are beginning to see more activity that generates new members. In addition, developers and homeowners' associations have been taking back vacation ownership interests which are available to be sold again. This allows developers to continue to generate sales revenues without significant capital expenditure for development. However, a high proportion of sales by developers continues to be to their existing owners, which does not result in new members to the Interval Network.

        Our 2015 results continue to be negatively affected by a shift in the percentage mix of the Interval Network membership base from traditional and direct renewal members to corporate members. Our corporate developer accounts enroll and renew their entire active owner base which positively impacts our retention rate; however, these members tend to have a lower propensity to transact with us. Membership mix as of September 30, 2015 included 58% traditional and 42% corporate members, compared to 59% and 41%, respectively, as of September 30, 2014.

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        Our Exchange and Rental segment results are susceptible to variations in economic conditions, particularly in its largest vacation rental market, Hawaii. According to the Hawaii Tourism Authority, visitor arrivals by air in Hawaii increased 4.3% for the nine months ended September 30, 2015 (latest available data) compared to the comparable period in the prior year. Applying the change to the calculation of revenue per available room ("RevPAR") discussed in the revenue section of our Results of Operations below to the prior year period, RevPAR in Hawaii increased 5.7% to $129.97 for the nine months ended September 30, 2015, driven by higher average daily rate ("ADR") of 5.0% when compared to the same period in 2014.

        As of the latest forecast (August 2015), the Hawaii Department of Business, Economic Development and Tourism forecasts increases of 4.3% in visitors to Hawaii and 3.8% in visitor expenditures in 2015 over 2014.

Vacation Ownership

        For the United States based businesses, our management fees are paid by the homeowners' association and funded from the annual maintenance fees paid by the individual owners to the association. Most of VRI Europe revenue is based on a different model. Typically, VRI Europe charges vacation owners directly an annual fee intended to cover property management, all resort operating expenses and a management profit. Consequently, VRI Europe's business model normally operates at a lower gross margin than the other management businesses, when excluding pass-through revenue.

        HVO, TPI and VRI also offer vacation rental services to individual timeshare owners and homeowners' associations. HVO provides management services to homeowners' associations and resorts that participate in the HRC. VRI Europe manages resorts developed by CLC World Resorts, our joint venture partner in VRI Europe, as well as independent homeowners' associations. The loss of several of our largest management agreements could materially impact our Vacation Ownership business.

        On October 1, 2014, in connection with the closing of the acquisition of HVO, our subsidiary entered into a Master License Agreement with a subsidiary of Hyatt Hotels Corporation. The Master License Agreement provides an exclusive license for the use of the Hyatt® brand in connection with the shared ownership business. Pursuant to the terms of the Master License Agreement, our subsidiary may continue to develop, market, sell and operate existing shared ownership projects as well as new shared ownership projects agreed to by us and Hyatt. HVO must comply with designated Hyatt® brand standards with respect to the operation of the licensed business. The initial term of the Master License Agreement expires on December 31, 2093, with three 20-year extensions subject to meeting sales performance tests. In consideration for the exclusive license and for access to Hyatt's various marketing channels, including the existing hotel loyalty program, we have agreed to pay Hyatt certain recurring royalty fees based on revenues generated from vacation ownership sales, management, rental and club dues collected by us related to the branded business. Hyatt may terminate the Master License Agreement upon the occurrence of certain uncured, material defaults by us. Such defaults include, but are not limited to, a substantial payment default, bankruptcy, a transfer in breach of the specified transfer restrictions or a material failure to comply with Hyatt® brand standards on a systemic level.

        Over the past year, we have been reviewing the effectiveness of our HVO sales and marketing organization. We are in the process of rebuilding the distribution platform, particularly for the consolidated properties.

Business Acquisition

        The financial effect of the acquisition of HVO impacts the year-over-year comparability as further discussed in our Results of Operations section.

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Outlook

        We expect additional consolidation within the vacation ownership industry leading to increased competition in our Exchange and Rental business and reduced availability of exchange and Getaway inventory. Additionally, we anticipate continued margin compression and increased competition in our Exchange and Rental business.

        For the vacation rental business, we expect RevPAR to post year-over-year improvement for the remainder of the year. Our RevPAR expectation generally tracks with the forecasted upward trend in tourism activity of its largest market, Hawaii, which is benefitting from a relatively stable North American market. Additionally, expanded airlift into the island chain remains a positive factor bolstering the Hawaiian tourism economy; however, limited inter-island airlift and increases in the cost of a Hawaiian vacation, particularly for Japanese travelers who have lost purchasing power due to the strengthening U.S. dollar, may continue to negatively impact visitor arrivals and expenditures, and temper growth.

        In the vacation ownership management business, we expect independent homeowners' associations to be increasingly dependent on secondary sales of inventory to replace lost maintenance fees from an aging owner base. Changes in currency exchange rates are expected to negatively affect the results of our VRI Europe business.

        Additionally, our completion of the HVO acquisition in the fourth quarter of 2014 will affect the year-over-year comparability of our results of operations for the year ended December 31, 2015.

        On October 27, 2015, we entered into an Agreement and Plan of Merger, with Starwood Hotels & Resorts Worldwide, Inc. (Starwood), Vistana Signature Experiences, Inc. (Vistana) and our newly formed subsidiary, pursuant to which we will acquire Vistana, the vacation ownership business of Starwood. The acquisition will be effected through a "Reverse Morris Trust" structure, which means that Vistana will be spun-off to Starwood's shareholders pursuant to a Separation Agreement and then merged with our subsidiary with Vistana shareholders receiving stock of ILG. Vistana will be the surviving entity of the merger. Prior to the spin-off, Vistana will distribute approximately $132 million to Starwood, subject to adjustment. Prior to the merger, Starwood will transfer to Vistana the vacation ownership business and five hotels that are expected to be converted into vacation ownership properties over time. The combination will result in Starwood shareholders owning approximately 55% of the combined company on a fully diluted basis, with existing shareholders of ILG owning approximately 45% of the combined company. Completion of the merger is subject to customary closing conditions, including regulatory and ILG shareholder approvals. Liberty Interactive Corp and ILG's senior executives have entered into Voting and Support Agreements, which provide for them to vote in favor of the merger and the issuance of ILG shares pursuant to the merger. For additional information see "Note 16—Subsequent Event" in Part I, Item 1 of this report.

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RESULTS OF OPERATIONS

Revenue

For the three months ended September 30, 2015 compared to the three months ended September 30, 2014

	Three Months Ended September 30,
	2015		% Change			2014
	(Dollars in thousands)
Exchange and Rental
Transaction revenue	$	46,728		(0.3	)%	$	46,868
Membership fee revenue		31,326		(2.2	)%		32,017
Ancillary member revenue		1,689		(10.9	)%		1,896
Total member revenue		79,743		(1.3	)%		80,781
Other revenue		7,815		34.2	%		5,825
Rental management revenue		13,626		5.0	%		12,973
Pass-through revenue		23,704		14.9	%		20,638
Total Exchange and Rental revenue		124,888		3.9	%		120,217
Vacation Ownership
Management fee revenue		25,759		16.4	%		22,123
Sales and financing revenue		9,002		NM			—
Pass-through revenue		14,391		231.4	%		4,343
Total Vacation Ownership revenue		49,152		85.7	%		26,466
Total ILG revenue	$	174,040		18.7	%	$	146,683

        Revenue for the three months ended September 30, 2015 of $174.0 million increased $27.4 million, or 18.7%, compared to revenue of $146.7 million in 2014. Exchange and Rental segment revenue of $124.9 million increased $4.7 million, or 3.9%, and Vacation Ownership segment revenue of $49.2 million increased $22.7 million, or 85.7%, in the quarter compared to the prior year quarter. On a constant currency basis, ILG revenue for the current quarter would have been $176.7 million, an increase of 20.4% over the prior year quarter.

Exchange and Rental

        Exchange and Rental segment revenue increased $4.7 million, or 3.9%, in the third quarter of 2015 compared to 2014. This increase is primarily due to incremental revenue attributable to our HRC business (acquired in October 2014) which drove an increase of $2.0 million in other revenue. In addition, rental management revenue was higher by $0.7 million, or 5.0%, over the prior year and pass-through revenue increased by $3.1 million to $23.7 million for the quarter. Transaction revenue in the quarter was relatively consistent with the prior year, while membership fee revenue declined 2.2% to $31.3 million. Further details on the components of this quarter's net increase in revenue are as follows:

•

Increase in pass-through revenue of $3.1 million, or 14.9%, in the quarter compared to prior year. Pass-through revenue (and related expenses) represents reimbursed compensation and other employee-related costs directly associated with managing properties that are included in both revenue and expenses and that are passed on to the property owners or homeowners associations without mark-up. The increase in pass-through revenue in the quarter is largely attributable to new property management contracts secured subsequent to the third quarter of 2014 and an increase in employee-related costs being reimbursed in the period compared to last year.

45

•

Increase in other revenue of $2.0 million primarily attributable to the inclusion of the HRC business in our results subsequent to its acquisition. Specifically, HRC rental revenue is included within this revenue line item.

•

Rental management revenue earned from managed hotel and condominium resort properties at Aqua-Aston increased $0.7 million, or 5.0%, in the quarter. Aqua-Aston combined RevPAR was $123.86, a decrease of 0.5% over prior year's RevPAR of $124.46. The decrease in RevPAR was driven by a 3.8% decrease in occupancy rate and a 3.4% increase in average daily rate. On a Hawaii-only basis, RevPAR increased 1.1% to $128.48 in the quarter compared to $127.10 in the prior year. The increase in Hawaii-only RevPAR was driven by a 3.8% increase in average daily rate, partly offset by a 2.6% drop in occupancy, compared to last year. With regards to the prior RevPAR figures, effective January 1, 2015, a change in industry reporting standards now precludes certain resort fees from being included within gross lodging revenue. Consequently, this reporting change impacts the year-over-year comparability of RevPAR and, therefore, we have recast prior year RevPAR figures for purposes of this comparison. Additionally, certain revisions resulting from a refinement in our calculation of RevPAR pursuant to industry reporting standards are included in the recast prior year RevPAR figures.

•

Transaction revenue of $46.7 million in the quarter was relatively consistent with the prior year. The quarter's activity was unfavorably impacted by lower reservation servicing revenue, partly offset by incremental HRC transactions. Revenue from exchanges and Getaways were relatively consistent with the prior year. The quarter's activity related to exchanges and Getaways was driven by a higher average transaction fee of 1.9%, largely mitigated by a decline in transaction volume of 1.6%. Lower transaction volume is related to the shift in percentage mix of the membership base from traditional to corporate, which reduced transaction propensity.

•

Membership fee revenue of $31.3 million in the quarter was lower by $0.7 million, or 2.2%, compared to the prior year. This decrease in membership fee revenue can be attributed to the continued shift in the percentage mix of our membership base from traditional to corporate members as well as the impact of less favorable terms related to the multi-year renewal of certain large developer clients in the prior year taking effect in the current period. This impact was partly offset by the inclusion of the HRC business in the 2015 period and the continued improvement in the member base penetration of our Platinum and Club Interval products. Total active members in the Interval Network at September 30, 2015 remained relatively consistent with the prior year at approximately 1.82 million members.

•

Overall, Interval Network average revenue per member was $43.83 in the quarter, which was lower by 1.7% compared to average revenue per member of $44.57 in the prior year period.

Vacation Ownership

        The increase of $22.7 million, or 85.7%, in segment revenue for the third quarter of 2015 reflects increases over the prior year of $9.0 million of incremental vacation ownership sales and financing revenue and $10.0 million in pass-through revenue, entirely related to the HVO acquisition, as well as $3.6 million in management fee revenue. The increase in management fee revenue is a result of incremental revenue from our HVO acquisition, partly offset by the foreign currency negative impact of translating the results of our European vacation ownership management businesses into U.S. dollars as part of consolidating our results. This unfavorably impacted revenue by approximately $2.2 million in the quarter, driven by the weakening of foreign currencies compared to the U.S. dollar. On a constant currency basis, total revenue and revenue excluding pass-through for this segment would have been $51.3 million and $36.9 million, respectively, an increase of 94.0% and 67.0% over the prior year

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quarter. For the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014

	Nine Months Ended September 30,
	2015		% Change			2014
	(Dollars in thousands)
Exchange and Rental
Transaction revenue	$	150,931		0.4	%	$	150,294
Membership fee revenue		94,453		(1.0	)%		95,437
Ancillary member revenue		4,490		(14.1	)%		5,228
Total member revenue		249,874		(0.4	)%		250,959
Other revenue		25,386		41.6	%		17,932
Rental management revenue		39,236		6.2	%		36,932
Pass-through revenue		70,625		15.2	%		61,284
Total Exchange and Rental revenue		385,121		4.9	%		367,107
Vacation Ownership
Management fee revenue		75,672		12.7	%		67,118
Sales and financing revenue		28,473		NM			—
Pass-through revenue		43,071		230.6	%		13,027
Total Vacation Ownership revenue		147,216		83.7	%		80,145
Total ILG revenue	$	532,337		19.0	%	$	447,252

        Revenue for the nine months ended September 30, 2015 of $532.3 million increased $85.1 million, or 19.0%, compared to revenue of $447.3 million in 2014. Exchange and Rental segment revenue of $385.1 million increased $18.0 million, or 4.9%, and Vacation Ownership segment revenue of $147.2 million increased $67.1 million, or 83.7%, in the period compared to prior year. On a constant currency basis, ILG revenue for the nine months of 2015 would have been $541.3 million, an increase of 21.0% over the prior year.

Exchange and Rental

        Exchange and Rental segment revenue increased $18.0 million, or 4.9%, in 2015 compared to 2014. This increase is primarily due to incremental revenue attributable to our HRC business which drove an increase of $7.5 million in other revenue and $0.6 million in transaction revenue. Additionally, our rental businesses drove rental management revenue higher by $2.3 million, or 6.2%, over the prior year and pass-through revenue of $70.6 million in the period was higher by $9.3 million. These increases were partly offset by $1.0 million of lower membership fee revenue. Further details on the components of this period's net increase in revenue are as follows:

•

Increase in pass-through revenue of $9.3 million, or 15.2%, in 2015 compared to prior year. The increase in pass-through revenue in the period is largely attributable to new property management contracts secured subsequent to the third quarter of 2014 and an increase in employee-related costs being reimbursed in the period compared to last year.

•

Increase in other revenue of $7.5 million is primarily attributable to the inclusion of the HRC business in our results subsequent to its acquisition. Specifically, HRC rental revenue is included within this revenue line item. In addition, the increase in other revenue reflects higher rental transaction activity generated outside of the Interval Network.

Rental management revenue earned from managed hotel and condominium resort properties at Aqua-Aston increased $2.3 million, or 6.2%, in the period. Aqua-Aston combined RevPAR was

47

$119.14, a decrease of 0.2% over prior year's RevPAR of $119.39. The decrease in RevPAR was driven by a 4.4% decrease in occupancy rate and a 4.4% increase in the average daily rate. On a Hawaii-only basis, RevPAR increased 5.7% to $129.97 in the period compared to $122.99 in the prior year. The increase in Hawaii-only RevPAR was driven by 5.0% higher average daily rate in the period compared to prior year.

•

Higher transaction revenue of $0.6 million primarily related to an increase in revenue from exchanges and Getaways, as well as incremental HRC transactions. Higher transaction revenue from exchanges and Getaways was driven by an increase of 1.8% in average fee per Interval Network transaction, partly offset by a decline in transaction volume of 0.9%. Lower transaction volume is related to the shift in percentage mix of the membership base from traditional to corporate, which reduced transaction propensity.

•

Lower membership fee revenue of $1.0 million in the period reflects the continued shift in the percentage mix of our membership base from traditional to corporate members as well as the impact of less favorable terms related to the multi-year renewal of certain large developer clients in the prior year taking effect in the current period. This was partly offset by the inclusion of the HRC business subsequent to its acquisition and the continued improvement in the member base penetration of our Platinum and Club Interval products.

•

Overall, Interval Network average revenue per member was $137.89 in the nine months of 2015, which was relatively consistent with average revenue per member of $138.28 in the prior year period.

Vacation Ownership

        The increase of $67.1 million, or 83.7%, in segment revenue for 2015 reflects increases over the prior year of $28.5 million of incremental vacation ownership sales and financing revenue and $30.0 million in pass-through revenue, entirely related to the HVO acquisition, as well as $8.6 million in management fee revenue. The increase in management fee revenue is a result of incremental revenue from our HVO acquisition, partly offset by the foreign currency negative impact of translating the results of our European vacation ownership management businesses into U.S. dollars as part of consolidating our results. This unfavorably impacted revenue by approximately $7.4 million in the current year, driven by the weakening of foreign currencies compared to the U.S. dollar. On a constant currency basis, total revenue and revenue excluding pass-through for this segment would have been $154.6 million and $111.6 million, respectively, an increase of 92.9% and 66.2% over the prior year period.

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Cost of Sales

For the three months ended September 30, 2015 compared to the three months ended September 30, 2014

	Three Months Ended September 30,
	2015			% Change			2014
	(Dollars in thousands)
Exchange and Rental
Exchange and rental expenses	$	23,865			1.3	%	$	23,549
Pass-through expenses		23,704			14.9	%		20,638
Total Exchange and Rental cost of sales		47,569			7.7	%		44,187
Gross margin		61.9	%		(2.1	)%		63.2	%
Gross margin without pass-through revenue/expenses		76.4	%		0.1	%		76.4	%
Vacation Ownership
Management, sales and financing expenses		13,653			30.5	%		10,465
Pass-through expenses		14,391			231.4	%		4,343
Total Vacation Ownership cost of sales		28,044			89.4	%		14,808
Gross margin		42.9	%		(2.5	)%		44.0	%
Gross margin without pass-through revenue/expenses		60.7	%		15.2	%		52.7	%
Total ILG cost of sales	$	75,613			28.2	%	$	58,995
As a percentage of total revenue		43.4	%		8.0	%		40.2	%
As a percentage of total revenue excluding pass-through revenue		55.6	%		14.7	%		48.5	%
Gross margin		56.6	%		(5.4	)%		59.8	%
Gross margin without pass-through revenue/expenses		72.4	%		0.5	%		72.1	%

        Cost of sales consists primarily of compensation and other employee-related costs (including stock-based compensation) for personnel engaged in providing services to members, property owners and/or guests of our respective segment businesses. Additionally, cost of sales includes other items such as costs necessary to operate certain of our managed properties, costs of rental inventory used primarily for Getaways included within the Exchange and Rental segment, costs associated with vacation ownership sales and related incentives, as well as recurring royalty fees related to our Hyatt-branded vacation ownership business.

        Cost of sales for the three months ended September 30, 2015 increased $16.6 million from 2014, consisting of increases of $3.4 million from our Exchange and Rental segment and $13.2 million from our Vacation Ownership segment. Overall gross margin decreased by 323 basis points to 56.6% in the quarter compared to last year. The decrease in overall gross margin is due to the incremental gross profit contribution from our lower-margin Vacation Ownership segment relative to total ILG gross profit.

Exchange and Rental

        Gross margin for the Exchange and Rental segment in the quarter decreased 133 basis points to 61.9% when compared to the prior year. However, excluding the effect of pass-through revenue, gross margin of 76.4% in the quarter was in-line with the prior year. Cost of sales for this segment rose $3.4 million, or 7.7%, from 2014 primarily resulting from $3.1 million of higher pass-through expenses at our rental management businesses and the inclusion of the HRC business subsequent to its October 1, 2014 acquisition. This change was partly offset by a decrease in call center costs.

49

Vacation Ownership

        The increase of $13.2 million in cost of sales from the Vacation Ownership segment was attributable to the incremental costs of $14.8 million resulting from our HVO acquisition. Of this amount, $10.5 million represented incremental HVO pass-through expenses. This increase was partly offset by lower cost of sales at our other vacation ownership management businesses in the quarter largely attributable to the foreign currency impact of translating the results of our European vacation ownership management businesses into U.S. dollars at end of period. This decreased cost of sales by approximately $1.2 million in the quarter on a constant currency basis.

        Gross margin of 42.9% for this segment decreased by 110 basis points when compared to the prior year. Excluding the effect of pass-through revenue, gross margin for this segment was 60.7% in the quarter compared to 52.7% last year. The increase in gross margin (excluding pass-throughs) for this segment largely resulted from a relative decrease in certain reported expenses, partly offset by the incremental gross profit contribution from HVO relative to total segment gross profit, specifically our vacation ownership sales and financing business which operates at a lower gross margin.

For the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014

	Nine Months Ended September 30,
	2015			% Change			2014
	(Dollars in thousands)
Exchange and Rental
Exchange and rental expenses	$	77,686			1.3	%	$	76,709
Pass-through expenses		70,625			15.2	%		61,284
Total Exchange and Rental cost of sales		148,311			7.5	%		137,993
Gross margin		61.5	%		(1.5	)%		62.4	%
Gross margin without pass-through revenue/expenses		75.3	%		0.5	%		74.9	%
Vacation Ownership
Management, sales and financing expenses		47,011			48.8	%		31,586
Pass-through expenses		43,071			230.6	%		13,027
Total Vacation Ownership cost of sales		90,082			101.9	%		44,613
Gross margin		38.8	%		(12.5	)%		44.3	%
Gross margin without pass-through revenue/expenses		54.9	%		3.6	%		52.9	%
Total ILG cost of sales	$	238,393			30.6	%	$	182,606
As a percentage of total revenue		44.8	%		9.7	%		40.8	%
As a percentage of total revenue excluding pass-through revenue		56.9	%		16.2	%		49.0	%
Gross margin		55.2	%		(6.7	)%		59.2	%
Gross margin without pass-through revenue/expenses		70.2	%		(1.1	)%		71.0	%

        Cost of sales for the nine months ended September 30, 2015 increased $55.8 million from 2014, consisting of increases of $10.3 million from our Exchange and Rental segment and $45.5 million from our Vacation Ownership segment. Overall gross margin decreased by 395 basis points to 55.2% in the period compared to last year. The decrease in overall gross margin is due to the incremental gross profit contribution from our lower-margin Vacation Ownership segment relative to total ILG gross profit.

Exchange and Rental

        Gross margin for the Exchange and Rental segment in the nine months of 2015 decreased 92 basis points to 61.5% when compared to the prior year. However, excluding the effect of pass-through

50

revenue, gross margin of 75.3% in the period was higher by 38 basis points when compared to the prior year. Cost of sales for this segment rose $10.3 million, or 7.5%, from 2014 primarily resulting from $9.3 million of higher pass-through expenses at our rental management businesses and the inclusion of the HRC business. This change was partly offset by a decrease in call center costs and $0.6 million of lower purchased rental inventory expense. The decline in purchased rental inventory expense was principally due to lower average cost per unit of inventory purchased.

Vacation Ownership

        The increase of $45.5 million in cost of sales from the Vacation Ownership segment was attributable to the incremental costs of $51.3 million resulting from our HVO acquisition. Of this amount, $31.8 million represented incremental HVO pass-through expenses. This increase was partly offset by lower cost of sales at our other vacation ownership management businesses in the period largely attributable to the foreign currency impact of translating the results of our European vacation ownership management businesses into U.S. dollars at end of period. This decreased cost of sales by approximately $4.0 million in the period on a constant currency basis.

        Gross margin of 38.8% for this segment decreased by 553 basis points when compared to the prior year. Excluding the effect of pass-through revenue, gross margin for this segment was 54.9% in the period compared to 52.9% last year. The increase in gross margin (excluding pass-throughs) for this segment largely resulted from a relative decrease in certain reported expenses, partly offset by the incremental gross profit contribution from HVO relative to total segment gross profit, specifically our vacation ownership sales and financing business which operates at a lower gross margin.

Selling and Marketing Expense

For the three months ended September 30, 2015 compared to the three months ended September 30, 2014

	Three Months Ended September 30,
	2015			% Change			2014
	(Dollars in thousands)
Exchange and Rental	$	14,570			(0.5	)%	$	14,640
Vacation Ownership		3,563			NM			159
Total ILG selling and marketing expense	$	18,133			22.5	%	$	14,799
As a percentage of total revenue		10.4	%		3.3	%		10.1	%
As a percentage of total revenue excluding pass-through revenue		13.3	%		9.7	%		12.2	%

        Selling and marketing expense consists primarily of advertising and promotional expenditures and compensation and other employee-related costs (including stock-based compensation) for personnel engaged in sales and sales support functions. Selling and marketing expenditures for our Exchange and Rental segment primarily include printing costs of directories and magazines, promotions, tradeshows, agency fees, marketing fees and related commissions.

        Selling and marketing expenditures for our Vacation Ownership segment primarily relates to a range of marketing efforts aimed at generating prospects for our vacation ownership sales activities. These marketing efforts can include targeted promotional mailings, multi-night mini-vacation packages, telemarketing activities, premiums such as gift certificates and tickets to local attractions or events, the cost of renting space at off-property locations, and other costs related to encouraging potential owners to attend sales presentations.

        Selling and marketing expense in the third quarter of 2015 increased $3.3 million, or 22.5%, compared to 2014. This increase pertains to incremental costs associated with our vacation ownership

51

selling and marketing efforts subsequent to the acquisition of HVO in October 2014. Sales and marketing spend in our Exchange and Rental segment was in-line with the prior year.

        As a percentage of total revenue and total revenue excluding pass-through revenue, sales and marketing expense increased 33 and 118 basis points, respectively, during the quarter compared to the prior year.

For the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014

	Nine Months Ended September 30,
	2015			% Change			2014
	(Dollars in thousands)
Exchange and Rental	$	45,419			5.9	%	$	42,897
Vacation Ownership		9,500			NM			280
Total ILG selling and marketing expense	$	54,919			27.2	%	$	43,177
As a percentage of total revenue		10.3	%		6.9	%		9.7	%
As a percentage of total revenue excluding pass-through revenue		13.1	%		13.3	%		11.6	%

        Selling and marketing expense in the nine months of 2015 increased $11.7 million, or 27.2%, compared to 2014. Higher sales and marketing spend of $2.5 million in our Exchange and Rental segment is attributable to a shift in the timing for mailing an Interval Network magazine into the second quarter compared to the prior year's distribution schedule, as well as increased marketing fees related to developer contract renewals executed in 2014. The increase of $9.2 million in our Vacation Ownership segment principally pertains to incremental costs associated with our vacation ownership selling and marketing efforts subsequent to the acquisition of HVO.

        As a percentage of total revenue and total revenue excluding pass-through revenue, sales and marketing expense increased 66 and 154 basis points, respectively, during the period compared to the prior year.

General and Administrative Expense

For the three months ended September 30, 2015 compared to the three months ended September 30, 2014

	Three Months Ended September 30,
	2015			% Change			2014
	(Dollars in thousands)
General and administrative expense	$	39,360			25.6	%	$	31,340
As a percentage of total revenue		22.6	%		5.8	%		21.4	%
As a percentage of total revenue excluding pass-through revenue		29.0	%		12.4	%		25.8	%

        General and administrative expense consists primarily of compensation and other employee-related costs (including stock-based compensation) for personnel engaged in finance, legal, tax, human resources, information technology and executive management functions, as well as facilities costs, fees for professional services and other company-wide benefits.

        General and administrative expense in the third quarter of 2015 increased $8.0 million from 2014 predominately due to incremental expenses of $7.0 million from the inclusion of HVO in our results of operations and $1.3 million in higher professional fees (largely associated with acquisition related activities). Additionally, excluding HVO, the quarter-over-quarter change in general and administrative expense was impacted by higher compensation and other employee-related costs of $0.4 million partly

52

attributable to a rise in health and welfare costs resulting from higher self-insured claim activity, partly offset by a $0.5 million legal settlement recorded in the prior year.

        As a percentage of total revenue and total revenue excluding pass-through revenue, general and administrative expense increased 125 and 320 basis points, respectively, during the quarter compared to the prior year.

For the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014

	Nine Months Ended September 30,
	2015			% Change			2014
	(Dollars in thousands)
General and administrative expense	$	110,796			17.8	%	$	94,028
As a percentage of total revenue		20.8	%		(1.0	)%		21.0	%
As a percentage of total revenue excluding pass-through revenue		26.5	%		5.0	%		25.2	%

        General and administrative expense in the nine months of 2015 increased $16.8 million from 2014 predominately due to incremental expenses of $15.9 million from the inclusion of HVO in our results of operations. Additionally, excluding HVO, the change in general and administrative expense in the period was impacted by higher compensation and other employee-related costs of $3.7 million. This increase was partly offset by lower professional fees (primarily associated with acquisition related activities) of $0.9 million, a $0.5 million legal settlement recorded in the prior year, and $1.3 million of lower restructuring expenses incurred in the prior year which consisted mainly of estimated costs of exiting contractual commitments and costs associated with workforce reorganizations.

        The $3.7 million increase in overall compensation and other employee-related costs (excluding HVO) was primarily due to an increase of $1.1 million in non-cash compensation expense, a rise in health and welfare insurance expense of $0.8 million resulting from higher self-insured claim activity during the period and higher salary and other employee-related costs.

        As a percentage of total revenue and total revenue excluding pass-through revenue, general and administrative expense decreased 21 basis points and increased 125 basis points, respectively, during the period compared to the prior year.

Amortization Expense of Intangibles

For the three and nine months ended September 30, 2015 compared to the three and nine months ended September 30, 2014

	Three Months Ended September 30,									Nine Months Ended September 30,
	2015			% Change			2014			2015			% Change			2014
	(Dollars in thousands)									(Dollars in thousands)
Amortization expense of intangibles	$	3,517			22.2	%	$	2,879		$	10,532			20.5	%	$	8,740
As a percentage of total revenue		2.0	%		3.0	%		2.0	%		2.0	%		1.2	%		2.0	%
As a percentage of total revenue excluding pass-through revenue		2.6	%		9.4	%		2.4	%		2.5	%		7.3	%		2.3	%

        Amortization expense of intangibles for the three and nine months ended September 30, 2015 increased $0.6 million and $1.8 million, respectively, over 2014 predominately due to incremental amortization expense pertaining to the HVO acquisition in October 2014.

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Depreciation Expense

For the three and nine months ended September 30, 2015 compared to the three and nine months ended September 30, 2014

	Three Months Ended September 30,									Nine Months Ended September 30,
	2015			% Change			2014			2015			% Change			2014
	(Dollars in thousands)									(Dollars in thousands)
Depreciation expense	$	4,394			16.7	%	$	3,765		$	12,991			13.6	%	$	11,434
As a percentage of total revenue		2.5	%		(1.6	)%		2.6	%		2.4	%		(4.5	)%		2.6	%
As a percentage of total revenue excluding pass-through revenue		3.2	%		4.5	%		3.1	%		3.1	%		1.2	%		3.1	%

        Depreciation expense for the three and nine months ended September 30, 2015 increased $0.6 million and $1.6 million, respectively, over the comparable 2014 period largely due to incremental depreciation expense related to fixed assets acquired as part of the HVO acquisition, in addition to other depreciable assets being placed in service subsequent to September 30, 2014. These depreciable assets pertain primarily to software and related IT hardware.

Operating Income

For the three months ended September 30, 2015 compared to the three months ended September 30, 2014

	Three Months Ended September 30,
	2015			% Change			2014
	(Dollars in thousands)
Exchange and Rental	$	30,352			(1.2	)%	$	30,729
Vacation Ownership		2,671			(36.0	)%		4,176
Total ILG operating income	$	33,023			(5.4	)%	$	34,905
As a percentage of total revenue		19.0	%		(20.3	)%		23.8	%
As a percentage of total revenue excluding pass-through revenue		24.3	%		(15.3	)%		28.7	%

        Operating income in the third quarter of 2015 decreased $1.9 million from 2014, consisting of decreases of $1.5 million and $0.4 million from our Vacation Ownership and Exchange and Rental segments, respectively. On a constant currency basis, operating income would have been $33.9 million, a decrease of 3.0% over the prior year quarter.

        Operating income for our Exchange and Rental segment decreased $0.4 million to $30.4 million in the quarter compared to the prior year. Operating income in the quarter for this segment was driven by the incremental contributions from our HRC business post-acquisition, largely offset by operating items such as higher employee related costs (including higher health and welfare insurance expense) and professional fees largely pertaining to acquisition related activities, as well as lower Interval Network membership fee revenue.

        The decrease in operating income of $1.5 million in our Vacation Ownership segment is largely due to $0.8 million of unfavorable foreign currency impact in the period from translating the results of our European vacation ownership management businesses into U.S. dollars. On a constant currency basis, operating income for this segment would have been $3.4 million, lower by $0.7 million compared to the prior year quarter. This change is largely attributable to higher acquisition related expenses in the current quarter compared to last year.

54

        Operating income in the quarter for our Vacation Ownership segment also reflects incremental depreciation and amortization expense of intangibles of $0.5 million related to our HVO acquisition, as well as the unfavorable impact of a purchase accounting treatment applicable to our acquisition of HVO whereby pre-acquisition deferred revenue and any related expenses have been re-measured as of the acquisition date. As it relates to our HVO transaction, this re-measurement resulted in less income being recognized during the quarter than would have otherwise been recognized on a historical basis. Consequently, we did not recognize a net contribution of approximately $0.3 million in operating income due to this purchase accounting treatment.

For the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014

	Nine Months Ended September 30,
	2015			% Change			2014
	(Dollars in thousands)
Exchange and Rental	$	94,956			0.6	%	$	94,413
Vacation Ownership		9,750			(24.1	)%		12,854
Total ILG operating income	$	104,706			(2.4	)%	$	107,267
As a percentage of total revenue		19.7	%		(18.0	)%		24.0	%
As a percentage of total revenue excluding pass-through revenue		25.0	%		(13.0	)%		28.8	%

        Operating income in the nine months of 2015 decreased $2.6 million from 2014, consisting of a $3.1 million decrease from our Vacation Ownership segment, offset in part by a $0.5 million increase from our Exchange and Rental segment. On a constant currency basis, operating income would have been $107.8 million, relatively consistent when compared to last year.

        Operating income for our Exchange and Rental segment increased $0.5 million to $95.0 million in the period compared to the prior year. The change in operating income was driven by the incremental contributions from our HRC business post-acquisition, together with stronger results from our rental businesses. These positive contributions were partly offset by higher operating expense items such as employee related costs (including higher health and welfare insurance expense) and sales and marketing expense, in addition to lower Interval Network membership fee revenue.

        The decrease in operating income of $3.1 million in our Vacation Ownership segment is due to $2.6 million of unfavorable foreign currency impact in the period from translating the results of our European vacation ownership management businesses into U.S. dollars. On a constant currency basis, operating income for this segment would have been $12.4 million, relatively consistent with the prior year. This segment's operating income for the period reflects, among other items, the impact of lower acquisition related expenses in the current year compared to last year, largely offset by a favorable adjustment recorded in the prior year related to a change in the estimated fair value of contingent consideration for acquisitions.

        Operating income in the period for our Vacation Ownership segment also reflects incremental depreciation and amortization expense of intangibles of $1.6 million related to our HVO acquisition, as well as the unfavorable impact of a purchase accounting treatment applicable to our acquisition of HVO whereby pre-acquisition deferred revenue and any related expenses have been re-measured as of the acquisition date. As it relates to our HVO transaction, this re-measurement resulted in less income being recognized during the quarter than would have otherwise been recognized on a historical basis. Consequently, we did not recognize a net contribution of approximately $1.0 million in operating income due to this purchase accounting treatment.

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Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization

        Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) is a non-GAAP measure and is defined in "ILG's Principles of Financial Reporting." Prior period amounts have been recast to conform to the current period definition of Adjusted EBITDA.

For the three months ended September 30, 2015 compared to the three months ended September 30, 2014

	Three Months Ended September 30,
	2015			% Change			2014
	(Dollars in thousands)
Exchange and Rental	$	39,335			1.2	%	$	38,854
Vacation Ownership		7,179			29.4	%		5,546
Total ILG adjusted EBITDA	$	46,514			4.8	%	$	44,400
As a percentage of total revenue		26.7	%		(11.7	)%		30.3	%
As a percentage of total revenue excluding pass-through revenue		34.2	%		(6.2	)%		36.5	%

        Adjusted EBITDA in the third quarter of 2015 increased by $2.1 million, or 4.8%, from 2014, consisting of increases of $1.6 million from our Vacation Ownership segment and $0.5 million from our Exchange and Rental segment. On a constant currency basis, adjusted EBITDA would have been $47.4 million, an increase of 6.7% over the prior year quarter.

        Adjusted EBITDA of $39.3 million from our Exchange and Rental segment rose by $0.5 million, or 1.2%, compared to the prior year. The increase in adjusted EBITDA is a result of the incremental contributions from our recently acquired HRC business and lower call center related costs. This was largely offset, among other items, by membership fee revenue compression, higher overall compensation and other employee-related costs partly attributable to a rise in health and welfare costs resulting from higher self-insured claim activity, and an increase in professional fees.

        Adjusted EBITDA from our Vacation Ownership segment rose by $1.6 million, or 29.4%, to $7.2 million in the quarter from $5.5 million in the prior year. The growth in adjusted EBITDA in this segment is driven by the incremental management and sales and financing activities from our recently acquired HVO business, which was somewhat moderated by the unfavorable purchase accounting impact described within the operating income discussion above. Of this incremental contribution, we recognized $1.3 million in equity in earnings from unconsolidated entities, principally HVO's joint venture in Maui. The adjusted EBITDA increase was partly offset by the unfavorable foreign currency impact in the period of translating the results of our European vacation ownership management businesses into U.S. dollars. This unfavorably impacted adjusted EBITDA by approximately $0.8 million in the quarter, driven by the weakening of foreign currencies compared to the U.S. dollar. On a constant currency basis, adjusted EBITDA for this segment would have been $7.9 million, an increase of 43.2% over the prior year quarter.

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For the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014

	Nine Months Ended September 30,
	2015			% Change			2014
	(Dollars in thousands)
Exchange and Rental	$	121,705			1.9	%	$	119,484
Vacation Ownership		21,127			26.7	%		16,681
Total ILG adjusted EBITDA	$	142,832			4.9	%	$	136,165
As a percentage of total revenue		26.8	%		(11.9	)%		30.4	%
As a percentage of total revenue excluding pass-through revenue		34.1	%		(6.6	)%		36.5	%

        Adjusted EBITDA in the nine months of 2015 increased by $6.7 million, or 4.9%, from 2014, consisting of increases of $4.4 million from our Vacation Ownership segment and $2.2 million from our Exchange and Rental segment. On a constant currency basis, adjusted EBITDA would have been $145.9 million, an increase of 7.2% over the prior year.

        Adjusted EBITDA of $121.7 million from our Exchange and Rental segment increased by $2.2 million, or 1.9%, compared to the prior year. The increase in adjusted EBITDA is a result of the incremental contributions from our recently acquired HRC business, together with lower call center related costs. This was partly offset, among other items, by an increase in sales and marketing expense attributable to a shift in the timing for mailing an Interval Network magazine into the second quarter compared to the prior year's distribution schedule, membership fee revenue compression, and higher overall compensation and other employee-related costs partly attributable to a rise in health and welfare costs resulting from higher self-insured claim activity.

        Adjusted EBITDA from our Vacation Ownership segment increased by $4.4 million, or 26.7%, to $21.1 million in the period from $16.7 million last year. The growth in adjusted EBITDA in this segment reflects the incremental management and sales and financing activities from our recently acquired HVO business, which was somewhat moderated by the unfavorable purchase accounting impact described within the operating income discussion above, as well as outperformance at our European vacation ownership management businesses. Of the incremental HVO contribution, we recognized $3.7 million in equity in earnings from unconsolidated entities, principally HVO's joint venture in Maui. The adjusted EBITDA increase was partly offset by the unfavorable foreign currency impact in the period of translating the results of our European vacation ownership management businesses into U.S. dollars. This unfavorably impacted adjusted EBITDA by approximately $2.6 million in the period, driven by the weakening of foreign currencies compared to the U.S. dollar. On a constant currency basis, adjusted EBITDA for this segment would have been $23.7 million, an increase of 42.3% over the prior year.

Other Income (Expense), net

For the three months ended September 30, 2015 compared to the three months ended September 30, 2014

	Three Months Ended September 30,
	2015			% Change			2014
	(Dollars in thousands)
Interest income	$	276			401.8	%	$	55
Interest expense	$	(6,386	)		317.7	%	$	(1,529	)
Other income, net	$	2,197			329.9	%	$	511
Equity in earnings from unconsolidated entities	$	1,322			NM		$	—

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        Interest income increased $0.2 million in the third quarter of 2015 compared to 2014 due to a loan receivable issued in the fourth quarter of 2014, as described in Note 9 to our condensed consolidated financial statements.

        Interest expense in the quarter relates to interest and amortization of debt costs on our amended and restated revolving credit facility and our $350 million senior notes issued in April of 2015. Higher interest expense in the quarter is primarily a function of our newly issued senior notes, which carry a higher interest rate than our revolving credit facility. Our senior notes were used to pay down our revolving credit facility in April 2015. Overall, we carried a higher average outstanding balance when compared to the prior year period primarily due to the funding of the HVO acquisition in the fourth quarter of 2014.

        Other income, net primarily relates to net gains and losses on foreign currency exchange related to cash held by foreign subsidiaries in currencies other than their functional currency. Non-operating foreign exchange net gains were $2.2 million and $0.5 million in the third quarter of 2015 and 2014, respectively. The favorable fluctuations during both quarters were primarily driven by U.S. dollar positions held at September 30, 2015 and 2014 affected by the stronger dollar compared to the Colombian and Mexican pesos.

        Equity in earnings from unconsolidated entities relates to noncontrolling investments that are recorded under the equity method of accounting; principally, our joint venture in Hawaii which developed a vacation ownership resort for the purpose of selling vacation ownership interests. Income and losses from this joint venture are allocated based on ownership interests. See Note 6 to our condensed consolidated financial statements for further discussion.

For the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014

	Nine Months Ended September 30,
	2015			% Change			2014
	(Dollars in thousands)
Interest income	$	819			431.8	%	$	154
Interest expense	$	(15,113	)		237.3	%	$	(4,481	)
Other income, net	$	3,313			NM		$	95
Equity in earnings from unconsolidated entities	$	3,771			NM		$	—

        Interest income increased $0.7 million in the nine months of 2015 compared to 2014 due to a loan receivable issued in the fourth quarter of 2014, as described in Note 9 to our condensed consolidated financial statements.

        Interest expense in the period relates to interest and amortization of debt costs on our amended and restated revolving credit facility and our $350 million senior notes issued in April of 2015. Higher interest expense in the period is primarily a function of our newly issued senior notes, which carry a higher interest rate than our revolving credit facility. Our senior notes were used to pay down our revolving credit facility in April 2015. Overall, we carried a higher average outstanding balance when compared to the prior year period primarily due to the funding of the HVO acquisition in the fourth quarter of 2014.

        Other income, net primarily relates to net gains and losses on foreign currency exchange related to cash held by foreign subsidiaries in currencies other than their functional currency. Non-operating foreign exchange net gains were $3.5 million and $0.4 million for the nine months ended September 30, 2015 and 2014, respectively. The favorable fluctuations during the periods were primarily driven by U.S. dollar positions held at September 30, 2015 and 2014 affected by the stronger dollar compared to the Mexican and Colombian pesos.

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        Equity in earnings from unconsolidated entities relates to noncontrolling investments that are recorded under the equity method of accounting; principally, our joint venture in Hawaii which developed a vacation ownership resort for the purpose of selling vacation ownership interests. Income and losses from this joint venture are allocated based on ownership interests. See Note 6 to our condensed consolidated financial statements for further discussion.

Income Tax Provision

For the three months ended September 30, 2015 compared to the three months ended September 30, 2014

        For the three months ended September 30, 2015 and 2014, ILG recorded income tax provisions for continuing operations of $10.7 million and $11.8 million, respectively, which represent effective tax rates of 35.3% and 34.9% for the respective periods. These tax rates are different than the federal statutory rate of 35% due principally to state and local income taxes offset by foreign income taxed at lower rates. The effective tax rate for the three months ended September 30, 2015 is higher than the prior year period due to the shift in the projection of the proportion of income earned and taxed between the various jurisdictions.

For the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014

        For the nine months ended September 30, 2015 and 2014, ILG recorded income tax provisions for continuing operations of $34.9 million and $36.8 million, respectively, which represents an effective tax rate of 35.8% for both periods. These tax rates are higher than the federal statutory rate of 35% due principally to state and local income taxes partially offset by foreign income taxed at lower rates.

        On July 8, 2015, the U.K. government released its 2015 Summer Budget, where it indicated that it intends to enact further decreases in the U.K. corporate income tax rate to 19% and 18% effective April 1, 2017 and April 1, 2020, respectively. The impact of these further rate reductions will be reflected in the reporting period when the law is enacted and will be dependent on our deferred tax position at that time. However, going forward, the lower corporate tax rate will decrease income tax expense and favorably impact our effective tax rate.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

        As of September 30, 2015, we had $101.4 million of cash and cash equivalents, including $72.4 million of U.S. dollar equivalent or denominated cash deposits held by foreign subsidiaries which are subject to changes in foreign exchange rates. Of this amount, $51.1 million is held in foreign jurisdictions, principally the United Kingdom. Earnings of foreign subsidiaries, except Venezuela, are permanently reinvested. Additional tax provisions would be required should such earnings be repatriated to the U.S. Additionally, we are also exposed to risks associated with the repatriation of cash from certain of our foreign operations to the United States where currency restrictions exist, such as Venezuela and Argentina, which limit our ability to immediately access cash through repatriations. These currency restrictions had no impact on our overall liquidity during the nine months ended September 30, 2015 and, as of September 30, 2015, the respective cash balances were immaterial to our overall cash on hand.

        Cash generated by operations is used as our primary source of liquidity. We believe that our cash on hand along with our anticipated operating future cash flows and availability under our $600 million revolving credit facility, which may be increased to up to $700 million subject to certain conditions, are sufficient to fund our operating needs, quarterly cash dividend, capital expenditures, development and expansion of our operations, debt service, investments and other commitments and contingencies for at least the next twelve months. However, our operating cash flow may be impacted by macroeconomic and other factors outside of our control.

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Cash Flows Discussion

Operating Activities

        Net cash provided by operating activities increased to $135.4 million in the nine months ended September 30, 2015 from $91.5 million in the same period of 2014. The increase of $43.9 million from 2014 was principally due to higher net cash receipts due in part to the addition of HVO, lower income tax payments of $14.2 million, and lower net payments of $11.0 million made in connection with long-term agreements.

Investing Activities

        Net cash used in investing activities of $13.5 million in the nine months ended September 30, 2015 pertain to capital expenditures, primarily related to IT initiatives and to additional investment in financing receivables of $0.3 million. Net cash used in investing activities of $15.0 million in the nine months ended September 30, 2014 pertain to capital expenditures of $14.3 million primarily related to IT initiatives and to an investment in loan receivable of $0.8 million.

Financing Activities

        Net cash used in financing activities of $95.6 million in the nine months ended September 30, 2015 related to net principal payments of $413.0 million on our revolving credit facility, cash dividend payments of $20.7 million as well as cash dividend payments of $3.0 million to a noncontrolling interest, payments of debt issuance costs of $6.7 million related primarily to our issuance of senior notes and also to amendments to our Amended Credit Agreement, and withholding taxes on the vesting of restricted stock units of $4.3 million. These uses of cash were partially offset by the proceeds of the issuance of senior notes of $350 million, of which net proceeds were used to repay indebtedness outstanding on our revolving credit facility, excess tax benefits from stock-based awards and the proceeds from the exercise of stock options. Net cash used in financing activities of $38.8 million in the nine months ended September 30, 2014 related to cash dividend payments of $19.0 million, repurchases of our common stock which settled during the year at market prices totaling $14.1 million (including commissions), $7.3 million contingent consideration payment related to acquisitions, withholding taxes on the vesting of restricted stock units of $3.9 million, and payment of $1.7 million of debt issuance costs related to the amendment of our credit facility in April 2014. These uses of cash were partially offset by $5.0 million of net borrowings on our revolving credit facility, excess tax benefits from stock-based awards and the proceeds from the exercise of stock options.

Revolving Credit Facility

        In 2014, we entered into amendments to our amended and restated credit agreement which increased the revolving line of credit from $500 million to $600 million, extended the maturity of the credit facility to April 2019 and provided for certain other amendments to covenants. The terms related to interest rates and commitment fees remain unchanged.

        On April 10, 2015, we entered into a third amendment to the Amended Credit Agreement which changes the leverage-based financial covenant from a maximum consolidated total leverage to EBITDA ratio of 3.5 to 1.0 to a maximum consolidated secured leverage to EBITDA ratio of 3.25 to 1.0. In addition, the amendment adds an incurrence test requiring a maximum consolidated total leverage to EBITDA ratio of 4.5 to 1.0 on a pro forma basis in certain circumstances in which we make acquisitions or investments, incur additional indebtedness or make restricted payments. Also, the amendment added a new pricing level to the pricing grid for when the consolidated leverage to EBITDA ratio equals or exceeds 3.5 to 1.0. This pricing level is either LIBOR plus 2.5% or the base rate plus 1.5% and requires a commitment fee on undrawn amounts of 0.4% per annum. There were no other material changes under this amendment.

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        Additionally, on May 5, 2015, we entered into a fourth amendment which changes the definition of change of control to remove the provision that certain changes in the composition of the board of directors would constitute a change of control and therefore be a default under the credit agreement. The amendment also includes additional clarifying language regarding provisions that relate to our 5.625% senior notes due in 2023. There were no other material changes under this amendment.

        As of September 30, 2015, borrowings outstanding under the revolving credit facility amounted to $75 million, with $516.7 million available to be drawn, net of any letters of credit. Borrowings outstanding as of September 30, 2015 reflect the paydown of our revolving credit facility with proceeds from our senior notes issued in April 2015.

Senior Notes

        On April 10, 2015, we completed a private offering of $350 million in aggregate principal amount of our 5.625% senior notes due in 2023. The net proceeds from the offering, after deducting offering related expenses, were $343.1 million. We used the proceeds to repay indebtedness outstanding on our revolving credit facility. As of September 30, 2015, total unamortized debt issuance costs pertaining to our senior notes were $6.5 million.

        Interest on the senior notes is paid semi-annually in arrears on April 15 and October 15 of each year and the senior notes are fully and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries that are required to guarantee the Amended Credit Facility. Additionally, the voting stock of the issuer and the subsidiary guarantors is 100% owned by ILG. The senior notes are redeemable from April 15, 2018 at a redemption price starting at 104.219% which declines over time.

Restrictions and Covenants

        The senior notes and revolving credit facility have various financial and operating covenants that place significant restrictions on us, including our ability to incur additional indebtedness, to incur additional liens, issue redeemable stock and preferred stock, pay dividends or distributions or redeem or repurchase capital stock, prepay, redeem or repurchase debt, make loans and investments, enter into agreements that restrict distributions from our subsidiaries, sell assets and capital stock of our subsidiaries, enter into certain transactions with affiliates and consolidate or merge with or into or sell substantially all of our assets to another person.

        The indenture governing the senior notes restricts our ability to issue additional debt in the event we are not incompliance with the minimum fixed charge coverage ratio of 2.0 to 1.0 and limits restricted payments and investments unless we are in compliance with the minimum fixed charge coverage ratio and the amount is within a bucket that grows with our consolidated net income. We are in compliance with this covenant as of September 30, 2015. Additionally, the revolving credit facility requires us to meet certain financial covenants regarding the maintenance of a maximum consolidated leverage ratio of consolidated secured debt over consolidated Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as defined in the amended credit agreement. As of September 30, 2015, the maximum consolidated secured leverage to EBITDA ratio is 3.25x and the minimum consolidated interest coverage ratio is 3.0x. As of September 30, 2015, ILG was in compliance in all material respects with the requirements of all applicable financial and operating covenants and our consolidated secured leverage ratio and consolidated interest coverage ratio under the amended credit agreement were 0.45 and 10.92, respectively.

Free Cash Flow

        Free cash flow is a non-GAAP measure and is defined in "ILG's Principles of Financial Reporting." For the nine months ended September 30, 2015 and 2014, free cash flow was

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$122.1 million and $77.2 million, respectively. The change is mainly a result of the variance in net cash provided by operating activities as discussed above.

Dividends and Share Repurchases

        In February, May and August of 2015, our Board of Directors declared a quarterly dividend payment of $0.12 per share paid in March, June and September of 2015, respectively, amounting to $6.9 million each. In November 2015, our Board of Directors declared a $0.12 per share dividend payable December 16, 2015 to shareholders of record on December 2, 2015. Based on the number of shares of common stock outstanding as of September 30, 2015, at a dividend of $0.12 per share, the anticipated cash outflow would be $6.9 million in the fourth quarter of 2015. We currently expect to declare and pay quarterly dividends of similar amounts.

        In February 2015, our Board of Directors increased the remaining share repurchase authorization to a total of $25 million. Acquired shares of our common stock are held as treasury shares carried at cost on our condensed consolidated financial statements. Common stock repurchases may be conducted in the open market or in privately negotiated transactions. The amount and timing of all repurchase transactions are contingent upon market conditions, applicable legal requirements and other factors. This program may be modified, suspended or terminated by us at any time without notice.

        During the year ended December 31, 2014, we repurchased 0.7 million shares of common stock for $14.1 million, including commissions. As of September 30, 2015, the remaining availability for future repurchases of our common stock was $25.0 million. There were no repurchases of common stock during the nine months ended September 30, 2015.

Contractual Obligations and Commercial Commitments

        We have funding commitments that could potentially require our performance in the event of demands by third parties or contingent events. At September 30, 2015, guarantees, surety bonds and letters of credit totaled $88.6 million. The total includes a guarantee by us of up to $36.7 million of the construction loan for the Maui project. This amount represents the maximum exposure under guarantee related to this construction loan from a legal perspective; however, our reasonable expectation of our exposure under this guarantee based on the agreements among guarantors is proportionally reduced by our ownership percentage in the Maui project to $18.1 million as of September 30, 2015. Additionally, the total also includes maximum exposure under guarantees of $41.5 million primarily relating to our vacation rental business's hotel and resort management agreements, including those with guaranteed dollar amounts, and accommodation leases supporting the rental management activities entered into on behalf of the property owners for which either party generally may terminate such leases upon 60 to 90 days prior written notice to the other.

        In addition, certain of the vacation rental business's hotel and resort management agreements provide that owners receive specified percentages of the revenue generated under management. In these cases, the operating expenses for the rental operations are paid from the revenue generated by the rentals, the owners are then paid their contractual percentages, and we either retain the balance (if any) as our management fee or make up the deficit. Although such deficits are reasonably possible in a few of these agreements, as of September 30, 2015, future amounts are not expected to be significant, individually or in the aggregate. Certain of our vacation rental businesses also enter into agreements, as principal, for services purchased on behalf of property owners for which they are subsequently reimbursed. As such, we are the primary obligor and may be liable for unreimbursed costs. As of September 30, 2015, amounts pending reimbursements are not significant.

        As of September 30, 2015, our letters of credit totaled $8.3 million and were principally related to our Vacation Ownership sales and financing activities. More specifically, these letters of credit provide alternate assurance on amounts held in escrow which enable our developer entities to access purchaser

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deposits prior to closings, as well as provide a guarantee of maintenance fees owed by our developer entities during subsidy periods at a particular vacation ownership resort, among other items.

        Contractual obligations and commercial commitments at September 30, 2015 are as follows:

	Payments Due by Period
Contractual Obligations	Total		Up to 1 year		1 - 3 years		3 - 5 years		More than 5 years
	(Dollars in thousands)
Debt principal(a)	$	425,000	$	—	$	—	$	75,000	$	350,000
Debt interest(a)		164,416		24,224		48,423		41,730		50,039
Purchase obligations and other commitments(b)		82,896		11,894		34,534		19,443		17,025
Operating leases		63,235		14,099		22,169		15,810		11,157
Total contractual obligations	$	735,547	$	50,217	$	105,126	$	151,983	$	428,221

(a)

Debt principal and projected debt interest represent principal and interest to be paid on our senior notes and revolving credit facility based on the balance outstanding as of September 30, 2015, exclusive of debt issuance costs. In addition, also included are certain fees associated with our revolving credit facility based on the unused borrowing capacity and outstanding letters of credit balances, if any, as of September 30, 2015. Interest on the revolving credit facility is calculated using the prevailing rates as of September 30, 2015.

(b)

Purchase obligations and other commitments primarily relate to future guaranteed purchases of rental inventory, operational support services, marketing related benefits, membership fulfillment benefits and other commitments.

	Amount of Commitment Expiration Per Period
Other Commercial Commitments(c)	Total Amounts Committed		Less than 1 Year		1 - 3 Years		3 - 5 Years		More than 5 Years
	(In thousands)
Guarantees, surety bonds and letters of credit	$	88,605	$	64,728	$	14,857	$	8,967	$	53

(c)

Commercial commitments include minimum revenue guarantees related to hotel and resort management agreements, accommodation leases entered into on behalf of the property owners, and funding commitments that could potentially require performance in the event of demands by third parties or contingent events, such as under a letter of credit extended or under guarantees.

Off-Balance Sheet Arrangements

        Except as disclosed above in our Contractual Obligations and Commercial Commitments (excluding "Debt principal"), as of September 30, 2015, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a) (4) (ii) of SEC Regulation S-K.

Recent Accounting Pronouncements

        Refer to Note 2 accompanying our condensed consolidated financial statements for a description of recent accounting pronouncements.

Seasonality

        Refer to Note 1 accompanying our condensed consolidated financial statements for a discussion on the impact of seasonality.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

        The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates which are based on historical experience and on various other judgments and assumptions that we believe are reasonable under the circumstances. Actual outcomes could differ from those estimates. We have discussed those estimates that we believe are critical and required the use of significant judgment and use of estimates that could have a significant impact on our financial statements in our 2014 Annual Report on Form 10-K. There have been no material changes to our critical accounting policies in the interim period.

ILG'S PRINCIPLES OF FINANCIAL REPORTING

Definition of ILG's Non-GAAP Measures

Earnings before interest, taxes, depreciation and amortization (EBITDA) is defined as net income attributable to common stockholders excluding, if applicable: (1) non-operating interest income and interest expense, (2) income taxes, (3) depreciation expense, and (4) amortization expense of intangibles.

Adjusted EBITDA is defined as EBITDA excluding, if applicable: (1) non-cash compensation expense, (2) goodwill and asset impairments, (3) acquisition related and restructuring costs, (4) other non-operating income and expense, and (5) other special items.

Adjusted net income is defined as net income attributable to common stockholders excluding the impact of (1) acquisition related and restructuring costs, (2) other non-operating foreign currency remeasurements, and (3) other special items.

Adjusted earnings per share (EPS) is defined as adjusted net income divided by the weighted average number of shares of common stock outstanding during the period for basic EPS and, additionally, inclusive of dilutive securities for diluted EPS.

Free cash flow is defined as cash provided by operating activities less capital expenditures.

Constant currency represents current period results of operations determined by translating our functional currency results to U.S. dollars (our reporting currency) using the actual prior year blended rate of translation from the comparable prior period. We believe that this measure improves the period to period comparability of results from business operations as it eliminates the effect of foreign currency translation.

Contract sales represents total vacation ownership interests sold at consolidated and unconsolidated projects pursuant to purchase agreements, net of actual cancellations and rescissions, where we have met a minimum threshold amounting to a 10% down payment of the contract purchase price during the period. Contract sales included herein are only since HVO's October 1, 2014 acquisition.

        Our presentation of above-mentioned non-GAAP measures may not be comparable to similarly-titled measures used by other companies. We believe these measures are useful to investors because they represent the consolidated operating results from our segments, excluding the effects of any non-core expenses. We also believe these non-GAAP financial measures improve the transparency of our disclosures, provide a meaningful presentation of our results from our business operations, excluding the impact of certain items not related to our core business operations and improve the period-to-period comparability of results from business operations. These non-GAAP measures have certain limitations in that they do not take into account the impact of certain expenses to our statement of operations; such as non-cash compensation and acquisition related and restructuring costs as it relates to adjusted EBITDA. We endeavor to compensate for the limitations of the non-GAAP

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measures presented by also providing the comparable GAAP measure with equal or greater prominence and descriptions of the reconciling items, including quantifying such items, to derive the non-GAAP measure.

        We report these non-GAAP measures as supplemental measures to results reported pursuant to GAAP. These measures are among the primary metrics by which we evaluate the performance of our businesses, on which our internal budgets are based and by which management is compensated. We believe that investors should have access to the same set of metrics that we use in analyzing our results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. We provide and encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures which are discussed below.

Items That Are Excluded From ILG's Non-GAAP Measures (as applicable)

Amortization expense of intangibles is a non-cash expense relating primarily to acquisitions. At the time of an acquisition, the intangible assets of the acquired company, such as customer relationships, purchase agreements and resort management agreements are valued and amortized over their estimated lives. We believe that since intangibles represent costs incurred by the acquired company to build value prior to acquisition, they were part of transaction costs.

Depreciation expense is a non-cash expense relating to our property and equipment and is recorded on a straight-line basis to allocate the cost of depreciable assets to operations over their estimated service lives.

Non-cash compensation expense consists principally of expense associated with the grants of restricted stock units. These expenses are not paid in cash, and we will include the related shares in our future calculations of diluted shares of stock outstanding. Upon vesting of restricted stock units, the awards will be settled, at our discretion, on a net basis, with us remitting the required tax withholding amount from our current funds.

Goodwill and asset impairments are non-cash expenses relating to adjustments to goodwill and long-lived assets whereby the carrying value exceeds the fair value of the related assets, and are infrequent in nature.

Acquisition related and restructuring costs are transaction fees, costs incurred in connection with performing due diligence, subsequent adjustments to our initial estimate of contingent consideration obligations associated with business acquisitions, and other direct costs related to acquisition activities. Additionally, this item includes certain restructuring charges primarily related to workforce reductions and estimated costs of exiting contractual commitments.

Other non-operating income and expense consists principally of foreign currency translations of cash held in certain countries in currencies, principally U.S. dollars, other than their functional currency, in addition to any gains or losses on extinguishment of debt.

Other special items consist of other items that we believe are not related to our core business operations. For the nine months ended September 30, 2015, such item relates to legal proceedings.

RECONCILIATIONS OF NON-GAAP MEASURES

        The following tables reconcile EBITDA and adjusted EBITDA to operating income for our operating segments and to net income attributable to common stockholders in total for the three and

65

nine months ended September 30, 2015 and 2014 (in thousands). The noncontrolling interest relates to the Vacation Ownership segment.

	Three Months Ended September 30, 2015
	Exchange and Rental			Vacation Ownership			Consolidated
Adjusted EBITDA	$	39,335		$	7,179		$	46,514
Non-cash compensation expense		(2,660	)		(588	)		(3,248	)
Other non-operating income, net		2,177			20			2,197
Acquisition related and restructuring costs		(195	)		(1,404	)		(1,599	)
EBITDA		38,657			5,207			43,864
Amortization expense of intangibles		(2,155	)		(1,362	)		(3,517	)
Depreciation expense		(3,958	)		(436	)		(4,394	)
Less: Net income attributable to noncontrolling interest		8			581			589
Equity in earnings from unconsolidated entities		(23	)		(1,299	)		(1,322	)
Less: Other non-operating expense, net		(2,177	)		(20	)		(2,197	)
Operating income	$	30,352		$	2,671			33,023
Interest income								276
Interest expense								(6,386	)
Other non-operating income, net								2,197
Equity in earnings from unconsolidated entities								1,322
Income tax provision								(10,743	)
Net income								19,689
Net income attributable to noncontrolling interest								(589	)
Net income attributable to common stockholders							$	19,100

	Three Months Ended September 30, 2014
	Exchange and Rental			Vacation Ownership			Consolidated
Adjusted EBITDA	$	38,854		$	5,546		$	44,400
Non-cash compensation expense		(2,423	)		(394	)		(2,817	)
Other non-operating income (expense), net		535			(24	)		511
Acquisition related and restructuring costs		(385	)		(458	)		(843	)
EBITDA		36,581			4,670			41,251
Amortization expense of intangibles		(1,739	)		(1,140	)		(2,879	)
Depreciation expense		(3,587	)		(178	)		(3,765	)
Less: Net income attributable to noncontrolling interest		9			800			809
Less: Other non-operating income (expense), net		(535	)		24			(511	)
Operating income	$	30,729		$	4,176			34,905
Interest income								55
Interest expense								(1,529	)
Other non-operating income, net								511
Income tax provision								(11,838	)
Net income								22,104
Net income attributable to noncontrolling interest								(809	)
Net income attributable to common stockholders							$	21,295

66

	Nine Months Ended September 30, 2015
	Exchange and Rental			Vacation Ownership			Consolidated
Adjusted EBITDA	$	121,705		$	21,127		$	142,832
Non-cash compensation expense		(8,062	)		(2,120	)		(10,182	)
Other non-operating income (expense), net		3,385			(72	)		3,313
Acquisition related and restructuring costs		(363	)		(1,718	)		(2,081	)
Other special items		(144	)		(27	)		(171	)
EBITDA		116,521			17,190			133,711
Amortization expense of intangibles		(6,465	)		(4,067	)		(10,532	)
Depreciation expense		(11,680	)		(1,311	)		(12,991	)
Less: Net income attributable to noncontrolling interest		19			1,583			1,602
Equity in earnings from unconsolidated entities		(54	)		(3,717	)		(3,771	)
Less: Other non-operating income (expense), net		(3,385	)		72			(3,313	)
Operating income	$	94,956		$	9,750			104,706
Interest income								819
Interest expense								(15,113	)
Other non-operating income, net								3,313
Equity in earnings from unconsolidated entities								3,771
Income tax provision								(34,891	)
Net income								62,605
Net income attributable to noncontrolling interest								(1,602	)
Net income attributable to common stockholders							$	61,003

	Nine Months Ended September 30, 2014
	Exchange and Rental			Vacation Ownership			Consolidated
Adjusted EBITDA	$	119,484		$	16,681		$	136,165
Non-cash compensation expense		(7,163	)		(1,134	)		(8,297	)
Other non-operating income (expense), net		273			(178	)		95
Acquisition related and restructuring costs		(1,724	)		(1,525	)		(3,249	)
EBITDA		110,870			13,844			124,714
Amortization expense of intangibles		(5,319	)		(3,421	)		(8,740	)
Depreciation expense		(10,892	)		(542	)		(11,434	)
Less: Net income attributable to noncontrolling interest		27			2,795			2,822
Less: Other non-operating income (expense), net		(273	)		178			(95	)
Operating income	$	94,413		$	12,854			107,267
Interest income								154
Interest expense								(4,481	)
Other non-operating income, net								95
Income tax provision								(36,843	)
Net income								66,192
Net income attributable to noncontrolling interest								(2,822	)
Net income attributable to common stockholders							$	63,370

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        The following tables present the inputs used to compute operating income and adjusted EBITDA margin for our operating segments for the three and nine months ended September 30, 2015 and 2014 (in thousands).

	Exchange and Rental
	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Revenue	$	124,888		$	120,217		$	385,121		$	367,107
Revenue excluding pass-through revenue		101,184			99,579			314,496			305,823
Operating income		30,352			30,729			94,956			94,413
Adjusted EBITDA		39,335			38,854			121,705			119,484
Margin computations
Operating income margin		24.3	%		25.6	%		24.7	%		25.7	%
Operating income margin excluding pass-through revenue		30.0	%		30.9	%		30.2	%		30.9	%
Adjusted EBITDA margin		31.5	%		32.3	%		31.6	%		32.5	%
Adjusted EBITDA margin excluding pass-through revenue		38.9	%		39.0	%		38.7	%		39.1	%

	Vacation Ownership
	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Revenue	$	49,152		$	26,466		$	147,216		$	80,145
Revenue excluding pass-through revenue		34,761			22,123			104,145			67,118
Operating income		2,671			4,176			9,750			12,854
Adjusted EBITDA		7,179			5,546			21,127			16,681
Margin computations
Operating income margin		5.4	%		15.8	%		6.6	%		16.0	%
Operating income margin excluding pass-through revenue		7.7	%		18.9	%		9.4	%		19.2	%
Adjusted EBITDA margin		14.6	%		21.0	%		14.4	%		20.8	%
Adjusted EBITDA margin excluding pass-through revenue		20.7	%		25.1	%		20.3	%		24.9	%

        The following table reconciles cash provided by operating activities to free cash flow for the nine months ended September 30, 2015 and 2014 (in thousands).

	Nine Months Ended September 30,
	2015			2014
Net cash provided by operating activities	$	135,358		$	91,456
Less: Capital expenditures		(13,243	)		(14,266	)
Free cash flow	$	122,115		$	77,190

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        The following tables reconcile net income attributable to common stockholders to adjusted net income, and to adjusted earnings per share for the three and nine months ended September 30, 2015 and 2014 (in thousands).

	Three Months Ended September 30,						Nine Months Ended September 30,
	2015			2014			2015			2014
Net income attributable to common stockholders	$	19,100		$	21,295		$	61,003		$	63,370
Acquisition related and restructuring costs		1,599			843			2,081			3,249
Other non-operating foreign currency remeasurements		(2,197	)		(518	)		(3,523	)		(382	)
Other special items		—			—			171			—
Income tax impact on adjusting items(1)		234			(127	)		498			(1,125	)
Adjusted net income	$	18,736		$	21,493		$	60,230		$	65,112
Earnings per share attributable to common stockholders:
Basic	$	0.33		$	0.37		$	1.06		$	1.10
Diluted	$	0.33		$	0.37		$	1.05		$	1.09
Adjusted earnings per share:
Basic	$	0.33		$	0.38		$	1.05		$	1.13
Diluted	$	0.32		$	0.37		$	1.04		$	1.12
Weighted average number of common stock outstanding:
Basic		57,477			57,098			57,369			57,424
Diluted		58,055			57,683			57,948			57,976

(1)

Tax rate utilized is the applicable effective tax rate respective to the period to the extent amounts are deductible.

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

Foreign Currency Exchange Risk

        We conduct business in certain foreign markets, primarily in the United Kingdom and other European Union markets. Our foreign currency risk primarily relates to our investments in foreign subsidiaries that transact business in a functional currency other than the U.S. dollar. This exposure is mitigated as we have generally reinvested profits in our international operations. As currency exchange rates change, translation of the income statements of our international businesses into U.S. dollars affects year-over-year comparability of operating results.

        In addition, we are exposed to foreign currency risk related to transactions and/or assets and liabilities denominated in a currency other than the functional currency. Historically, we have not hedged currency risks. However, our foreign currency exposure related to EU VAT liabilities denominated in euros is offset by euro denominated cash balances.

        Furthermore, in an effort to mitigate economic risk, we hold U.S. dollars in certain subsidiaries that have a functional currency other than the U.S. dollar.

        Operating foreign currency exchange for the three months ended September 30, 2015 and 2014 resulted in a net loss of less than $0.1 million and net gain of $0.3 million, respectively. For the nine months ended September 30, 2015 and 2014, operating foreign currency exchange resulted in a net loss of $0.2 million and net gain of $0.4 million, respectively. This activity attributable to foreign currency remeasurements of operating assets and liabilities denominated in a currency other than their functional currency.

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        For the three months ended September 30, 2015 and 2014, non-operating foreign exchange net gains were $2.2 million and $0.5 million, respectively. The favorable fluctuations during the quarters were primarily driven by U.S. dollar positions held at September 30, 2015 and 2014 affected by the stronger dollar compared to the Colombian and Mexican pesos.

        For the nine months ended September 30, 2015 and 2014, non-operating foreign exchange resulted in net gains of $3.5 million and $0.4 million, respectively. The favorable fluctuations during the periods were primarily driven by U.S. dollar positions held at September 30, 2015 and 2014 affected by the stronger dollar compared to the Mexican and Colombian pesos.

        Our operations in international markets are exposed to potentially volatile movements in currency exchange rates. The economic impact of currency exchange rate movements on us is often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. These changes, if material, could cause us to adjust our financing, operating and hedging strategies. A hypothetical 10% weakening/strengthening in foreign exchange rates to the U.S. dollar for the three and nine months ended September 30, 2015 would result in an approximate change to revenue of $1.7 million and $5.3 million, respectively. There have been no material quantitative changes in market risk exposures since December 31, 2014.

Interest Rate Risk

        We are exposed to interest rate risk through borrowings under our amended credit agreement which bears interest at variable rates. The interest rate on the amended credit agreement as of April 2015 is based on (at our election) either LIBOR plus a predetermined margin that ranges from 1.25% to 2.50%, or the Base Rate as defined in the amended credit agreement plus a predetermined margin that ranges from 0.25% to 1.50%, in each case based on ILG's leverage ratio. As of September 30, 2015, the applicable margin was 2.25% per annum for LIBOR revolving loans and 1.25% per annum for Base Rate loans. During the third quarter of 2015, we had at least $75 million outstanding under our revolving credit facility; a 100 basis point change in interest rates would result in an approximate change to interest expense of $0.2 million and $1.8 million for the three and nine months ended September 30, 2015, respectively. While we currently do not hedge our interest rate exposure, this risk is mitigated by the issuance of $350 million senior notes in April 2015 at a fixed rate of 5.625% as well as variable interest rates earned on our cash balances. The proceeds of the senior notes were used to pay down the revolving credit facility in April 2015.

Item 4.    Controls and Procedures

        We monitor and evaluate on an ongoing basis our disclosure controls and internal control over financial reporting in order to improve our overall effectiveness. In the course of this evaluation, we modify and refine our internal processes as conditions warrant.

        As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), our management, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined by Rule 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective in providing reasonable assurance that information we are required to disclose in our filings with the Securities and Exchange Commission under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management,

70

including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

        As required by Rule 13a-15(d) of the Exchange Act, we, under the supervision and with the participation of our management, including the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, also evaluated whether any changes occurred to our internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, such control. Based on that evaluation, there have been no material changes to internal controls over financial reporting.

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PART II
OTHER INFORMATION

Item 1.    Legal Proceedings

        Not applicable

Item 1A.    Risk Factors

        See Part I, Item IA., "Risk Factors," of ILG's 2014 Annual Report on Form 10-K, for a detailed discussion of the risk factors affecting ILG. There have been no material changes from the risk factors described in the Annual Report except as follows:

Following the issuance of the senior notes, we continue to have substantial debt and interest payment obligations that may restrict our future operations and impair our ability to meet our obligations.

        We and our consolidated subsidiaries have substantial indebtedness and, as a result, significant debt service obligations. As of September 30, 2015, we had $425 million of total indebtedness outstanding and $516.7 million (net of any outstanding letters of credit) available for future borrowings as secured indebtedness under the credit facility. Our level of debt and these significant demands on our cash resources could have material consequences to our business, including, but not limited to:

•

making it more difficult for us to satisfy our financial obligations;

•

limiting our ability to obtain additional financing on satisfactory terms to fund our working capital requirements, capital expenditures, research and development efforts, acquisitions, investments and other general corporate obligations;

•

reducing the availability of our cash flow to fund our working capital requirements, capital expenditures, research and development, acquisitions, investments and other general corporate requirements because we will be required to use a substantial portion of our cash flow to service our debt obligations;

•

increasing our vulnerability to general economic downturns and adverse competitive and industry conditions;

•

increasing our exposure to interest rate increases because a portion of our borrowings is and will be at variable interest rates;

•

limiting our flexibility in planning for, or reacting to, changes in our business and the industries in which we compete; and

•

placing us at a competitive disadvantage to competitors that have less debt.

We may not be able to generate sufficient cash to service all of our indebtedness, including the senior notes.

        Our ability to make payments on and to refinance our indebtedness, including the senior notes, depends on our ability to generate cash in the future, which will be affected by general economic, financial, competitive, business and other factors beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations or that future borrowings will be available to us under the credit facility in amounts sufficient to enable us to service our debt obligations, pay our indebtedness, including the notes at maturity or otherwise, or to fund our other liquidity needs. If we are unable to meet our debt obligations or to fund our other liquidity needs, we may need to restructure or refinance our indebtedness, including the notes. Our ability to refinance our indebtedness or obtain additional financing will depend on, among other things:

•

our financial condition at the time;

72

•

restrictions in agreements governing our indebtedness, including the indenture governing the notes offered hereby and the credit agreement governing the credit facility; and

•

other factors, including financial market or industry conditions.

        Our ability to restructure or refinance our debt will depend on the condition of the capital markets and our financial condition at such time. Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations. As a result, it may be difficult for us to obtain financing on terms that are acceptable to us, or at all. Without this financing, we could be forced to reduce or delay investments and capital expenditures, or to sell assets, seek additional capital or restructure or refinance our indebtedness, including the notes. The terms of the credit facility and the indenture governing the senior notes limit our ability to sell assets and also restrict the use of proceeds from such a sale. Moreover, substantially all of our domestic assets have been pledged to secure repayment of our indebtedness under the credit facility. In addition, we may not be able to sell assets quickly enough or for sufficient amounts to enable us to meet our obligations, including our obligations on the notes.

Despite our substantial indebtedness, we may still be able or obligated to incur more debt, which could intensify the risks described above.

        Although the terms of the credit facility and the indenture governing the senior notes contain, restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of important exceptions, and indebtedness incurred in compliance with these exceptions could be substantial. As of September 30, 2015, we had approximately $516.7 million (net of any outstanding letters of credit) available for additional revolving credit borrowings under the Credit Facility. To the extent we incur additional indebtedness, the risks discussed above will increase.

We may not consummate our acquisition of Vistana, Starwood's vacation ownership business or realize the anticipated benefits if we do complete the acquisition.

        Our proposed acquisition of the Vistana business may not be consummated in a timely manner or at all. If we are unable to complete the proposed acquisition, we will have incurred substantial expenses and diverted significant management time and resources from our ongoing business. Even if we consummate the proposed acquisition, we will still have incurred substantial expenses but may not realize the anticipated revenue and cost synergies and other benefits of the acquisition. Given the size and significance of the acquisition, we may encounter difficulties in the integration of the operations of the Vistana business, which could adversely affect our combined business and financial performance.

        If the proposed transaction is not completed the price of the our common stock may decline to the extent that the market price of our common stock reflects positive market assumptions that the proposed acquisition will be completed and the related anticipated benefits will be realized. We also may be subject to additional risks if the proposed transaction is not completed, including, depending on the reasons for termination of the merger agreement, the requirement that we pay Starwood a termination fee of $40.0 million or reimburse Starwood for their expenses in connection with the transactions in an amount up to $15.0 million or, in the case of our breach, $30.0 million.

We could be adversely affected by changes to or violations of sanctions laws.

        The United States has from time to time imposed sanctions that restrict U.S. companies from engaging in business activities with certain persons, foreign countries, or foreign governments that it determines are adverse to U.S. foreign policy interests. Other countries in which we operate may also impose such sanctions. Any restrictions on our ability to conduct our business operations could negatively impact our financial results. If we are found to be liable for violations of U.S. sanctions laws or equivalent laws of another country where we operate, either due to our own acts or out of

73

inadvertence, we could suffer monetary penalties and reputational harm which could have a material and adverse effect on our results of operations and financial condition.

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

(a)

Unregistered Sale of Securities.    None



(b)

Use of Proceeds.    Not applicable



(c)

Purchases of Equity Securities by the Issuer and Affiliated Purchasers:    The following table sets forth information with respect to purchases of shares of our common stock made during the quarter ended September 30, 2015 by or on behalf of ILG or any "affiliated purchaser," as defined by Rule 10b-18(a)(3) of the Exchange Act. All purchases were made in accordance with Rule 10b-18 of the Exchange Act.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchase Under the Plans or Programs(1)
July 2015		—		—		—	$	25,000,000
August 2015		—		—		—	$	25,000,000
September 2015		—		—		—	$	25,000,000

(1)

In February 2015, we announced that our Board of Directors had authorized the repurchase of up to $25 million of our common stock. There is no time restriction on this authorization and repurchases may be made in the open-market or through privately negotiated transactions.

Items 3-5. Not applicable

Item 6.    Exhibits

Exhibit Number			Description	Location
	3.1		Amended and Restated Certificate of Incorporation of Interval Leisure Group, Inc.	Exhibit 3.1 to ILG's Current Report on Form 8-K, filed on August 25, 2008
	3.2		Certificate of Designations, Preferences and Rights to Series A Junior Participating Preferred Stock	Exhibit 3.2 to ILG's Quarterly Report on Form 10-Q, filed on August 11, 2009
	3.3		Fourth Amended and Restated By-Laws of Interval Leisure Group, Inc.	Exhibit 3.2 to ILG's Current Report on Form 8-K, filed on December 12, 2014
	10.1	†	Amended and Restated Lease Agreement between Guilford Development Group, L.L.C. and Interval International, Inc., dated as of September 30, 2015
	10.2	†	ILG Spinco Agreement, dated as of October 27, 2015, by and among Interval Leisure Group, Inc., Liberty Interactive Corporation and Liberty USA Holding, LLC

74

Exhibit Number			Description	Location
	10.3	†	Amended and Restated Registration Rights Agreement, dated as of October 27, 2015, by and among Liberty Interactive Corporation, the Liberty Parties and Interval Leisure Group, Inc.
	31.1	†	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
	31.2	†	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
	31.3	†	Certification of the Chief Accounting Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
	32.1	††	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
	32.2	††	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
	32.3	††	Certification of the Chief Accounting Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
	101.INS	†	XBRL Instance Document
	101.SCH	†	XBRL Taxonomy Extension Schema Document
	101.CAL	†	XBRL Taxonomy Calculation Linkbase Document
	101.LAB	†	XBRL Taxonomy Label Linkbase Document
	101.PRE	†	XBRL Taxonomy Presentation Linkbase Document

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Exhibit Number			Description	Location
	101.DEF	†	XBRL Taxonomy Extension Definition Linkbase Document

†

Filed herewith.

††

Furnished herewith.

*

Reflects management contracts and management and director compensatory plans.

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SIGNATURES

        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.

Date: November 9, 2015

INTERVAL LEISURE GROUP, INC.
By:	/s/ WILLIAM L. HARVEY William L. Harvey Chief Financial Officer
By:	/s/ JOHN A. GALEA John A. Galea Chief Accounting Officer

EX-10.1

Exhibit 10.1

AMENDED AND RESTATED LEASE AGREEMENT

BETWEEN

GUILFORD DEVELOPMENT GROUP, L.L.C.,

as Landlord

AND

INTERVAL INTERNATIONAL, INC.,

as Tenant

AMENDED AND RESTATED LEASE

THIS AMENDED AND RESTATED LEASE (this “Lease”), is dated as of September 30, 2015, between GUILFORD DEVELOPMENT GROUP, L.L.C., a Florida limited liability company (“Landlord”), and INTERVAL INTERNATIONAL, INC., a Florida corporation (“Tenant”).

W I T N E S S E T H:

WHEREAS, pursuant to that certain Lease dated as of August 21, 1998, between Frank W. Guilford, Jr., Individually and as Trustee, as landlord (“Original Landlord”), and Tenant, as Tenant, as amended by that certain First Amendment to Lease, dated as of December 12, 2006 (the Lease as so amended hereinafter referred to as the “Original Lease”), Original Landlord, as Landlord’s predecessor-in-interest, leased to Tenant two (2) office buildings consisting of approximately sixty thousand fifteen (60,015) square feet of Rentable Area (as defined herein) all as more particularly shown on Exhibit A attached hereto and made a part hereof and located on North Kendall Drive at S.W. 99th Avenue, Miami-Dade County, Florida, with a street address of 9995 S.W. 88th Street, Miami, Florida  33176; and

WHEREAS, Landlord and Tenant desire to amend and restate the Original Lease as of the Commencement Date (as defined herein) in its entirety, on the terms and conditions hereinafter set forth.

NOW, THEREFORE, in consideration of One Dollar ($1.00), the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree that from and after the Commencement Date, the Original Lease is amended and restated in its entirety as follows:

1.ORIGINAL LEASE.

a.The Original Lease is modified, amended and restated in its entirety as hereinafter set forth, and all of the following provisions shall constitute the Amended and Restated Lease which shall, as of the Commencement Date replace, in its entirety, all of the provisions of the Original Lease.  Notwithstanding the foregoing, until the occurrence of the Commencement Date, the Base Rent, Operating Costs, Landlord’s Operating Costs, parking charges for the Additional Parking Spaces, monthly charges for the additional features pursuant to Section 10.f of the Original Lease, and other charges payable by Tenant under the Original Lease shall continue to be paid by Tenant to Landlord at the same rate and in the same manner as provided in the Original Lease, and Tenant shall comply with all other terms, covenants and conditions of the Original Lease arising prior to the Commencement Date.

b.The provisions of this Amended and Restated  Lease shall take effect on the Commencement Date.  After the occurrence of the Commencement Date, in determining the relationship between Landlord and Tenant, no further reference shall be necessary to any prior instrument or document comprising the Original Lease other than within this instrument which shall entirely and fully govern said relationship and any and all rights and obligations flowing therefrom.

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2.CERTAIN DEFINITIONS.

a.“Premises”:  Two (2) office buildings consisting of approximately sixty thousand fifteen (60,015) square feet of Rentable Area (one office building consists of approximately thirty-two thousand three hundred forty-nine (32,349) square feet of Rentable Area, and the second office building consists of approximately twenty-seven thousand six hundred sixty-six (27,666) square feet of Rentable Area, which Buildings are interconnected including without limitation that they share the same lobby), all as more particularly shown on Exhibit A, attached hereto and made a part hereof.  The buildings comprising the Premises are located on North Kendall Drive at S.W. 99th Avenue, Miami-Dade County, Florida, with a street address of 9995 S.W. 88th Street, Miami, Florida  33176 (each hereinafter called a “Building” and collectively called the “Buildings”), located on a tract of land (the “Land”) more particularly described in Exhibit B, attached hereto and made a part hereof.  The Premises, the Buildings, the Land, all appurtenances thereto, all parking facilities and other buildings and improvements relating to the Buildings are hereinafter collectively called the “Project.”

b.“Buildings”:  Shall mean the two (2) office buildings (any and all appurtenances thereto) located upon the Land.

c.“Commencement Date”:  Shall mean October 1, 2016.

d.“Comparable Class Building”:  Shall mean comparable buildings (of comparable size with comparable uncovered parking) that are located in the Dadeland Mall/West Kendall area from U.S. 1 (South Dixie Highway) to the Florida Turnpike, Miami-Dade County, Florida, and such criteria shall be based on but not be limited to (i) ownership and property management by an institutional entity, (ii) the quality or aesthetic exterior and interior building design and finish, (iii) the mechanical, electrical and plumbing systems, (iv) common areas and amenities, (v) buildings where the total project costs are similar to the subject Project on a per square foot basis, and (vi) tenants of similar quality and creditworthiness as in the subject Project.

e.“Default Rate”:  Shall mean the lesser of (i) the prime rate of interest published by Citibank, N.A., New York (or its successors) from time to time as of the date that an interest calculation at the Default Rate is to be made plus six (6%) percent, or (ii) sixteen (16%) percent per annum or (iii) the highest rate of interest permitted by law.

f.“Operating Costs”:  The amount of Operating Costs (as hereinafter defined in Section 5) incurred with respect to the Project during the term of this Lease.

g.“Original Tenant”:  Shall mean the entity set forth as “Tenant” in the preamble to this Lease.

h.“Parking Area”:  The parking area for the Buildings is the existing on-site/on-grade parking (the “Parking Area”), as more particularly shown on Exhibit A.

i.“Proportionate Share”:  Tenant’s Proportionate Share is stipulated to be one hundred (100%) percent.

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j.“Real Estate Taxes”:  Shall mean all general and special real estate taxes, special assessments and other ad valorem and non ad valorem taxes, levies and assessments (including any refund) assessed during the Term of this Lease, paid upon or in respect of the Land and the Project, and all taxes or other charges imposed in lieu of any such taxes.  Notwithstanding the foregoing, the term “Real Estate Taxes” shall not include any net income, franchise or capital gains tax, inheritance tax or estate tax imposed or constituting a lien upon Landlord or all or any part of the Project, or any impact fees or taxes specifically related to Landlord’s development of the Project pursuant to the Original Lease.  Tenant will pay all Real Estate Taxes prior to delinquency.  Without limiting the generality of the foregoing, Tenant acknowledges that it will be responsible for the Real Estate Taxes with respect to all of the Land and the entire Project commencing on the Commencement Date and that Tenant is responsible for all Real Estate Taxes payable pursuant to the Original Lease even if not billed until after the Commencement Date of this Lease.

k.“Rent”:  Rent shall mean Base Rent, and any and all other amounts (“Additional Rent”), payable by Tenant to Landlord pursuant to this Lease.  Rent, plus any applicable tax as defined herein, shall be paid to Landlord, without deduction, counterclaim or offset, except as otherwise specifically set forth herein, at its office located at the address set forth in Section 29 hereof, or at such other place as Landlord may hereafter specify in writing.

l.“Rentable Area of the Buildings” or “Rentable Area of the Premises”:  Is hereby stipulated by Landlord and Tenant to be sixty thousand fifteen (60,015) square feet.  There shall be no remeasurement of Rentable Area by either party.

m.“Term”:  The Term of this Lease shall commence on the Commencement Date and shall expire on September 30, 2026 (the “Expiration Date”), subject, however, to (i) Tenant’s right to terminate this Lease effective April 10, 2024 upon twelve (12) months prior written notice to Landlord in the event that Landlord is unable to secure on or before March 13, 2022 an extension of that certain Miami-Dade County Environmental Quality Control Board Order No. 14-25 filed with the Clerk of Court on May 19, 2014 and recorded in Official Records Book 29157, Page 4909, of the Public Records of Miami-Dade County, Florida (the “Order”) authorizing Tenant’s continued use of the diesel powered generators serving the Premises through the Expiration Date (provided that Landlord’s inability to secure such extension of the Order is not due to the acts or omissions of Tenant, its agents, employees or contractors; provided, however, Tenant’s occupancy of the Premises in accordance with the terms of this Lease shall not be deemed to be an act or omission for purposes of this parenthetical phrase, it being agreed that for an act or omission to be attributed to Tenant under this parenthetical phrase, the act or omission must constitute a default by Tenant under this Lease), and (ii) the provisions for earlier cancellation or renewal as provided herein.  Notwithstanding the foregoing, if Landlord does not obtain an extension of the Order but Landlord notifies Tenant no later than December 31, 2022 that Landlord, at Landlord’s expense, will, no later than March 31, 2024, replace the diesel powered generators with one or more natural gas generators and tank with no less than the equivalent amount of back-up power than the diesel powered generators serving the Premises, then Tenant shall not have the right to terminate this Lease.  A “Lease Year” of the Term means the twelve (12) full calendar months commencing on the Commencement Date.  However, the final Lease Year may contain less than twelve (12) months due to sooner termination of the Term.

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n.“Use of Premises”:  All lawful purposes and uses ancillary and related thereto (which permitted use may include, but is not limited to, the supporting use of conference and computer facilities, and employee kitchen and related non-commercial facilities for employee and guest use only).

3.PREMISES AND TERM.  Landlord, in consideration of the Rent hereinafter reserved to be paid and of the covenants, conditions and agreements to be kept and performed by Tenant, hereby leases, lets and demises to Tenant, and Tenant hereby leases and hires from Landlord, the Project.  Upon the Commencement Date, Tenant shall be entitled to the exclusive use and occupancy of the Premises and the Parking Area.

4.RENT.  Beginning on the Commencement Date, Tenant covenants and agrees to pay, without abatement, deduction or offset except as otherwise specifically provided herein, to Landlord, “Base Rent” for the Premises, on or before the first (1st) day of the first (1st) full calendar month of the Term hereof and on or before the first (1st) day of each and every successive calendar month thereafter during the full Term of this Lease and any renewal thereof, subject to the adjustments as provided hereinafter along with any applicable tax as defined herein, at the then current rate.  Notwithstanding the foregoing or anything else to the contrary set forth in this Section 4, Base Rent shall be abated for the months of October 2016, October 2017, October 2018, October 2019, October 2020, October 2021, October 2022, and October 2023 (the “Base Rent Abatement”).  Notwithstanding the foregoing, Landlord, at its option, exercisable no later than thirty (30) days prior to the Commencement Date, may elect that the Base Rent Abatement shall instead be for the first eight (8) months of the Term, commencing on the Commencement Date (i.e., from October 1, 2016 through May 31, 2017).

If Tenant fails to pay any regular monthly installment of Base Rent or any other monthly amounts by the seventh (7th) day of the month in which such installment is due (provided that Landlord will be required to give Tenant written notice of Tenant’s failure to pay any such monthly payments two (2) times in any twelve (12) month period prior to such late fees being charged), or if Tenant fails to pay any other sum of money within thirty (30) days after written notice by Landlord to Tenant, or if any check delivered for the payment of Rent is returned for insufficient funds, there will be added to the unpaid amount a late charge based on the monthly prorata percentage of the Default Rate and applied to the amount due to compensate Landlord for the extra administrative expenses incurred.  Notwithstanding anything to the contrary above, Landlord agrees that it will not impose the aforesaid late charges unless Tenant has failed to pay any installment of Rent on the due date thereof (and such failure shall not have been cured on or before the last day of any grace period, if any) two (2) times in any twelve (12) month period.

The Base Rent payable by Tenant to Landlord for the first (1st) Lease Year shall be $1,020,555.00, plus sales tax, based on a rate of $17.00 per square foot of Rentable Area of the Premises per annum, plus sales tax, with a monthly payment of $85,021.25, plus sales tax.  The Base Rent (without regard to the Base Rent Abatement as set forth above) shall be adjusted at the beginning of the second (2nd) Lease Year by multiplying the Base Rent then being paid by a fraction, the numerator of which shall be the Consumer Price Index - U.S. City average for urban wage earners and clerical workers all items (1982-84 equals 100) (“CPI”) for the third (3rd) month preceding the month of adjustment, and the denominator of which shall be the CPI for the third (3rd) month preceding the Commencement Date.  Thereafter, the Base Rent shall be

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adjusted at the beginning of each succeeding Lease Year during the Term of this Lease (without regard to the Base Rent Abatement if applicable as set forth above) (and not to include the Renewal Periods, as hereinafter defined, if applicable) by multiplying the Base Rent then being paid by a fraction, the numerator of which shall be the CPI for the third (3rd) month preceding the month of adjustment, and the denominator of which shall be the CPI for the fifteenth (15th) month preceding the month of adjustment.

Anything herein to the contrary notwithstanding, in no event shall Base Rent in any Lease Year be less than the Base Rent paid for the immediately prior Lease Year.  Should the CPI become unavailable, a reasonable substitute prepared by the U.S. Department of Labor or other source, as reasonably acceptable to Landlord and Tenant, shall be used.  Base Rent shall continue to be payable in monthly installments as otherwise described above until Landlord notifies Tenant of the new monthly Base Rent installment amount.  Landlord shall attempt to so notify Tenant prior to the commencement of each new Lease Year.  However, failure of Landlord to timely notify Tenant of the new monthly Base Rent installment amount shall not be deemed a waiver by Landlord of the increased rental; the new monthly amount (or any portion not previously paid) shall be payable, retroactive to the commencement of the new Lease Year, upon notification by Landlord to Tenant of the new monthly Base Rent installment amount; provided, however, that if Landlord fails to so notify Tenant within nine (9) months after the date of adjustment, then the CPI adjustment for that year shall be deemed to be waived.

In no event shall Base Rent increases exceed two and seventy-five hundredths (2.75%) percent of the Base Rent paid for the immediately prior Lease Year, on a non-cumulative basis.

5.OPERATING COSTS.

a.Tenant, at its sole cost and expense, shall pay all Operating Costs in the repair, maintenance and operation of the Project as required hereby.  It is intended that this Lease is a completely “triple-net” lease to the Landlord, except as otherwise expressly herein stated.  Landlord is not responsible for any expenses or outlays of any nature arising from or relating to the Premises, the use or occupancy thereof, the contents thereof, or the business carried on therein, except as otherwise expressly herein stated.  Tenant shall pay all charges, impositions, and outlays of every nature and kind relating to the Project, except as otherwise expressly herein stated.  For these purposes, “Operating Costs” shall mean all expenses, costs and disbursements in connection with the operation, repair and maintenance of the Project and the personal property used in connection therewith, including, but not limited to, the following:  Real Estate Taxes; expenses incurred for heat, cooling and other utilities; cost of insurance and deductibles applicable to any claims; cost of janitorial and cleaning service, security services, trash collection services and pest control; charges under maintenance and service contracts for elevators, chillers, boilers or controls; window cleaning; Building and grounds maintenance (including without limitation Building painting and Parking Area maintenance, restriping, repaving, resealing and lighting); permits and licenses for Tenant’s business operations; and placing and replacing and maintaining landscaping.

b.In connection with Tenant’s payment of Real Estate Taxes, Tenant shall deliver to Landlord, prior to the date of delinquency, receipts or other reasonably satisfactory evidence of payment of all Real Estate Taxes so paid by Tenant.  Tenant, at its sole cost and

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expense, may dispute and contest any assessment of Real Estate Taxes (in its own name or in the name of Landlord, or in the name of both, as it may deem appropriate, and Landlord, at Tenant’s expense, will cooperate in any such dispute and contest), and in such cases the disputed charge need not be paid until finally adjudged to be valid, except as otherwise required by law.  At the conclusion of such contest, Tenant shall pay the charge contested to the extent it is held valid, together with all court costs, interest, penalties and other expenses relating thereto and will indemnify and hold harmless Landlord from any costs, expenses and damages incurred in connection with such proceedings, including reasonable attorneys’ fees.  Nothing herein contained, however, shall be construed as to allow such items to remain unpaid for such length of time as shall permit the Project (or any part thereof) to be sold by governmental, city or municipal authorities for the non-payment of the same.  Despite contesting such taxes, Tenant shall be responsible for all other charges and payments due under this Lease.

c.If, at any time, in the judgment of Landlord reasonably exercised, it shall become necessary so to do, Landlord, after written notice to Tenant, may, under protest if so requested by Tenant, pay such monies as may be required to prevent the sale of the Project or any part thereof, or foreclosure of the lien created thereon by such item, and such amount shall become immediately due and payable by Tenant to Landlord and shall constitute Additional Rent hereunder, or at Tenant’s option and at Tenant’s sole cost and expense, in lieu thereof, Tenant shall obtain lien release bonds in amounts equal to the claims of any such liens or as otherwise required by applicable law (or shall provide Landlord with other security reasonably acceptable to Landlord).

d.Commencing on the Commencement Date, Landlord agrees that Tenant shall not be liable or obligated for any payment or reimbursement to Landlord of Landlord’s costs of insurance to be obtained by Landlord pursuant to this Lease, if any, and any reserve for capital replacements to be made by Landlord to the Project.  Landlord acknowledges that as of the date hereof it is holding in accordance with the terms of the Original Lease a reserve fund for capital replacements in the amount $                (the “Existing Reserve Fund”).  Landlord represents and warrants that the accounting of the Existing Reserve Fund attached hereto as Exhibit C showing all contributions to, and expenditures from the Existing Reserve Fund by Landlord since the date of inception is, to the best of Landlord’s knowledge, true and accurate in all material respects and Tenant hereby accepts said accounting as true and correct.  On or before the Commencement Date, Landlord shall provide Tenant with an updated accounting of all contributions to, and expenditures from, the Existing Reserve Fund by Landlord between the date hereof until the Commencement Date.

e.Landlord acknowledges and agrees that prior to the Commencement Date, any funds being held in the Existing Reserve Fund shall only be used by Landlord for the replacement of capital improvements at the Premises and shall not be applied in connection with the compliance with, or extension of, the Order.  In the event that Landlord determinates it is necessary to expend any of the funds set forth in the Existing Reserve Fund it shall provide Tenant with an accounting of the Existing Reserve Fund and the intended use of the expenditures being made by Landlord from the Existing Reserve Fund, which, in all cases, must be compliant with terms of this Section 5 and the applicable terms of the Original Lease.  Within the first thirty (30) days after the Commencement Date, Tenant shall be entitled to, and Landlord shall disburse to Tenant on demand fifty (50%) percent in the aggregate of the then-existing Existing

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Reserve Fund plus any interest earned thereon (the “Tenant Reserve”) for Tenant’s use for any capital improvements to the Premises including without limitation refurbishments of the existing leasehold improvements in the Premises that will be capitalized and not expensed, as determined by Tenant to be desirable in its sole and absolute discretion provided that Landlord’s prior written approval for any such capital improvements is required in accordance with Section 13.  The remaining fifty (50%) percent of the Existing Reserve Fund will be released to Landlord to be used for its own purposes.

f.If Landlord’s mortgage lender requires that Real Estate Taxes and/or insurance for which the lender is an additional insured (unless insurance is provided by Tenant as part of a blanket policy meeting the conditions described in Section 30 below) be paid on a monthly basis into an escrow account held by such mortgage lender, then Tenant shall be required to pay to Landlord sufficient funds on a monthly basis in order for Landlord to fund such escrow, and Landlord, Tenant and the lender will enter into a mutually reasonably acceptable agreement regarding such escrow.

6.USE OF PREMISES.

a.The Premises shall be used by Tenant for the Use of Premises, and for no other purpose.  Tenant shall not knowingly permit to be done in or about the Premises, nor bring or keep or permit to be brought or kept therein, anything which is prohibited by or will in any way violate any law, statute, ordinance or governmental rule or regulation now in force or which may hereafter be enacted or promulgated, or which is prohibited by any fire insurance policy, or cause a cancellation of any insurance policy covering the Project or any part thereof or any of its contents.  Tenant shall not allow the Project to be used for any unlawful purpose; nor shall Tenant cause, maintain, or permit any nuisance in or about the Project or commit or suffer to be committed any waste of the Project, other than ordinary reasonable wear and tear.  Tenant, without paying any Additional Rent for such space, shall also be entitled to use available space in the core and/or equipment rooms of the Building as needed for telephone, power and/or electric feeds, supplies and connections, at Tenant’s sole risk and expense (except for matters arising out of Landlord’s negligence, willful misconduct or breach of this Lease), and subject to compliance with all applicable federal, state, and local laws, codes, ordinances, rules and regulations of any governmental entity or agency having jurisdiction of the Premises (“Legal Requirements”).

b.Tenant agrees to comply with all applicable Legal Requirements, including, without limitation, the Americans with Disabilities Act and the regulations promulgated thereunder (the “ADA”).  If due to Tenant’s specific use of the Premises, repairs, improvements or alterations are necessary to comply with any Legal Requirements, Tenant shall pay the entire cost thereof.

7.ASSIGNMENT AND SUBLETTING.  Tenant shall not assign the Lease, the right of occupancy under this Lease, or any other interest therein (including, without limitation, a mortgage or pledge of Tenant’s interest in this Lease), or sublet the Premises, or any portion thereof, without the prior written consent of Landlord, which shall not be unreasonably withheld or delayed.  Among other items Landlord may consider, in its reasonable judgment, Tenant’s right to assign this Lease or sublet the Premises shall be based on the transferee being

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a creditworthy tenant (and, for a subtenant of the entire Premises for the entire remaining Term, that such subtenant may exercise Tenant’s Renewal Option as provided in Section 48).  A creditworthy tenant shall mean a tenant that has the financial ability to perform the Tenant’s obligations under this Lease, and with a net worth at least equal to the net worth of Tenant as of the date hereof.  Notwithstanding the foregoing, Tenant may, without Landlord’s consent, assign this Lease or sublet the Premises, in whole or in part, to any corporation or other legal entity that is an affiliate, subsidiary, parent or successor of Tenant, or to a corporation or other legal entity into or with which Tenant may be merged or consolidated.  Tenant shall notify Landlord within thirty (30) days after any such transfer not requiring Landlord’s consent.  For the purpose of this Section 7, a “subsidiary,” “affiliate” or a “successor” of Tenant shall mean the following (for purposes of this Lease, any “parent,” “subsidiary,” “affiliate” and “successor” of Tenant shall be collectively referred to as “Affiliated Company”):

a.An “affiliate” shall mean any corporation or other legal entity which, directly or indirectly, controls or is controlled by or is under common control with Tenant.  For the purposes of this Section 7, “control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such corporation or other legal entity, whether through the ownership of voting securities or by contract or otherwise.

b.A “subsidiary” shall mean any corporation or other legal entity not less than fifty (50%) percent owned directly or indirectly by Tenant.

c.A “successor” of Tenant shall mean:

(1)A corporation or other legal entity in which or with which Tenant is merged or consolidated, provided that by operation of law or by effective provisions contained in the instruments of merger or consolidation, the liabilities of the corporations or other legal entities participating in such merger or consolidation are assumed by the corporation or other legal entity surviving such merger or created by such consolidation; or

(2)A corporation or other legal entity acquiring this Lease and the Term hereby demised and a substantial portion of the property and assets of Tenant; or

(3)Any corporation successors or other legal entity successors to a successor corporation or other legal entity becoming such by either of the methods described in Section 7, subsection c (1) or (2) above.

Acquisition by Tenant, its successors or assigns, of a substantial portion of the assets, together with the assumption of all or substantially all the obligations and liabilities of any corporation or other legal entity, shall be deemed a merger or consolidation of such corporation or other legal entity into Tenant for purposes of this Section 7.  In addition, the transfer of the outstanding capital stock of any corporate tenant shall be deemed not to include the sale of such stock by persons or parties through the “over-the-counter market” or through any recognized stock exchange, other than those deemed “insiders” within the meaning of the Securities Exchange Act of 1934, as amended.

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Notwithstanding the foregoing, no such assignment or sublease set forth in this Section 7 shall be permitted without Landlord’s consent if the assignment or series of assignments or sublease or series of subleases is/are for the purpose of “spinning-off” this Lease to independent third parties.

With any assignment of the Lease, the assignee must assume all obligations and liabilities of Tenant under this Lease.  With any subletting of any portion of the Premises to an Affiliated Company, such Affiliated Company must assume all obligations and liabilities of Tenant under the Lease as to the sublet portion of the Premises and Landlord shall have the right, as an identified third-party beneficiary of such subletting, to hold the Affiliated Company primarily liable for the performance of such assumed obligations and liabilities.  Notwithstanding any assignment or sublease whatsoever, whether Landlord’s consent is or is not required, Tenant shall in no event be released from any obligations under this Lease accruing prior to or from and after the effective date of such assignment or sublease.  As part of a request for Landlord’s consent to an assignment of this Lease to an unaffiliated third party following the sixth (6th) anniversary of the Commencement Date, Tenant may propose to Landlord that Landlord consider agreeing to release the Guarantor (as hereinafter defined) from further liability under the Guaranty (as defined in Exhibit F) based on the creditworthiness of the assignee and/or a new guarantor.  Landlord agrees to consider such request in good faith, but Landlord is under no obligation to agree to any such release or to provide justification should Landlord not agree to such release of the Guarantor.

Consent by Landlord to one or more assignments or sublettings shall not operate as a waiver of Landlord’s rights as to any subsequent assignments or sublettings.

As to any proposed subletting for which Landlord’s consent is required, if the sublease is for at least an entire Building, if so requested, Landlord will, as part of its review of the proposed transaction, consider granting nondisturbance rights to the subtenant, which will not be unreasonably withheld or delayed so long as the subtenant agrees to pay all of the Rent and abide by all of the obligations of Tenant hereunder as applicable to the space to be subleased in the event that the sublease becomes a direct lease pursuant to the nondisturbance agreement.

Tenant agrees to promptly provide Landlord with such information regarding a proposed assignee or subtenant as is requested by Landlord, as well as with plans and specifications regarding any proposed alterations of the Premises which will be required in connection with such assignment or subletting.  In connection with Landlord’s review of any proposed assignment or subletting, Tenant shall pay to Landlord the reasonable attorneys’ fees incurred by Landlord not to exceed $1,500.00 for each such transfer.

Landlord shall be entitled to receive fifty (50%) percent of the net profits arising out of any assignment or sublease (other than an assignment or sublease not requiring Landlord’s consent), which net profits shall be determined by subtracting all Rent due from Tenant with respect to the time period and square footage applicable to the assignment or sublease, and the improvement costs, brokerage fees, and other reasonable expenses payable by Tenant pursuant to such assignment or sublease, from the total consideration to be paid by such assignee or sublessee.  Any consideration received by Tenant in connection with a merger or consolidation

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or sale of all or substantially all of Tenant’s assets shall be excluded from the determination of net profits to which Landlord may be entitled.

Affiliated Companies will be permitted to utilize all or any portion of the Project from time to time without Landlord’s consent for the purpose of their business operations.

At any time, Landlord may transfer, sell, lease, convey, or otherwise dispose of its interest in this Lease.  Landlord’s Lease obligations and liabilities accruing after the transfer shall be the sole responsibility of the new owner provided that such new owner assumes such obligations and liabilities and the transferor Landlord shall be deemed to be released from further liability under this Lease (including, without limitation, for the return of any security deposit).

8.         ACCESS TO PREMISES.  Upon reasonable prior notice to Tenant under the circumstances, Tenant shall permit Landlord or its representatives, who shall be properly identified to Tenant, to enter into and upon any part of the Premises:  (i) Mondays through Fridays (excluding Holidays); and (ii) for maintenance and repairs at all reasonable times under the circumstances, and (iii) in emergencies, at all times, to inspect the condition, occupancy or use, to show the Premises to prospective purchasers, mortgagees or insurers (or tenants, in the last year of the Term or any renewals or in the last twenty (20) months of the Term if Tenant exercises its right to renew the Lease for only one Building as provided below), or to clean or make repairs, alterations or additions.  Tenant shall have the right to provide an employee or other representative of Tenant to accompany Landlord or Landlord’s agents or representatives while in the Premises; provided, however, that if Tenant fails to provide an employee or other representative to accompany such persons promptly following Landlord’s notice, Landlord may proceed notwithstanding the absence of Tenant’s employee or representative.  In exercising its right of entry, Landlord shall make good faith efforts to (i) minimize any interference with the conduct of Tenant’s business, (ii) prevent breaches in security or customer confidentiality and (iii) avoid damage to the Premises or the equipment, fixtures or personal property of Tenant.

9.         SERVICES.

a.             As described above, it is agreed that this Lease is a completely “triple-net” lease to the Landlord, except as otherwise expressly herein stated.  Therefore, except for replacements of capital items as described below, Landlord is not responsible for the expenditures for any utilities or services in connection with Tenant’s use and occupancy of the Project.

b.             Any and all utilities serving the Project (including, without limitation, electricity, HVAC and water and sewer) will be separately metered and paid for directly by Tenant to the applicable utility companies.  Tenant shall pay all bills for utility services prior to delinquency.  Upon written request by Landlord, Tenant shall provide Landlord with copies of any utility bills received by Tenant.  In addition, Tenant agrees to execute any documentation required by any utility companies to enable such companies to provide copies of Tenant’s utility bills to Landlord.

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c.             In connection with Tenant’s repair and maintenance of the HVAC, elevator systems and other building controls for which Tenant is responsible, Tenant, at its expense, shall enter into industry-standard service contracts.  Upon request from time to time, Tenant shall provide Landlord with true, correct and complete copies of such service contracts, as well as with true, correct and complete copies of any other service agreements entered into by Tenant in connection with the Project, including, without limitation, janitorial, security and landscaping.  At a minimum, Tenant’s provision of the various services, repairs and maintenance of the Project shall be consistent with such services, repairs and maintenance in Comparable Class Buildings and the companies to be engaged by Tenant shall be professional, licensed and insured.  If Tenant provides any limited access systems for the Buildings, Tenant shall provide Landlord with the access codes and keys necessary to gain entry to the Buildings.  Tenant is also responsible, at its expense, to replace all electric light bulbs, tubes, and tube casings located within or serving the Premises and the Project generally, including, without limitation, Tenant’s signage, and the Parking Area.

10.      STRUCTURAL.  Tenant shall not place a load upon any floor of the Premises exceeding the floor load per square foot area which such floor was designed to carry and which may be allowed by law.  Landlord reserves the right to reasonably prescribe the weight limitations and position of all heavy equipment and similar items, and to prescribe the reinforcing necessary, if any, which in the reasonable opinion of the Landlord may be required under the circumstances, such reinforcing to be at Tenant’s expense.

11.      PARKING.

a.             Landlord will provide to Tenant at no cost to Tenant with the parking spaces in the Parking Area.

b.             Subject to compliance with all applicable Legal Requirements, and the terms hereof, Tenant may post signs or other markings in connection with the Parking Area.  In addition, since Tenant is responsible for its own security for the Project, Landlord is not responsible for providing any security or for policing the Parking Area or towing any cars wrongfully parked in any of Tenant’s parking spaces.

c.             All parking spaces are to be in the Parking Area for the Building.  All spaces provided to Tenant hereunder shall be used by Tenant’s officers, employees, visitors, agents, contractors, assignees, subtenants and invitees.  All parking provided for under this Lease shall be available twenty-four (24) hours per day, seven (7) days per week, subject to Force Majeure.

d.             Except for its negligence, willful misconduct or breach of this Lease, Landlord shall not be liable for any damage to automobiles of any nature whatsoever to, or any theft of, automobiles or other vehicles or the contents thereof, while in or about the parking lots.

12.      REPAIRS AND MAINTENANCE.

a.             Tenant Repairs, Replacements and Maintenance.  Except for the specific items to be maintained, repaired and replaced by Landlord as expressly provided in subsection b, below, Tenant, at its sole cost and expense, will repair and maintain (and replace if necessary

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including without limitation capital improvements) the Project (including, without limitation, all furniture, trade fixtures and equipment of Tenant, all areas devoted to corridors, elevator lobbies, restrooms, mechanical rooms, janitorial closets, electrical and telephone closets, vending areas, lobby areas, refuse dumpsters, loading docks and other similar facilities, Building stairs, Building elevator shafts, elevator mechanical rooms, fire towers, Building electrical, mechanical and telephone rooms, electrical, communications and mechanical chases, projections, flues, vents, stacks, pipe shafts and other vertical penetrations, ducts and chases, the HVAC system, major elevator components and the main equipment and systems providing services to the Project including without limitation, the Project-wide sprinkler systems, mechanical, electrical, life safety and plumbing systems, elevators, the fire alarm systems and repaving of the Parking Area) in a clean, attractive and safe condition and in a manner consistent with the standards prevailing from time to time in Comparable Class Buildings, except as to reasonable wear and tear.  Upon expiration or earlier termination of this Lease, Tenant will surrender and deliver the Premises to Landlord in a similar condition in which they existed at the commencement of this Lease excepting reasonable wear and tear and damage arising from either an insurable casualty or any cause not required to be repaired by Tenant.  Tenant shall be obligated to repair any damage incurred in connection with any removal of Tenant’s furniture, equipment or other personal property by Tenant or its agents, representatives or employees, provided that Tenant shall not be obligated to repair any damage to any area which Landlord has notified Tenant in writing that it intends to refurbish or remove in connection with renovation of the Project for re-letting.  This Section shall not apply in the case of damage or destruction by fire or other casualty which is covered by insurance maintained by Landlord or Tenant on the Project (as to which Section 15 hereof shall apply) or damage resulting from an eminent domain taking (as to which Section 16 hereof shall apply).

b.             Landlord Repairs, Replacements and Maintenance.

(i)            Landlord, at its sole cost and expense, will only be required to perform all maintenance and make all repairs and replacements of the roof, foundation and structural elements of the Buildings, unless the need for any such repair or replacement is caused by the negligence or willful misconduct of Tenant or its agents, employees, or contractors, or breach of this Lease by Tenant, in which event Tenant will bear the cost of such repairs to the extent as provided in this Lease.  In no event will Landlord be liable to Tenant for failure to make any required replacement unless written notice of the need for such replacement has been delivered by Tenant to Landlord and Landlord shall fail to make such replacement within a reasonable period after receipt of such notice.

Notwithstanding the foregoing, Tenant, at its sole cost and expense, will perform all maintenance and make all repairs and replacements of the roof, foundation and structural elements of the patio previously installed by Tenant at the back of the Buildings.

(ii)           If Landlord fails to perform a required repair or replacement within a reasonable period after receipt of notice as set forth above, and such failure renders all or any portion of the Premises untenantable for five (5) consecutive business days, and so long as the correction of the problem is within Landlord’s reasonable control, then Tenant shall be entitled to an abatement of Rent (in proportion to the area so untenantable) until such repairs or

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replacements are made.  If such failure and untenantable condition aggregates to a total of forty-five (45) days in any twelve (12) month period, and so long as the correction of the problem is within Landlord’s reasonable control, then Tenant shall have the right to terminate this Lease.

13.      ALTERATIONS AND IMPROVEMENTS.  Tenant acknowledges and agrees that Tenant is accepting possession of the Premises for its continued occupancy in “as-is” condition and that Landlord shall have no obligation whatsoever to furnish, render, or supply any money, work, labor, material, fixture, decoration, or equipment in order to prepare the Premises for Tenant’s continued occupancy, except for the disbursement of the Tenant Reserve.  Tenant shall make no alterations, additions or improvements to the Project without the prior written approval of Landlord.  In the case of alterations, additions or improvements to the interior of the Project which are nonstructural, do not affect any base building systems, and do not alter the exterior of the Buildings, such approval shall not be unreasonably withheld or delayed.  However, (i) if the cost of an alteration, addition or improvement does not exceed in the aggregate Ten Thousand and No/100 ($10,000.00) Dollars, then such approval shall not be required and no notice need be given to Landlord, and (ii) if the cost of an alteration, addition or improvement is more than Ten Thousand and No/100 ($10,000.00) Dollars in the aggregate but less than Thirty-Five Thousand and No/100 ($35,000.00) Dollars in the aggregate, then such approval shall not be required, but Tenant shall be required to give Landlord prior written notice thereof.  In any event, Tenant shall conduct its work in such a manner as to maintain harmonious labor relations and shall, prior to the commencement of the work, submit to Landlord copies of all necessary permits.  All alterations, additions and improvements to the Project made by or on behalf of Tenant will be made only in a good and workmanlike manner, using new, first-class materials, in conformity with all required permits, and in compliance with all applicable building codes and other Legal Requirements.  Landlord reserves the right to approve the contractors hired by Tenant, which approval shall not be unreasonably withheld or delayed.  Tenant shall pay to Landlord all reasonable architectural and engineering fees incurred by Landlord in connection with the review of any proposed alterations, additions or improvements for which Landlord’s consent is required.  All alterations, additions or improvements, whether temporary or permanent in character, made in or upon the Project prior to the Commencement Date either by Landlord or Tenant, shall, at the end of the Term hereof, be Landlord’s property and at the end of the Term hereof shall remain in or upon the Project without compensation to Tenant.  Tenant shall not be required to remove and restore any alterations, additions or improvements which were made after the Commencement Date, unless Landlord expressly requires in writing the removal of such alteration, addition or improvement, and the restoration occasioned by such removal, at the time Landlord’s consent is granted.

Notwithstanding the foregoing, all of Tenant’s furniture, personal property, movable trade fixtures, work stations, file systems, appliances, art, and equipment including without limitation all movable cabinets, loose woodwork and shelving, and telephone and communication equipment and data transmission equipment may be removed by Tenant at the termination of this Lease, and if Tenant so removes, Tenant shall at its sole expense repair any damage to the Project caused by such removal which damage is beyond what may be reasonably expected in connection with such move and reasonable wear and tear.  If not so removed by Tenant, such property shall become the property of Landlord without any accounting to Tenant.  In no event may Tenant remove any leasehold improvements or any base building mechanical,

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electrical, HVAC, plumbing, or life safety systems, except that Tenant may remove its separate generator.

Landlord acknowledges and agrees that all alterations, additions or improvements heretofore installed at the Premises by Tenant as of the date hereof pursuant to the terms of the Original Lease have been deemed approved and are not subject to the foregoing provisions of this Section 13, including, without limitation, any requirement for Landlord’s prior written approval.

14.      INDEMNITIES; LIABILITY.

a.             Landlord shall not be liable for any death or injury arising from or out of any occurrence in, upon, at, or relating to the Project or damage to property of Tenant or of others located on the Premises or elsewhere in the Project, nor shall it be responsible for any loss of or damage to any property of Tenant or others from any cause, unless such death, injury, loss, or damage results from the negligence or willful misconduct of Landlord or its agents, employees, or contractors, or breach of this Lease by Landlord.  Without limiting the generality of the foregoing, Landlord shall not be liable for any injury or damage to persons or property resulting from fire, explosion, falling plaster, falling ceiling tile, falling fixtures, steam, gas, electricity, water, rain, flood, or leaks from any part of the Buildings or from the pipes, sprinklers, appliances, plumbing works, roof, windows, or subsurface of any floor or ceiling of the Buildings or from the street or any other place or by dampness, or for losses due to theft or burglary, or by any other cause whatsoever, unless such death, injury, loss, or damage results from the negligence or willful misconduct of Landlord or its agents, employees, or contractors, or breach of this Lease by Landlord.  Tenant agrees to indemnify Landlord and hold it harmless from and against any and all loss (including loss of Base Rent and Additional Rent payable in respect to the Premises), claims, actions, damages, liability, and expense of any kind whatsoever (including reasonable attorneys’ fees and costs at all tribunal levels), unless such death, injury, loss, or damage results from the negligence or willful misconduct of Landlord or its agents, employees, or contractors, or breach of this Lease by Landlord, arising from any occurrence in, upon, or at the Premises, or the occupancy, use, or improvement by Tenant or its agents or invitees of the Premises or any part thereof, or occasioned wholly or in part by any act or omission of Tenant its agents, employees, and invitees or by anyone permitted to be on the Premises by Tenant.  This indemnity shall survive the expiration or sooner termination of this Lease.  In connection with any indemnity of Landlord by Tenant in this Lease, such indemnity shall also include the defense of Landlord, if Landlord so requests.

b.             Tenant shall not be liable for any death or injury arising from or out of any occurrence in, upon, at, or relating to the Project or damage to property of Landlord or of others located on the Premises or elsewhere in the Project, nor shall it be responsible for any loss of or damage to any property of Landlord or others from any cause, to the extent such death, injury, loss, or damage results from the negligence or willful misconduct of Landlord or its agents, employees, or contractors, or breach of this Lease by Landlord.  Landlord agrees to indemnify Tenant and hold it harmless from and against any and all loss, claims, actions, damages, liability, and expense of any kind whatsoever (including reasonable attorneys’ fees and costs at all tribunal levels), to the extent such death, injury, loss, or damage results from the negligence or willful misconduct of Landlord or its agents, employees, or contractors, or breach of this Lease

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by Landlord.  This indemnity shall survive the expiration or sooner termination of this Lease.  In connection with any indemnity of Tenant by Landlord in this Lease, such indemnity shall also include the defense of Tenant, if Tenant so requests.

c.             The indemnification provisions in this Section or elsewhere in this Lease are subject to the waiver of recovery and waiver of subrogation provisions set forth in Section 30 of this Lease.  To the extent of the proceeds received by either party under any insurance required to be maintained in this Lease, such party’s obligation to indemnify and hold harmless the other party against the hazard which is the subject of such insurance shall be deemed to be satisfied.

15.      DAMAGE BY FIRE OR THE ELEMENTS.

a.             If during the Term all or any part of the Project shall be damaged or destroyed by fire or other casualty, Tenant shall promptly give notice thereof to Landlord and Landlord shall, at Landlord’s sole cost and expense subject to availability and receipt from Tenant’s insurance company(ies) of the insurance proceeds and the receipt from Tenant of the deductible amount of such insurance, if any (except as provided in Section 15.b), repair, restore or replace the Premises as nearly as possible to its value, condition and character as of the Commencement Date.  Landlord shall within thirty (30) days following such notice from Tenant of the casualty advise Tenant the amount of time such repairs are reasonably estimated to require (or within sixty (60) days of the date of the casualty if the casualty is an area-wide casualty such as a hurricane).

b.             If during the Term the Project shall be substantially damaged or destroyed in any single casualty in such a manner that such damage cannot, in Landlord’s reasonable judgment, be repaired within nine (9) months from the date of such casualty, Landlord shall so notify Tenant within sixty (60) days after Landlord’s receipt of the notice required pursuant to Section 15.a hereof, or if such damage or destruction occurs during the last three (3) years of the Term (taking into account any previously exercised renewal option), then Landlord may by written notice terminate this Lease.  If Landlord shall give such notice of termination, this Lease shall terminate on the sixtieth (60th) day following the date Tenant receives notice of termination from Landlord in accordance with the provisions of this Section.

c.             If during the Term the Project shall be damaged or destroyed in any single casualty and Landlord (if permitted to do so) does not give notice of its intention to terminate this Lease, as provided above, this Lease shall continue in force and effect, and Landlord shall repair, restore or replace the same as provided above; provided, however, if (i) the estimated time period for repair exceeds nine (9) months, or (ii) such statement estimating the repair time is not timely delivered (and Tenant notified Landlord of its failure to timely deliver the statement and Landlord fails to respond to Tenant within five (5) days after Tenant’s notice), or (iii) such damage or destruction occurs during the last three (3) years of the Term (taking into account any previously exercised renewal option), then Tenant may elect to terminate this Lease by notice to Landlord delivered not later than thirty (30) days after (x) in the case of subsection c(i), the date Landlord delivers the statement estimating the repair time, or (y) in the case of subsection c(ii), five (5) days after Tenant’s notice of Landlord’s failure to deliver the statement or the date Landlord delivers the statement, if Landlord so delivers or (z) in the case of subsection c(iii), the

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date of damage or destruction.  If Tenant makes such election, the Term shall expire on the sixtieth (60th) day following the date Landlord receives notice of termination from Tenant in accordance with the provisions of this Section.  Notwithstanding anything herein to the contrary, Landlord shall not be required to proceed with repairs or restoration if the repair estimate exceeds nine (9) months and the casualty occurs within the last three (3) years of the existing Term (taking into account any previously exercised renewal option).

d.             Landlord shall not be required to rebuild, repair or replace any part of the furniture, equipment, fixtures and Tenant’s personal property which were placed by or for Tenant within the Project.  Tenant will maintain property insurance on such furniture, equipment, fixtures and Tenant’s personal property and Tenant will restore or replace the same promptly following the repair or restoration of the Project after an event of casualty.  Any insurance, if any, which may be carried by Landlord in its discretion (at Landlord’s sole cost) against loss or damage to the Premises or any other part of the Project shall be for the sole benefit of Landlord and under its sole control.

e.             If the Project shall be partially damaged or partially destroyed by a casualty, the Base Rent and Additional Rent payable hereunder shall be equitably abated to the extent that the Project shall have been rendered untenantable for the period from the date of such damage or destruction to the date the damage shall be repaired or restored.  If the Project or a major part thereof shall be damaged or destroyed that it is rendered untenantable on account of a casualty, the Base Rent and Additional Rent shall abate as of the date of the damage or destruction and until Landlord shall repair, restore and rebuild the Project; provided, however, that if Tenant reoccupies for the conduct of its business a portion of the Project during the period the restoration work is taking place and prior to the date that the same are made substantially completed, Base Rent and Additional Rent allocable to such portion shall be payable by Tenant from the date of such occupancy.

f.             All property insurance proceeds received by Landlord or Tenant on account of such damage or destruction to the Buildings in excess of $375,000.00 (excluding proceeds relating to Tenant’s personal property, which proceeds shall be used in accordance with Section 15.d, above), less the actual costs, fees and expenses, if any, incurred in connection with adjustment of the loss, shall be retained in escrow in such bank or title company as shall be selected by Landlord and approved by Tenant, which approval shall not be unreasonably withheld or delayed.  Such proceeds shall be for the purpose of reimbursing Landlord for expenditures made to repair, restore or replace any part of the Project so damaged or destroyed (which expenditures shall include expenditures made for temporary repairs for the protection of property pending the completion of permanent repairs, restorations or replacements to the Project, or to prevent interference with the business operated thereon, and repairs, restorations or replacements thereto then in process insofar as actually made or constructed) or to pay contractors, subcontractors, material suppliers, engineers, architects or other persons who have rendered services or furnished materials for said repairs, restorations or replacements (herein called “Restoration”).  Such proceeds shall be withdrawn from the escrow account as hereinafter provided from time to time as the Restoration progresses upon the written request of Landlord to the escrow agent (with a copy to Tenant), which shall be accompanied by the following:

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(i)            A certificate of the architect or engineer in charge of the Restoration (who shall be selected by Landlord and be reasonably satisfactory to Tenant) dated not more than thirty (30) days prior to such request, stating in effect that the work done through the date of such request has been substantially completed; and

(ii)           An affidavit from the general contractor for any partial or final payment in the form prescribed by Chapter 713, Florida Statutes.

Upon compliance with the foregoing provisions of this Section, the escrow agent shall be deemed to be authorized, without further instrument, to pay or cause to be paid to Landlord or to the persons, named in the contractor affidavit the respective amounts stated therein to have been paid by Landlord or to be due to them, as the case may be.

16.      EMINENT DOMAIN.

a.             The terms “eminent domain,” “condemnation,” “taken” and the like in this Section 16 include takings for public or quasi-public use and private purchases in place of condemnation by any authority authorized to exercise the power of eminent domain.

b.             If the entire Premises or the portions of the Project required for reasonable access to, or the reasonable use of, the Project are taken by eminent domain, this Lease shall automatically end on the earlier of:

(1)           the date title vests; or

(2)           the date Tenant is dispossessed by the condemning authority.

c.             If the taking of a part of the Premises materially interferes with Tenant’s ability to continue its business operations in substantially the same manner and space, then Tenant may end this Lease on the earlier of:

(1)           the date when title vests; or

(2)           the date Tenant is dispossessed by the condemning authority.

If there is a partial taking and this Lease continues, then the Lease shall end as to the part taken and the Rent shall abate in proportion to the part of the Premises and/or Parking Area, as applicable, taken, and all other matters under this Lease that are a function of Rentable Area shall be so reduced.  A taking of fifteen (15%) percent or more of the Parking Area shall be deemed a material interference with Tenant’s business operations.

d.             If this Lease is canceled as provided in this Section 16, then the Base Rent, Additional Rent, and any other charges shall be payable up to the date Tenant ceases business operations and vacates the Premises in the manner required by this Lease, and shall account for any abatement.  Landlord, considering any abatement, shall promptly refund to Tenant any prepaid, unaccrued Base Rent and Additional Rent, if any, less any sum then owing by Tenant to Landlord.

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e.             If this Lease is not canceled as provided for in this Section 16, then Landlord at its expense shall promptly repair and restore the Project to the condition that existed immediately before the taking, except for the part taken (and except as to alterations and improvements made by the Tenant under the Original Lease or this Lease), so as to render the Project a complete architectural unit, to the extent of the condemnation award received for the damage.

f.             Landlord reserves all rights to damages and awards paid because of any partial or entire taking of the Premises or other portion of the Project.  Tenant assigns to Landlord any right Tenant may have to any damages or awards.  Further, Tenant shall not make claims against Landlord or the condemning authority for damages.  Notwithstanding the foregoing, Tenant may claim and recover from the condemning authority a separate award for Tenant’s expenses, damages and costs (including, without limitation, cost of removal of, trade fixtures, furniture and other personal property belonging to Tenant, Tenant’s moving expenses and other relocation damages, such as loss of business, and the unamortized portion of leasehold improvements paid for by Tenant with no contribution or reimbursement from Landlord), so long as any such award to Tenant would not reduce the award payable to Landlord and in no event may Tenant seek any award for any improvements paid for by Landlord or for leasehold value.  Each party shall seek its own award, as limited by this paragraph, at its own expense, and neither shall have any right to the award made to the other.

g.             If part or all of the Premises are condemned for a period of time not to exceed one hundred eighty (180) days (a “temporary taking”), this Lease shall remain in effect.  The Rent and Tenant’s obligations for the part of the Premises taken shall abate during the temporary taking in proportion to the part of the Premises that Tenant is unable to use in its business operations as a result of the temporary taking.  Landlord shall receive the entire award for any temporary taking.

17.        SIGNS AND ADVERTISING.

a.             Subject to compliance with all applicable Legal Requirements, and the terms hereof, Tenant, at Tenant’s sole cost and expense, shall have the exclusive right to install and maintain signage of Tenant’s choosing on exterior facades of each of the Buildings or elsewhere in or about the Project (collectively, the “Exterior Signs”).  However, Tenant’s right to erect and install the Exterior Signs shall be conditioned upon (a) this Lease being in full force and effect; and (b) compliance with all applicable Legal, Requirements, and insurance requirements, as the same may from time to time be amended or promulgated.  In addition, Tenant shall coordinate the installation or removal of any Exterior Signs with Landlord so that Landlord or its contractors may monitor such installation or removal.  Tenant, at Tenant’s sole expense, shall exercise due diligence to apply and obtain all permits and licenses required in connection with the Exterior Signs and shall be fully responsible for the proper installation thereof.  Landlord will cooperate with Tenant in the obtaining of such permits and licenses.  Tenant shall indemnify and hold Landlord harmless from and against any and all losses, costs, damages, expenses, suits, demands, claims, injuries, or deaths occasioned by the installation, maintenance, and removal of the Exterior Signs pursuant to the terms of this Lease, except for the negligence or willful misconduct of Landlord or its agents, employees, or contractors, or breach of this Lease by Landlord.  This indemnity shall survive the expiration or sooner

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termination of this Lease.  Landlord acknowledges and agrees that all Exterior Signs installed at the Premises by Tenant as of the date hereof pursuant to the terms of the Original Lease are hereby deemed approved by Landlord.

b.             All signage (including, but not limited to, the Exterior Signs) will be installed and maintained at Tenant’s sole cost and expense.  The Exterior Signs shall be removed at the expiration or termination of Tenant’s signage rights, at Tenant’s sole cost and expense.

18.      DEFAULT.  Landlord, at its election, may exercise any one or more of the options referred to below upon the happening, or at any time after the happening, of any one or more of the following events (each, an “Event of Default”):

a.             Tenant’s failure to pay the Base Rent or any Additional Rent or any other sums payable hereunder for a period of ten (10) days after written notice from Landlord;

b.             Tenant’s failure to observe, keep or perform any of the other terms, covenants, agreements or conditions of this Lease for a period of thirty (30) days after written notice by Landlord stating the default with particularity; provided that if such failure cannot reasonably be corrected in such thirty (30) day period and Tenant shall commence such cure within such thirty (30) day period and shall proceed diligently to complete such cure as soon as reasonably possible, Tenant shall be allowed an additional reasonable period of time to cure the failure;

c.             The bankruptcy of Tenant;

d.             Tenant is making an assignment for the benefit of creditors;

e.             A receiver or trustee being appointed for Tenant or a substantial portion of Tenant’s assets;

f.             Tenant’s voluntary petitioning for relief under, or otherwise seeking the benefit of, any bankruptcy, reorganization, arrangement or insolvency law;

g.             Tenant’s interest under this Lease being sold under execution or other legal process; and

h.             Any unauthorized assignment of Tenant’s interest in this Lease or unauthorized subletting of the Premises.

In the event of any of the foregoing happenings, but subject to Tenant’s right to cure a default as expressly provided above, Landlord, at its election, may exercise any one or more of the following options, the exercise of any of which shall not be deemed to preclude the exercise of any others herein listed or otherwise provided by statute or general law or equity at the same time or in subsequent times or actions:

(1)           Landlord may cancel this Lease by notice to Tenant and retake possession of the Premises for Landlord’s account, or may terminate Tenant’s right to possession (without terminating this Lease), for the account of Tenant.  In either event,

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Tenant shall then quit and surrender the Premises to Landlord.  Tenant’s liability under all of the provisions of this Lease shall continue notwithstanding any expiration and surrender, or any re-entry, repossession, or disposition hereunder.  If Tenant’s right to possession is terminated (without terminating this Lease), Tenant shall remain liable (in addition to accrued liabilities) to the extent legally permissible for all Rent Tenant would have been required to pay until the date this Lease would have expired had such cancellation not occurred.  Tenant’s liability for Rent shall continue notwithstanding re-entry or repossession of the Premises by Landlord.  In addition to the foregoing, Tenant shall pay to Landlord such sums as the court which has jurisdiction thereover may adjudge as reasonable attorneys’ fees with respect to any successful lawsuit or action instituted by Landlord to enforce the provisions of this Lease.

(2)           Landlord may relet all or any part of the Premises for all or any part of the unexpired portion of the Term of this Lease or for any longer period, and may accept any reasonable rent then attainable; grant any reasonable concessions of rent, and agree to paint or make any reasonable repairs, alterations, and decorations for any new Tenant as it may deem advisable in its reasonable discretion.  Landlord shall be under no obligation to relet or to attempt to relet the Premises, except as expressly set forth below.  Any sums achieved by Landlord as a result of a reletting shall first be applied to Landlord’s costs and expenses in connection with such reletting and Tenant’s default.

(3)           If Tenant’s right to possession is terminated (without terminating this Lease), and Landlord so elects, the rent hereunder shall be accelerated and Tenant shall pay Landlord damages in the amount of any and all sums which would have been due for the remainder of the Term (reduced to present value using a discount factor equal to the stated prime lending rate on the date of Tenant’s default by Landlord’s then-existing mortgagee or, if there is no mortgagee, by Bank of America, Citibank, or Wells Fargo, as chosen by Landlord).  Prior to or following payment in full by Tenant of such discounted sum promptly upon demand, Landlord shall use good faith efforts to relet the Premises.  If Landlord receives consideration as a result of a reletting of the Premises relating to the same time period for which Tenant has paid accelerated rent, such consideration actually received by Landlord, less any and all of Landlord’s reasonable cost of repairs, alterations, additions, redecorating, and other expenses in connection with such reletting of the Premises, shall be a credit against such discounted sum, and such discounted sum shall be reduced if not yet paid by Tenant as called for herein, or if Tenant has paid such discounted sum, such credited amount shall be repaid to Tenant by Landlord (provided said credit shall not exceed the accelerated amount).

Forbearance by Landlord to enforce one or more of the remedies herein provided upon an Event of Default shall not be deemed or construed to constitute a waiver of any other violation or default.

In the event of any default by Landlord, Tenant may exercise any available legal and equitable remedies other than termination of this Lease, except for termination rights expressly granted to Tenant hereunder; provided, however, that nothing contained in this Lease shall be deemed to be a waiver by Tenant of any rights it may have to claim a constructive eviction of Tenant by Landlord pursuant to applicable Florida law.  Prior to any exercise by Tenant of its

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available remedies, Tenant will give Landlord written notice specifying such default with particularity, and Landlord shall have a period of thirty (30) days following the date of such notice in which to cure the default (provided, however, that if such default reasonably requires more than thirty (30) days to cure, Landlord shall have a reasonable time to cure such default, provided Landlord commences to cure within such thirty (30) day period and thereafter diligently prosecutes such cure to completion).  In addition, if a default by Landlord is not cured by Landlord within the applicable cure period, then Tenant may notify Landlord of its failure, and if Landlord fails to cure within ten (10) days after Tenant’s notice, then Tenant may, upon five (5) days’ written notice to Landlord (or sooner, if a bona fide emergency), cure the default and bill Landlord for the reasonable costs incurred by Tenant to cure the default.  If Landlord does not pay such costs within thirty (30) days after receipt of Tenant’s bill (together with reasonable supporting documentation), then Tenant shall have the option to deduct the amount of such bill from the next due monthly installment(s) of Base Rent and Additional Rent, until fully credited.  Notwithstanding any provision of this Lease, in the event of any breach or default by Landlord of any term or provision of this Lease, Tenant agrees to look solely to the equity or interest then-owned by Landlord in the Project (including the proceeds of insurance, condemnation and sale), and in no event shall any deficiency judgment be sought or obtained against Landlord.

The parties hereto agree that any and all suits for any and every breach of this Lease shall be instituted and maintained only in those courts of competent jurisdiction in the county or municipality in which the Project is located.

If Tenant shall be in default in the performance of any term of this Lease on Tenant’s part to be performed beyond the expiration of the applicable grace period, if any, Landlord, without thereby waiving such default and without liability to Tenant in connection therewith, may, but shall not be obligated to, upon notice (except in a bona fide emergency), perform the same for the account and at the expense of Tenant, and Landlord may take such action as may be reasonably required to cure any such default and may enter the Premises to do so as otherwise provided herein.  Any reasonable expenses incurred by Landlord in connection with any such performance or involved in collecting or endeavoring to collect Rent or enforcing or endeavoring to enforce any rights against Tenant under or in connection with this Lease or pursuant to law, including but not limited to any cost, expense and disbursement involved in instituting and prosecuting summary proceedings, as well the cost of any material, labor or services provided, furnished or rendered, including reasonable attorneys’ fees and disbursements, plus interest at the Default Rate on any amounts expended by Landlord from the date of outlay to the date of reimbursement by Tenant, shall be paid by Tenant as Additional Rent within thirty (30) days after demand.

Notwithstanding the foregoing, in any action or litigation in connection with this Lease the prevailing party shall be reimbursed by the other party for all costs and expenses, including reasonable attorney’s, paralegal’s and expert witness fees and costs, whether at trial or on appeal or in bankruptcy proceedings.

19.      SUBORDINATION.  In consideration of the execution of this Lease by Landlord, Tenant will subordinate this Lease to any ground leases, security interests or mortgages and all renewals, modifications, extensions, consolidations and replacements of the foregoing which

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might now or hereafter constitute a lease or a lien upon the Project or improvements therein or thereon or upon the Premises.

As a condition to any such subordination, Landlord shall obtain, for Tenant’s benefit, a non-disturbance agreement from the holder of any such future interest providing that so long as Tenant is not in default under the Lease, the enforcement of such interest will not terminate this Lease or disturb Tenant’s use or enjoyment of the Premises.  Any such non-disturbance agreement shall be in recordable form and shall otherwise be in form and content reasonably acceptable to Tenant and the holder of such interest, including, without limitation, a recognition of all rights of Tenant for any set-off arising out of Landlord’s failure to pay any allowances or perform any other monetary obligations under this Lease, provided that the lender was provided notice of the default creating the right of offset and was given the opportunity to cure such default as provided to the lender pursuant to the non-disturbance agreement (or if no notice and cure period is provided for in the non-disturbance agreement, then provided that lender was given the same opportunity to cure such default as provided to Landlord under this Lease).

Landlord covenants and agrees to obtain within thirty (30) days of the date hereof (the “SNDA Deadline”) a Subordination, Non-Disturbance and Attornment Agreement (“SNDA”) in the form attached hereto as Exhibit D from the Landlord’s current lender, which is Provident Life Accident and Insurance Company (provided that, in lieu of a new SNDA, Landlord may obtain a written consent to this Lease from Landlord’s current lender pursuant to the existing SNDA between Tenant and Landlord’s current lender, which is what is attached as Exhibit D).  If Landlord fails to obtain such SNDA or written consent by the SNDA Deadline, then as Tenant’s sole remedy, Tenant may elect to terminate this Lease by written notice to Landlord within ten (10) days following the SNDA Deadline.

20.      QUIET ENJOYMENT.  Provided Landlord has not terminated Tenant’s right to possession of the Project as herein provided, Tenant shall peaceably and quietly hold and enjoy the Project against Landlord and all persons claiming by, through or under Landlord, for the Term herein described, subject to the terms, provisions and conditions of this Lease.

Landlord represents and warrants to Tenant that, as of the date of this Lease, it is the fee simple owner of the Land, with full power and authority to enter into this Lease.  Tenant shall have the right, at its expense, to obtain a leasehold title insurance policy in connection with this Lease.

21.      CONSTRUCTION AND LIENS.  Tenant is prohibited from making, and agrees not to make, alterations in or to the Project, except as permitted by Section 13, and Tenant will not permit any construction, mechanics’ or materialmen’s lien or liens to be placed upon the Project or improvements therein caused by or resulting from any work performed, materials furnished or obligation incurred by or at the request of Tenant, and in the case of the filing of any such lien, Tenant will promptly discharge the lien or transfer the lien to a lien transfer bond (or other security) in accordance with Chapter 713, Florida Statutes.  If Tenant fails to discharge or transfer the lien within thirty (30) days after written notice thereof from Landlord to Tenant, Landlord shall have the right and privilege, at Landlord’s option, of paying the same or any portion thereof without inquiry as to the validity thereof, and any amounts so paid, including reasonable expenses, interest, and attorneys’ fees, shall be due from Tenant to

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Landlord and shall be repaid to Landlord immediately on rendition of a bill therefor, together with interest at the Default Rate until repaid, and if not so paid within thirty (30) days of the rendition of such bill shall constitute an Event of Default under Section 18 hereof.

Nothing in this Lease will be deemed in any way to give Tenant any right, power or authority to contract for or permit to be furnished any service or materials which would give rise to the filing of any construction, mechanics’ or material supplier’s lien against Landlord’s estate or interest in the Premises or the Project, it being agreed that no estate or interest of Landlord in the Premises or the Project will be subject to any lien arising in connection with any alteration, addition or improvement made by or on behalf of Tenant.

Tenant shall, within fifteen (15) days after being requested to do so by Landlord, execute, acknowledge and deliver to Landlord a short form of lease in recordable form confirming that the terms of this Lease expressly provide that the interest of Landlord in the Project shall not be subject to liens for improvements made by Tenant and such other information as may be required by Chapter 713, Florida Statutes to prevent the interest of Landlord in the Premises and the Project from being subject to liens for improvements made by Tenant.  The short form of lease shall be in the form attached hereto and made a part hereof as Exhibit E.

Landlord hereby waives any statutory and common law liens for rent (other than judgment liens).  Such waiver is self-executing and does not require any further instrument to evidence such waiver.  However, on request, Landlord shall further evidence its agreement to waive its liens by an instrument reasonably satisfactory to Landlord and prepared by Tenant or its lender, in either case at Tenant’s expense.

22.      FORCE MAJEURE.  With respect to any action to be taken by Landlord or Tenant or services to be provided by Landlord, except as to any payment of Base Rent or Additional Rent or other sums if due Landlord from Tenant under the terms of this Lease, Landlord or Tenant, as the case may be, shall not be liable or responsible for, and the period for performance shall be extended for any delays due to (a) strikes, riots, acts of God (not to include ordinary weather conditions), shortages of labor or materials, theft, fire, public enemy, injunction, insurrection, court order, requisition of other governmental body or authority, war, legal moratoria enacted after the date hereof; or (b) any other causes of any kind whatsoever which are beyond the control of Landlord or Tenant, as the case may be, but not to exceed ninety (90) days as to this Section 22 (all such events, causes and conditions being herein called “Force Majeure” or an “event of Force Majeure”).

23.      SEVERABILITY.  If any clause or provision of this Lease is illegal, invalid or unenforceable under present or future Legal Requirements effective during the Term of this Lease, then and in that event, it is the intention of the parties hereto that the remainder of this Lease shall not be affected thereby and such illegal, invalid or unenforceable provision shall be given force and effect to the extent valid and legal.

24.      RENT A SEPARATE COVENANT.  Except as may be specifically provided herein, Tenant shall not for any reason withhold or reduce Tenant’s required payments of Base Rent and Additional Rent provided in this Lease.  It is specifically understood and agreed by

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the parties that the payment of Base Rent and Additional Rent is a covenant by Tenant that is independent of the other covenants of the parties hereunder.

25.      HOLDING OVER.  If Tenant holds over without Landlord’s written consent after expiration or earlier termination of the Term of this Lease, Tenant shall, throughout the entire holdover period, be deemed to be occupying the Premises pursuant to a tenancy at sufferance, except that the Rent shall equal (a) for the first ninety (90) days, one hundred fifty (150%) percent of the Rent then in effect, and (b) thereafter, two hundred (200%) percent of the Rent then in effect.  This provision does not give Tenant the right to hold over beyond the expiration of the Term of this Lease and no holding over by Tenant after the expiration or earlier termination of the Term shall be construed to extend the Term.

26.      EXECUTION.  The person signing this Lease on behalf of each of Landlord and Tenant represents and warrants that this Lease has been duly authorized by such party and constitutes the valid and binding obligation of such party.

27.      ABSENCE OF OPTION.  The submission of this Lease for examination does not constitute a reservation of or offer or option for the Premises, and this Lease becomes effective only upon execution and delivery thereof by Landlord and Tenant.

28.      AMENDMENTS.  This Lease contains the entire agreement between the parties hereto and may not be altered, changed or amended, except by written instrument signed by both parties hereto.  No provision of this Lease shall be deemed to have been waived by either party unless such waiver be in writing signed by the waiving party and addressed to the other party, nor shall any custom or practice which may grow up between the parties in the administration of the provisions hereof be construed to waive or lessen the right of the other party to insist upon the performance in strict accordance with the terms hereof.

29.      NOTICES.  Any notice or document required or permitted to be delivered hereunder shall be in writing and deemed to be delivered or given when (i) actually received; or (ii) signed for or “refused” as indicated on the postal service return receipt.  Delivery may be by personal delivery with a signed receipt or by United States mail, postage prepaid, certified or registered mail, or by nationally-known overnight carrier, addressed to the parties hereto at the respective addresses set out opposite their names below, or at such other address as they may hereafter specify by written notice delivered in accordance herewith:

If to Landlord:	Guilford Development Group, L.L.C. 400 University Drive, Suite 201 Coral Gables, Florida  33134 Attention:  Frank W. Guilford, III, Member
If to Tenant:	Interval International, Inc. 6262 Sunset Drive Penthouse I Miami, Florida 33143 Attention:  David C. Gilbert, President

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With a required copy to: Interval International, Inc.
6262 Sunset Drive
Penthouse I
Miami, Florida 33143
Attention:  Legal Department

30.      INSURANCE.  Tenant shall not knowingly conduct or permit to be conducted any activity, or place any equipment, materials or other items in, on or about the Premises or the Project, which will in any way increase the rate of fire or liability or casualty insurance on the Project unless Tenant pays for all such increases; although it is understood that Tenant can use the Premises as permitted under Section 6 without being in violation of this provision.

a.             Property Insurance:

(1)           At all times during the Term, Tenant, at its sole cost and expense, will maintain a policy or policies of special form insurance insuring, in an amount not less than one hundred (100%) percent of the Full Insurable Value of the Project (including, without limitation, the Buildings and all leasehold improvements therein and Parking Area, Tenant’s personal property and on all items required to be insured by Tenant as set forth in Section 15) against loss or damage by fire, windstorm, explosion and other hazards and contingencies as are normally included in extended coverage policies with a Best’s A rated insurance company qualified to do business in the State of Florida having a Best’s Financial Size Category of not less than Class VIII.  The deductible amount under such insurance is subject to the prior written approval of Landlord, which shall not be unreasonably withheld or delayed (and recognizing the special windstorm deductible as may be standard in the industry).  As provided in Sections 5 and 15, the deductibles are the responsibility of Tenant.  The term “Full Insurable Value” as used in this Lease means the actual replacement or repair cost (excluding cost of replacement of excavations, foundations, grading, paving and landscaping) using like kind and quality materials.  Payments for losses thereunder in connection with the Project (other than Tenant’s personal property and on all items required to be insured by Tenant as set forth in Section 15) shall be made solely to Landlord or the mortgagee(s) of Landlord as their interest may appear or in accordance with the escrow requirements of Section 15 hereof.  Payments for losses thereunder in connection with Tenant’s personal property and on all items required to be insured by Tenant as set forth in Section 15.d shall be made solely to Tenant.  Tenant’s property insurance shall include rent loss coverage in order to provide coverage for Landlord for any rent abatement following casualty pursuant to Section 15.e.

(2)           Tenant shall, upon the written request of Landlord from time to time, provide Landlord with current certificates of insurance evidencing compliance with this Section 30.  If requested in writing by Landlord’s lender, Tenant will also provide copies of Tenant’s insurance policies required under this Lease.  If any such policies identify other locations of Tenant, the addresses of such other locations may be redacted, and Tenant may also redact other irrelevant but confidential information.  Such copies of the policies shall be delivered to Landlord and Landlord’s lender in confidence.

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b.             Liability Insurance:

(1)           Landlord may, but shall not be obligated to, maintain a policy or policies of commercial general liability and/or umbrella liability insurance with respect to the Project and the activities thereon.  If Landlord obtains such insurance, Tenant is not required to reimburse Landlord for any premiums in connection therewith.

(2)           Tenant agrees, that at all times during the Term (as well as prior and subsequent thereto if Tenant, its agents, employees, invitees and third persons in or about the Premises should then use or occupy any portion of the Premises), it will maintain commercial general liability insurance with respect to the Premises and Tenant’s activities therein and thereabout, insuring against liability for personal injury and property damage or a combination thereof, with deductibles of no more than $25,000.00, with the premiums thereon fully paid for on or before the due date, issued by a Best’s A rated insurance company qualified to do business in the State of Florida, having a Best’s Financial Size Category of not less than Class VIII, such insurance to afford minimum protection of not less than $5,000,000.00 combined single limit coverage or umbrella coverage for bodily injury, property damage or combination thereof.

c.             Landlord and Landlord’s mortgagee(s), if any, shall be named as additional insureds under Tenant’s property and liability insurance and shall include with the terms thereof contractual liability coverage and shall include ten (10) days’ notice of cancellation, to Landlord and its mortgagee(s).  Tenant shall deliver to Landlord a certificate or certificates evidencing such insurance reasonably acceptable to Landlord, and Tenant shall, at least thirty (30) days prior to the expiration of such policies, deliver to Landlord certificates of insurance evidencing the renewal of such policies, required hereunder.  Nothing in this Section 30 hereof shall prevent Tenant, so long as Tenant is the Original Tenant hereunder or is a successor by merger, consolidation or acquisition, from taking out the insurance of the kind and in the amounts provided for under this Section 30 under a blanket insurance policy or policies covering other properties as well as the Premises, provided, however, that any such policy or policies of blanket insurance shall otherwise comply as to endorsements and coverage with the provisions of this Section 30.

d.             Landlord and Tenant each hereby waives any and all rights of recovery, claim, action, or cause of action, against the other, its agents, officers, or employees, for any loss or damage that may occur to the Premises, or any improvements thereto or the Project of which the Premises are a part, or any improvements thereto, or any personal property of such party therein, by reason of fire, the elements, or any other causes which are, or could or should be insured against under the terms of the standard property insurance policies referred to in subsection a hereof, regardless of whether such insurance is actually maintained and regardless of the cause or origin of the damage involved.  Inasmuch as the above mutual waivers will preclude the assignment of any aforesaid claim by way of subrogation (or otherwise) to an insurance company (or any other person), Landlord and Tenant severally agree to give to each insurance company which has issued to it policies of insurance, written notice of the terms of said mutual waivers, and to have said insurance policies properly endorsed, if necessary, to prevent the invalidation of said insurance coverages by reason of said waivers.

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31.      RECORDING.  This Lease or any memorandum (other than Exhibit E) shall not be recorded without Landlord’s and Tenant’s prior written consent.

32.      TAX ON RENT.  If federal, state or local law now or hereafter imposes any sales, use or other tax, assessment, levy or other charge (other than any income, inheritance or estate tax) directly or indirectly upon:  (i) Landlord with respect to this Lease; (II) Tenant’s use or occupancy of the Premises; (iii) any Base Rent or Additional Rent payable under this Lease; or (iv) this transaction but only if any tax is due at execution of this Lease, then Tenant will pay the amount thereof as Additional Rent to Landlord with the payment of such Base Rent or Additional Rent to which such amount relates and otherwise upon demand.  Tenant acknowledges that the applicable sales tax as of the date hereof is seven (7%) percent.

33.      ESTOPPEL CERTIFICATES.  Tenant will from time to time, within fifteen (15) days after being requested to do so by Landlord, execute, acknowledge and deliver to Landlord (or, at Landlord’s request, to any existing or prospective purchaser, transferee, assignee or mortgagee of any or all of the Premises, the Project, any interest therein or any of Landlord’s rights under this Lease) an instrument in recordable form, certifying:  (i) that this Lease is unmodified and in full force and effect (or, if there has been any modifications thereof, that it is in full force and effect as so modified, stating therein the nature of such modifications); (ii) as to the dates to which the Base Rent and any Additional Rent and any other charges arising hereunder have been paid; (iii) as to the amount of any prepaid Rent or any credit due to Tenant hereunder; (iv) that Tenant has accepted possession of the Premises, and the date on which the Term of this Lease commenced; (v) as to whether, to the best of the Tenant’s knowledge, Landlord or Tenant is then in default in performing any of its obligations hereunder (and, if so, specifying the nature of each such default); and (vi) as to any other fact or condition reasonably requested by Landlord or such other addressee.  Such instrument shall contain an express acknowledgment that the statements contained therein are being relied upon by Landlord and any such other addressee.

Landlord will from time to time, within fifteen (15) days after being requested to do so by Tenant, execute, acknowledge and deliver to Tenant (or, at Tenant’s request, to a third party prospective or permitted assignee or sublessee) an instrument certifying (i) that this Lease is unmodified and in full force and effect (or, if there has been any modifications thereof, that it is in full force and effect as so modified, stating therein the nature of such modifications); (ii) as to the dates to which the Base Rent and any Additional Rent and any other charges arising hereunder have been paid; (iii) as to the amount of any prepaid Rent or any credit due to Tenant hereunder; (iv) as to whether, to the best of the Landlord’s knowledge, Landlord or Tenant is then in default in performing any of its obligations hereunder (and, if so, specifying the nature of each such default); and (v) as to any other fact or condition reasonably requested by Tenant or such other addressee.  Such instrument shall contain an express acknowledgment that the statements contained therein are being relied upon by Tenant and any such other addressee.

34.      ACCESS.  Tenant and its employees shall have access to the Project twenty-four (24) hours a day, seven (7) days a week, subject to emergency events and Force Majeure.

35.      BROKERAGE COMMISSION.  Landlord represents to Tenant that it has not dealt with any broker, agent or finder in connection with this Lease other than Capital Realty

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Services, Inc. (“Landlord Broker”) and CBRE, Inc. (“Tenant’s Broker”).  Tenant represents to Landlord that is has not dealt with any broker, finder or salesperson in connection with this Lease other than Landlord’s Broker  and Tenant’s Broker.  Landlord will pay all leasing commissions due to Landlord’s Broker in connection with this Lease pursuant to the terms of a separate agreement, and Landlord shall cause Landlord’s Broker to pay a commission to Tenant’s Broker pursuant to the terms of a separate agreement between Landlord’s Broker and Tenant’s Broker.  Except as aforesaid, each party hereto hereby represents and warrants to the other that, in connection with the leasing of the Premises hereunder, they have not dealt with any real estate broker, agent or finder, and there is no commission, charge or other compensation due or payable on account thereof.  Each party hereto shall defend, indemnify and hold harmless the other from and against any liabilities/claims, expenses and costs (including reasonable attorneys’ fees) arising out of any inaccuracy in such party’s representation.

36.      SUCCESSORS.  The terms, provisions, covenants and conditions contained in this Lease shall apply to, inure to the benefit of and be binding upon the parties hereto, and their respective successors in interest and legal representatives.

37.      CONSTRUCTION OF LEASE AGREEMENT.  The titles, captions and item numbers in this Lease are inserted for convenient reference only and do not define or limit the scope or intent and should not be used in the interpretation of any item, Section, subsection or provision of this Lease.  Whenever the context requires or permits, the singular shall include the plural, and plural shall include the singular and the masculine, feminine and neuter shall be freely interchangeable.  This Lease was the product of negotiations between representatives for Landlord and representatives for Tenant and the language of this Lease should not be more strictly construed against either party hereto.  If any term or provision of this Lease is susceptible to more than one interpretation, one or more of which render it valid and enforceable, and one or more of which would render it invalid or unenforceable, such term or provision shall be construed in a manner that would render it valid and enforceable.

38.      RADON GAS.  Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time.  Levels of radon that exceed federal and state guidelines have been found in buildings in Florida.  Additional information regarding radon and radon testing may be obtained from your county health department.

39.      SATELLITE DISH.  Subject to compliance with all applicable Legal Requirements, Tenant shall have the exclusive right to place, from time to time, satellite dishes, antennae and other communication or transmission devices (such devices being referred to as the “Satellite Dishes”) on the roof of each of the Buildings.  Additionally, Tenant shall have the right to install such wire, conduits, cables and other materials as necessary to connect the Satellite Dishes to Tenant’s allied machinery and equipment in the Premises (the Satellite Dishes and any such connecting material being collectively referred to as the “Satellite Dish Facilities”).  However, prior to the installation of any Satellite Dish Facilities, Tenant, at its expense, shall be required to provide Landlord with a certification by a registered professional structural engineer that the structural system of the roof is adequate to support the superimposed loads produced by any Satellite Dishes at the location on the roof of such

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Satellite Dishes and Tenant, at its expense, shall be required to provide Landlord with satisfactory assurance that the existing construction materials of the roof (such as the roof membrane) shall be protected from the Satellite Dishes.  At the expiration or earlier termination of the Lease, Tenant, at its expense, may remove the Satellite Dish Facilities belonging to Tenant, but Tenant shall remove any Satellite Dish Facilities belonging to an unaffiliated third party.  Any work required to restore the roof of any other part of the Buildings from any damage occasioned by the installation, maintenance or removal of the Satellite Dish Facilities shall be borne by Tenant, and Tenant shall indemnify and hold harmless Landlord from any costs, expenses, liabilities and the like, including reasonable attorneys’ fees, occasioned by any damage to property and injury or death to persons caused by such installation, maintenance or removal, except to the extent caused by the negligence, willful misconduct or breach of this Lease of Landlord. Landlord hereby ackowledges and agrees that any Satellite Dishes and Satellite Dish Facilities installed at the Premises by Tenant prior to the date hereof pursuant to the terms of the Original Lease comply with all of the requirements set forth in this Section 39 and are hereby deemed approved by Landlord.

Tenant shall be responsible for the installation of all Satellite Dish Facilities (including the attachment thereto to the roof) and for all costs and expenses arising from and relating to the Satellite Dish Facilities and the installation, operation, maintenance and repair thereof, and, if Tenant elects to remove the Satellite Dish Facilities, or for those Satellite Dish Facilities for which removal is required, for the removal thereof.

The installation, maintenance and removal of the Satellite Dish Facilities shall be performed by contractors and workers first approved by Landlord, which approval will not be unreasonably withheld or delayed.  However, Landlord reserves the right to require Tenant, at Tenant’s expense, to use Landlord’s roofing contractor in connection therewith if, in Landlord’s reasonable judgment, the Landlord’s roof warranty may be affected by any such work.

Landlord agrees that Tenant and engineering and maintenance personnel reasonably approved by Landlord shall have access to the Satellite Dish Facilities in order to install, operate, maintain, inspect and remove, as required, the Satellite Dish Facilities.  Landlord shall not unreasonably interfere with or impair the use, operation, maintenance or repair of the Satellite Dish Facilities.

Tenant may sublease to unaffiliated third parties rooftop rights for the installation of Satellite Dish Facilities, without Landlord’s consent, but Tenant shall give Landlord written notice of the existence of any such subleases from time to time upon Landlord’s request.  All revenues derived from such third party subleases shall belong to Tenant.

The Satellite Dish Facilities shall not be considered a part of the Premises for the purpose of determining Tenant’s rental obligations under the Lease and no Rent therefor shall be charged during the Term (including any renewal period specifically provided under this Lease).  However, Tenant’s use of the Satellite Dish Facilities is otherwise subject to all of the terms and conditions of this Lease with respect to Tenant’s use and occupancy of the Premises, including, without limitation, Sections 10, 21 and 30.

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40.      COMMUNICATION SYSTEMS.  Tenant will have the right to install its telephone, communications, data and related equipment including wiring and cables in the Building’s core and/or chase facilities at Tenant’s sole expense and subject to compliance with all applicable Legal Requirements.

41.      MISCELLANEOUS.

a.             Anything in this Lease to the contrary notwithstanding, under no circumstances shall Landlord have any lien or possessory interest in Tenant’s business papers and records, including the media on which those records and data are stored.

b.             Landlord and Tenant acknowledge their duty to exercise their rights and remedies, and perform their obligations reasonably and in good faith.

c.             Wherever in this Lease, the consent or approval of either the Landlord or the Tenant is required, such consent or approval shall not be unreasonably withheld or delayed, unless the Lease expressly provides that such consent shall be in such party’s sole discretion.  Whenever the provisions of this Lease allow the Landlord or the Tenant to perform or not perform some act at their option or in their judgment, the decision of the Landlord and Tenant to perform or not perform such act must be reasonable.  However, if any such items would affect the structure, base building systems, or exterior of a Building, then Landlord’s consent shall be in its sole discretion.

d.             Time is of the essence of this Lease.

42.      CONFIDENTIALITY.  The parties agree that the terms of this Lease are confidential information and shall not be disclosed to third parties (other than Landlord’s prospective purchasers or lenders, members, partners, employees, officers, directors, shareholders, leasing and management personnel, attorneys, accountants, and any other consultants, and any other person or entity to whom a landlord would normally disclose lease provisions) and other than Tenant’s prospective purchasers or lenders, members, partners, employees, officers, directors, shareholders, management personnel, attorneys, accountants, and any other consultants, and any other person or entity to whom a tenant would normally disclose lease provisions, and other than Tenant’s prospective subtenants or assignees) except pursuant to subpoena, court order, governmental subpoena or except as otherwise required by law or as part of a public stock offering by Tenant.  In addition, Tenant may make press releases concerning this Lease.

43.      EXHIBITS AND RIDERS.  The Exhibits and Rider(s), if any, attached to this Lease are made a part hereof and incorporated herein by this reference.

44.      GOVERNING LAW.  This Lease shall be construed in accordance with and governed by the laws of the State of Florida.

45.      ENVIRONMENTAL PROVISIONS.

a.             Tenant shall not knowingly permit to remain in, incorporate into, use or otherwise place or dispose of at the Premises or in the Project any toxic or hazardous materials

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unless (i) such materials are in small quantities, properly labeled and contained, (ii) such materials are handled and disposed of in accordance with accepted industry standards for safety, storage, use and disposal, (iii) such materials are for use in the ordinary course of business (i.e., as with office or cleaning supplies) and (iv) such materials are handled and disposed of in accordance with all applicable Legal Requirements.  If Tenant ever has knowledge of the presence in the Premises or the Project of toxic or hazardous materials, Tenant shall notify Landlord thereof in writing promptly after obtaining such knowledge.  For purposes of this Lease, hazardous or toxic materials shall mean hazardous or toxic chemicals or any materials containing hazardous or toxic materials to be classified as hazardous or toxic as then prescribed by the prevalent industry practice and standards or as set from time to time by EPA or OSHA or as defined under 29 CFR 1910 or 29 CFR 1925 or other applicable Legal Requirements.

b.             If Tenant or its employees, agents or contractors shall ever violate the provisions of subsection a, above, or if Tenant’s acts, negligence, breach of this provision or business operations directly and materially expand the scope of any contamination from toxic or hazardous materials, then Tenant, at its sole cost and expense, shall clean-up, remove and dispose of the material causing the violation, in compliance with all applicable Legal Requirements and repair any damage to the Premises or Project within such period of time as may be reasonable under the circumstances after written notice by Landlord, provided that such work shall commence not later than thirty (30) days from such notice and be diligently and continuously carried to completion by Tenant or Tenant’s designated contractors.  Tenant shall notify Landlord of its method, time and procedure for any clean-up or removal of toxic or hazardous materials under this provision; and shall obtain Landlord’s written approval, not to be unreasonably withheld or delayed.  Tenant shall indemnify and hold harmless Landlord against any costs, fines, damages, expenses, and other liabilities (including, but not limited to, reasonable attorneys’ fees and costs) arising therefrom.

c.             To the extent the presence of hazardous or toxic materials at the Project is caused by Landlord’s negligence, willful misconduct or breach of this Lease, then Landlord will be responsible for the clean-up, removal and disposal costs thereof, all in accordance with applicable Legal Requirements and accepted industry standards, and Landlord shall indemnify and hold harmless Tenant against any costs, fines, damages, expenses, and other liabilities (including, but not limited to, reasonable attorneys’ fees and costs) arising therefrom.

46.      NO PARTNERSHIP.  Nothing in this Lease creates any relationship between the parties other than that of lessor and lessee and nothing in this Lease constitutes the Landlord a partner of the Tenant or a joint venturer or member of a common enterprise with the Tenant.

47.      RIGHT OF FIRST OFFER.

a.             As of the date hereof, Landlord hereby grants to Tenant a continuing right of first offer to purchase the Project, exercisable by Tenant as follows:  Landlord shall notify Tenant in writing that it intends to place the Project on the market for sale to an unaffiliated third party.  By written notice delivered to Landlord within ten (10) business days after receipt of notice of such intent, Tenant may elect to pursue negotiations for the purchase of the Project.  If Tenant fails to so notify Landlord within such ten (10) business day period, then the right of first offer shall be deemed to be waived by Tenant and of no further force or effect for a period of one

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(1) year from the date that Landlord notified Tenant of Landlord’s intent to sell the Project.  If Landlord sells the Project to an unaffiliated third party during such one(1) year period, then the right of first offer shall be void and of no further force or effect and shall not be applicable to Landlord’s successor.  If Landlord does not sell the Project within such one (1) year period, then the right of first offer shall be deemed to be applicable the next time that Landlord intends to place the Project on the market for sale to an unaffiliated third party after the expiration of such one (1) year period.

b.             If Tenant elects to pursue negotiations, then Tenant and Landlord shall, within twenty (20) days after Tenant’s notice to Landlord, enter into good faith negotiations for the purchase of the Project by Tenant.  If, despite such good faith negotiations, the parties are unable to execute an agreement for the sale and purchase of the Project within thirty (30) days after the date that such negotiations commence, for any reason whatsoever, then Landlord shall have the right to sell the Project to any entity at any price within ten (10%) percent of the price that Landlord offered to sell the Project to Tenant.  In addition, Tenant shall execute, within ten (10) days after the expiration of the thirty (30) day negotiation period, an instrument in recordable form in order to evidence that Tenant and Landlord were unable to reach an agreement.  Notwithstanding anything contained herein to the contrary, Tenant shall not be permitted to exercise the right of first offer while in default of this Lease, subject to any applicable default notice and grace or cure periods.

c.             Notwithstanding the foregoing, the right of first offer shall not be applicable to any transfers by Landlord to (x) a lender as part of a financing by Landlord or (y) any corporation or other legal entity that is an affiliate, subsidiary, parent or successor of Landlord, or to a corporation or other legal entity into or with which Landlord may be merged or consolidated or to any entity as part of an intra-family transfer for estate planning purposes or otherwise, and/or (ii) transfer of Landlord’s interest pursuant to a foreclosure or deed in lieu thereof; provided, further, that Landlord may not effect such a transfer if the purpose of the transfer is to transfer the Project to an unrelated third party and to circumvent Tenant’s right of first offer set forth herein.

d.             The right of first offer shall be exercisable only by the Original Tenant, any affiliated successor to the Original Tenant or by the first (1st) unaffiliated successor to the Original Tenant.  Upon any further assignment or other transfer of this Lease by the Original Tenant, any affiliated successor or the first (1st) unaffiliated successor between the date of this Lease and the closing date of the sale of the Project to Tenant (except for a transfer not requiring Landlord’s consent), the right of first offer shall, at Landlord’s option, be deemed void and of no force or effect.

48.      RENEWAL OPTIONS.

a.             Grant of Renewal Options.  Tenant may extend the Term of the Lease on the same terms and conditions of the Lease, except as otherwise provided herein, for the Renewal Periods, as hereinafter defined (the “Renewal Option”).

b.             Renewal Periods.  There shall be two (2) Renewal Periods, herein sometimes called the “First Renewal Period” and the “Second Renewal Period” (each, a

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“Renewal Period”).  The “First Renewal Period” is the period commencing on the first day after the last day of the initial Term (the “First Renewal Period Commencement Date”) and ending on the last day of the sixtieth (60th) full calendar month thereafter, unless ended earlier under the Lease (i.e., the First Renewal Period is from October 1, 2026 through September 30, 2031).  The “Second Renewal Period” is the period commencing on the first day after the last day of the First Renewal Period (the “Second Renewal Period Commencement Date”) and ending on the last day of the sixtieth (60th) full calendar month thereafter, unless ended earlier under the Lease (i.e., the Second Renewal Period is from October 1, 2031 through September 30, 2036).

c.             Exercise of Renewal Options.  The Renewal Option for the First Renewal Period (the “First Renewal Option”) shall be exercisable by delivery of written notice from Tenant to Landlord of Tenant’s election to exercise the First Renewal Option at least twelve (12) months before the First Renewal Period Commencement Date, time being of the essence.  The Renewal Option for the Second Renewal Period (the “Second Renewal Option”) shall be exercisable by delivery of written notice from Tenant to Landlord of Tenant’s election to exercise the Second Renewal Option at least twelve (12) months before the Second Renewal Period Commencement Date, time being of the essence.

d.             Renewal for One Building.  Tenant may elect in its sole and absolute discretion to exercise the Renewal Option with respect to only one (1) of the Buildings at the Project.  If Tenant elects to exercise the Renewal Option for one (1) of the Buildings only, then Tenant shall exercise the First Renewal Option or Second Renewal Option, as applicable, at least twenty (20) months prior to the First Renewal Period Commencement Date or the Second Renewal Period Commencement Date, as applicable (instead of twelve (12) months as provided in Section 48.c hereof).  In the event that Tenant properly exercises a Renewal Option with respect to only one (1) of the Buildings in accordance with this Section 48 (a “Renewed Building”), then the Lease with respect to the Building for which the Renewal Option was not exercised (the “Non-Renewed Building”) shall be terminated on the commencement date of the Renewal Period for the Renewed Building and Tenant shall surrender the Non-Renewed Building in accordance with the applicable terms of this Lease as of the expiration of the then-current Term (including without limitation that Tenant at its expense shall remove all Exterior Signs except for Exterior Signs attached to the Renewed Building, and thereafter Landlord in its sole discretion may grant signage rights to one or more tenants of the Non-Renewed Building, it being agreed that Tenant shall no longer have exclusive signage rights for the Project except for the Exterior Signs attached to the Renewed Building).  Landlord and Tenant agree to reasonably cooperate to execute an amendment to this Lease on or prior to the commencement date for a Renewed Building to memorialize the renewal of this Lease for the Renewed Building, including without limitation, the recitation of the Term, Premises and Base Rent as necessary to reflect the removal of the Non-Renewed Building from the Premises and any other required conforming changes, including without limitation the following:  (i) Tenant’s Proportionate Share shall be a fraction, the numerator of which is the Rentable Area of the Renewed Building and the denominator of which is the Rentable Area of the Project; and (ii) Tenant shall be entitled to use Tenant’s Proportionate Share of the total number of parking spaces in the Parking Area, it being agreed that future tenants of the Non-Renewed Building shall have the right to utilize the remainder of the Parking Area and that Landlord may grant other tenants the right to exclusive parking spaces; and (iii) the Project thereafter shall be a multi-tenant project as opposed to a single-tenant project, and the amendment shall include

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provisions that are customarily included in leases for multi-tenant projects, including without limitation that:

(A)          All Parking Areas, landscaped areas, sidewalks, means of ingress and egress to the Project, security features serving the Project, and any facilities or systems that are shared by both Buildings (including without limitation the lobby) shall thereafter be deemed to be common areas under Landlord’s exclusive management and control, and Tenant shall have the use of such common areas in common with tenants of the Non-Renewed Building; and

(B)          Landlord shall maintain and repair the common areas and Tenant shall pay to Landlord on a monthly basis Tenant’s Proportionate Share of estimated Operating Costs for the common areas pursuant to a customary operating cost provision (including without limitation an annual reconciliation of estimated versus actual common area Operating Costs and shall be administered as follows:  The Operating Costs for the calendar year in which the applicable Renewal Period commences shall be the actual Operating Costs for such year, and thereafter there shall be a cap on increases in Operating Costs (other than non-controllable expenses such as, without limitation, utilities) equal to five (5%) percent per year on a cumulative and compounding basis); and

(C)          Landlord shall pay all Real Estate Taxes for the Project and maintain property and liability insurance for the Project (and all other forms of insurance as may be required by Landlord’s lender), and Tenant shall pay to Landlord on a monthly basis Tenant’s Proportionate Share of estimated Real Estate Taxes and Landlord’s insurance for the Project in the same manner as Tenant’s payment of Operating Costs as described hereinabove except that there shall be no cap on increases in Real Property Taxes and/or insurance; and

(D)          Operating Costs will not include (1) mortgage principal or interest; (2) ground lease payments; (3) leasing commissions; (4) costs of advertising space for lease in the Project; (5) costs for which Landlord is reimbursed by insurance proceeds or from other tenants (other than such tenants’ regular contributions to Operating Costs); (6) the costs of constructing additional buildings or additions to existing buildings; (7) legal fees incurred for negotiating leases or collecting rents; (8) costs directly and solely related to the maintenance and operation of the entity that constitutes the Landlord, such as accounting fees incurred solely for the purpose of reporting Landlord’s financial condition, (9) costs of capital repairs, improvements, and replacements, except to the extent (i) required to comply with laws not in effect on the Commencement Date of the applicable Renewal Term, or (ii) the capital item will result in a verifiable expense savings to Tenant, in which case the monthly amortization of the capital item in question shall be the sum of the (x) quotient obtained by dividing the cost of the capital improvement the number of months of useful life of such improvement based on generally accepted accounting principles plus (y) interest imputed on the unamortized portion at the interest rate customarily utilized by Landlord or its affiliates in its amortization of capital improvements; (10) expenses for tenant improvement work or allowances, inducements, and other concessions for any tenant; (11) depreciation of; (12) compensation paid to officers or executives of Landlord above the level of property manager; or (13) professional fees incurred in connection with preparing or enforcing any lease; and

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(E)           Not more than one (1) time per year, Tenant shall have the right to cause Landlord’s books and records with respect to Operating Costs, Real Estate Taxes and insurance to be audited by an independent certified public accountant of Tenant’s choosing who shall not be compensated on a contingency fee basis).  Landlord shall cause such books and records to be made available for such inspection during such normal business hours in Landlord’s management office, upon ten (10) business days’ prior notification to Landlord.  Such audit shall be done in accordance with generally accepted accounting principles, consistently applied.  If, at the conclusion of such audit, Tenant’s audit of such expenses for the preceding year indicates that Tenant made an overpayment to Landlord for such preceding year, Landlord shall remit the amount of such overpayment to Tenant within thirty (30) days after receipt of notice from Tenant of the amount of such overpayment if no default is then continuing beyond applicable notice and cure periods.  If, at the conclusion of such audit, such audit reveals an underpayment by Tenant, Tenant will remit the amount of such underpayment within thirty (30) days of Tenant becoming aware of such underpayment.  Should Landlord disagree with the results of Tenant’s audit, Landlord and Tenant shall refer the matter to a mutually acceptable independent certified public accountant, who shall work in good faith with Landlord and Tenant to resolve the discrepancy.  The fees and costs of such independent accountant to which such dispute is referred shall be borne by the unsuccessful party and shall be shared pro rata to the extent each party is unsuccessful as determined by such independent certified public account, whose decision shall be final and binding.  Such books and records and the results of any such audit are to be kept strictly confidential and are not to be made available or published by Tenant to anyone, unless required by any applicable legal requirement or governmental authority.  Landlord shall pay the cost of Tenant’s initial audit if the total amount of Operating Costs, Real Estate Taxes and insurance used for the calculation of pass-throughs for the year in question exceeded five (5%) percent or more of the total amount of Operating Costs, Real Estate Taxes and insurance that should properly have been used; and

(F)           Landlord shall be entitled to make such changes to the common areas as Landlord deems to be advisable in its sole discretion in order to convert the Project into a multi-tenant project (including without limitation changes to the Parking Area and lobby), so long as Tenant’s access to the Renewed Building is not adversely affected in any material respect; and

(G)          Tenant’s self-help right to cure a Landlord default as set forth in Section 15 above shall only be applicable to the extent the default is curable wholly within the Renewed Building (it being agreed that Tenant will not have such self-help right with respect to a Landlord default relating to any common areas); and

(H)          At Landlord’s option in Landlord’s sole discretion, Tenant shall be required to remove, at Tenant’s expense, any and all of Tenant’s security features serving the entire Project including without limitation any guardhouses and lobby security desks.  Notwithstanding the foregoing, if the parties reach an agreement for an additional building to be built on the Land pursuant to Section 49, and Tenant thereafter exercises a Renewal Option, Tenant shall not have the right to renew for only one (1) Building pursuant to this subsection d; in such event Tenant may only renew the Lease for the entire then-existing Premises.

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e.             Conditions of Exercise.  Tenant may only exercise a Renewal Option, and an exercise thereof shall only be effective if at the time of Tenant’s exercise of such Renewal Option and on the respective Renewal Period Commencement Date the Lease is in full force and effect and no default exists under the Lease beyond the expiration of the applicable grace period, if any.  If a Renewal Option is not exercised as provided above, such Renewal Option (and any subsequent Renewal Option) shall terminate and Tenant shall not thereafter have any further rights hereunder.  Tenant’s right to exercise the Second Renewal Option is conditioned upon Tenant’s proper renewal of the Term for the First Renewal Period.

f.             Rent.  The Base Rent per square foot of Rentable Area of the Premises payable during each Renewal Period shall be the Market Rental Rate, as hereinafter defined.  “Market Rental Rate” of the Premises shall be an amount determined by Landlord on the basis of ninety-five (95%) percent of the then-prevailing market rental rate for office space in Comparable Class Buildings for new tenant lease transactions on an “as-is” basis taking into account tenant improvement allowances, rent abatements or other concessions then being offered in Comparable Class Buildings by tenants of comparable quality, size and creditworthiness.

g.             Determination of Market Rental Rate.  Commencing one hundred eighty (180) days prior to the deadline for Tenant to exercise each Renewal Option, Tenant shall have the right to request Landlord’s determination of the Base Rent for the upcoming Renewal Period.  Landlord shall notify Tenant of its determination no later than thirty (30) days thereafter so that Tenant shall have sufficient time to decide whether to elect to renew the Lease.  If, despite good faith negotiation, Landlord and Tenant cannot agree on the Base Rent for the upcoming Renewal Period on or before thirty (30) days prior to the deadline for Tenant to exercise its Renewal Option, then Tenant must nonetheless timely elect to exercise its Renewal Option and be bound by the result of the appraisal process described below.  Upon Tenant’s exercise, Landlord and Tenant (within ten (10) days) shall each select an independent disinterested MAI appraiser, which appraisers shall complete their written appraisals of the Market Rental Rate within twenty (20) days thereafter.  Landlord and Tenant shall each bear the costs of their respective appraisers.  If the difference between the two appraisals is equal to or less than ten (10%) percent of the higher appraisal, then the average of such two appraisals shall be the Base Rent for the upcoming Renewal Period.  If the difference between the two appraisals is more than ten (10%) percent of the higher appraisal, then the appraisers shall mutually select a third independent disinterested MAI appraiser (within ten (10) days).  Such third appraiser shall then (within ten (10) days) make its determination of the Market Rental Rate of the Premises, and the average of such three appraisals shall be the Base Rent for the upcoming Renewal Period.  Landlord and Tenant shall each pay one-half (1/2) of the fees and costs of such third appraiser.  At a minimum, each of the MAI appraisers shall be disinterested commercial real estate appraisers doing business in west Miami-Dade County, Florida, and properly licensed, with substantial experience in the west Miami-Dade County, Florida office markets.  If the dispute is not finally resolved as of the commencement of the applicable Renewal Period, then Tenant shall pay the Base Rent for the Renewal Period for the immediately prior year, increased by CPI, until such dispute is finally resolved.  Upon the final determination, then Tenant shall receive a credit, or Tenant shall pay any underpayment to Landlord within thirty (30) days of such determination, as applicable, such credit or payment to be equal to the difference between the Base Rent then being paid by Tenant and the Base Rent that Tenant should have been paying, as determined by such appraisal process.

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h.             As-Is.  Tenant shall be deemed to have accepted the Premises in “as-is” condition as of the commencement of each Renewal Period, subject to any other repair and maintenance obligations of Landlord under the Lease, it being understood and agreed that Landlord shall have no additional obligation to renovate or remodel the Premises or any portion of the Project as a result of Tenant’s renewal of the Lease.

i.              No Further Renewal.  Following expiration of the Second Renewal Period as provided herein, Tenant shall have no further right to renew or extend the Lease.

j.              Assignees/Subtenants.  The Renewal Option as set forth in this Section 48 shall not be personal to Original Tenant and shall run to the benefit of any permitted assignees of Original Tenant’s interest under this Lease subject to Landlord’s approval not to be unreasonably withheld, conditioned or delayed.  In addition, solely in connection with an approved sublease of the entire Premises for the entire remaining Term, the right to exercise the Renewal Option as set forth in this Section 48 may be assigned by Tenant to such subtenant so that such subtenant shall have the right to exercise the Renewal Option and enter into a direct lease with Landlord commencing on the first day of the Renewal Period, provided that (i) as part of Tenant’s assignment of the Renewal Option to such subtenant, Tenant expressly and irrevocably waives in writing Tenant’s right to exercise the Renewal Option, and (ii) as a condition to the effectiveness of the exercise by such subtenant of the Renewal Option, following such subtenant’s exercise of the Renewal Option and prior to the expiration of the then-current Term, such subtenant and Landlord shall enter into a lease of the Premises on all of the same terms and conditions of this Lease and as applicable to the Renewal Period (including without limitation the Base Rent to be paid for such Renewal Period as determined as provided above).

49.      POTENTIAL EXPANSION INQUIRY.  Tenant shall have the right to require Landlord to provide certain material terms under which Landlord would agree to construct a new building on the Land of not less than thirty thousand (30,000) and no more than sixty thousand (60,000) square feet by providing written notice to Landlord (the “Expansion Inquiry Notice”).  The Expansion Inquiry Notice shall include a reasonable level of specificity on Tenant’s requirements for any such new building and the material terms on any proposed lease amendment to be entered into in connection therewith.  The request for such material terms and specifications may include, without limitation, (i) the approximate cost to build any such building, (ii) timeline of construction, (iii) material lease terms in the event that any such building is added to the Premises and (iv) any other material terms reasonably requested by Tenant.  Landlord shall use commercially reasonable efforts to respond (the “Expansion Inquiry Response”) to any such Expansion Inquiry Notice within thirty (30) days after receipt thereof or as soon as reasonably practicable thereafter.  Landlord shall use commerically reasonable efforts to include in any such Expansion Inquiry Response detailed responses on each and every query included in the Expansion Inquiry Notice.  Upon receipt of the Expansion Inquiry Reponse, Tenant may, in its sole and absolute discretion, engage Landlord on further negotiations on the potential construction of an additional building to be added to the Premises.  Tenant acknowledges that an additional building to be built on the Land will reduce the Parking Area available to the Project.  Landlord and Tenant each agree to negotiate in good faith thereafter on a commercially reasonable and market agreement in connection with such construction and the leasing thereof by Tenant; provided, however, Landlord and Tenant agree that, notwithstanding anything to the contrary set forth in this Lease, the Term of the

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then-existing Premises and the term for any such new building to be added to the Premises, shall be for a period of ten (10) years commencing on the date of substantial completion of any such new building and the commencement of Tenant’s rental obligations with respect thereto.  In the event that Landlord and Tenant are able to come to a mutually acceptable agreement regarding the addition of any such future building to the Premises, the parties shall act in good faith to promptly complete an amendment to this Lease reflecting any new lease terms required in connection with such construction and Tenant and Landlord’s new rights and obligations relating thereto.

The parties acknowledge that despite good faith negotiations, all of the essential terms for the leasing of a new building would need to be agreed to (including without limitation improvements and rental rates, which would be a function of total project costs), which essential terms shall be acceptable to the parties in their sole and absolute discretion, and the development and construction of a new building on the Land would be subject to Landlord being able to obtain construction financing and any and all required governmental permits and approval therefor, all on terms acceptable to Landlord in its sole and absolute discretion.  Except to negotiate in good faith, neither Landlord nor Tenant shall have any obligation or liability whatsoever if the parties fail to reach agreement for a lease for a new building on the Land, and even a failure to negotiate in good faith shall have no effect whatsoever on the obligations of Landlord and Tenant pursuant to this Lease (it being acknowledged and agreed that any breach of this Section shall in no event constitute a default by either party under this Lease, and that any remedies as between Landlord and Tenant in connection with any such negotiations shall be pursued separately from this Lease).

Notwithstanding anything to the contrary contained herein:  (a) Tenant may provide an Expansion Inquiry Notice only if at such time the Lease is in full force and effect and no default exists under the Lease beyond the expiration of the applicable grace period, if any; and (b) if there is a foreclosure of Landlord’s interest in the Project or deed-in-lieu of foreclosure, then this Section 49 shall automatically and without further notice or instrument be deemed to be void and of no further force or effect; and (c) Tenant’s right to provide an Expansion Inquiry Notice shall automatically and without further notice or instrument be deemed to be void and of no further force or effect as of September 30, 2022.

50.        OFAC COMPLIANCE/PATRIOT ACT.  Each of Landlord and Tenant represents and warrants that:  (a) neither it nor any person or entity that directly or indirectly owns an interest in it nor any of its officers, directors, or managing members is a person or entity (each, a “Prohibited Person”) with whom U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute, executive order (including Executive Order 13224 (the “Executive Order”) signed on September 24, 2001 and entitled “Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism”), or other governmental action, (b) its activities do not violate the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001 or the regulations or orders promulgated thereunder (as amended from time to time, the “Money Laundering Act”) (i.e., Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”), and (c) throughout the Term of this Lease, Landlord

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and Tenant shall comply with the Executive Order, the Money Laundering Act, and the Patriot Act.

51.        SECURITY DEPOSIT.  There is no security deposit required to be posted by Tenant under this Lease.  If Landlord is holding a security deposit under the Original Lease, Landlord agrees to to promptly return the security deposit to Tenant within thirty (30) days after the Commencement Date (or if the security deposit was in the form of one or more Letters of Credit and if Landlord cannot locate the original(s) thereof, Tenant shall provide copies thereof to Landlord and Landlord will provide a letter to the issuer(s) authorizing the issuer(s) to cancel the Letter(s) of Credit).

52.      GUARANTY.  Simultaneously with the execution of this Lease, Tenant shall cause its parent company, INTERVAL LEISURE GROUP, INC., a Delaware corporation, to execute and deliver to Landlord that certain Unconditional Guaranty attached hereto and made a part hereof as Exhibit F.

53.      LANDLORD’S RECAPTURE OPTION.

a.             Option to Recapture Portion of Parking Area.  Notwithstanding anything to the contrary contained in this Lease, Landlord shall have the option (the “Parking Recapture Option”) to recapture a portion of the Parking Area consisting of approximately 20,000 square feet, as more particularly shown on Exhibit G attached hereto and made a part hereof (the “Parking Recapture Area”), exercisable upon ninety (90) days’ written notice to Tenant (the “Parking Recapture Effective Date”).  In no event may Landlord recapture more than a total of fifty-five (55) parking spaces (the actual number of parking spaces recaptured by Landlord is hereinafter referred to as the “Actual Recaptured Spaces”).  If Landlord exercises the Parking Recapture Option, Landlord at its expense shall provide a survey and legal description of the Parking Recapture Area, and as part of Landlord’s exercise of the Parking Recapture Option, Landlord shall confirm that, if Tenant provides an Expansion Inquiry Notice and the parties enter into negotiations as provided in Section 49 above, such expansion to the Premises can be accomplished without the Parking Recapture Area, or in the alternative, that Landlord would provide alternative replacement parking (which may be structured parking) to allow for an additional building on the remaining Land (it being intended that Landlord’s exercise of the Parking Recapture Option in and of itself should not be a basis for Landlord not being able to accommodate construction of an additional building as contemplated in Section 49; and in addition, it is intended that if Landlord determines that structured parking will be constructed, the incremental cost of structured parking over surface parking should not be included in the determination of the rent for an additional building pursuant to Section 49 to the extent that structured parking is needed to accommodate parking for an additional building due to the elimination of the spaces in the Parking Recapture Area; unless Tenant requests additional spaces in a parking structure as part of the negotiations for an additional building pursuant to Section 49).

b.             Modification of Parking Area.  If Landlord exercises the Parking Recapture Option, Landlord at its expense will relocate the fence/wall to enclose the remainder of the Parking Area and will make all other necessary modifications to the Parking Area, including paving, striping, curbing and landscaping.

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c.             Base Rent Reduction.  Commencing on the Parking Recapture Effective Date and continuing for the remainder of the initial Term, Tenant shall be entitled to a monthly Base Rent reduction equal to $45.00 per space per month multiplied by the number of Actual Recaptured Spaces (the “Base Rent Reduction”).

d.             Amendment.  If Landlord exercises the Parking Recapture Option, the parties will enter into an amendment to this Lease to memorialize such exercise and the corresponding Base Rent Reduction.

54.      WAIVER OF JURY TRIAL.  THE PARTIES HERETO SHALL, AND THEY HEREBY DO, WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON ANY MATTERS WHATSOEVER ARISING OUT OF, OR IN ANY WAY CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES OR PROJECT.

[signatures on next page]

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IN WITNESS WHEREOF, the parties have caused this Lease to be executed, effective as provided in Section 27.

WITNESSES:	LANDLORD:
	GUILFORD DEVELOPMENT GROUP, L.L.C., a Florida limited liability company
/s/ Lidia Gonzalez
Print Name:  Lidia Gonzalez
	By:	/s/ Frank W. Guilford III
	Name: Frank W. Guilford III
	Title: Managing Member
/s/ Olga Orihuela	Dated:  9-30-15
Print Name:  Olga Orihuela
	TENANT:
	INTERVAL INTERNATIONAL, INC., a Florida corporation
/s/ Michele L. Keusch	By:	/s/ Victoria J. Kincke
Print Name:  Michele L. Keusch	Name:  Victoria J. Kincke
	Title:  Senior Vice President
/s/ Patricia Kemp	Dated:  9/30/15
Print Name:  Patricia Kemp

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EX-10.2

Exhibit 10.2

EXECUTION VERSION

ILG SPINCO AGREEMENT

This ILG Spinco Agreement (this “Agreement”), dated as of October 27, 2015, is by and among Interval Leisure Group, Inc., a Delaware corporation (“ILG”), Liberty Interactive Corporation (f/k/a Liberty Media Corporation), a Delaware corporation (“Liberty”), and Liberty USA Holdings, LLC, a Delaware limited liability company and wholly owned subsidiary of Liberty (“Liberty Holdings”).

WHEREAS, as of the date hereof, Liberty is the beneficial owner and Liberty Holdings is the record and beneficial owner of 16,643,957 shares of common stock, par value $0.01 per share, of ILG;

WHEREAS, Liberty, the Liberty Parties and IAC/InterActiveCorp entered into a Spinco Agreement, dated as of May 13, 2008 (as assigned, the “Original Spinco Agreement”) in connection with the spin-off of ILG from IAC/InterActiveCorp (the “Spin-Off”);

WHEREAS, Liberty, Liberty Holdings, and IAC/InterActiveCorp entered into an Affiliate Assignment and Assumption Agreement, dated as of August 20, 2008, with respect to the Original Spinco Agreement;

WHEREAS, ILG, IAC/InterActiveCorp, Liberty and Liberty Holdings entered into a Spinco Assignment and Assumption Agreement (ILG), dated as of August 20, 2008, with respect to the Original Spinco Agreement in connection with the Spin-Off;

WHEREAS, ILG, Iris Merger Sub, Inc., Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”) and Vistana Signature Experiences, Inc. (“Vistana”) have entered into that certain Agreement and Plan of Merger, dated as of October 27, 2015 (the “Merger Agreement”);

WHEREAS, the parties now desire to amend and restate the Original Spinco Agreement with respect to those matters described herein as between ILG and its Affiliates, on the one hand, and Liberty and its Affiliates, on the other hand; and

WHEREAS, simultaneously with the execution of this Agreement, ILG and Liberty are entering into that certain Amended and Restated Registration Rights Agreement (ILG) (the “Registration Rights Agreement”).

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereto agree that, subject to Section 10(c), the Original Spinco Agreement is hereby amended and restated in its entirety with respect to the parties hereto as follows:

1.Definitions

“Affiliate” shall have the meaning given such term in Rule 12b-2 under the Exchange Act.  For purposes of this definition, (i) natural persons shall not be deemed to be Affiliates of each other and (ii) none of ILG or any of its Affiliates shall be deemed to be Affiliates of Liberty or its Affiliates.

“Affiliate Assignment and Assumption Agreement” means an agreement in the form of Exhibit 2 hereto to be executed by ILG, the applicable Transferring Liberty Parties and the Liberty Controlled Affiliates to which Equity Securities of ILG are Transferred in the event of a Transfer pursuant to Sections 5(e)(i)(3) and 9(b), pursuant to which the parties thereto will agree to (i) be bound by the terms

of this Agreement (including, for the avoidance of doubt, the provisions of Section 3 hereof) and, (ii) effective immediately prior to such Transfer (but subject to the consummation of such Transfer), substitute such transferee(s) for Liberty if Liberty no longer has Beneficial Ownership of any Equity Securities of ILG after such Transfer for all purposes under this Agreement.

“Applicable Percentage” means 35%.

“Assignment and Assumption Agreement” means any of a New Holder Assignment and Assumption Agreement or an Affiliate Assignment and Assumption Agreement.

“Beneficial Ownership” or “Beneficially Own” shall have the meaning given such term in Rule 13d-3 under the Exchange Act and a Person’s Beneficial Ownership of securities shall be calculated in accordance with the provisions of such Rule; provided, however, that for purposes of determining any Person’s Beneficial Ownership, such Person shall be deemed to be the Beneficial Owner of any Equity Securities of ILG which may be acquired by such Person (disregarding any legal impediments to such Beneficial Ownership), whether within 60 days or thereafter, upon the conversion, exchange, redemption or exercise of any warrants, options, rights or other securities issued by ILG or any subsidiary thereof.  Notwithstanding anything to the contrary set forth herein, (x) (i) prior to the delivery to any counterparty of Equity Securities in final settlement of a Hedging Transaction and (ii) with respect to any Stock Lending Transactions effected in accordance with this Agreement until such time as the lending Liberty Party no longer has a right to the return of the securities lent thereunder, Liberty will be deemed to Beneficially Own all Equity Securities subject to such Hedging Transaction or Stock Lending Transaction and (y) prior to the pledgee commencing action to foreclose upon any Equity Securities pledged in accordance with Section 5(e)(v) of this Agreement, any such pledged Equity Securities will be deemed Beneficially Owned by the pledging party.

“Business Day” means any day other than a Saturday, Sunday or a day on which the banks in New York, New York are authorized or required by law to remain closed.

“Closing” means the closing of the merger pursuant to the Merger Agreement.

“Code” means the Internal Revenue Code of 1986, as amended.

“Control” (including the term “Controlled”), with respect to the relationship between or among two or more Persons, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.

“Controlled Affiliate” means, with respect to a specified Person, those Affiliates of such specified Person that it Controls.

“Covered Transaction” involving ILG shall mean (i) a tender or exchange offer by a third party for shares of capital stock of ILG, resulting in such third party (or any “group” of which such third party is a member (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)) becoming the Beneficial Owner of securities representing greater than 35% of the outstanding shares of ILG Common Stock and other Equity Securities of ILG that are, at the time of commencement of such offer, convertible into or exchangeable for ILG Common Stock (calculated on an ILG Common Stock equivalent basis) or Voting Securities of ILG representing greater than 35% of the voting power of the outstanding Voting Securities of ILG, (ii) a merger, consolidation, business combination or similar extraordinary transaction involving ILG and a third party upon which the holders of the outstanding ILG Common Stock and other Equity Securities of ILG that are then convertible into or exchangeable for ILG Common Stock

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(calculated on an ILG Common Stock equivalent basis) immediately prior to such transaction would cease to own securities representing greater than a majority of the outstanding shares of ILG Common Stock and other Equity Securities of ILG that are then convertible into or exchangeable for ILG Common Stock (calculated on an ILG Common Stock equivalent basis) or Voting Securities of ILG representing greater than a majority of the voting power of the outstanding Voting Securities of ILG (or upon any merger or consolidation in which ILG does not survive, the surviving or successor entity) or (iii) the sale of assets of ILG that generated 30% or more of the consolidated total revenues or EBITDA (determined in accordance with GAAP) of ILG and its subsidiaries for the twelve months ending on the last day of the last completed fiscal quarter of ILG (which, for the avoidance of doubt, shall not include merger, consolidation, business combination or similar transactions described in clause (ii) above), to any third party; provided, that none of the transactions contemplated by the Merger Agreement shall be deemed to be a Covered Transaction.

“Distribution Transaction” involving any Person which Beneficially Owns Equity Securities means any transaction pursuant to which the equity interests of (i) such Person or (ii) any Person that directly or indirectly owns a majority of the equity interests of such Person are distributed (whether by redemption, dividend, share distribution, merger or otherwise) to all the holders of one or more classes or series of the common stock of Parent Company that are registered under Section 12(b) or 12(g) of the Exchange Act (all the holders of one or more such classes or series, “Parent Company Holders”), on a pro rata basis with respect to each such class or series, or such equity interests of such Person are available to be acquired by Parent Company Holders (including through any rights offering, exchange offer, exercise of subscription rights or other offer made available to Parent Company Holders), on a pro rata basis with respect to each such class or series, whether voluntary or involuntary.

“Equity Securities” means the equity securities of ILG, including shares of the ILG Common Stock and shares of ILG Common Stock or other equity securities of ILG issuable upon exercise, conversion, exchange or redemption of any warrants, options, rights or other securities issued by ILG or any subsidiary thereof.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities Exchange Commission promulgated thereunder (as in effect on the date of this Agreement).

“Fall-Away Date” means the later of (x) the third (3rd) anniversary of the Closing and (y) the first date on which the Liberty Ownership Percentage first falls below 10%; provided, however, that in the event one or more of the Liberty Parties Transfers ILG Common Stock following the Closing and following such Transfer, the Liberty Ownership Percentage is less than 10%, then the Fall-Away Date will be deemed to occur upon the Liberty Ownership Percentage ceasing to be 10% or more.

“Hedging Transaction” means any transaction involving a Liberty Party or a Liberty Controlled Affiliate pursuant to which (i) a counterparty may engage in short sales of ILG Common Stock, (ii) a counterparty may purchase, sell or grant any right (including any put or call option) in respect of ILG Common Stock, (iii) such Liberty Party or such Liberty Controlled Affiliate may enter into a forward sale (whether for a fixed or variable number of shares or at a fixed or variable price and whether pre-paid or post-paid) of or with respect to ILG Common Stock or (iv) such Liberty Party or such Liberty Controlled Affiliate issues any security (other than a broad-based market basket or index) that includes, relates to or derives any significant part of its value from ILG Common Stock (including a security exchangeable into ILG Common Stock), and, if applicable to such transaction, includes (a) the pledge by any Liberty Party or Liberty Controlled Affiliate of ILG Common Stock in connection with any of the foregoing to secure the obligations of the pledgor under a Hedging Transaction and (b) the pledge of a Hedging Transaction itself to secure any extension of credit to a party based, in whole or part, on the value thereof.

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“ILG Common Stock” means the common stock of ILG, $.01 par value per share, or shares of capital stock of ILG issued in substitution therefor in connection with any combination, reclassification, recapitalization, merger, consolidation, exchange or other similar affiliated reorganization; provided, that, for the avoidance of doubt, any shares of capital stock issued in substitution for ILG Common Stock in a Covered Transaction shall not constitute ILG Common Stock.

“Independent Director” of ILG means a director that is, as to ILG, “independent” within the meaning of the rules and regulations of NASDAQ, or, if the ILG Common Stock is not at the time of determination listed on NASDAQ, the rules and regulations of such other national securities exchange on which such securities are primarily traded.

“Liberty Controlled Affiliate” means any Person Controlled by Liberty.

“Liberty Controlled Subsidiary” means any entity (x) in which Liberty owns directly or indirectly 50% or more of the equity of such entity (by value) and (y) that is a Liberty Controlled Affiliate.

“Liberty Director” means any person designated by Liberty to serve on ILG’s Board of Directors who is reasonably acceptable to ILG (as determined by a majority of those directors of ILG that were not designated by Liberty); provided, that those persons designated by Liberty and serving on ILG’s Board of Directors immediately prior to the date hereof are deemed acceptable to ILG.

“Liberty Ownership Percentage” with respect to ILG means, at any time, the ratio, expressed as a percentage, of (i) the Total Voting Power of the Equity Securities of ILG Beneficially Owned by Liberty and the Liberty Controlled Affiliates to (ii) the sum of (x) the Total Voting Power of Total Equity Securities of ILG and (y) the Total Voting Power of the shares of ILG Common Stock included in clause (i) that are issuable upon conversion, exchange, redemption or exercise of Equity Securities of ILG that are not included in clause (x).

“Liberty Parties” means (x) Liberty, (y) Liberty Holdings, and (z) each Liberty Controlled Affiliate that acquires record ownership of any Equity Securities of ILG, in the case of a Person described in clause (y) or (z), until such time as such Person is not a Liberty Controlled Affiliate or ceases to have record ownership of any ILG Common Stock or Equity Securities of ILG, as the case may be.

“LM Transfer” means a Transfer of all Equity Securities of ILG Beneficially Owned by the Liberty Parties to Liberty Media or a Controlled Affiliate of Liberty Media in a transaction meeting the requirements of Section 5(e)(i)(3).

“Loan Transaction” means any loan entered into or guaranteed by a Liberty Party or a Liberty Controlled Affiliate that includes the pledge by any Liberty Party or a Liberty Controlled Affiliate of ILG Common Stock to secure the obligations of the pledgor, in whole or in part, under such loan and any ancillary documents.

“New Holder Assignment and Assumption Agreement” means an agreement in the form of Exhibit 1 hereto to be executed by ILG, the applicable Transferring Persons and the Restricted Transferee, the Distributed Company or Liberty Media or a Controlled Affiliate thereof, as applicable, in the event of a Permitted Restricted Transfer, a Distribution Transaction or a LM Transfer, respectively, pursuant to which the parties thereto will agree to (i) be bound by the terms of this Agreement (including, for the avoidance of doubt, the provisions of Section 3 hereof) and, (ii) effective immediately prior to such Transfer (but subject to the consummation of such Transfer), substitute such transferee(s) for Liberty

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(or, in the case of a subsequent Transfer by such transferee in accordance with the terms of this Agreement, substitution of such subsequent transferee) for all purposes under this Agreement.

“Ownership Percentage” of any Person with respect to ILG means, at any time, the ratio, expressed as a percentage, of (i) the Total Voting Power of the Equity Securities of ILG Beneficially Owned by such Person and its Affiliates to (ii) the sum of (x) the Total Voting Power of Total Equity Securities of ILG and (y) with respect to such Person, the Total Voting Power of the shares of ILG Common Stock included in clause (i) that are issuable upon conversion, exchange, redemption or exercise of Equity Securities of ILG that are not included in clause (x).

“Parent Company” means the publicly traded Person which Beneficially Owns, through an unbroken chain of majority-owned subsidiaries, the Person having record ownership of the Equity Securities of ILG.  For purposes of this definition, the term “publicly traded” means that the Person in question (x) has a class or series of equity securities registered under Section 12(b) or 12(g) of the Exchange Act or (y) is required to file reports pursuant to Section 15(d) of the Exchange Act.

“Permitted Restricted Transfer” has the meaning specified in Section 5(e)(i)(6) hereof.

“Person” means any individual, partnership, joint venture, corporation, limited liability company, trust, unincorporated organization, government or department or agency of a government.

“Qualified Stock Lending Transaction” means any Stock Lending Transaction that meets the requirements of Section 1058(b) of the Code.

“Related Hedging Transactions” means a series of Hedging Transactions between one or more of the Liberty Parties and their respective Controlled Affiliates, on the one hand, and the same counterparty or its Affiliates, on the other hand, which Hedging Transactions each have specified maturity or expiration dates occurring within a period of ninety (90) days.

“Related Stock Lending Transactions” means a series of Stock Lending Transactions between one or more of the Liberty Parties and their respective Controlled Affiliates, on the one hand, and the same counterparty or its Affiliates, on the other hand, which Stock Lending Transactions each have specified maturity or expiration dates occurring within a period of ninety days.

“Restricted Transferee” has the meaning specified in Section 5(e)(i)(6) hereof.

“Rights Agreement” means the Rights Agreement, dated as of June 10, 2009, between Interval Leisure Group, Inc. and the Bank of New York Mellon, as Rights Agent.

“Rights Offering” means the issuance by ILG to existing holders of the ILG Common Stock of rights to buy, within a fixed time period, a proportional number of newly issued shares of such ILG Common Stock or other Equity Securities.

“Stock Lending Transaction” shall mean a transaction whereby a Liberty Party or a Liberty Controlled Affiliate lends shares of ILG Common Stock to a third party or permits a third party to sell, pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose of, or otherwise use in its business, such shares of ILG Common Stock.

“Total Equity Securities” of ILG at any time shall mean, subject to the next sentence, the total number of ILG’s outstanding equity securities.  Any Equity Securities Beneficially Owned by a Person that are not outstanding Voting Securities but that, upon exercise, conversion or exchange, would become

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Voting Securities, shall be deemed to be outstanding for the purpose of computing Total Equity Securities and the percentage of Equity Securities owned by such Person but shall not be deemed to be outstanding for the purpose of computing Total Equity Securities and the percentage of the Equity Securities owned by any other Person.

“Total Voting Power” of any Equity Securities at any time shall mean, subject to the next sentence, the aggregate number of votes entitled to be cast generally in the election of directors by the holders of such securities.  Any Equity Securities Beneficially Owned by a Person that are not outstanding Voting Securities but that, upon exercise, conversion or exchange, would become Voting Securities, shall be deemed to be outstanding and to have full voting power for the purpose of computing Total Voting Power of the Equity Securities Beneficially Owned by such Person but shall not be deemed to be outstanding or have such voting power for the purpose of computing Total Voting Power of the Equity Securities Beneficially Owned by any other Person or (except in calculating the Total Voting Power of a Person who Beneficially Owns Voting Securities that are not outstanding) Total Voting Power of the Total Equity Securities of ILG.

“Transfer” by any Person means directly or indirectly, to sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any Equity Securities Beneficially Owned by such Person or of any interest (including any voting interest) in any Equity Securities Beneficially Owned by such Person; provided, however, that (i) the entry into, modification of or existence of a Stock Lending Transaction will not be deemed a Transfer of ILG Common Stock solely to the extent such ILG Common Stock is lent to any Person in connection with such Stock Lending Transaction and (ii) no Transfer of Equity Securities shall be deemed to have occurred as a result of the entry into, modification of or existence of any (x) Hedging Transaction unless and until ILG Common Stock is delivered upon settlement or termination of such Hedging Transaction or (y) Loan Transaction in which ILG Common Stock is pledged unless and until there occurs the commencement of any action entitling the pledgee to foreclose on the pledged shares.  For the avoidance of doubt, a transfer of control of the direct or indirect Beneficial Owner of Equity Securities of ILG is a Transfer of such Equity Securities for purposes of this Agreement.

“Voting Securities” of ILG shall mean at any particular time (i) the ILG Common Stock, (ii) shares of any other class of capital stock of ILG or a subsidiary thereof then entitled to vote in the election of any directors of ILG generally and (iii) any securities of ILG or any subsidiary thereof then convertible or exchangeable into shares of any class of capital stock of ILG then entitled to vote in the election of any directors of ILG generally; provided, that with respect to clauses (ii) and (iii), any securities which would become Voting Securities upon the occurrence or non-occurrence of any event, receipt of any governmental approval or passage of time will be deemed Voting Securities for purposes of this Agreement as of the date of original issuance of such securities.

2.[Intentionally Omitted]

3.ILG Board and Other Governance Matters

(a)(i)         Subject in all respects to Section 3(a)(ii) and Section 3(b), until the fifth anniversary of the Closing, Liberty shall have the right to nominate two Liberty Directors; provided, that (x) if the Liberty Ownership Percentage does not at any time exceed 20% by the time of the fifth anniversary of the Closing, then on and after such fifth anniversary, Liberty shall have the right to appoint such additional number of Liberty Directors (if any) as is required to cause the number of Liberty Directors to equal the Liberty Ownership Percentage of the total number of directors serving on the Board

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of Directors of ILG (rounded up to the next whole number) and thereafter to nominate such number of Liberty Directors as is equal to the Liberty Ownership Percentage of the total number of directors serving on the Board of Directors of ILG (rounded up to the next whole number) in each case with a minimum of one Liberty Director, as long as the Liberty Ownership Percentage is at least 10%; and (y) if the Liberty Ownership Percentage at any time exceeds 20% at or prior to the time of the fifth anniversary of the Closing, then, on and following the date the Liberty Ownership Percentage exceeds 20%, Liberty shall have the right to appoint such additional number of Liberty Directors (if any) as is required to cause the number of Liberty Directors to equal the Liberty Ownership Percentage of the total number of directors serving on the Board of Directors of ILG (rounded up to the next whole number) and thereafter to nominate such number of Liberty Directors as is equal to the Liberty Ownership Percentage of the total number of directors serving on the Board of Directors of ILG (rounded up to the next whole number) in each case with (A) a minimum of one Liberty Director, as long as the Liberty Ownership Percentage is at least 10% and less than 20%, and (B) a minimum of two Liberty Directors, as long as the Liberty Ownership Percentage is at least 20%;

(ii)If Liberty has the right to nominate only one Liberty Director, such director shall be an Independent Director.  If Liberty has the right to nominate more than one Liberty Director, each Liberty Director in excess of the first Liberty Director must qualify as an Independent Director.  Unless required by the rules and regulations of NASDAQ (or such other national securities exchange on which ILG’s securities are primarily traded), no officer or director of Liberty shall be deemed to not be an Independent Director for purposes of this Section 3(a)(ii) solely by virtue of Liberty’s ownership of shares of ILG Common Stock;

(iii)ILG shall cause each such Liberty Director to be included in the slate of nominees recommended by the Board of Directors of ILG to ILG’s stockholders for election as directors at each annual meeting of the stockholders of ILG and shall use commercially reasonable efforts to cause the election of each such Liberty Director, including soliciting proxies in favor of the election of such persons; and

(iv)Until the Fall-Away Date, in the event that a vacancy is created at any time by the death, disability, retirement, resignation or removal (with or without cause) of any such Liberty Director, by any increase in the number of directors constituting the entire Board of Directors of ILG or by increase in the number of Liberty Directors Liberty has the right to nominate (such that, in any such event, Liberty is entitled to additional representation on such Board of Directors of ILG to maintain its representation rights set forth in Section 3(a)(i) above), Liberty shall, subject to Section 3(a)(i), have the right to designate a replacement or additional Liberty Director to fill such vacancy, and ILG shall use commercially reasonable efforts to cause such vacancy to be filled with the replacement or additional Liberty Director so designated.

(b)If at any time the number of Liberty Directors whom Liberty has the right to nominate is reduced pursuant to Section 3(a)(i) below the number of Liberty Directors then serving on the Board of Directors of ILG, upon the written request of ILG, Liberty shall use its commercially reasonable efforts to cause such excess number of Liberty Directors then serving on the Board of Directors of ILG to promptly resign from such Board of Directors.  Following the Fall-Away Date, upon the written request of ILG, Liberty shall use its commercially reasonable efforts to cause any Liberty Director then serving on the Board of Directors of ILG to promptly resign from such Board of Directors.

(c)At the time of and immediately upon the Closing, Liberty shall cause one Liberty Director (selected by Liberty) then serving on the Board of Directors of ILG to promptly resign from such Board of Directors, to the extent there are three Liberty Directors then serving on such Board of

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Directors.  ILG shall cause all equity awards held by such resigning Liberty Director to vest in full upon his resignation.

(d)Until the Fall-Away Date, one Liberty Director shall be eligible to serve on each of the Audit, Nominating and Compensation Committees of the Board of Directors of ILG; provided, that any and all such Liberty Directors shall be Independent Directors and shall also meet any additional regulatory or securities exchange requirements for membership on such committee.

(e)In the event the Ownership Percentage of Liberty in respect of ILG exceeds the Applicable Percentage as a result of an acquisition of Equity Securities in breach of this Agreement, in addition to any other remedy at equity or law that may be available, no Equity Securities of ILG Beneficially Owned by Liberty representing an Ownership Percentage in excess of the Applicable Percentage (such Equity Securities, the “Excess Shares”) shall be voted on any matter submitted to stockholders of ILG, and ILG shall not recognize any votes purported to be cast in respect of any such Excess Shares.

(f)For the avoidance of doubt, Liberty’s rights under this Section 3 will be transferable to a Restricted Transferee or Distributed Company, subject to such Person’s compliance with the provisions of Sections 5(e)(i)(6) and (7), as applicable, and to Liberty Media, subject to its compliance with the requirements of Section 5(e)(i)(3).

4.[Intentionally Omitted]

5.Certain Restrictions

(a)Except as provided in the last sentence of this Section 5(a), from the date of the Closing until the second (2nd) anniversary of the Closing, no Liberty Party shall, and Liberty shall cause its Liberty Controlled Subsidiaries not to, directly or indirectly, knowingly acquire, by means of a purchase, tender or exchange offer, merger or other business combination or in any other manner, Beneficial Ownership of any Equity Securities of ILG; provided, however, that none of the following will be considered an acquisition of Equity Securities of ILG subject to this Section 5(a):  (x) any acquisition from ILG or its Affiliates, including an acquisition made pursuant to a Rights Offering or an offer that was made generally available to holders of Equity Securities of ILG as a result of their ownership of Equity Securities of ILG or as a result of any subdivision, split, reverse split, stock dividend, combination, reclassification or similar event with respect to the ILG Common Stock, (y) any Hedging Transaction or Related Hedging Transactions entered into prior to the second (2nd) anniversary of the Closing so long as, upon settlement or termination thereof, the number of shares of ILG Common Stock or other Equity Securities of ILG Beneficially Owned by the Liberty Parties and the Liberty Controlled Subsidiaries would not be increased, or (z) an acquisition pursuant to Section 6 hereof; provided, further, that the parties acknowledge and agree that acquisitions, whether direct or indirect, by the Liberty Parties and the Liberty Controlled Subsidiaries, during the period from the Closing to the second (2nd) anniversary of the Closing, of Equity Securities of ILG which represent in the aggregate an increase in Beneficial Ownership of 1% or less of the Total Equity Securities of ILG (calculated based on the outstanding equity of ILG immediately following the Closing), will not constitute a breach of this Section 5(a), but such acquisitions will not be deemed a waiver or modification of this Section 5(a), and the Liberty Parties shall continue to be bound by the provisions of this Section 5(a).  Liberty’s obligations under this Section 5(a) will terminate automatically and without further action from any party upon the occurrence of (i) ILG’s failure to deliver a certificate of a senior officer of ILG to Liberty on the Closing Date confirming that a tax opinion, at a “more likely than not” level (or higher) and dated as of the Closing Date, has been delivered to Starwood by either Starwood Tax Counsel (as defined in the Merger Agreement) or another nationally recognized tax advisor to Starwood, to the effect that the Contribution and the Distribution (each as defined in the Merger Agreement), taken together, more likely than not qualify as a reorganization pursuant to Sections 355, 361 and 368(a)(1)(D) of the Code for U.S. federal income tax purposes and that Sections 355(d) and (e) of the Code more likely than not do not apply to the Distribution, (ii) the date of any “determination” described in Section 1313(a) of the Code, pursuant to which Starwood is required to recognize gain or loss for U.S. federal income tax purposes as a result of the Distribution not qualifying as a reorganization pursuant to Sections 355, 361 and 368(a)(1)(D) of the Code for U.S. federal income

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tax purposes or as a result of Sections 355(d) or (e) of the Code applying to the Distribution, or (iii) the date Starwood or Vistana take any position for U.S. federal income tax purposes that the Distribution will be treated as a disposition of the assets of Vistana pursuant to Section 336(e) of the Code (other than solely a protective election made pursuant to Section 1.336-2(j) of the U.S. Treasury Regulations, which has no effect because the Distribution is not a qualified stock disposition, as defined in Section 1.336-1(b)(6) of the U.S. Treasury Regulations).

(b)Without limiting Section 5(a) above, no Liberty Party shall, and Liberty shall cause its Affiliates not to, directly or indirectly, acquire (other than in an acquisition from ILG made pursuant to a Rights Offering or an offer that was made generally available to holders of Equity Securities of ILG as a result of their ownership of Equity Securities of ILG) by means of a purchase, tender or exchange offer, business combination or in any other manner, Beneficial Ownership of any Equity Securities of ILG, including rights or options to acquire such ownership, unless (i) after giving effect to such acquisition, the Ownership Percentage of Liberty with respect to ILG would not exceed the Applicable Percentage, (ii) pursuant to a Qualified Acquisition or (iii) permitted pursuant to Section 6 hereof.  Notwithstanding anything to the contrary contained herein, no acquisition of Beneficial Ownership of Equity Securities by Liberty which results solely from Liberty holding Equity Securities at a time when ILG effects any subdivision, split, reverse split, stock dividend, combination, reclassification or similar event with respect to the ILG Common Stock shall be deemed to be an acquisition of Beneficial Ownership of Equity Securities for purposes of this Section 5(b); provided that such Equity Securities actually acquired shall be included in the calculation of the Ownership Percentage of Liberty (after giving effect to the Equity Securities actually issued to all holders of Equity Securities of ILG upon expiration of any exercise period, if applicable).  The term “Qualified Acquisition” means the acquisition of Beneficial Ownership of Equity Securities of ILG in a transaction that has been approved in advance by a majority of directors of the Board of Directors of ILG not designated by Liberty.  Nothing in this Section 5(b) or Section 5(c) shall prohibit any Liberty Party or the Liberty Controlled Affiliates from acquiring any securities of ILG if after giving effect to such acquisition, the Ownership Percentage of Liberty with respect to ILG would not exceed the Applicable Percentage.

(c)From the Closing until the second (2nd) anniversary of the Closing, other than in connection with a Covered Transaction and in accordance with Section 6 hereof, neither any Liberty Party nor any of their respective officers, directors or employees shall, and Liberty shall cause its Affiliates not to (and no Liberty Party nor any of its officers, directors or employees shall, and Liberty shall cause its Affiliates not to, assist or form, join or in any way participate in a group within the meaning of Section 13(d)(3) of the Exchange Act, act in concert or participate with or encourage other persons, to):

(i)directly or indirectly, make a request to amend or waive Section 5(a), 5(b) or 5(c) or Section 6, except that Liberty shall be permitted to make private requests to ILG to amend or waive Section 5(a);

(ii)directly or indirectly, make any public disclosure, or take any action which could reasonably be expected to require ILG to make any public disclosure, with respect to any of the matters set forth in Section 5(a), 5(b) or 5(c); or

(iii)directly or indirectly, enter into any discussions, negotiations, arrangements or understandings with any third party with respect to any of the foregoing.

(d)Prior to a Permitted Restricted Transfer by the Liberty Parties or a Transfer of all Equity Securities pursuant to Section 5(e)(i)(7)(ii), ILG will not adopt (i) a Shareholder Rights Plan (as used herein, as such term is commonly understood in connection with corporate transactions) or (ii) any charter or bylaw provision, in the case of each of clause (i) and clause (ii), that would materially adversely affect

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the Liberty Parties’ ability in accordance with the terms hereof to acquire Equity Securities up to the Applicable Percentage or which otherwise would impose material economic burdens on the Liberty Parties’ ability to do so (an “Anti-Takeover Provision”), provided, however, that following such time that the restrictions in Section 5(b) are no longer applicable to any Liberty Party, there shall be no limitation pursuant to this Agreement on ILG’s ability to adopt a Shareholder Rights Plan or any other Anti-Takeover Provision.  To the extent that ILG or a subsidiary thereof effects a Rights Offering or an offer that was made generally available to holders of Equity Securities of ILG as a result of their ownership of Equity Securities of ILG, the Liberty Parties will be entitled to exercise in full all rights issued or distributed to them or exchange in full; provided, that to the extent such exercise results in the Ownership Percentage of Liberty with respect to ILG exceeding the Applicable Percentage, it will not constitute a breach of this Agreement, provided that any Excess Shares shall be voted in the same proportion as all other votes cast with respect to the applicable matter (such proportion determined without inclusion of the votes cast by the Liberty Parties) until such time as the Ownership Percentage of Liberty with respect to ILG does not exceed the Applicable Percentage.  Prior to the Closing, ILG will take all such actions as are necessary to cause Liberty to remain an Exempt Person (as defined in the Rights Agreement) under the Rights Agreement in accordance with the terms thereof and this Agreement.

(e)Prior to the Fall-Away Date:

(i)No Liberty Party shall, and Liberty shall cause the Liberty Controlled Affiliates not to, without the prior approval of the Board of Directors of ILG, Transfer any Equity Securities of ILG to any Person except for:

(1)Transfers to ILG or a subsidiary of ILG or Transfers of any rights received in a Rights Offering;

(2)(i) at such times as Rule 144 under the Securities Act of 1933, as amended (“Rule 144”), is applicable, Transfers pursuant to Rule 144 or, (ii) at such times as Rule 144 is not applicable, Transfers pursuant to “brokers transactions” within the meaning of Rule 144;

(3)Transfers (w) to Liberty, (x) between or among the Liberty Parties, (y) to a Liberty Controlled Affiliate or (z) to Liberty Media Corporation (“Liberty Media”) or a Controlled Affiliate thereof in an LM Transfer; provided, that, in the case of clause (x) or (y), such transferee will execute and deliver to ILG an Affiliate Assignment and Assumption Agreement (to the extent such transferee is not a party hereto) and ILG shall also execute such Affiliate Assignment and Assumption Agreement; and provided, further, that, in the case of clause (z), Liberty Media, any of its Controlled Affiliates which acquires Beneficial Ownership of Equity Securities of ILG in the LM Transfer, and the Transferring Liberty Party will execute and deliver to ILG a New Holder Assignment and Assumption Agreement and ILG shall also execute such New Holder Assignment and Assumption Agreement;

(4)Transfers (i) pursuant to a third party tender or exchange offer for such Equity Securities or (ii) in connection with any merger or other business combination involving ILG and a third party, which merger or business combination has been approved by ILG;

(5)in a public offering in a manner designed to result in a wide distribution (other than a Transfer described in subsection (e)(i)(7), which shall be governed by the terms of such subsection (e)(i)(7) and not this subsection (e)(i)(5)); provided, that no Transfer under this clause (5) is made, to the knowledge of the Liberty Parties, to any Person whose Ownership Percentage in respect of ILG, after giving effect to such Transfer, would exceed 15%;

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(6)a Transfer, in a single transaction (other than a Transfer described in subsection (e)(i)(7), which shall be governed by the terms of such subsection (e)(i)(7) and not this subsection (e)(i)(6), and other than a Transfer to Liberty Media pursuant to an LM Transfer satisfying the requirements of Section 5(e)(i)(3)), of all the Equity Securities of ILG Beneficially Owned at such time by the Liberty Parties and the Liberty Controlled Affiliates (or by any Person who previously acquired Equity Securities from any Liberty Party or any Liberty Controlled Affiliates or another Restricted Transferee in a Permitted Restricted Transfer) to a Person (a “Restricted Transferee”) (A) whose Ownership Percentage with respect to ILG, after giving effect to such Transfer, would not exceed the Applicable Percentage and (B) that, prior to such Transfer, shall have (along with the applicable Transferring Persons) executed and delivered to ILG a New Holder Assignment and Assumption Agreement (a “Permitted Restricted Transfer”).  ILG and the applicable Transferring Persons shall also execute such New Holder Assignment and Assumption Agreement;

(7)a Transfer of the Equity Securities Beneficially Owned by Liberty or any Liberty Party solely as a result of (i) a change in the Beneficial Ownership of Liberty or, if Liberty is not a Parent Company or is not the Parent Company of such Liberty Party, any Parent Company of Liberty or any Liberty Party, or (ii) a Distribution Transaction involving such Person (the Person the equity interests of which are being distributed in the Distribution Transaction is referred to as the “Distributed Company”) in which all of the Equity Securities of ILG Beneficially Owned by the Liberty Parties and the Liberty Controlled Affiliates are so Transferred to the Distributed Company or its Controlled Affiliates in connection with a Distribution Transaction; provided, however, that, in the case of clause (ii), such Distributed Company shall (along with the applicable Transferring Persons) execute and deliver to ILG a New Holder Assignment and Assumption Agreement.  ILG and the applicable Transferring Persons shall also execute the New Holder Assignment and Assumption Agreement delivered by the Distributed Company under this subsection (e)(i)(7); and

(8)issuances of Exchangeable Securities (as defined in the Registration Rights Agreement) and sales thereof under Rule 144A or a registered public offering and delivery of ILG Common Stock or other Equity Securities of ILG to Exchange Holders (as defined in the Registration Rights Agreement) upon the exercise of their exchange right thereunder; provided, that no Exchangeable Securities will be issued pursuant to this clause (8) to any Person whose Ownership Percentage in respect of ILG, after giving effect to such sale of Exchangeable Securities to it and delivery of shares of ILG Common Stock or other Equity Securities to such Person upon exercise of the exchange rights thereunder, would, as of the date of sale of the Exchangeable Security, to the knowledge of the Liberty Parties, exceed 15%.

(ii)at least one Business Day prior to any proposed Transfer or series of related Transfers pursuant to clause (3), (6) or (8) above by any Liberty Party to any Person of Equity Securities of ILG representing 10% or more of the Total Equity Securities with respect to ILG, Liberty shall, or shall cause such Liberty Party to, provide written notice to ILG of the proposed Transfer, including a general description of the proposed Transfer (but which need not include the identity of the counterparty);

(iii)[Intentionally Omitted]

(iv)the Board of Directors of ILG shall, as promptly as reasonably practical following receipt of a written request therefor from Liberty, exempt (i) the Restricted Transferee in any Permitted Restricted Transfer, (ii) the Distributed Company in any Transfer under Section 5(e)(i)(7)(ii) or (iii) Liberty Media or any Controlled Affiliate thereof in any LM Transfer, as applicable, from the operation of any Shareholder Rights Plan or other Anti-Takeover Provision then in effect with respect to ILG, such that an acquisition by it of Equity Securities up to the Applicable Percentage would not materially adversely affect such Restricted Transferee, Distributed Company or Liberty Media or

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Controlled Affiliate thereof, as the case may be, under the terms of any Shareholder Rights Plan or other Anti-Takeover Provision then in effect or which otherwise would impose material economic burdens on such Restricted Transferee’s, Distributed Company’s or Liberty Media’s (or its Controlled Affiliate’s) ability to do so; and

(v)Section 5(e) shall not prohibit any Transfer to the extent relating to the entry into, maintenance of, performance of obligations under, or early termination and unwinding of any Hedging Transactions, Stock Lending Transactions or Loan Transactions effected by the Liberty Parties or the Liberty Controlled Affiliates, including the Transfer of Equity Securities in connection therewith through the delivery of Equity Securities to a third party in connection with the settlement or satisfaction of a Hedging Transaction, upon a default by a counterparty in a Stock Lending Transaction, or the foreclosure and sale by a secured party of any Equity Securities pledged to secure the obligations of a party under a Hedging Transaction or Loan Transaction or in respect of any extension of credit to a party based, in whole or part, on the value of such Hedging Transaction; provided that no Liberty Party shall, and Liberty will cause the Liberty Controlled Affiliates not to, engage in any Loan Transaction, Stock Lending Transaction, Hedging Transaction, or any pledge of Equity Securities not otherwise within the definition of “Hedging Transaction”, “Loan Transaction” or “Stock Lending Transaction” (x) unless the amount of Equity Securities of ILG subject to a Hedging Transaction or Related Hedging Transactions, any Loan Transaction, any Stock Lending Transaction or Related Stock Lending Transactions, or any other pledge transaction involving any Liberty Party or a Liberty Controlled Affiliate, constitutes 10% or less of the Total Equity Securities of ILG (determined as of the date of the Hedging Transaction, Loan Transaction, Stock Lending Transaction or other pledge transaction or the date of the initial Hedging Transaction or Stock Lending Transaction in any series of Related Hedging Transactions or series of Related Stock Lending Transactions), (y) unless the counterparty or lender in such transaction is a financial institution in the business of engaging in such transactions and Liberty does not know or have reason to know that such counterparty or lender is engaging in such transaction (other than with respect to a Transfer complying with Section 5(e)(i)(8)) for the purpose of acquiring Equity Securities or voting rights with respect thereto for its own account or with an intent to transfer such securities or such rights to any particular Person or group and (z) unless the total number of Equity Securities of ILG underlying Hedging Transactions, Loan Transactions and Stock Lending Transactions, and other pledge transactions involving any Liberty Party or a Liberty Controlled Affiliate, entered into during the prior 90 days, together with the Equity Securities underlying such Hedging Transaction, Loan Transaction, Stock Lending Transaction or other pledge transaction, do not exceed 10% of the Total Equity Securities of ILG.  Notwithstanding anything to the contrary herein, the limitations set forth in clauses (x) and (z) of the preceding sentence shall only be applicable if, at the time the applicable Liberty Party enters into a transaction referenced in clauses (x) or (z) above, the Liberty Ownership Percentage is greater than or equal to 25%.

(f)Any transaction involving Liberty or any of its Affiliates (i) that would be required by Item 7(b) of Schedule 14A under the Exchange Act, insofar as Item 7(b) calls for information required by Section 404 of Regulation S-K under the Exchange Act, to be disclosed by ILG in a proxy statement furnished to ILG’s stockholders in connection with a meeting at which directors are to be elected, or (ii) and ILG or any of its Affiliates, shall require the approval of a majority of the directors of ILG not designated by Liberty; provided, that this Section 5(f) shall not apply to immaterial, arms-length transactions between ILG or any of its Affiliates, on the one hand, and Liberty or any of its Affiliates, on the other hand.

(g)Until the date that Liberty no longer has the right to nominate at least one (1) Liberty Director, the Board of Directors shall take such action as is necessary to cause the exemption of any acquisition or disposition of Equity Securities by the Liberty Parties from or to, as applicable, ILG from the liability provisions of Section 16(b) of the Exchange Act pursuant to Rule 16b-3.

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6.Certain Offers

Until the Fall-Away Date:

(a)(i)  in the event the Board of Directors of ILG determines to pursue a Covered Transaction with respect to ILG on a negotiated basis and in connection therewith (x) conducts or publicly announces an intention to conduct an “auction” or similar process with respect thereto, Liberty shall be invited to participate in such process on a comparable basis with other potential bidders or (y) if no such process shall be conducted, (A) promptly following the first date on which a draft agreement that, upon execution, would bind (subject to conditions) ILG to enter into a Covered Transaction is provided by or on behalf of ILG to the counterparty or written comments on such counterparty’s draft definitive transaction agreement are provided by or on behalf of ILG to such counterparty (but in no event less than 5 Business Days prior to the Board of Directors of ILG authorizing ILG to enter into an agreement providing for a Taxable Covered Transaction or less than 72 hours prior to the Board of Directors of ILG authorizing ILG to enter into an agreement providing for a Covered Transaction that is not a Taxable Covered Transaction), ILG shall give notice to Liberty of the possibility of the pending Covered Transaction, which notice shall include a general description of the Covered Transaction (but which need not include the identity of the counterparty) and shall indicate whether ILG expects the Covered Transaction will be a Taxable Covered Transaction (the “Tax Status”), and (B) so long as ILG is pursuing such Covered Transaction, ILG shall advise Liberty in the event it becomes substantially likely that such Covered Transaction, if previously characterized as not being a Taxable Covered Transaction, now will be a Taxable Covered Transaction, or upon a material change in the nature of the Covered Transaction as described in the notice previously provided;

(ii)in the case of a potential Covered Transaction as to which clause (a)(i) of this Section 6 applies, (x) Liberty shall, and Liberty shall cause the Liberty Controlled Affiliates to, keep confidential the fact of its or their receipt of any invitation to participate or other notice in respect of such potential Covered Transaction and the contents of any such invitation or notice (subject to customary exceptions, including disclosure to representatives who acknowledge such confidentiality obligation) and (y) promptly following receipt of any such invitation or notice, but in any event within five Business Days of such receipt, Liberty shall inform ILG whether Liberty intends to in good faith participate in the auction or similar process (in the case of subclause (a)(i)(x) of this Section 6) or in good faith pursue the Covered Transaction (in the case of subclause (a)(i)(y) of this Section 6).  If Liberty shall so inform ILG of its good faith intention to participate in the process or to pursue the transaction, it shall actively so participate or pursue, and shall promptly provide notice to ILG in the event its intention changes.  In the event Liberty provides notice to ILG that it does not intend to participate in the process or pursue the Covered Transaction (whether such notice is given initially or following a prior indication of interest), or if Liberty ceases to actively so participate or pursue, then ILG shall be relieved of any further obligation under this Section 6(a) with respect to such Covered Transaction; provided, that if thereafter the expected Tax Status of the Covered Transaction changes from not being a Taxable Covered Transaction to being a Taxable Covered Transaction, or upon a material change in the nature of the Covered Transaction as described in the notice previously provided, ILG will promptly notify Liberty of such changed status or nature and Liberty shall again be permitted to inform ILG of its good faith intention to participate in the process or pursue the transaction, all in accordance with the provisions of this Section 6; and

(iii)in connection with any potential Covered Transaction as to which clause (a)(i)(y) of this Section 6 applies, (x) if so requested by Liberty, ILG will furnish Liberty with information regarding ILG reasonably comparable to the information provided to the prospective counterparty to such Covered Transaction provided that Liberty shall have executed and delivered to ILG a nondisclosure (or similar) agreement substantially equivalent to any nondisclosure (or similar) agreement entered into with such prospective counterparty (other than any “standstill” obligations therein on the part of such

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prospective counterparty and provided that such confidentiality agreement will contain customary exceptions to such obligations) and (y) the Board of Directors of ILG shall consider any offer for a Covered Transaction made in good faith by Liberty but shall have no obligation hereunder to accept any such offer or to enter into negotiations with Liberty;

(b)in the event a third party shall commence (within the meaning of Rule 14d-2 under the Exchange Act) an offer for a Covered Transaction described in clause (i) of the definition thereof which offer is not made pursuant to an agreement with ILG (the “Triggering Offer”), and within 10 Business Days following the commencement of such Triggering Offer the Board of Directors of ILG shall have failed to take action reasonably calculated to prevent such third party from acquiring Beneficial Ownership of Equity Securities of ILG to the extent such acquisition would result in such third party’s Ownership Percentage with respect to ILG exceeding the Applicable Percentage (whether through the adoption of a Shareholder Rights Plan, pursuit of litigation or otherwise) (“Blocking Action”), the Liberty Parties (x) shall be relieved of their obligations under Sections 5(a) or 5(b), as applicable, of this Agreement to the extent reasonably necessary to permit Liberty to commence a Competing Offer and (y) for so long as the third party has not withdrawn or abandoned its offer or Liberty receives a notice from ILG pursuant to Section 6(a)(i)(y) regarding a Covered Transaction with such third party, shall be relieved of their obligations under Sections 5(a) and 5(b) to the extent necessary to permit Liberty to consummate such Competing Offer.  Notwithstanding the foregoing, this paragraph (b) shall not relieve any Liberty Party of its obligations in the event that a majority of the directors of ILG not designated by Liberty have supported the taking of Blocking Action and, notwithstanding such support, the Board of Directors of ILG fails to take Blocking Action;

(c)in the event Liberty shall consummate a Competing Offer for ILG in the circumstances permitted by Section 6(b) and otherwise in compliance with the terms of this Agreement, and as a result of which consummation the Liberty Ownership Percentage shall exceed 50%, any consent or approval requirements of the directors of ILG not designated by Liberty set forth in this Agreement will be deemed terminated and will cease to be of any further force and effect, and, following the date the Liberty Ownership Percentage exceeds 50%, the provisions of Sections 5(a), 5(b), 5(c) and 5(d) of this Agreement will be deemed terminated and will cease to be of any further force and effect; and

(d)in the event a third party shall publicly disclose that its Ownership Percentage with respect to ILG exceeds 20% and within 10 Business Days following such public announcement the Board of Directors of ILG shall have failed to take Blocking Action, the Liberty Parties shall be relieved of their obligations under Sections 5(a), 5(b), 5(c) and 5(d) of this Agreement to the extent reasonably necessary to permit Liberty to commence and consummate an offer to acquire all of the outstanding Equity Securities of ILG.  Notwithstanding the foregoing, this paragraph (d) shall not relieve any Liberty Party of its obligations in the event that a majority of the directors of ILG not designated by Liberty have supported the taking of Blocking Action and, notwithstanding such support, the ILG Board of Directors fails to take Blocking Action.

(e)For purposes of this Section 6, the terms below shall have the following meanings:

“Taxable Covered Transaction” means the acquisition of ILG by a third party in a Covered Transaction that is generally taxable to the stockholders of ILG for federal income tax purposes.

“Competing Offer” means a tender or exchange offer for any and all Equity Securities of ILG or a merger proposal to acquire all of the outstanding Equity Securities of ILG not owned by the Liberty Parties; provided, that, if the Triggering Offer is for less than any and all such Equity Securities, the Competing Offer may instead be for such Equity Securities of ILG as would, upon consummation of the Competing Offer, result in the Liberty Ownership Percentage in respect of ILG being equal to or less than

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what the third party offeror’s Ownership Percentage in respect of ILG would be upon consummation of the Triggering Offer assuming all shares sought in the Triggering Offer were tendered and accepted.

7.[Intentionally Omitted]

8.[Intentionally Omitted]

9.Third Party Beneficiaries; Standalone Agreements; Assignment

(a)Nothing in this Agreement, whether express or implied, shall be construed to give any Person, other than the parties hereto, any legal or equitable right, remedy or claim under or in respect of this Agreement.

(b)If any Liberty Party shall transfer or otherwise dispose of any Equity Securities of ILG to a Liberty Controlled Affiliate in a transfer or disposition permitted by the terms of this Agreement, such transferee and the Transferring Liberty Party shall execute and deliver to ILG an Affiliate Assignment and Assumption Agreement.  ILG shall also execute such Affiliate Assignment and Assumption Agreement.

(c)Except pursuant to any Assignment and Assumption Agreement, neither this Agreement nor any rights or obligations under this Agreement shall be assigned, in whole or in part, by any party without the prior written consent (i) of Liberty, in the case of an assignment by ILG or (ii) of ILG in the case of an assignment by any Liberty Party.  Subject to the foregoing, the provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

10.General Provisions

(a)Notices.  All notices, requests and other communications to any party hereunder shall be in writing (including telecopy and e-mail) and shall be given, if to any Liberty Party, to:

Liberty Interactive Corporation
12300 Liberty Boulevard
Englewood, Colorado  80112
Attention:General Counsel
Facsimile:(720) 875-5401
E-mail:  legalnotices@libertymedia.com

with a copy (which shall not constitute notice) to:

Baker Botts L.L.P.
30 Rockefeller Plaza
44th Floor
New York, New York  10112
Attention:Frederick H. McGrath
Facsimile:(212) 408-2501
Email:frederick.mcgrath@bakerbotts.com

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if to ILG, to:

Interval Leisure Group, Inc.
6262 Sunset Drive
Miami, Florida 33143
Attention: Victoria J. Kincke, General Counsel
Facsimile: (305) 667-2072
E-mail:  Victoria.Kincke@iilg.com

with a copy (which shall not constitute notice) to:

Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention:  Michael E. Lubowitz
Facsimile:  (212) 310-8007
E-mail:michael.lubowitz@weil.com

or such address or facsimile number as such party may hereafter specify for the purpose by notice to the other parties hereto.  Each such notice, request or other communication shall be effective when delivered personally, telegraphed, e-mailed or telecopied, or, if mailed, five business days after the date of the mailing.

(b)Amendments; No Waivers.  Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by ILG and Liberty, or in the case of a waiver, by the party or parties against whom the waiver is to be effective.

No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

(c)Effectiveness of this Agreement.  Notwithstanding anything to the contrary contained in this Agreement, except as set forth in the following sentence, this Agreement shall become effective upon the execution by all parties hereto, and shall amend and restate in its entirety the Original Spinco Agreement; provided, however, that notwithstanding the foregoing, (i) during the period from the date hereof to the Closing (the “Interim Period”), (x) the provisions of Sections 3(a) and (b) hereof will be deemed not to be effective and will be deemed replaced by Sections 3(a) and (b) of the Original Spinco Agreement, (y) the term “Fall-Away Date” will be deemed to be defined as “the first date on which the Liberty Ownership Percentage first falls below 20%” and (z) Section 5(a) will not be effective and will not be deemed to limit or restrict acquisitions of ILG Common Stock or other Equity Securities of ILG during the Interim Period and (ii) in the event the Merger Agreement is terminated and the transactions contemplated by the Merger Agreement not completed, in each case, in accordance with the terms of the Merger Agreement, then automatically upon termination of the Merger Agreement and without further action by any party hereto, this Agreement will be deemed amended to (A) reflect that Sections 3(a) and (b) hereof will be replaced by Sections 3(a) and (b) of the Original Spinco Agreement, and the term “Fall-Away Date” will be deemed to be defined as “the first date on which the Liberty Ownership Percentage first falls below 20%” and (B) delete in their entirety Sections 3(c), 5(a) and 5(c) hereof.

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(d)Registration Rights Agreement. Substantially concurrently with the execution of this Agreement, ILG and Liberty will enter into the Registration Rights Agreement which, for the avoidance of doubt, will remain in full force and effect regardless of whether or not the Closing occurs.

(e)Termination.  Upon the Fall-Away Date, this Agreement (other than Section 5(a) (in the event the Fall-Away Date occurs prior to the second anniversary of the Closing), Section 9(a), Section 9(c), Section 10 and the corresponding definitions in Section 1 of the defined terms appearing in such sections (collectively, the “Surviving Spinco Provisions”)) shall automatically terminate without further action by any party hereto and shall be of no further force or effect; provided, that notwithstanding the occurrence of the Fall-Away Date, the Surviving Spinco Provisions shall continue to remain in full force and effect until the date that is two (2) years following the Closing, at which time the Surviving Spinco Provisions shall automatically terminate without further action by any party hereto and shall have no further force or effect.  Notwithstanding any other provision in Section 10(c) or this Section 10(e), no termination of this Agreement or of any of the provisions contained herein shall relieve any party hereto from liability arising from a breach by such party of any of the terms of this Agreement that occurred prior to the date of such termination.

(f)Governing Law; Consent To Jurisdiction.  This Agreement shall be construed in accordance with and governed by the internal laws of the State of Delaware, without giving effect to the principles of conflicts of laws.  Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of Delaware, for any action, proceeding or investigation in any court or before any governmental authority (“Litigation”) arising out of or relating to this Agreement and the transactions contemplated hereby and further agrees that service of any process, summons, notice or document by U.S. mail to its respective address set forth in this Agreement shall be effective service of process for any Litigation brought against it in any such court.  Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any Litigation arising out of this Agreement or the transactions contemplated hereby in the courts of the State of Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Litigation brought in any such court has been brought in an inconvenient forum.  Each of the parties irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any and all rights to trial by jury in connection with any Litigation arising out of or relating to this Agreement or the transactions contemplated hereby.

(g)Counterparts.  This Agreement may be executed in separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same agreement.

(h)Specific Performance; Other Limitations.  ILG and each Liberty Party each acknowledge and agree that the parties’ respective remedies at law for a breach or threatened breach of any of the provisions of this Agreement would be inadequate and, in recognition of that fact, agrees that, in the event of a breach or threatened breach by ILG or a Liberty Party of the provisions of this Agreement, in addition to any remedies at law, the Liberty Party or ILG, respectively, without posting any bond shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available.  No breach or threatened breach on the part of any party hereto shall relieve any other party of any of its obligations under this Agreement.

(i)Severability.  If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated, provided that the parties hereto shall negotiate in good faith

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to attempt to place the parties in the same position as they would have been in had such provision not been held to be invalid, void or unenforceable.

(j)Entire Agreement.  This Agreement, together with the agreements and instruments referenced herein, embodies the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes any prior understanding or agreements by or among the parties, written or oral, with respect to the subject matter hereof, including, as of the Closing, the Original Spinco Agreement.

(k)Interpretation.  References in this Agreement to Sections shall be deemed to be references to Sections of this Agreement unless the context shall otherwise require.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of such agreement or instrument.  The word “knowledge” when used in this Agreement shall refer to the actual knowledge of the Person in question without such Person being under any duty or obligation to make any inquiries.  Each reference to a statute, rule or regulation (including any section of the Code and any Treasury Regulations) herein shall be deemed to include any successor statute, rule or regulation thereto.  Without limiting the rights in Sections 5(a) and 5(b) hereof, increases in Liberty’s Ownership Percentage solely resulting from actions taken by ILG or its Affiliates, including stock repurchases, reverse splits and reclassifications, will not be deemed to constitute an acquisition of Beneficial Ownership of Equity Securities of ILG.

(l)Headings.  The headings contained in this Agreement are for convenience only and shall not be interpreted to limit or otherwise affect the provisions of this Agreement.

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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date first written above.

Liberty Interactive Corporation,		Liberty USA Holdings, LLC,
a Delaware corporation		a Delaware limited liability company
By:	/s/ Craig Troyer
Name: Craig Troyer			By: Liberty Interactive LLC, its sole member and manager
Title:  Vice President and Deputy General Counsel
		By:		/s/ Craig Troyer
		Name:		Craig Troyer
		Title:		Vice President
		Interval Leisure Group, Inc.,
			a Delaware corporation
			By:		/s/ Jeanette E. Marbert
			Name: Jeanette E. Marbert
			Title:  Executive Vice President and Chief Operating Officer

EX-10.3

EXHIBIT 10.3

EXECUTION VERSION

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (ILG)

AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of October 27, 2015, is entered into by and among LIBERTY INTERACTIVE CORPORATION, a Delaware corporation (“Liberty”), the LIBERTY PARTIES (as defined below) and INTERVAL LEISURE GROUP, INC., a Delaware corporation (the “Issuer” or “ILG”).

RECITALS:

WHEREAS, Liberty, the Liberty Parties, and ILG entered into a Registration Rights Agreement (ILG), dated as of August 20, 2008, (the “Original Registration Rights Agreement”) in connection with the spin-off of ILG from IAC/InterActiveCorp;

WHEREAS, ILG, Iris Merger Sub, Inc., Starwood Hotels & Resorts Worldwide, Inc. and Vistana Signature Experiences, Inc. have entered into that certain Agreement and Plan of Merger, dated as of October 27, 2015 (the “Merger Agreement”);

WHEREAS, simultaneously with the execution of this Agreement, ILG and Liberty are entering into that certain ILG Spinco Agreement; and

WHEREAS, the parties now desire to amend and restate the Original Registration Rights Agreement.

NOW, THEREFORE in consideration of the mutual promises and covenants set forth herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Original Registration Rights agreement is hereby amended and restated in its entirety with respect to the parties hereto as follows:

ARTICLE I

DEFINITIONS

Section 1.01.  Certain Defined Terms.  As used in the Agreement, the following terms shall have the meanings set forth below:

“1933 Act” means the Securities Act of 1933, as amended, or any similar successor federal statute and the rules and regulations promulgated thereunder, as the same shall be in effect from time to time.

“1934 Act” means the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the rules and regulations promulgated thereunder, as the same shall be in effect from time to time.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such first Person.  For purposes of this definition, the term “control” (including its correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by

contract or otherwise.  For purposes of this definition, (i) natural persons shall not be deemed to be Affiliates of each other, and (ii) neither the Issuer nor any of its Affiliates shall be deemed to be an Affiliate of Liberty, any Liberty Party or any of their respective Affiliates.

“ASRS” means an “automatic shelf registration statement” as defined in Rule 405 promulgated under the 1933 Act.

“ASRS Eligible” means the Issuer meets or is deemed to meet the eligibility requirements to file an ASRS as set forth in General Instruction I.D. to Form S-3.

“beneficially own” has the meaning set forth in Rule 13d-3 under the 1934 Act, as such Rule is in effect on the date hereof.

“Blackout Notice” has the meaning set forth in Section 2.05(a).

“Blackout Period” has the meaning set forth in Section 2.05(a).

“Board of Directors” means the Board of Directors of the Issuer or an authorized committee thereof.

“Business Day” means any day other than a Saturday, a Sunday or a day on which banks in New York City are authorized or obligated by law or executive order to close.

“Common Stock” means Common Stock, par value $.01 per share, of the Issuer.

“Demand Registration Statement” has the meaning set forth in Section 2.01.

“Demand Request” has the meaning set forth in Section 2.01.

“Disadvantageous Condition” has the meaning set forth in Section 2.05(a).

“Effective Time” has the meaning set forth in Section 2.01.

“Effective Time Shares” means the shares of Common Stock owned by the Liberty Parties after giving effect to the transactions contemplated by the Merger Agreement, including such shares as may be transferred to a Holder which transfer is, at the time of such transfer, permitted by the Spinco Agreement.

“Effectiveness End Date” has the meaning set forth in Section 2.01.

“Effectiveness Period” has the meaning set forth in Section 2.01.

“Exchange Holder” means a holder of Exchangeable Securities that exercises its exchange right thereunder and receives Common Stock from the issuer of such Exchangeable Securities.

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“Exchangeable Securities” mean notes or debentures of a Holder or an Affiliate that reference Common Stock and that permit the holder to exchange such Exchangeable Securities for such Common Stock or other consideration provided for in such Exchangeable Securities.

“Free Writing Prospectus” means each “free writing prospectus” within the meaning of Rule 405 promulgated under the 1933 Act.

“Hedging Counterparty” means a broker-dealer registered under Section 15(b) of the 1934 Act or an Affiliate thereof or any other financial institution that routinely engages in Hedging Transactions in the ordinary course of its business.

“Hedging Transaction” means any transaction, agreement or arrangement involving a security linked to the Registrable Shares or any security that would be deemed to be a “derivative security” (as defined in Rule 16a-1(c) under the 1934 Act) with respect to the Registrable Shares or any transaction (even if not a security) which would (were it a security) be considered such a derivative security, or which transfers some or all of the economic risk of ownership of the Registrable Shares, including any forward contract, equity swap, put or call, put or call equivalent position, collar, non-recourse loan, sale of an Exchangeable Security or similar transaction.  For the avoidance of doubt, the following transactions shall be deemed to be Hedging Transactions:

(a)transactions by a Holder in which a Hedging Counterparty engages in short sales of Common Stock pursuant to a prospectus and may use Registrable Shares to close out its short position;

(b)transactions pursuant to which a Holder sells short Common Stock pursuant to a prospectus and delivers Registrable Shares to close out its short position;

(c)transactions by a Holder in which the Holder delivers, in a transaction exempt from registration under the 1933 Act, Registrable Shares to a Hedging Counterparty who may then publicly resell or otherwise transfer such Registrable Shares pursuant to a prospectus or an exemption from registration under the 1933 Act; and

(d)a loan or pledge of Registrable Shares to a Hedging Counterparty who may then become a Permitted Transferee and sell the loaned shares or, in an event of default in the case of a pledge, then sell the pledged shares, in each case, in a public transaction pursuant to a prospectus.

“Holder” means Liberty, each of the Liberty Parties, each Permitted Transferee (which, for the avoidance of doubt, may include an Exchange Holder), and to the extent LMC beneficially owns Registrable Shares, LMC, in each case, for so long as such Person beneficially owns Registrable Shares.

“Indemnified Party” has the meaning set forth in Section 4.03.

“Indemnifying Party” has the meaning set forth in Section 4.03.

“Inspectors” has the meaning set forth in Section 3.01(j).

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“Lead Holder” means, until such time as the Liberty Parties effect a Permitted Restricted Transfer, Liberty or, to the extent that LMC becomes a Holder, LMC, and, thereafter, shall mean the Restricted Transferee in such Permitted Restricted Transfer.

“Liability” has the meaning set forth in Section 4.01.

“Liberty Parties” means Liberty USA Holdings, LLC, a Delaware limited liability company (and any successor or assign or acquirer of a Liberty Party (whether by merger, consolidation, sale of assets or otherwise), provided that such Liberty Party shall have caused such successor, assign or acquirer to enter into an agreement, in writing in form and substance reasonably satisfactory to the Issuer, to be bound by the terms and provisions of this Agreement as a condition of any such transaction.

“LMC” means Liberty Media Corporation, a Delaware corporation.

“Lock-up Agreements” has the meaning set forth in Article IV.

“Market Value” of a share of Common Stock on any Trading Day means the last reported sale price, regular way, of a share of such stock on such Trading Day or, in case there is no last reported sale price on such Trading Day, the average of the reported closing bid and asked prices regular way of a share of such stock on such Trading Day, in either case on the principal stock exchange on which shares of such stock are traded.  The Market Value of a share of Common Stock on any day which is not a Trading Day shall be deemed to be the Market Value of a share of Common Stock on the immediately preceding Trading Day.

“Maximum Number of Shares” means, with respect to any underwritten offering, the maximum number of shares of Common Stock (including Registrable Shares) that the co-managing underwriters advise the Issuer can be included in such offering without having an adverse effect on such offering, including the price at which the shares can be sold.

“Merger Agreement” has the meaning set forth in the Recitals.

“Offering Confidential Information” has the meaning set forth in Section 2.10(e)(i).

“Original Amount” means the number of shares of Common Stock constituting Registrable Shares on the date hereof (as such number shall be appropriately adjusted to give effect to any of the events described in Section 6.01).

“Original Registration Rights Agreement” has the meaning set forth in the Recitals.

“Other Shares” means shares of Common Stock, other than Effective Time Shares, acquired by the Liberty Parties consistent with the Spinco Agreement, including such shares as may be transferred to a Holder which transfer is, at the time of such transfer, permitted by the Spinco Agreement.

“Other Shareholders” means holders of Common Stock that have obtained registration rights from the Issuer (other than the Holders).

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“Permitted Restricted Transfer” has the meaning given such term in the Spinco Agreement.

“Permitted Transferee” has the meaning set forth in Section 2.09.

“Person” means any individual, partnership, joint venture, corporation, limited liability company, trust, unincorporated organization, government or department or agency of a government.

“Piggyback Notice” has the meaning set forth in Section 2.10.

“Piggyback Registration” has the meaning set forth in Section 2.10.

“prospectus” means the prospectus related to any Registration Statement (including a prospectus that discloses information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance on Rule 415), as amended or supplemented by any amendment (including post-effective amendments), pricing term sheet, Free Writing Prospectus or prospectus supplement, and all documents and materials incorporated by reference in such prospectus.

“Records” has the meaning set forth in Section 3.01(j).

“Registrable Shares” means, at any time, the Effective Time Shares and the Other Shares that are beneficially owned by any of the Holders; provided that any particular shares will cease to be Registrable Shares: (i) if and when such shares shall have been disposed of pursuant to an effective Registration Statement; (ii) if and when such shares shall have been sold pursuant to Rule 144 under the 1933 Act; (iii) if and when such shares shall have been otherwise transferred and such shares shall not be subject to any restrictions under Rule 144 of the 1933 Act (or any successor rule or regulation thereto) in the hands of such transferee; and (iv) if and when such shares shall have ceased to be outstanding (for the avoidance of doubt, any shares held in the treasury of the Issuer or by a subsidiary of the Issuer shall not be considered outstanding).  Effective Time Shares and Other Shares which are Registrable Shares shall also cease to be Registrable Shares if and when such shares may be disposed of by the holder thereof without volume, holding period or manner of sale restrictions.

“Registration Expenses” means the following expenses incurred in connection with any registration of Registrable Shares or, in the case of a Hedging Counterparty, if applicable, other shares of Common Stock, pursuant to this Agreement: (i) the fees, disbursements and expenses of the Issuer’s counsel and accountants; (ii) all filing fees in connection with the filing of any Registration Statement, any prospectus, any other offering documents and any amendments and supplements thereto; (iii) all expenses in connection with the qualification of the Registrable Shares or other shares of Common Stock to be disposed of for offering and sale or distribution under state securities laws (other than those contemplated in clause (C) to the proviso below); (iv) the filing fees incident to securing any required review by the Financial Industry Regulatory Authority of the terms of the sale or distribution of the Registrable Shares or other shares of Common Stock to be disposed of; (v) all security engraving and security printing expenses; and (vi) all expenses in connection with the listing of the Registrable Shares on the principal stock

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exchange on which other shares of Common Stock are listed; provided, however, that the term “Registration Expenses” shall not include (A) the fees, disbursements and expenses of Special Counsel or any other counsel for the Holders; (B) all expenses incurred in connection with the printing, mailing and delivering of copies of any Registration Statement, any prospectus, any other offering documents and any amendments and supplements thereto to any underwriters and dealers; (C) the cost of preparing, printing or producing any agreements among underwriters, underwriting agreements, and blue sky or legal investment memoranda, any selling agreements and any other similar documents in connection with the offering, sale, distribution or delivery of the Registrable Shares or other shares of Common Stock to be disposed of, including any fees of counsel for any underwriters in connection with the qualification of the Registrable Shares or other shares of Common Stock to be disposed of for offering and sale or distribution under state securities laws; (D) any broker’s commissions or underwriter’s discount, fee or commission relating to the sale of Registrable Shares or other shares of Common Stock and any other fees and disbursements of underwriters; and (E) costs and expenses of the Issuer relating to analyst or investor presentations.

“Registration Statement” means a Demand Registration Statement or a Section 2.10 Registration Statement, as the context requires.

“Restricted Transferee” has the meaning given such term in the Spinco Agreement.

“Rule 144” means Rule 144 as promulgated by the SEC under the 1933 Act, as such Rule may be amended from time to time, or any similar successor rule promulgated by the SEC.

“Rule 405” means Rule 405 as promulgated by the SEC under the 1933 Act, as such Rule may be amended from time to time, or any similar successor rule promulgated by the SEC

“Rule 415” means Rule 415 as promulgated by the SEC under the 1933 Act, as such Rule may be amended from time to time, or any similar successor rule promulgated by the SEC.

“S-3 Eligible” means the Issuer meets or is deemed to meet the eligibility requirements to file on Form S-3 as set forth in General Instruction I.A. to Form S-3.

“SEC” means the Securities and Exchange Commission.

“Section 2.10 Registration Statement” has the meaning set forth in Section 2.10.

“Special Counsel” means Baker Botts L.L.P., or such other law firm of national reputation as may be selected by the Lead Holder (or any other Holder who (together with its Affiliates), at the time of such selection, beneficially owns the highest percentage of the  Registrable Shares) and notified in writing to the Issuer.

“Spinco Agreement” means the ILG Spinco Agreement, dated as of October 27, 2015, among the parties hereto.

“Total Registrable Amount” means the Original Amount on the date hereof plus the number of Other Shares acquired after the date hereof, in each case appropriately adjusted, but

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only with respect to the number of Registrable Shares on the date of such event, to give effect to any of the events described in Section 6.01.

“Trading Day” means a day on which shares of the Common Stock are traded on the principal United States securities exchange on which such shares are listed.

ARTICLE II

REGISTRATION RIGHTS

Section 2.01.  Registration Upon Demand.  At any time commencing upon the earlier of (i) sixty (60) days after the date of the closing of the transactions contemplated by the Merger Agreement and (ii) the date of the termination of the Merger Agreement in accordance with its terms, and for so long as there are any Registrable Shares, upon the written request of the Lead Holder acting on behalf of one or more Holders (a “Demand Request”), the Issuer shall prepare a registration statement (a “Demand Registration Statement”) on (i) if the Issuer is then S-3 Eligible, a Form S-3 or (ii) if the Issuer is not then S-3 Eligible, any other appropriate form under the 1933 Act, for the type of offering contemplated by the Demand Request (which may include an offering to be made on a delayed or continuous basis under Rule 415); provided, that the aggregate offering price applicable to any Demand Registration Statement so requested to be filed shall not be less than $50 million (determined by multiplying the number of Registrable Shares to be included in such Demand Registration Statement by the Market Value on the day on which such Demand Request is received by the Issuer).  The Demand Request shall specify, for each Holder, the number of Registrable Shares to be included in such Demand Registration Statement for such Holder’s account and such Holder’s intended method of distribution.  If the Issuer is ASRS Eligible at the time any Demand Request is received for a shelf registration statement, the Issuer shall use commercially reasonable efforts to cause the Demand Registration Statement to be an ASRS.  Subject to Section 2.05, the Issuer shall use its commercially reasonable efforts to cause the Demand Registration Statement (i) to be filed with the SEC as promptly as reasonably practicable following the receipt of the Demand Request, (ii) to become effective as promptly as reasonably practicable after filing, and (iii) to remain continuously effective during the time period (the “Effectiveness Period”) commencing on the date such Demand Registration Statement is declared effective (the “Effective Time”) and ending on (A) the date that there are no longer any Registrable Shares covered by such Demand Registration Statement or (B) if earlier, the 90th day (180th day if the Demand Registration Statement is on Form S-3) after the Demand Registration Statement is initially declared effective (the ending date specified in this clause (iii), the “Effectiveness End Date”).  No more than four (4) Demand Requests may be made.

Section 2.02.  Revocation of Demand Request.  Any Demand Request may be revoked by notice from the Lead Holder to the Issuer prior to the effective date of the corresponding Demand Registration Statement; provided, that such revoked Demand Request shall count as one of the four Demand Requests referred to in the last sentence of Section 2.01 unless the Issuer as promptly as reasonably practicable is reimbursed for all out-of-pocket expenses (including fees of outside counsel and accountants and other Registration Expenses) incurred by the Issuer relating to the registration requested pursuant to such revoked Demand Request.  A Demand

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Request may not be made for a minimum of 30 calendar days after the revocation of an earlier Demand Request.

Section 2.03.  Selection of Underwriters and Underwriter’s Counsel.  The Holders may effect one or more underwritten public offerings with respect to the Registrable Shares included in a Demand Registration Statement; provided, that no underwritten public offering shall be effected in which the gross proceeds to the selling Holders, in the aggregate, are not expected to exceed $50 million.  The Holder(s) effecting any such public offering, acting through the Lead Holder, shall select the managing underwriter or co-managing underwriters for such public offering, subject to the approval of the Issuer, which shall not be unreasonably withheld, delayed or conditioned.  Designated underwriters’ counsel shall be a firm of national reputation representing underwriters in capital markets transactions and shall be subject to the approval of the Issuer, which shall not be unreasonably withheld, delayed or conditioned.

Section 2.04.  Registration In Connection With Hedging Transactions.

(a)The Issuer acknowledges that from time to time a Holder may seek to enter into one or more Hedging Transactions with a Hedging Counterparty.  The Issuer agrees that, in connection with any proposed Hedging Transaction then permitted by the Spinco Agreement, if, in the reasonable judgment of counsel to such Holder (after good faith consultation with counsel to the Issuer), it is necessary or desirable to register under the 1933 Act sales or transfers (whether short or long and whether by the Holder or by the Hedging Counterparty) of Registrable Shares or (by the Hedging Counterparty) other shares of Common Stock in connection therewith, then a Registration Statement covering Registrable Shares or such other shares of Common Stock may be used in a manner otherwise in accordance with the terms and conditions of this Agreement to register such sales or transfers under the 1933 Act.  Notwithstanding anything in this Agreement to the contrary, the Issuer shall not be required to register, and shall not be required to pay Registration Expenses in connection with the registration of, an aggregate number of sales or transfers of Registrable Shares or other shares of Common Stock in excess of the Total Registrable Amount, it being understood that a sale or transfer of a Registrable Share or other share of Common Stock shall be considered to have been registered for purposes of this Section 2.04 and Section 6.15 when (1) a Registration Statement covering such Registrable Share or other share of Common Stock shall have been declared effective or, following a request pursuant to Section 2.04(b), an effective shelf Registration Statement is available to cover the sale or transfer of the Registrable Share or other share of Common Stock requested to be covered and (2) in the case of a Demand Registration Statement, such Demand Registration Statement shall have remained effective until (A) such sale or transfer of such Registrable Share or other share of Common Stock shall have occurred or (B) if earlier, the Effectiveness End Date thereof.

(b)If, in the circumstances contemplated by Section 2.04(a), a Holder seeks to register sales or transfers of Registrable Shares (or the sale or transfer by a Hedging Counterparty of other shares of Common Stock) in connection with a Hedging Transaction at a time when a Registration Statement covering Registrable Shares is effective, upon receipt of written notice thereof from the Lead Holder, the Issuer shall use commercially reasonable efforts to take such actions as may reasonably be required to permit such sales or transfers in connection with such Hedging Transaction to be covered by such effective Registration

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Statement in a manner otherwise in accordance with the terms and conditions of this Agreement, which may include, among other things, the filing of a prospectus supplement or post-effective amendment including a description of such Hedging Transaction, the name of the Hedging Counterparty, identification of the Hedging Counterparty or its Affiliates as underwriters or potential underwriters, if applicable, and any change to the plan of distribution contained in the prospectus; provided that, in the case of a Demand Registration Statement, in no event shall the foregoing require the Issuer to extend the Effectiveness Period of the Registration Statement beyond the Effectiveness End Date.

(c)Any information regarding a Hedging Transaction included in a Registration Statement pursuant to this Section 2.04 shall be deemed to be information provided by the Holder selling or transferring Registrable Shares or shares of Common Stock pursuant to such Registration Statement for purposes of Article V of this Agreement.

(d)If, with respect to a Hedging Transaction in connection with which a registration is contemplated by Section 2.04(a), a Hedging Counterparty or any Affiliate thereof is (or may be considered) an underwriter or selling securityholder, then, as a condition to including in any Registration Statement any sales or transfers of Registrable Shares or other shares of Common Stock by such Hedging Counterparty in connection with such Hedging Transaction, it and the Issuer shall be required to enter into an agreement with the other (x) providing for indemnification rights substantially similar to those provided under Article V and (y) pursuant to which such Hedging Counterparty and/or Affiliate thereof, to the extent registering shares of Common Stock that are not Registrable Shares, agrees to be bound by the obligations applicable to a Holder hereunder as if such other shares were Registrable Shares.

(e)The Issuer acknowledges that, from time to time, the Lead Holder may offer and sell Exchangeable Securities, in one or more transactions exempt from the registration requirements of Section 5 of the 1933 Act.  Notwithstanding anything to the contrary contained herein, the Issuer agrees that, in connection with any proposed offering of Exchangeable Securities, a Registration Statement covering the secondary sale of the Common Stock referenced by such Exchangeable Security may be used in a manner otherwise in accordance with the terms and conditions of this Agreement to register such sales or transfers under the 1933 Act.

Section 2.05.  Blackout Periods.

(a)With respect to any Registration Statement, or amendment or supplement thereto, whether filed or to be filed pursuant to this Agreement, if the General Counsel of the Issuer shall determine, in its good faith judgment, that to maintain the effectiveness of such Registration Statement or file an amendment or supplement thereto (or, if no Registration Statement has yet been filed, to file such a Registration Statement) would (i) require the public disclosure of material non-public information concerning any transaction or negotiations involving the Issuer or any of its consolidated subsidiaries that would materially interfere with such transaction or negotiations, (ii) require the public disclosure of material non-public information concerning the Issuer at a time when its directors and executive officers are restricted from trading in the Issuer’s securities, or (iii) otherwise materially interfere with material financing plans, acquisition activities or business activities of the Issuer (a

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“Disadvantageous Condition”), the Issuer may, for the shortest period reasonably practicable (a “Blackout Period”), and in any event for not more than 60 consecutive days, notify the Lead Holder and the other Holders whose sales of Registrable Securities are covered (or to be covered) by such Registration Statement (a “Blackout Notice”) that such Registration Statement is unavailable for use (or will not be filed as requested).  Upon the receipt of any such Blackout Notice, the Holders shall forthwith discontinue use of the prospectus contained in any effective Registration Statement; provided, that, if at the time of receipt of such Blackout Notice, any Holder shall have sold its Registrable Shares (or have signed a firm commitment underwriting agreement with respect to the purchase of such shares) and the Disadvantageous Condition is not of a nature that would require a post-effective amendment to the Registration Statement, then the Issuer shall use its commercially reasonable efforts to take such action as to eliminate any restriction imposed by federal securities laws on the timely delivery of such shares.  When any Disadvantageous Condition as to which a Blackout Notice has been previously delivered shall cease to exist or, if earlier, the expiration of the Blackout Period, the Issuer shall as promptly as reasonably practicable notify the Lead Holder and such other Holders and take such actions in respect of such Registration Statement as are otherwise required by this Agreement.  If a Blackout Period occurs during the Effectiveness Period of any Demand Registration Statement, the Effectiveness End Date in respect of such Registration Statement shall be extended for a number of days equal to the total number of days during which the distribution of Registrable Shares included in such Registration Statement was suspended under this Section 2.05(a).  The Issuer shall not impose, in any 360 calendar day period, Blackout Periods lasting, in the aggregate, in excess of 120 calendar days.

(b)If the Issuer declares a Blackout Period with respect to a Demand Registration Statement that has not yet been declared effective, (i) the Lead Holder may by notice to the Issuer withdraw the related Demand Request without such Demand Request counting against the four Demand Requests permitted to be made under Section 2.01 and (ii) neither the Lead Holder nor any other Holder will be responsible for the Issuer’s related Registration Expenses.

Section 2.06.  SEC Orders Suspending Effectiveness.  The Issuer shall notify the Lead Holder and all other Holders that have Registrable Shares included in a Registration Statement of any stop order threatened or issued by the SEC (to the extent known to the Issuer) with respect to such Registration Statement and, as to threatened orders, shall use commercially reasonable efforts to prevent the entry of such stop order.  If the effectiveness of a Registration Statement is suspended by a stop order issued by the SEC at any time during the Effectiveness Period, the Issuer shall use commercially reasonable efforts to obtain the prompt withdrawal of such order and to amend the Registration Statement in a manner reasonably expected by the Issuer to obtain the withdrawal of such order.

Section 2.07.  Plan of Distribution.  The “plan of distribution” section of each prospectus included in a Demand Registration Statement with respect to an offering to be made on a delayed or continuous basis under Rule 415 shall be substantially in the form of Annex A hereto or in a form otherwise appropriate, subject to the comments of the SEC and the inclusion of such other information as is required by applicable SEC regulations or to conform with applicable SEC practice or as is reasonably requested by the Holder.  Each Holder agrees to dispose of its

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Registrable Shares under a Registration Statement in accordance with the “plan of distribution” section of the applicable prospectus.

Section 2.08.  Expenses.  Subject to Section 2.02, the Issuer shall pay all Registration Expenses, and each Holder shall (i) pay all other expenses incurred by it and (ii) reimburse the Issuer for any other out-of-pocket expenses reasonably incurred by the Issuer, in each case in connection with any registration of its Registrable Shares pursuant to this Agreement.

Section 2.09.  Transfer of Registration Rights.  Each Holder shall have the right to transfer, by written agreement, any or all of its rights granted under this Agreement to any direct or indirect transferee of such Holder’s Registrable Shares (each Person to whom rights to register shares shall have been so transferred hereunder a “Permitted Transferee”); provided, (i) such transferee is Liberty, a Liberty Party, an Affiliate of Liberty or a Liberty Party, LMC or an Affiliate of LMC, or (ii) such transferee is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the 1933 Act, and in either such case (x) such transferee agrees, in writing in form and substance reasonably satisfactory to the Issuer, to be bound by the terms and provisions of this Agreement (it being specifically understood that any sale of Registrable Shares by a Permitted Transferee shall be in accordance with the “plan of distribution” section of the applicable prospectus); and (y) such transfer of Registrable Shares shall be effected in accordance with applicable securities laws, the Spinco Agreement (if the transferring Holder is a party thereto or has agreed to be bound thereby) and any other agreements between the Issuer and such Holder.  Following any transfer or assignment made pursuant to this Section 2.09 in connection with the transfer by a Holder of a portion of its Registrable Shares, such Holder shall retain all rights under this Agreement with respect to the remaining portion of its Registrable Shares.  Notwithstanding the foregoing, (a) unless Liberty (or LMC, as the case may be) and the Liberty Parties shall have effected a Permitted Restricted Transfer to a Restricted Transferee (in which case the Restricted Transferee shall be substituted for Liberty (or LMC, as the case may be) in all respects hereunder as the Lead Holder), the Issuer shall have no obligation to deliver any notices under this Agreement to or otherwise interact with any Holder other than the Lead Holder for any purpose under this Agreement (other than in accordance with Sections 2.05(a), 2.06, 2.10(e)(ii), 3.01(f), 3.01(h), 3.02(d), 6.01, 6.02 and 6.13 and Article V hereof), and (b) any Exchange Holder may sell shares of Common Stock pursuant to a Registration Statement and shall have the same rights and obligations as a Holder hereunder; provided, that the Lead Holder alone (to the extent there then-exists a Lead Holder) shall retain the right to make any Demand Request on behalf of any Exchange Holders, and shall otherwise act as agent for such Exchange Holders in connection with any sale of Common Stock by the Exchange Holders under a Registration Statement.

Section 2.10.  Incidental Registration.

(a)If the Issuer at any time proposes to register the offer and sale of shares of Common Stock under the 1933 Act (other than on Form S-8 or Form S-4 or a registration statement on Form S-1 or Form S-3 covering solely an employee benefit or dividend reinvestment plan) (any such registration statement covering sales or transfers of Registrable Shares, a “Section 2.10 Registration Statement”) for its own account or for the account of any Other Shareholders, in a manner which would permit registration of Registrable Shares for sale to the public under the 1933 Act (a “Piggyback Registration”), the Issuer will as

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promptly as reasonably practicable give written notice (a “Piggyback Notice”) to the Lead Holder (which shall give notice to all other Holders) of its intention to do so, but in any event at least 10 Business Days prior to the anticipated filing date of the Section 2.10 Registration Statement.  The Piggyback Notice shall offer all Holders the opportunity to include in such Section 2.10 Registration Statement such number of Registrable Shares as each Holder may request, acting through the Lead Holder, subject to Section 2.10(d); provided, however, that any Holder who has included Registrable Shares on a Demand Registration Statement that was declared effective within the 60 calendar days immediately preceding the receipt of such Piggyback Notice shall not be permitted to request the inclusion of any Registrable Shares in such Section 2.10 Registration Statement.  Subject to the proviso to the immediately preceding sentence and to Section 2.10(d), the Issuer will use its commercially reasonable efforts to include in the Section 2.10 Registration Statement the number of Registrable Shares of each Holder sought to be included therein and so specified in a written notice delivered to the Issuer by the Lead Holder on behalf of such Holder within 5 Business Days after such Lead Holder’s receipt of the related Piggyback Notice.  A Holder, acting through the Lead Holder, may, at least two Business Days prior to the effective date of a Section 2.10 Registration Statement, withdraw any Registrable Shares that it had sought to have included therein, whereupon such Holder shall as promptly as reasonably practicable pay to the Issuer all Registration Expenses incurred by the Issuer in connection with the registration of such withdrawn Registrable Shares under the 1933 Act or the 1934 Act and the inclusion of such shares in the Section 2.10 Registration Statement.

(b)If a Piggyback Registration involves an underwritten offering, then all Holders whose Registrable Shares are included in the Section 2.10 Registration Statement must sell such shares in such underwritten offering and agree to the same terms and conditions as those agreed to by the Issuer or, if the Section 2.10 Registration Statement is for the benefit of Other Shareholders, such Other Shareholders.

(c)In connection with any Piggyback Registration, each Holder shall notify the Issuer in writing 24 hours prior to effecting any transaction in reliance on any Section 2.10 Registration Statement, or amendment or supplement thereto, whether filed or to be filed pursuant to this Agreement.  In the case of a transaction by a Hedging Counterparty covered by such Section 2.10 Registration Statement, such notice may specify a period of time, not to exceed five Business Days, during which such sales or transfers may be effected.  If (and only if) the Issuer does not give such Holder or Hedging Counterparty a Blackout Notice within 24 hours of the Issuer’s receipt of such Holder’s notice, such Holder or Hedging Counterparty may engage in the transaction referenced in the notice in accordance with the terms of this Agreement.

(d)The Issuer may elect, in its sole discretion, to terminate a Section 2.10 Registration Statement at any time prior to the effective date thereof.  Upon giving written notice of such election to the Lead Holder, the Issuer shall be relieved of its obligation to register any Registrable Shares (or, in the case of a Hedging Counterparty, if applicable, other shares of Common Stock) in connection with such registration (without prejudice, however, to the rights of Holders under Section 2.01 hereof).

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(e)If a Piggyback Registration involves an underwritten offering and the co-managing underwriters advise the Issuer (and, if applicable, the Other Shareholders) that the number of shares of Common Stock requested to be included in the Piggyback Registration exceeds the Maximum Number of Shares, the following rules shall apply:

(i)If the Section 2.10 Registration Statement was originated by the Issuer for a primary offering, then there will be included in such Registration Statement: (i) first, all of the shares of Common Stock that the Issuer proposes to sell for its own account; and (ii) second, to the extent that the number of shares of Common Stock included by the Issuer for its own account is less than the Maximum Number of Shares, the shares of Common Stock proposed to be included by the Other Shareholders and the Registrable Shares (or, in the case of a Hedging Counterparty, if applicable, other shares of Common Stock) proposed to be included by Holders (or Hedging Counterparties ), allocated pro rata among such Persons on the basis of the number of shares each such Person has requested to be included in such Registration Statement (up to the Maximum Number of Shares).

(ii)If the Section 2.10 Registration Statement was originated by Other Shareholders for a secondary offering, then there will be included in such Registration Statement: (i) first, all of the shares of Common Stock that such Other Shareholders propose to sell for their own account; and (ii) second, to the extent that the number of shares of Common Stock included by the Other Shareholders is less than the Maximum Number of Shares, the Registrable Shares (or, in the case of a Hedging Counterparty, if applicable, other shares of Common Stock) proposed to be included by Holders (or Hedging Counterparties), allocated pro rata among such Holders on the basis of the number of shares that each such Person has requested to be included in such Registration Statement (up to the Maximum Number of Shares).

(f)(i)  The following shall be deemed to be “Offering Confidential Information” in respect of a Piggyback Registration: (x) the Issuer’s plan to file the relevant Registration Statement and engage in the offering so registered, (y) any information regarding the offering being registered (including, without limitation, the potential timing, price, number of shares, underwriters or other counterparties, selling stockholders or plan of distribution) and (z) any other information (including information contained in draft supplements or amendments to offering materials) provided to the Lead Holder or the Holders (or Hedging Counterparties) by the Issuer (or by third parties) in connection with the Piggyback Registration.  Offering Confidential Information shall not include information that (1) was or becomes generally available to the public (including as a result of the filing of the relevant Registration Statement) other than as a result of a disclosure by any Holder (or Hedging Counterparty), (2) was or becomes available to any Holder (or Hedging Counterparty) from a source not bound by any confidentiality agreement with the Issuer or (3) was otherwise in such Holder’s (or Hedging Counterparty’s) possession prior to it being furnished to such Holder (or Hedging Counterparty) by the Lead Holder or by the Issuer or on the Issuer’s behalf.

(ii)  After a Holder has been notified of its opportunity to include Registrable Shares in a Piggyback Registration, such Holder (or Hedging Counterparty) shall treat the

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Offering Confidential Information as confidential information and shall not use the Offering Confidential Information for any purpose other than to evaluate whether to include its Registrable Shares (or other shares of Common Stock) in such Piggyback Registration and agrees not to disclose the Offering Confidential Information to any Person other than such of its agents, employees, advisors and counsel as have a need to know such Offering Confidential Information and to cause such agents, employees, advisors and counsel to comply with the requirements of this Section 2.10(e), provided, that such Holder (or Hedging Counterparty) may disclose Offering Confidential Information if such disclosure is required by legal process, but such Holder (or Hedging Counterparty) shall cooperate with the Issuer to limit the extent of such disclosure through protective order or otherwise, and to seek confidential treatment of the Offering Confidential Information.

ARTICLE III

REGISTRATION PROCEDURES

Section 3.01.  Registration Procedures.  In connection with any registration of Registrable Shares contemplated by this Agreement:

(a)The Issuer shall, at least three Business Days prior to the initial filing of the Registration Statement with the SEC, furnish to Special Counsel a copy of such Registration Statement as proposed to be filed (including documents to be incorporated by reference therein, to the extent not then available via the SEC’s EDGAR system, but only to the extent they expressly relate to any offering to be effected thereunder), which will be subject to the reasonable review and comments of Special Counsel during such three-Business-Day period, and the Issuer will not file the Registration Statement (or any such documents incorporated by reference) containing any statements with respect to any Holder or the plan of distribution to which Special Counsel shall reasonably object in writing.  After the filing of the Registration Statement, the Issuer will as promptly as reasonably practicable notify Special Counsel of: (i) if the SEC has determined to not review the Registration Statement, the effectiveness thereof; (ii) if the Registration Statement is an ASRS, the filing thereof; or (iii) if the SEC has determined to review the Registration Statement, such determination.  If a Registration Statement is subject to review by the SEC: (A) the Issuer will as promptly as reasonably practicable provide the Special Counsel with a copy of each comment letter issued in respect of such Registration Statement and a copy of the Issuer’s draft responses thereto (it being understood that preliminary drafts shall not be required to be provided); (B) the Issuer shall further provide Special Counsel with a copy of any proposed amendment to be filed with the SEC no less than three Business Days prior to the Issuer’s proposed filing date, and each such amendment will be subject to the reasonable review and comments of Special Counsel during such three-Business-Day period; (C) the Issuer will not file any such amendment containing any statements with respect to any Holder or the plan of distribution to which Special Counsel shall reasonably object in writing; and (D) once the Registration Statement is cleared from review, the Issuer will as promptly as reasonably practicable inform Special Counsel of the effectiveness thereof.

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(b)After the initial Effective Time of a Registration Statement, the Issuer shall, at least two Business Days prior to the filing of a post-effective amendment to the Registration Statement or a prospectus (including a prospectus supplement, a Free Writing Prospectus and any documents to be incorporated by reference in the prospectus but only to the extent they expressly relate to an offering or a Hedging Transaction under the Registration Statement), furnish a copy of such proposed filing to Special Counsel (who will furnish such copy to any Hedging Counterparty (if such filing relates to a Hedging Transaction) and any underwriter (if such filing relates to an underwritten offering)), which will be subject to the reasonable review and comments of Special Counsel during such two-Business-Day period, and the Issuer will not file any such post-effective amendment or prospectus that contains any statements with respect to any Holder, Hedging Counterparty or underwriter or the plan of distribution to which Special Counsel (on behalf of any Holder, any such Hedging Counterparty or any underwriter) shall reasonably object in writing.

(c)The Issuer shall as promptly as reasonably practicable furnish to Special Counsel copies of any and all transmittal letters and other correspondence with the SEC and all correspondence (including comment letters, such as those contemplated by Section 3.01(a)) from the SEC to the Issuer relating to the Registration Statement or any prospectus or any amendment or supplement thereto.

(d)After a Registration Statement is declared effective, and in connection with any underwritten offering or Hedging Transaction under the Registration Statement, the Issuer will furnish to the Lead Holder (for distribution to the Holders whose Registrable Shares are included in such Registration Statement and to any Hedging Counterparties and underwriters) such number of copies of the Registration Statement, each amendment and supplement thereto (in each case including all exhibits thereto but excluding documents (x) incorporated by reference therein other than those that expressly relate to the offering, Hedging Transaction or underwritten offering or (y) that are available via the SEC’s EDGAR system), the prospectus included in such Registration Statement (including any prospectus supplements) and such other documents as any such Holders, Hedging Counterparties or underwriters may reasonably request through the Lead Holder in order to facilitate the disposition of the Registrable Shares included in the Registration Statement.

(e)The Issuer will use commercially reasonable efforts (i) to register or qualify the Registrable Shares under such other securities or blue sky laws of such jurisdictions in the United States (in the event an exemption is not available) as any Holder of Registrable Shares covered by a Registration Statement, acting through the Lead Holder, reasonably (in the light of such Holder’s intended plan of distribution) requests and (ii) to cause such Registrable Shares to be registered with or approved by such other governmental agencies or authorities as may be necessary by virtue of the business and operations of the Issuer and do any and all other acts and things that may be reasonably necessary or advisable to enable such Holder to consummate the disposition in such jurisdictions of the Registrable Shares owned by such Holder; provided that the Issuer will not be required to (w) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (f), (x) conform its capitalization or the composition of its assets at the time to the securities or

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blue sky laws of any such jurisdiction, (y) subject itself to taxation in any such jurisdiction or (z) consent to general service of process in any such jurisdiction.

(f)The Issuer will as promptly as reasonably practicable notify the Lead Holder and each other Holder of Registrable Shares covered by the Registration Statement, at any time when a prospectus relating thereto is required to be delivered (or deemed delivered) under the 1933 Act, of the occurrence of an event of which the Issuer has knowledge requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered (or deemed delivered) to the purchasers of such Registrable Shares, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, and, subject to Section 2.05, the Issuer will as promptly as reasonably practicable prepare and furnish to the Lead Holder a supplement to or an amendment of such prospectus so that, as thereafter delivered (or deemed delivered) to the purchasers of such Registrable Shares, such prospectus will not contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.  For the avoidance of doubt, upon the expiration or termination of a Blackout Period and to the extent required in connection with this Section 3.01(f), the Issuer shall as promptly as reasonably practicable prepare a post-effective amendment or supplement to the Registration Statement or the prospectus, or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Shares included therein, the prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(g)The Issuer will use commercially reasonable efforts to enter into reasonable and customary agreements (including an underwriting, registration or similar agreement in reasonable and customary form for the Holder or the applicable underwriter or Hedging Counterparty containing customary indemnification and contribution provisions) and use commercially reasonable efforts to take such other actions as are reasonably required or requested by a Holder, underwriter or Hedging Counterparty, acting through the Lead Holder, in order to expedite or facilitate the disposition of any Registrable Shares in a manner permitted by this Agreement and the Spinco Agreement; provided, that (i) any legal opinion that the Issuer is required to use commercially reasonable efforts to obtain pursuant to the foregoing may be rendered by the Issuer’s General Counsel (or another appropriate in-house lawyer), unless the Person to whom such opinion is to be delivered will not accept a “10b-5-opinion” from such counsel, in which case the Issuer shall use commercially reasonable efforts to obtain such legal opinion from the Issuer’s outside counsel; and (ii) in no event shall the Issuer be required to obtain more than two comfort letters from the Issuer’s public accountants in connection with any Registration Statement.

(h)Upon execution of a customary confidentiality agreement, the Issuer will make available for inspection by any Holder of Registrable Shares covered by a Registration Statement, any Hedging Counterparty in connection with any Hedging Transaction, any underwriter participating in an underwritten offering pursuant to the Registration Statement,

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Special Counsel, and any attorney, accountant or other professional retained by any such Holder, Hedging Counterparty or underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of the Issuer (collectively, the “Records”) and cause the Issuer’s and its significant subsidiaries’ officers, directors and employees to, and shall use commercially reasonable efforts to cause the Issuer’s independent accountants to, as promptly as reasonably practicable, supply all information reasonably requested by any Inspector in connection with such Registration Statement, Hedging Transaction or underwritten offering, in each case, to the extent reasonably necessary to establish the applicable Person’s due diligence defense under U.S. securities laws; provided that in no event shall the Issuer be required to make available to the Holders any information which the Board of Directors in its good faith judgment believes is competitively sensitive or otherwise is confidential.  The Inspectors shall coordinate with one another so that the inspection permitted hereunder will not unnecessarily interfere with the Issuer’s conduct of business.  In any event, Records which the Issuer determines, in good faith, to be confidential and which it notifies or otherwise identifies in writing to the Inspectors are confidential shall not be disclosed by the Inspectors unless (and only to the extent that) (i) the disclosure of such Records is necessary to permit a Holder to enforce its rights under this Agreement or (ii) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction.  Each Holder agrees that information obtained by it as a result of such inspections shall be deemed confidential and shall not be used by it as the basis for any market transactions in the securities of the Issuer or its Affiliates unless and until such is made generally available to the public by the Issuer or such Affiliate or for any reason not related to the registration of Registrable Securities.  Each Holder further agrees that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, cause the Lead Holder to give notice to the Issuer and allow the Issuer, at its expense, to undertake appropriate action to prevent disclosure of the Records deemed confidential.

(i)The Issuer will otherwise use commercially reasonable efforts (i) to comply with all applicable rules and regulations of the SEC to the extent necessary to permit it to lawfully fulfill its obligations under this Agreement, and (ii) to make available to its security holders, as promptly as reasonably practicable, an earnings statement covering a period of 12 months, beginning upon the first disposition of Registrable Shares pursuant to a Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the 1933 Act.

(j)The Issuer will use its commercially reasonable efforts to cause all Registrable Shares to be listed on each securities exchange on which the Common Stock is listed.

(k)The Issuer will prepare and file with the SEC, as promptly as reasonably practicable upon the request of any Holder, acting through the Lead Holder, any amendments or supplements to a Registration Statement or prospectus which, in the reasonable opinion of Special Counsel, is required under the 1933 Act in connection with the distribution of the Registrable Shares contemplated by the Registration Statement or prospectus.

(l)The Issuer will use commercially reasonable efforts to timely file the reports and materials required to be filed by it under the 1933 Act and the 1934 Act to enable the Holders to sell Registrable Shares without registration under the 1933 Act within the limitation of the

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exemption provided by Rule 144.   As promptly as reasonably practicable following its receipt of the request of the Lead Holder (acting on behalf of a Holder), the Issuer will deliver to the Lead Holder (which shall deliver to such Holder) a written statement as to whether it has complied with such requirements, and shall use commercially reasonable efforts to provide such assurances as any broker or dealer facilitating a sale of Registrable Shares under Rule 144 may reasonably request.

(m)The Issuer shall reasonably cooperate with each Holder, acting through the Lead Holder, in the disposition (provided such disposition is permitted by the Spinco Agreement) of such Holder’s Registrable Shares in accordance with the terms of this Agreement.  Such cooperation shall include the endorsement and transfer of any certificates representing Registrable Shares (or a book-entry transfer to similar effect) transferred in accordance with this Agreement.

Section 3.02.  Holder Responsibilities.

(a)The Issuer may require each Holder of Registrable Shares included in a Registration Statement and each Hedging Counterparty in respect of a Hedging Transaction as promptly as reasonably practicable to furnish in writing to the Issuer, through the Lead Holder, such information regarding such Holder, the Hedging Counterparty or the distribution of the Registrable Shares as the Issuer may from time to time reasonably request and such other information as may be legally required in connection with such registration.  If a Holder or Hedging Counterparty fails to provide the requested information after being given 15 Business Days’ written notice of such request and the requested information is required by applicable law to be included in the Registration Statement, the Issuer shall be entitled to refuse to include for registration such Holder’s Registrable Shares or other shares of Common Stock in connection with such Hedging Counterparty’s Hedging Transaction, as the case may be.

(b)In connection with any disposition of Registrable Shares pursuant to a Registration Statement, each Holder agrees that it will not use any Free Writing Prospectus without the prior consent of the Issuer, which consent will not be unreasonably withheld or delayed.

(c)Each Holder agrees that, upon receipt of any written notice from the Lead Holder or the Issuer of the happening of any event of the kind described in Section 3.01(f), such Holder will forthwith discontinue the disposition of such Holder’s Registrable Shares pursuant to the Registration Statement until such Holder’s receipt of the copies of the supplemented or amended prospectus contemplated by Section 3.01(f).  If the Issuer shall give such notice with regards to any Demand Registration Statement, the Effectiveness End Date in respect of such Registration Statement shall be extended by the number of days during the period from and including the date such notice was given by the Issuer to the date when the Issuer shall have made available to the Lead Holder a prospectus or prospectus supplement that conforms with the requirements of Section 3.01(f).

(d)Each Holder will as promptly as reasonably practicable notify the Issuer and the Lead Holder, at any time when a prospectus relating thereto is required to be delivered (or deemed delivered) under the 1933 Act, of the occurrence of an event, of which such Holder

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has knowledge, relating to such Holder or its disposition of Registrable Shares thereunder requiring the preparation of a supplement or amendment to such prospectus so that, as thereafter delivered (or deemed delivered) to the purchasers of such Registrable Shares, such prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading.

ARTICLE IV

LOCK-UP AGREEMENTS

If requested by the managing underwriters in connection with an underwritten offering of Registrable Shares under a Registration Statement or a Hedging Counterparty, each of the Holders and the Issuer shall execute and deliver agreements (“Lock-up Agreements”) containing customary restrictions on their ability to sell, offer to sell, or otherwise dispose of any shares of Common Stock or any securities convertible into or exercisable for such stock (or enter into any hedging or similar transaction with an economic effect similar to any of the foregoing); provided that such restrictions shall be the same for all such Persons and shall not have a duration in excess of the shortest period required by the managing underwriters or Hedging Counterparties and in any event not more than 180 days after the completion of such offering.  Any Lock-up Agreements executed by the Holders shall contain provisions naming the Issuer as an intended third-party beneficiary thereof and requiring the prior written consent of the Issuer for any amendments thereto or waivers thereof.  Any Lock-up Agreements executed by the Issuer shall contain provisions naming the Holders as intended third-party beneficiary thereof and requiring the prior written consent of the Holders for any amendments thereto or waivers thereof.

ARTICLE V

INDEMNIFICATION

Section 5.01.  Indemnification By the Issuer.  The Issuer agrees to indemnify and hold harmless to the fullest extent permitted by law each Holder whose Registrable Shares are covered by the Registration Statement, its officers, directors and each Person, if any, who controls such Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and all losses, claims, damages, liabilities, and expenses, or any action or proceeding in respect thereof (each, a “Liability” and collectively, “Liabilities”) (including reimbursement of such Holder for any legal or any other expenses reasonably incurred by it in investigating or defending such Liabilities) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any prospectus relating to such Registrable Shares (or in any amendment or supplement thereto), or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as such Liabilities arise out of or are based upon any such untrue statement or omission or alleged untrue statement or omission based upon information furnished in writing to the Issuer by such Holder or on such Holder’s behalf, in either such case expressly for use therein; provided, that with respect to any untrue statement or omission or alleged untrue statement or

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omission made in any prospectus, the indemnity agreement contained in this paragraph shall not apply to the extent that any such Liability results from (a) the fact that a current copy of the prospectus was not sent or given to the Person asserting any such Liability at or prior to the written confirmation of the sale of the Registrable Shares concerned to such Person if it is determined that the Issuer has provided such prospectus and it was the responsibility of such Holder or its agents to provide such Person with a current copy of the prospectus and such current copy of the prospectus would have cured the defect giving rise to such Liability, (b) the use of any prospectus by or on behalf of any Holder after the Issuer has notified such Person (i) that such prospectus contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (ii) that a stop order has been issued by the SEC with respect to the Registration Statement or (iii) that a Disadvantageous Condition exists or (c) the use of any prospectus by or on behalf of any Holder with respect to any Registrable Shares after such time as the Issuer’s obligation to keep the Registration Statement effective in respect of such Registrable Shares has expired.

Section 5.02.  Indemnification By Holders of Registrable Shares. Each Holder whose Registrable Shares are included in the Registration Statement agrees, severally and not jointly, to indemnify and hold harmless to the fullest extent permitted by law (including reimbursement of the Issuer for any legal or any other expenses reasonably incurred by it in investigating or defending such Liabilities) the Issuer, its officers, directors, agents, and each Person, if any, who controls the Issuer within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the same extent as the foregoing indemnity from the Issuer to such Holder in Section 5.01, but only (i) to the extent such Liabilities arise out of or are based upon information furnished in writing by such Holder or on such Holder’s behalf, in either case expressly for use in the Registration Statement, prospectus or in any amendment or supplement thereto relating to such Holder’s Registrable Shares or (ii) to the extent that any Liability described in this Section 5.02 results from (a) the fact that a current copy of the prospectus was not sent or given to the Person asserting any such Liability at or prior to the written confirmation of the sale of the Registrable Shares concerned to such Person if it is determined that it was the responsibility of such Holder or its agent to provide such Person with a current copy of the prospectus and such current copy of the prospectus would have cured the defect giving rise to such loss, claim, damage, liability or expense, (b) the use of any prospectus by or on behalf of any Holder after the Issuer has notified such Person (x) that such prospectus contains an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (y) that the SEC has issued a stop order with respect to the Registration Statement or (z) that a Disadvantageous Condition exists or (c) the use of any prospectus by or on behalf of any Holder after such time as the obligation of the Issuer to keep the related Registration Statement in respect of such Holder’s Registrable Shares effective has expired.

Section 5.03.  Conduct Of Indemnification Proceeding.  After receipt by any Person (an “Indemnified Party”) of any notice of the commencement of any action, suit, proceeding or investigation or threat thereof in respect of which indemnity may be sought pursuant to Section 5.01 or 5.02, such Indemnified Party shall as promptly as reasonably practicable notify the Person against whom such indemnity may be sought (the “Indemnifying Party”) in writing.

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Following notice of commencement of any such action given to the Indemnifying Party as above provided, the Indemnifying Party shall be entitled to participate in and, to the extent it may wish, jointly with any other Indemnifying Party similarly notified, to assume the defense of such action at its own expense, with counsel reasonably satisfactory to such Indemnified Party.  In any such proceeding so assumed by the Indemnifying Party, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) representation of both parties by the same counsel would be inappropriate due to actual or potential differing or conflicting interests between them.  It is understood that the Indemnifying Party, in connection with any proceeding or related proceedings in the same jurisdiction, shall be liable only for the reasonable fees and expenses of one firm of attorneys (in addition to any necessary local counsel) at any time for all such Indemnified Parties, and that all such fees and expenses shall be reimbursed as they are incurred upon submission of reasonably itemized invoices that comply with the Issuer’s standard billing policies for outside counsel.  In the case of any such separate firm for Holders who are entitled to indemnity pursuant to Section 5.01, such firm shall be designated in writing by the Indemnified Party who had the largest number of Registrable Shares included in the Registration Statement at issue.  The Indemnifying Party shall not be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent, or if there be a final judgment for the plaintiff, the Indemnifying Party shall indemnify and hold harmless such Indemnified Parties from and against any loss or liability (to the extent stated above) by reason of such settlement or judgment.  No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Party is or could have been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement includes an unconditional release of such Indemnified Party from all liability arising out of such proceeding.

Section 5.04.  Contribution.

(a)If the indemnification provided for hereunder shall for any reason be held by a court of competent jurisdiction to be unavailable to an Indemnified Party in respect of any Liability referred to herein, then each such Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Liabilities between the Issuer on the one hand and each Holder whose Registrable Shares are covered by the Registration Statement in issue on the other, in such proportion as is appropriate to reflect the relative fault of the Issuer and of each such Holder in connection with any untrue statement of a material fact contained in the Registration Statement, any prospectus or any amendment or supplement thereto or caused by any omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, which resulted in such Liabilities, as well as any other relevant equitable considerations.  The relative fault of the Issuer on the one hand and of each such Holder on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by such party, and the parties’ relative

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intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

(b)The Issuer and the Holders (including each Permitted Transferee) agree that it would not be just and equitable if contribution pursuant to this Section 5.04 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph.  The amount paid or payable by an Indemnified Party as a result of the Liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Article V, no Holder shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Shares sold by it under the Registration Statement exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1934 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

ARTICLE VI

MISCELLANEOUS PROVISIONS

Section 6.01.  Recapitalization, Exchanges, etc.  The provisions of this Agreement shall apply to the full extent set forth herein with respect to any and all securities into which any of the Registrable Shares are converted, exchanged or substituted in any recapitalization or other capital reorganization involving the Issuer and any and all securities of the Issuer or any successor or assign or acquirer of the Issuer (whether by merger, consolidation, sale of assets or otherwise) which may be issued in respect of, in conversion of, in exchange for or in substitution of, such Registrable Shares and shall be appropriately adjusted for any dividends of Common Stock in respect of the Common Stock, stock splits, reverse splits, combinations, recapitalizations and the like occurring after the date hereof.  The Issuer shall cause any successor or assign or acquiror (whether by merger, consolidation, sale of assets or otherwise) to enter into a new registration rights agreement with the Holders on terms no less favorable to such parties than the terms provided under this Agreement as a condition of any such transaction.

Section 6.02.  Notices.  All notices, requests, claims and demands and other communications hereunder shall be in writing and shall be deemed duly delivered and received (i) three Business Days after the same are sent by certified or registered mail, postage prepaid, return receipt requested, (ii) when delivered by hand or transmitted by telecopy (answer back received), if received prior to 5 p.m. on a Business Day, otherwise on the next Business Day or (iii) one Business Day after the same are sent by a reliable overnight courier service, with acknowledgment of receipt requested, in each case to the intended recipient as set forth below:

If to Liberty or any Liberty Party, to:

Liberty Interactive Corporation

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12300 Liberty Boulevard

Englewood, Colorado 80112

Attention: General Counsel

Fax: (720) 875-5382

with a copy to:

Baker Botts L.L.P.

30 Rockefeller Plaza

New York, New York  10112

Attention:Frederick H. McGrath

Renee L. Wilm

Fax: (212) 259-2500

If to the Issuer, to:

Interval Leisure Group, Inc.

6262 Sunset Drive

Miami, Florida 33143

Attention: General Counsel

Fax:  (305) 667-2072

Any party to this Agreement may give any notice or other communication hereunder using any other means (including personal delivery, messenger service, telecopy or ordinary mail), but no such notice or other communication shall be deemed to have been duly given unless and until it actually is received by the office of the party for whom it is intended during business hours on a Business Day in the place of receipt.  Any party to this Agreement may change the address to which notices and other communications hereunder are to be delivered by giving the other parties to this Agreement notice in the manner herein set forth.  Each Person (other than Liberty or a Liberty Party) upon becoming a Holder hereunder shall concurrently provide notice to the other parties hereto of such Holder’s address.  The Issuer shall have no obligation to deliver any notices under this Agreement to or otherwise interact with any purported Holder that has not provided notice to the Issuer pursuant to the preceding sentence, and no such Person shall have any rights under this Agreement unless and until such Person delivers such notice.

Section 6.03.  Entire Agreement; No Inconsistent Agreements.

(a)This Agreement, together with the Spinco Agreement, constitutes the entire agreement among the parties hereto and supersedes any prior understandings, agreements or representations by or among the parties hereto, or any of them, written or oral, with respect to the subject matter hereof.

(b)The Issuer shall not hereafter enter into or amend any agreement with respect to its securities that is inconsistent with the rights granted to the Holders of Registrable Shares in this Agreement or otherwise conflicts with the provisions hereof in a manner adverse to the Holders.

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(c)Prior to the date hereof and except for any agreement to which Liberty is a party, the Issuer has not granted any “piggyback” or other registration rights to any Person that would entitle any Person (other than the Holders) to participate in any registration contemplated by this Agreement.

(d)The Issuer will not grant any “piggyback” or other registration rights to any Person that would entitle that Person (other than the Holders) to participate in any Demand Registration Statement except on terms that are no less favorable to the Holders than those applicable to Other Shareholders as set forth in Section 2.10(e)(ii).

Section 6.04.  Further Assurances.  Each of the parties shall execute such documents and perform such further acts as may be reasonably required or desirable to carry out or perform the provisions of this Agreement.

Section 6.05.  No Third-Party Beneficiaries.  Except as provided in Sections 2.09, 5.01, and 5.02, this Agreement is not intended, and shall not be deemed, to confer any rights or remedies upon any Person other than the parties hereto and their respective successors and permitted assigns or to otherwise create any third-party beneficiary hereto.

Section 6.06.  Assignment.  This Agreement shall be binding upon, shall inure to the benefit of, and shall be enforceable by the parties hereto and their respective successors and permitted assigns and, with respect to each Holder, any Permitted Transferee.  No assignment (other than in accordance with Section 6.01) or transfer shall be effective hereunder unless and until the purported transferee executes and delivers an agreement, in form and substance reasonably acceptable to the parties, agreeing to be bound by the terms hereof.  Notwithstanding anything to the contrary in this Agreement, other than an assignment contemplated by Section 6.01, the Issuer may not assign its obligations hereunder.

Section 6.07.  Amendments and Waivers.  Except as otherwise provided herein, the provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless consented to in writing by the Issuer, the Lead Holder (if any) and Holders of at least 50% of the Registrable Shares held by all Holders of Registrable Shares as of such date.

Section 6.08.  Nominees for Beneficial Owners.  If any Registrable Shares are held by a nominee for the beneficial owner thereof, the beneficial owner thereof may, at its election in writing delivered to the Issuer through the Lead Holder, be treated as the Holder of such Registrable Shares for purposes of any request, consent, waiver or other action by any Holder or Holders of Registrable Shares pursuant to this Agreement or any determination of any number or percentage of Registrable Shares held by any Holder or Holders of Registrable Shares contemplated by this Agreement.  If the beneficial owner of any Registrable Shares makes the election provided in this Section 6.08, the Issuer may require assurances reasonably satisfactory to it of such owner’s beneficial ownership of such Registrable Shares.

Section 6.09.  Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity of the offending term or provision in

24

any other situation or in any other jurisdiction.  If the final judgment of a court of competent jurisdiction declares that any term or provision hereof is invalid or unenforceable, the parties hereto agree that the court making such determination shall have the power to limit the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provisions that is valid and enforceable and that comes closest to expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified.  In the event such court does not exercise the power granted to it in the prior sentence, the parties hereto agree to replace such invalid or unenforceable term or provision with a valid and enforceable term or provision that shall achieve, to the extent possible, the economic, business and other purposes of such invalid or unenforceable term.

Section 6.10.  Counterparts and Signature.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties hereto and delivered to the other parties, it being understood that all parties need not sign the same counterpart.  This Agreement may be executed and delivered by facsimile transmission.

Section 6.11.  Interpretation.  When reference is made in this Agreement to a Section, such reference shall be to a Section of this Agreement, unless otherwise indicated.  The headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.  The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party.  Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa.  Any reference to any federal, state, local or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise.  Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.”

Section 6.12.  Governing Law; Consent To Jurisdiction.  This Agreement shall be construed in accordance with and governed by the internal laws of the State of Delaware, without giving effect to the principles of conflicts of laws.  Each of the parties hereto hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the courts of the State of Delaware, for any action, proceeding or investigation in any court or before any governmental authority (“Litigation”) arising out of or relating to this Agreement and the transactions contemplated hereby and further agrees that service of any process, summons, notice or document by U.S. mail to its respective address set forth in this Agreement shall be effective service of process for any Litigation brought against it in any such court.  Each of the parties hereto hereby irrevocably and unconditionally waives any objection to the laying of venue of any Litigation arising out of this Agreement or the transactions contemplated hereby in the courts of the State of Delaware, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such Litigation brought in any such court has been brought in an inconvenient forum.  Each of the parties irrevocably and unconditionally waives, to the fullest extent permitted by applicable law, any and all rights to trial by jury in connection

25

with any Litigation arising out of or relating to this Agreement or the transactions contemplated hereby.

Section 6.13.  Remedies; Limitation on Liability.  (a)  Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party shall be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy shall not preclude the exercise of any other remedy.  The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached.   It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which the parties are entitled at law or in equity.

(b)  In no event shall the Issuer have any liability to any Holder or other Person under this Agreement for any act or failure to act by the Lead Holder in accordance with the terms hereof, each of which Holder agrees that its sole remedy, whether at equity or in law, in any such case shall be against the Lead Holder, and further agrees not to bring any action against the Issuer or any of Affiliates in connection with any such act or failure to act by the Lead Holder.  Except in respect of the Issuer’s indemnification obligations under Article V of this Agreement, each Holder (other than the Lead Holder) hereby assigns to the Lead Holder such Holder’s right under this Agreement to bring any action or to pursue any remedy against the Issuer or any of its Affiliates for any breach or violation, or any alleged or threatened breach or violation, by the Issuer of its obligations under this Agreement, and each such Holder (other than the Lead Holder) hereby agrees not to directly bring any such action or to pursue any such remedy against the Issuer or any of its Affiliates therefor.  The Issuer agrees not to challenge the standing of the Lead Holder to bring any such claim or cause of action or pursue any remedy in the name of the Lead Holder on behalf of a Holder.  Any Holder and the Lead Holder may execute such instruments, including an assignment of any claims, as may be necessary to permit the Leader Holder to validly pursue any action or remedy on behalf of a Holder pursuant to this Section 6.13 and to preserve any injured Holder’s right to receive any recovery obtained by the Lead Holder on behalf of such Holder.

Section 6.14.  Confidentiality.  Each Holder agrees not to (and to cause any Hedging Counterparty to a Hedging Transaction with such Holder not to) disclose without the prior written consent of the Issuer any information (i) regarding the Issuer’s exercise of any of its rights under Section 2.05 or Section 3.01(f) or (ii) obtained pursuant to this Agreement which the Issuer identifies to be proprietary to the Issuer or otherwise confidential. Notwithstanding the foregoing, each Holder or Hedging Counterparty may disclose such information to such of its agents, employees, advisors and counsel as have a need to know such information provided that such Holder shall cause such agents, employees, advisors and counsel to comply with the requirements of this Section 6.14, provided, that such Holder or Hedging Counterparty may disclose such information if (and only to the extent that) (A) such disclosure is necessary to permit a Holder to enforce its rights under this Agreement or (B) such disclosure is required by legal process, but such Holder or Hedging Counterparty shall cooperate with the Issuer to limit the extent of such disclosure through protective order or otherwise, and to seek confidential

26

treatment of such information. Each Holder further acknowledges, understands and agrees (and shall cause any such Hedging Counterparty to agree) that any confidential information will not be utilized in connection with purchases and/or sales of the Issuer’s securities except in compliance with applicable state and federal antifraud statutes.

Section 6.15.  Termination.  This Agreement (other than Article V and Article VI) shall terminate and be of no further force and effect at the first such time as there are no Registrable Shares or, if earlier, at such time as the Issuer has registered pursuant to this Agreement an aggregate number of sales or transfers of Registrable Shares or other shares of Common Stock equal to the Total Registrable Amount (it being specified, for the avoidance of doubt, that a sale or transfer of a Registrable Share or other share of Common Stock shall be considered to have been registered for purposes of this Section 6.15 in the circumstances specified in the last sentence of Section 2.04(a)); provided, that any such termination shall not relieve any party of any liability for any breach of this Agreement prior to such termination.

27

IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the date first written above.

Liberty Interactive Corporation, a Delaware corporation		INTERVAL LEISURE GROUP, INC., a Delaware corporation
By:	/s/ Craig Troyer
Name: Craig Troyer		By:	/s/ Jeanette E. Marbert
Title: Vice President and Deputy General Counsel		Name: Jeanette E. Marbert
		Title: Executive Vice President and Chief Operating Officer
Liberty USA Holdings, LLC
a Delaware limited liability company
By: Liberty Interactive LLC, its sole member and manager
By:	/s/ Craig Troyer
Name: Craig Troyer
Title: Vice President

[Signature Page to ILG Registration Rights Agreement (Liberty)]

ANNEX A

PLAN OF DISTRIBUTION

Each of the selling stockholders, including certain transferees who may later hold its interest in the shares covered by this prospectus and who are otherwise entitled to resell the shares using this prospectus, may sell the shares covered by this prospectus from time to time in any legal manner selected by the selling stockholder, including directly to purchasers or through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, concessions or commissions from the selling stockholder or the purchasers.  These discounts, concessions or commissions as to any particular underwriter, broker-dealer or agent may be in excess of those customary in the types of transactions involved.  The selling stockholders will act independently of us in making decisions with respect to the timing, manner and size of each sale of the shares covered by this prospectus.

Each selling stockholder has advised us that its shares may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market prices, at varying prices determined at the time of sale and/or at negotiated prices. These sales may be effected in one or more transactions, including:

·on the New York Stock Exchange or the Nasdaq Stock Market;

·in the over-the-counter market;

·in transactions otherwise than on the New York Stock Exchange or the Nasdaq Stock Market or in the over-the-counter market; or

·any combination of the foregoing.

In addition, the selling stockholders may also enter into hedging and/or monetization transactions. For example, a selling stockholder may:

·enter into transactions with a broker-dealer or affiliate of a broker-dealer or other third party in connection with which that other party will become a selling stockholder and engage in short sales of shares under this prospectus, in which case the other party may use shares received from the selling stockholder to close out any short positions;

·itself sell short the shares under this prospectus and use the securities held by it to close out any  short position;

·enter into options, forwards or other transactions that require the selling stockholder to deliver, in a transaction exempt from registration under the Securities Act, the securities to a broker-dealer or an affiliate of a broker-dealer or other third party who may then become a selling stockholder and publicly resell or otherwise transfer the securities under this prospectus; or

·loan or pledge the securities to a broker-dealer or affiliate of a broker-dealer or other third party who may then  become a selling stockholder and sell the loaned securities

A-1

or, in an event of default in the case of a pledge, become a selling stockholder and sell the pledged securities, under this prospectus.

Each selling stockholder has advised us that it has not entered into any agreements, arrangements or understandings with any underwriter, broker-dealer or agent regarding the sale of its shares. However, we are required, under a registration rights agreement relating to the shares being sold under this prospectus, to enter into customary underwriting and other agreements in connection with the distribution of the securities under this prospectus.  The specific terms of any such underwriting or other agreement will be disclosed in a supplement to this prospectus filed with the SEC under Rule 424(b) under the Securities Act, or, if appropriate, a post-effective amendment to the registration statement of which this prospectus forms a part.  Each selling stockholder may sell any or all of the shares offered by it pursuant to this prospectus.  In addition, there can be no assurance that any selling stockholder will not transfer, devise or gift its shares by other means not described in this prospectus.

There can be no assurance that a selling stockholder will sell any or all of its shares pursuant to this prospectus. In addition, any shares covered by this prospectus that qualify for sale pursuant to Rule 144 of the Securities Act may be sold under Rule 144 rather than pursuant to this prospectus.

The aggregate proceeds to a selling stockholder from the sale of the shares offered by it will be the purchase price of the shares less discounts and commissions, if any. If the shares are sold through underwriters or broker-dealers, the selling stockholder will be responsible for underwriting discounts and commissions and/or agent’s commissions. We will not receive any of the proceeds from the sale of the shares covered by this prospectus.

In order to comply with the securities laws of some states, if applicable, the shares may be sold in these jurisdictions only through registered or licensed brokers or dealers. In addition, in some states the shares may not be sold unless they have been registered or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.

Any underwriters, broker-dealers or agents that participate in the sale of the securities may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act.  As a result, any profits on the sale of the shares by the selling stockholder and any discounts, commissions or concessions received by any such broker-dealers or agents may be deemed to be underwriting discounts and commissions under the Securities Act.

To the extent required, the shares to be sold, the names of the selling stockholders, the respective purchase prices and public offering prices, the names of any agent, dealer or underwriter, and any applicable commissions or discounts with respect to a particular offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement of which this prospectus is a part.

We have agreed to indemnify each selling stockholder and its directors, officers and controlling Persons against certain liabilities, including specified liabilities under the Securities Act, or to contribute with respect to payments which the selling stockholder may be required to make in respect of such liabilities. The selling stockholder has agreed to indemnify us for

A-2

liabilities arising under the Securities Act with respect to written information furnished to us by it or to contribute with respect to payments in connection with such liabilities.

We have agreed to pay certain costs, fees and expenses incident to our registration of the resale of the selling stockholder’s shares, excluding legal fees of the selling stockholders, commissions, fees and discounts of underwriters, brokers, dealers and agents and certain other expenses.

Under our registration rights agreement with the selling stockholders, we will use our commercially reasonable efforts to keep the registration statement of which this prospectus is a part continuously effective, subject to customary suspension periods, until the earlier of (i) the 90th day (or, if such registration statement is on Form S-3, the 180th day) after such registration statement is initially declared effective, and (ii) the date that there are no longer any securities covered by such registration statement.

Our obligation to keep the registration statement to which this prospectus relates effective is subject to specified, permitted exceptions. In these cases, we may suspend offers and sales of the shares pursuant to the registration statement to which this prospectus relates.

A-3

EX-31.1

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Exhibit 31.1

Certification

I, Craig M. Nash, certify that:

1.

I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2015 of Interval Leisure Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: November 9, 2015 /s/ CRAIG M. NASH
Craig M. Nash
Chairman, President and Chief Executive Officer

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Exhibit 31.1

Certification

EX-31.2

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Exhibit 31.2

Certification

I, William L. Harvey, certify that:

1.

I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2015 of Interval Leisure Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: November 9, 2015 /s/ WILLIAM L. HARVEY
William L. Harvey
Chief Financial Officer

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Exhibit 31.2

Certification

EX-31.3

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Exhibit 31.3

Certification

I, John A. Galea, certify that:

1.

I have reviewed this quarterly report on Form 10-Q for the period ended September 30, 2015 of Interval Leisure Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: November 9, 2015 /s/ JOHN A. GALEA
John A. Galea
Chief Accounting Officer

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Exhibit 31.3

Certification

EX-32.1

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Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        I, Craig M. Nash, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

(1)

the Quarterly Report on Form 10-Q for the period ended September 30, 2015 of Interval Leisure Group, Inc. (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and



(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Interval Leisure Group, Inc.

Dated: November 9, 2015 /s/ CRAIG M. NASH
Craig M. Nash
Chairman, President and Chief Executive Officer

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Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EX-32.2

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Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        I, William L. Harvey, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

(1)

the Quarterly Report on Form 10-Q for the period ended September 30, 2015 of Interval Leisure Group, Inc. (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and



(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Interval Leisure Group, Inc.

Dated: November 9, 2015 /s/ WILLIAM L. HARVEY
William L. Harvey
Chief Financial Officer

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Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EX-32.3

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Exhibit 32.3

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        I, John A. Galea, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

(1)

the Quarterly Report on Form 10-Q for the period ended September 30, 2015 of Interval Leisure Group, Inc. (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and



(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Interval Leisure Group, Inc.

Dated: November 9, 2015 /s/ JOHN A. GALEA
John A. Galea
Chief Accounting Officer

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Exhibit 32.3

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

XML

GOODWILL AND OTHER INTANGIBLE ASSETS (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015 USD ($) item	Dec. 31, 2014 USD ($)
GOODWILL AND OTHER INTANGIBLE ASSETS
Number of reporting units | item	2
Changes in carrying amount of goodwill
Balance at the beginning of the period	$ 562,250	$ 540,839
Additions		22,539
Foreign Currency Translation	(433)	(1,128)
Balance at the end of the period	561,817	562,250
Exchange reporting unit
Changes in carrying amount of goodwill
Balance at the beginning of the period	495,748	483,462
Additions		12,286
Balance at the end of the period	495,748	495,748
Rental reporting unit
Changes in carrying amount of goodwill
Balance at the beginning of the period	20,396	20,396
Balance at the end of the period	20,396	20,396
VO management reporting unit
Changes in carrying amount of goodwill
Balance at the beginning of the period	39,160	36,981
Additions		3,307
Foreign Currency Translation	(433)	(1,128)
Balance at the end of the period	38,727	39,160
VO sales and financing reporting unit
Changes in carrying amount of goodwill
Balance at the beginning of the period	6,946
Additions		6,946
Balance at the end of the period	$ 6,946	$ 6,946

XML

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Reconciliation of total income tax provision
Income tax provision	$ 10,743	$ 11,838	$ 34,891	$ 36,843
Effective tax rate (as a percent)	35.30%	34.90%	35.80%	35.80%
Federal statutory rate (as a percent)	35.00%	35.00%	35.00%	35.00%

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FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands		3 Months Ended	9 Months Ended
		Sep. 30, 2015	Sep. 30, 2015	Apr. 10, 2015	Dec. 31, 2014	Apr. 30, 2014	Jun. 21, 2012
Fair Value of Financial Instruments
Restricted cash and cash equivalents		$ 15,636	$ 15,636		$ 19,984
5.625% Senior Notes
Fair Value of Financial Instruments
Senior notes		(350,000)	(350,000)	$ (350,000)
Debt issuance costs		6,494	6,494
Revolving credit facility
Fair Value of Financial Instruments
Revolving credit facility		(75,000)	(75,000)		(488,000)
Debt issuance costs		3,246	3,246		3,617
Maximum borrowing capacity		600,000	600,000		600,000	$ 600,000	$ 500,000
HVO
Fair Value of Financial Instruments
Investments in marketable securities		11,000	11,000
Unrealized trading losses		(800)	(500)
Carrying Amount
Fair Value of Financial Instruments
Cash and cash equivalents		101,417	101,417		80,493
Restricted cash and cash equivalents		15,636	15,636		19,984
Financing receivables		16,134	16,134		15,896
Vacation ownership mortgages receivable		32,273	32,273		36,502
Investments in marketable securities		10,961	10,961		11,368
Revolving credit facility	[1]	(71,754)	(71,754)		(484,383)
Senior notes	[1]	(343,506)	(343,506)
Fair Value
Fair Value of Financial Instruments
Cash and cash equivalents		101,417	101,417		80,493
Restricted cash and cash equivalents		15,636	15,636		19,984
Financing receivables		16,134	16,134		15,896
Vacation ownership mortgages receivable		33,616	33,616		37,624
Investments in marketable securities		10,961	10,961		11,368
Revolving credit facility	[1]	(75,000)	(75,000)		$ (488,000)
Senior notes	[1]	$ (344,750)	$ (344,750)

[1] The carrying value of our revolving credit facility and senior notes include $3.2 million and $6.5 million of debt issuance costs, which are presented as a direct reduction of the corresponding liability.

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SEGMENT INFORMATION (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) item	Sep. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
SEGMENT INFORMATION
Number of operating segments which are also reportable segments | item			2
SEGMENT INFORMATION
Total revenues	$ 174,040	$ 146,683	$ 532,337	$ 447,252
Cost of sales	75,613	58,995	238,393	182,606
Gross profit	98,427	87,688	293,944	264,646
Selling and marketing expense	18,133	14,799	54,919	43,177
General and administrative expense	39,360	31,340	110,796	94,028
Amortization expense of intangibles	3,517	2,879	10,532	8,740
Depreciation expense	4,394	3,765	12,991	11,434
Direct segment operating expenses	65,404	52,783	189,238	157,379
Operating income	33,023	34,905	104,706	107,267
Total assets
Total assets	1,302,402		1,302,402		$ 1,324,002
Exchange And Rental
SEGMENT INFORMATION
Transaction Revenue	46,728	46,868	150,931	150,294
Membership fee revenue	31,326	32,017	94,453	95,437
Ancillary member revenue	1,689	1,896	4,490	5,228
Total member revenue	79,743	80,781	249,874	250,959
Other revenue	7,815	5,825	25,386	17,932
Rental management revenue	13,626	12,973	39,236	36,932
Pass-through revenue	23,704	20,638	70,625	61,284
Total revenues	124,888	120,217	385,121	367,107
Cost of sales	47,569	44,187	148,311	137,993
Gross profit	77,319	76,030	236,810	229,114
Selling and marketing expense	14,570	14,640	45,419	42,897
General and administrative expense	26,284	25,335	78,290	75,593
Amortization expense of intangibles	2,155	1,739	6,465	5,319
Depreciation expense	3,958	3,587	11,680	10,892
Operating income	30,352	30,729	94,956	94,413
Total assets
Total assets	934,860		934,860		928,081
Vacation Ownership
SEGMENT INFORMATION
Management fee revenue	25,759	22,123	75,672	67,118
Vacation ownership sales and financing revenue	9,002		28,473
Pass-through revenue	14,391	4,343	43,071	13,027
Total revenues	49,152	26,466	147,216	80,145
Cost of sales	28,044	14,808	90,082	44,613
Gross profit	21,108	11,658	57,134	35,532
Selling and marketing expense	3,563	159	9,500	280
General and administrative expense	13,076	6,005	32,506	18,435
Amortization expense of intangibles	1,362	1,140	4,067	3,421
Depreciation expense	436	178	1,311	542
Operating income	2,671	$ 4,176	9,750	$ 12,854
Total assets
Total assets	$ 367,542		$ 367,542		$ 395,921

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LONG-TERM DEBT (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Apr. 10, 2015	Dec. 31, 2014
LONG-TERM DEBT
Total long-term debt, net of debt issuance costs	$ 415,260		$ 484,383
5.625% Senior Notes
LONG-TERM DEBT
Stated interest rate (as a percent)	5.625%	5.625%
5.625% senior notes	$ 350,000	$ 350,000
Unamortized debt issuance costs	(6,494)
Revolving credit facility
LONG-TERM DEBT
Revolving credit facility	$ 75,000		$ 488,000
Stated interest rate (as a percent)	2.45%		1.92%
Unamortized debt issuance costs	$ (3,246)		$ (3,617)

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STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2015

STOCK-BASED COMPENSATION

Schedule of allocation of recognized compensation cost

Non-cash stock-based compensation expense related to equity awards is included in the following line items in the accompanying condensed consolidated statements of income for the three and nine months ended September 30, 2015 and 2014 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Cost of sales	$	192	$	189	$	625	$	572
Selling and marketing expense		356		301		1,237		998
General and administrative expense		2,700		2,327		8,320		6,727
Non-cash compensation expense	$	3,248	$	2,817	$	10,182	$	8,297

Schedule of RSU award activity

	Shares			Weighted-Average Grant Date Fair Value
	(In thousands)
Non-vested RSUs at January 1, 2015		1,694		$	20.23
Granted		553			25.72
Vested		(547	)		17.34
Forfeited		(28	)		21.74
Non-vested RSUs at September 30, 2015		1,672		$	22.97

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COMMITMENTS AND CONTINGENCIES (Details) $ in Millions	9 Months Ended
	Sep. 30, 2015 USD ($)
Commitments and guarantees
Letter of credit outstanding amount	$ 8.3
Guarantees Surety Bonds Letters of Credit
Commitments and guarantees
Guarantees and commitments amount	88.6
Amount of guarantees and commitments, year one	64.7
Guarantees
Commitments and guarantees
Guarantees and commitments amount	41.5
Reasonable expectation of guarantees and commitments amount	$ 18.1
Guarantees | Minimum
Commitments and guarantees
Notice period for termination of lease	60 days
Guarantees | Maximum
Commitments and guarantees
Notice period for termination of lease	90 days
Guarantees construction loan
Commitments and guarantees
Guarantees and commitments amount	$ 36.7

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2015

SIGNIFICANT ACCOUNTING POLICIES

Schedule of computation of weighted average common and common equivalent shares

The computation of weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Basic weighted average shares of common stock outstanding		57,477		57,098		57,369		57,424
Net effect of common stock equivalents assumed to be vested related to RSUs		578		583		578		547
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees		—		2		1		5
Diluted weighted average shares of common stock outstanding		58,055		57,683		57,948		57,976

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BENEFIT PLANS (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Retirement savings plan qualified under Section 401(k) of the Internal Revenue Code and other various benefit plans
Employee contribution as maximum percentage of pre-tax earnings			50.00%
Employer contribution against each dollar contributed by employee (as a percent)			50.00%
Matching contributions	$ 0.5	$ 0.4	$ 1.7	$ 1.4
Deferred compensation plan
Vesting percentage under deferred compensation plan			100.00%
Shares of common stock reserved for issuance pursuant to deferred compensation plan	100,000		100,000
Shares outstanding under the deferred compensation plan	50,920		50,920
Maximum
Retirement savings plan qualified under Section 401(k) of the Internal Revenue Code and other various benefit plans
Employer's maximum contribution of participant's eligible earnings (as a percent)			3.00%
HVO
Deferred compensation plan
Net transfer into deferred compensation plan			$ 10.6
Fair value of investments in the Rabbi Trust	$ 11.0		11.0
Deferred compensation liability recorded in other long term liabilities	11.0		11.0
Unrealized investment losses related to deferred compensation plan	$ (0.8)		$ (0.5)

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VACATION OWNERSHIP INVENTORY (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
VACATION OWNERSHIP INVENTORY
Completed unsold vacation ownership interests	$ 48,216	$ 53,434
Land held for development	627	627
Inventory, Net, Total	$ 48,843	$ 54,061

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SIGNIFICANT ACCOUNTING POLICIES (Details 2) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share
Basic weighted average shares of common stock outstanding	57,477	57,098	57,369	57,424
Diluted weighted average shares of common stock outstanding	58,055	57,683	57,948	57,976
Non-vested RSUs
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share
Net effect of common stock equivalents (in shares)	578	583	578	547
Stock options
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share
Net effect of common stock equivalents (in shares)		2	1	5

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STOCK-BASED COMPENSATION (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Non-cash stock-based compensation expense
Non-cash compensation expense before income taxes	$ 3,248	$ 2,817	$ 10,182	$ 8,297
Cost of sales
Non-cash stock-based compensation expense
Non-cash compensation expense before income taxes	192	189	625	572
Selling and marketing expense
Non-cash stock-based compensation expense
Non-cash compensation expense before income taxes	356	301	1,237	998
General and administrative expense
Non-cash stock-based compensation expense
Non-cash compensation expense before income taxes	$ 2,700	$ 2,327	$ 8,320	$ 6,727

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LONG-TERM DEBT (Details 2) $ in Thousands		3 Months Ended		9 Months Ended
	Apr. 10, 2015 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	May. 05, 2015	Dec. 31, 2014 USD ($)	Apr. 30, 2014 USD ($)	Jun. 21, 2012 USD ($)
Senior Secured Credit Facility and Covenants
Total unamortized debt issuance costs		$ 9,700		$ 9,700			$ 3,600
Accumulated amortization on debt issuance costs		3,100		3,100			2,000
Interest expense		(6,386)	$ (1,529)	$ (15,113)	$ (4,481)
Minimum fixed charge coverage ratio				2.0
5.625% Senior Notes
Senior Secured Credit Facility and Covenants
5.625% senior notes	$ 350,000	$ 350,000		$ 350,000
Proceeds from issuance of senior notes	$ 343,100
Stated interest rate (as a percent)	5.625%	5.625%		5.625%
Unamortized debt issuance costs		$ 6,494		$ 6,494
Redemption price ( as a percent)				104.219%
Issuer and subsidiary guarantors | 5.625% Senior Notes
Senior Secured Credit Facility and Covenants
Ownership interest ( as a percent)		100.00%		100.00%
Revolving credit facility
Senior Secured Credit Facility and Covenants
Principal amount		$ 600,000		$ 600,000			600,000	$ 600,000	$ 500,000
Amount outstanding		$ 75,000		$ 75,000			$ 488,000
Commitment fee (as a percent)				0.375%
Percentage of voting equity securities of the Borrower and its U.S. subsidiaries by which credit facility is secured				100.00%
Percentage of equity in the first-tier foreign subsidiaries of the Borrower by which credit facility is secured				65.00%
Stated interest rate (as a percent)		2.45%		2.45%			1.92%
Unamortized debt issuance costs		$ 3,246		$ 3,246			$ 3,617
Revolving credit facility | Actual
Senior Secured Credit Facility and Covenants
Consolidated leverage ratio of debt over EBITDA				0.45
Consolidated interest coverage ratio				10.92
Revolving credit facility | Minimum
Senior Secured Credit Facility and Covenants
Commitment fee (as a percent)				0.25%
Revolving credit facility | Minimum | Financial covenant
Senior Secured Credit Facility and Covenants
Consolidated interest coverage ratio				3.00
Revolving credit facility | Maximum
Senior Secured Credit Facility and Covenants
Commitment fee (as a percent)				0.40%
Revolving credit facility | Maximum | Financial covenant
Senior Secured Credit Facility and Covenants
Consolidated leverage ratio of debt over EBITDA				3.25
Revolving credit facility | Base rate
Senior Secured Credit Facility and Covenants
Reference rate				Base Rate
Applicable margin (as a percent)				1.25%
Revolving credit facility | Base rate | Minimum
Senior Secured Credit Facility and Covenants
Applicable margin (as a percent)				0.25%
Revolving credit facility | Base rate | Maximum
Senior Secured Credit Facility and Covenants
Applicable margin (as a percent)				1.50%
Revolving credit facility | LIBOR
Senior Secured Credit Facility and Covenants
Reference rate				LIBOR
Applicable margin (as a percent)				2.25%
Revolving credit facility | LIBOR | Minimum
Senior Secured Credit Facility and Covenants
Applicable margin (as a percent)				1.25%
Revolving credit facility | LIBOR | Maximum
Senior Secured Credit Facility and Covenants
Applicable margin (as a percent)				2.50%
Third Amendment To Credit Agreement
Senior Secured Credit Facility and Covenants
Commitment fee (as a percent)	0.40%
Third Amendment To Credit Agreement | Minimum | Actual
Senior Secured Credit Facility and Covenants
Consolidated leverage ratio of debt over EBITDA	3.25
Third Amendment To Credit Agreement | Minimum | Financial covenant
Senior Secured Credit Facility and Covenants
Consolidated leverage ratio of debt over EBITDA	3.5
Third Amendment To Credit Agreement | Minimum | Pro Forma
Senior Secured Credit Facility and Covenants
Consolidated leverage ratio of debt over EBITDA	4.5
Third Amendment To Credit Agreement | Maximum | Actual
Senior Secured Credit Facility and Covenants
Consolidated leverage ratio of debt over EBITDA	1.0
Third Amendment To Credit Agreement | Maximum | Financial covenant
Senior Secured Credit Facility and Covenants
Consolidated leverage ratio of debt over EBITDA	1.0
Third Amendment To Credit Agreement | Maximum | Pro Forma
Senior Secured Credit Facility and Covenants
Consolidated leverage ratio of debt over EBITDA	1.0
Third Amendment To Credit Agreement | Base rate
Senior Secured Credit Facility and Covenants
Reference rate	Base Rate
Applicable margin (as a percent)	1.50%
Third Amendment To Credit Agreement | LIBOR
Senior Secured Credit Facility and Covenants
Reference rate	LIBOR
Applicable margin (as a percent)	2.50%
Fourth Amendment To Credit Agreement Member | 5.625% Senior Notes
Senior Secured Credit Facility and Covenants
Stated interest rate (as a percent)						5.625%

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SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2015

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

        Our significant accounting policies were described in Note 2 to our audited consolidated financial statements included in our 2014 Annual Report on Form 10-K. There have been no significant changes in our significant accounting policies for the nine months ended September 30, 2015.

Accounting Estimates

        ILG's management is required to make certain estimates and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates.

        Significant estimates underlying the accompanying condensed consolidated financial statements include: the recovery of long-lived assets as well as goodwill and other intangible assets; purchase price allocations of business combinations; the determination of deferred income taxes including related valuation allowances; the determination of deferred revenue and membership costs; and the determination of stock-based compensation. In the opinion of ILG's management, the assumptions underlying the historical condensed consolidated financial statements of ILG and its subsidiaries are reasonable.

Earnings per Share

        Basic earnings per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per share attributable to common stockholders is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are common stock equivalents that are freely exercisable into common stock at less than market prices or otherwise dilute earnings if converted. The net effect of common stock equivalents is based on the incremental common stock that would be issued upon the assumed exercise of common stock options and the vesting of restricted stock units ("RSUs") using the treasury stock method. Common stock equivalents are not included in diluted earnings per share when their inclusion is antidilutive. The computations of diluted earnings per share available to common stockholders do not include approximately 0.4 million RSUs for the three months ended September 30, 2015 and 1.2 million stock options and RSUs for the three months ended September 30, 2014, and 0.5 million and 1.0 million stock options and RSUs for the nine months ended September 30, 2015 and 2014, respectively, as the effect of their inclusion would have been antidilutive to earnings per share.

        In connection with the spin-off, stock options to purchase ILG common stock were granted to non-ILG employees for which there is no future compensation expense to be recognized by ILG. As of September 30, 2015, there were no stock options outstanding, and as of September 30, 2014, 0.8 million remained outstanding.

        The computation of weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Basic weighted average shares of common stock outstanding		57,477		57,098		57,369		57,424
Net effect of common stock equivalents assumed to be vested related to RSUs		578		583		578		547
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees		—		2		1		5
Diluted weighted average shares of common stock outstanding		58,055		57,683		57,948		57,976

Recent Accounting Pronouncements

        With the exception of those discussed below, there are no recent accounting pronouncements or changes in accounting pronouncements since the recent accounting pronouncements described in our 2014 Annual Report on Form 10-K that are of significance, or potential significance, to ILG based on our current operations. The following summary of recent accounting pronouncements is not intended to be an exhaustive description of the respective pronouncement.

        In September 2015, the FASB issued ASU 2015-16, "Business Combinations Topic 805)." The purpose of the ASU is to simplify the accounting for measurement-period adjustments related to business combinations. ASU 2015-16 requires an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period, in the reporting period in which the adjustment amounts are determined. The amendments in this update are effective for fiscal years beginning after December 31, 2015, including interim periods within the fiscal year and should be applied prospectively. We are currently assessing the future impact of this new accounting standard update on our consolidated financial statements.

        In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which defers by one year the effective date of ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)" to annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. ASU 2014-09 supersedes revenue recognition requirements in Topic 605, "Revenue Recognition." The purpose of the ASU is to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS that would remove inconsistencies and weaknesses in revenue requirement; provide a more robust framework for addressing revenue issues; improve comparability of revenue recognition practices across entities and industries; provide more useful information to users of financial statements through improved disclosure requirements and to simplify the preparation of financial statements. We are currently assessing the future impact of this new accounting standard update on our consolidated financial statements.

        In June 2015, the FASB issued ASU 2015-10, "Technical Corrections and Improvements" ("ASU 2015-10"). The purpose of this ASU is to clarify guidance, correct unintended application of guidance, or make minor improvements to guidance that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Additionally, some of the amendments are intended to simplify guidance by making it easier to understand and easier to apply by eliminating inconsistencies, providing needed clarifications, and improving the presentation of guidance in the Codification. Transition guidance varies based on the amendments in this update. The amendments in this update that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of this update. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial statements.

        In April 2015, the FASB issued ASU 2015-05, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement" ("ASU 2015-05"). The FASB amended its guidance on internal use software to clarify how customers in cloud computing arrangements should determine whether the arrangement includes a software license. The guidance also eliminates the existing requirement for customers to account for software licenses they acquire by analogizing to the guidance on leases. Instead, entities will account for these arrangements as licenses of intangible assets. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial statements.

        In February 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis" ("ASU 2015-02"). The amendments in this topic are intended to improve and simplify targeted areas of the consolidation guidance. ASU 2015-02 modifies the method for determining whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities. Further, it eliminates the presumption that a general partner should consolidate a limited partnership and impacts the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. The ASU is effective for fiscal years beginning after December 15, 2015 (and interim periods within those fiscal years). Early adoption is permitted. We are currently assessing the future impact, if any, this new accounting standard update may have on our consolidated financial statements.

Adopted Accounting Pronouncements

        In April 2015, the FASB issued ASU 2015-03, "Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" ("ASU 2015-03"). ASU 2015-03 simplifies presentation of debt issuance costs, requiring debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The guidance in the standard is limited to the presentation of debt issuance costs and does not affect the recognition and measurement of debt issuance costs. The amortization of such costs are to continue being calculated using the interest method and be reported as interest expense. The ASU is effective for fiscal years beginning after December 15, 2015 (and interim periods within those fiscal years). Early adoption is permitted for financial statements that have not been previously issued and will be applied on a retrospective basis. We adopted the provisions of the ASU as of June 30, 2015 retrospectively and the adoption did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures. Other non-current assets and long-term debt on our consolidated balance sheet as of December 31, 2014 has been retrospectively adjusted by $3.6 million to effectuate the adoption of this ASU as described above.

        In April 2014, the FASB issued ASU No. 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)" ("ASU 2014-08"). The amendments in ASU 2014-08 change the requirements for reporting and disclosing discontinued operations. Among other items, this new guidance defines a discontinued operation as a disposal of a component or group of components that is disposed of or is classified as held for sale and "represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results." The standard states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. The ASU is effective for fiscal years beginning after December 15, 2014 (and interim periods within those fiscal years), with early adoption permitted. The adoption of ASU 2014-08 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

        In January 2014, the FASB issued ASU No. 2014-04, "Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure" ("ASU 2014-04"). Current US GAAP requires a loan to be reclassified to Other Real Estate Owned ("OREO") upon a troubled debt restructuring that is "in substance a repossession or foreclosure," where the creditor receives "physical possession" of the debtor's assets regardless of whether formal foreclosure proceedings take place. The amendments in ASU 2014-04 clarify when an "in substance a repossession or foreclosure" and "physical possession" has occurred as these terms are not defined in US GAAP, in addition to requiring certain supplementary interim and annual disclosures. The ASU is effective for fiscal years beginning after December 15, 2014 (and interim periods within those fiscal years) and shall be applied prospectively, with early adoption permitted. The adoption of ASU 2014-04 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

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VACATION OWNERSHIP MORTGAGES RECEIVABLE (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($) item	Dec. 31, 2014 USD ($)
VACATION OWNERSHIP MORTGAGES RECEIVABLE
Fair value of acquired loans	$ 37,500
Expected remaining principal payment and accrued interest	29,800	$ 38,000
Schedule to mature mortgages receivables
2016	6,092
2017	5,439
2018	4,614
2019	3,957
2020	4,074
2021 and thereafter	14,274
Total	38,450
Less: discount on acquired loans	(4,541)
Less allowance for loan losses on originated loans	(1,636)	(347)
Net vacation ownership mortgages receivable	32,273	36,502
Accretable yield expected to be collected over the carrying amount
Balance, beginning of period	15,406
Accretion	(3,267)
Reclassification between nonaccretable difference	583
Balance, end of period	12,722
Nonaccretable difference, end of period balance	6,345
Allowance for Vacation Ownership Mortgage Receivable Losses
Receivables Past Due	780
Receivables greater than 90 Days Past Due	$ 114
Weighted average FICO score within acquired loan pool | item	703
Weighted average FICO score within originated loan pool | item	716
Average estimated rate of default for all outstanding loans	11.10%
Acquired vacation
Schedule to mature mortgages receivables
2016	$ 5,600
2017	4,874
2018	3,992
2019	3,267
2020	3,303
2021 and thereafter	8,715
Total	29,751
Less: discount on acquired loans	(4,541)
Net vacation ownership mortgages receivable	$ 25,210	33,953
Weighted-average interest rate on vacation ownership mortgage receivables	14.00%
Allowance for Vacation Ownership Mortgage Receivable Losses
Receivables Past Due	$ 752
Receivables greater than 90 Days Past Due	114
Originated vacation
Schedule to mature mortgages receivables
2016	492
2017	565
2018	622
2019	690
2020	771
2021 and thereafter	5,559
Total	8,699	$ 2,896
Less allowance for loan losses on originated loans	(1,636)
Net vacation ownership mortgages receivable	$ 7,063
Weighted-average interest rate on vacation ownership mortgage receivables	13.90%
Allowance for Vacation Ownership Mortgage Receivable Losses
Receivables Past Due	$ 28
Minimum | Acquired vacation
Schedule to mature mortgages receivables
Weighted-average interest rate on vacation ownership mortgage receivables	12.50%
Minimum | Originated vacation
Schedule to mature mortgages receivables
Weighted-average interest rate on vacation ownership mortgage receivables	12.90%
Maximum | Acquired vacation
Schedule to mature mortgages receivables
Weighted-average interest rate on vacation ownership mortgage receivables	17.90%
Maximum | Originated vacation
Schedule to mature mortgages receivables
Weighted-average interest rate on vacation ownership mortgage receivables	14.90%

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INVESTMENTS IN UNCONSOLIDATED ENTITIES (Tables)

9 Months Ended

Sep. 30, 2015

INVESTMENTS IN UNCONSOLIDATED ENTITIES

Schedule of ownership percentages and carrying value of our investments in unconsolidated entities

	Ownership Interest	Carrying Value
		(in thousands)
Maui Timeshare Venture, LLC	33.0%	$	36,635
Other	25.0% - 43.3%		555
Total		$	37,190

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VACATION OWNERSHIP MORTGAGES RECEIVABLE (Tables)

9 Months Ended

Sep. 30, 2015

VACATION OWNERSHIP MORTGAGES RECEIVABLE

Schedule of mortgages receivable

Vacation ownership mortgages receivable carrying amounts as of September 30, 2015 and December 31, 2014 were as follows (in thousands):

	September 30, 2015			December 31, 2014
Acquired vacation ownership mortgages receivable at various stated interest rates with varying payment through 2024 (see below)	$	25,210		$	33,953
Originated vacation ownership mortgages receivable at various stated interest rates with varying payment through 2025 (see below)		8,699			2,896
Less allowance for loan losses on originated loans		(1,636	)		(347	)
Net vacation ownership mortgages receivable	$	32,273		$	36,502

Schedule of changes in accretable yield

Accretable Yield	Nine Months Ended September 30, 2015
Balance, beginning of period	$	15,406
Accretion		(3,267	)
Reclassification between nonaccretable difference		583
Balance, end of period	$	12,722
Nonaccretable difference, end of period balance	$	6,345

Schedule to mature mortgages receivables

Vacation ownership mortgages receivable as of September 30, 2015 are scheduled to mature as follows (in thousands):

	Vacation Ownership Mortgages Receivable
Twelve month period ending September 30,	Acquired loans	Originated loans	Total
2016	$5,600	$492	$	6,092
2017	4,874	565		5,439
2018	3,992	622		4,614
2019	3,267	690		3,957
2020	3,303	771		4,074
2021 and thereafter	8,715	5,559		14,274
Total	29,751	8,699		38,450
Less: discount on acquired loans(1)	(4,541)	—		(4,541	)
Less: allowance for losses	—	(1,636)		(1,636	)
Net vacation ownership mortgages receivable	$25,210	$7,063	$	32,273
Weighted average stated interest rate as of September 30, 2015	14.0%	13.9%
Range of stated interest rates as of September 30, 2015	12.5% to 17.9%	12.9% to 14.9%

(1)           The difference between the contractual principal amount of acquired loans of $29.8 million and the net carrying amount of $25.2 million as of September 30, 2015 is related to the application of ASC 310-30.

Schedule of past-due and nonaccrual status of mortgages receivable

Our aged analysis of past-due vacation ownership mortgages receivable and the gross balance of vacation ownership mortgages receivable greater than 90 days past-due as of September 30, 2015 is as follows (in thousands):

	Vacation Ownership Mortgages
	Receivable
	Acquired		Originated
	loans		loans		Total
Receivables past due	$	752	$	28	$	780
Receivables greater than 90 days past due	$	114	$	—	$	114

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SEGMENT INFORMATION (Details 2) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2015 USD ($) item	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) item	Sep. 30, 2014 USD ($) item	Dec. 31, 2014 USD ($)
Geographic Information
Number of other countries in which entity operates | item		15		15
Revenue:
Revenue		$ 174,040	$ 146,683	$ 532,337	$ 447,252
Long-lived assets (excluding goodwill and intangible assets):
Total long-lived assets		86,211		$ 86,211		$ 86,601
Minimum
Geographic Information
Number of countries from which revenue is sourced | item				100	100
United States
Revenue:
Revenue		144,610	112,973	$ 441,636	$ 345,201
Long-lived assets (excluding goodwill and intangible assets):
Total long-lived assets		81,276		81,276		81,291
Europe
Revenue:
Revenue		16,360	18,337	50,828	55,046
Long-lived assets (excluding goodwill and intangible assets):
Total long-lived assets		4,567		4,567		4,884
All other countries
Revenue:
Revenue	[1]	13,070	$ 15,373	39,873	$ 47,005
Long-lived assets (excluding goodwill and intangible assets):
Total long-lived assets		$ 368		$ 368		$ 426

[1] Includes countries within the following continents: Africa, Asia, Australia, North America and South America.

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INVESTMENTS IN UNCONSOLIDATED ENTITIES (Details) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015 USD ($)	Sep. 30, 2015 USD ($)
Schedule of Equity Method Investments [Line Items]
Equity income from investments in unconsolidated entities	$ 1,322	$ 3,771
carrying value of investments in unconsolidated entities	37,190	37,190
Maui Timeshare Venture, LLC
Schedule of Equity Method Investments [Line Items]
carrying value of investments in unconsolidated entities	$ 36,635	$ 36,635
Ownership percentages of investments in unconsolidated entities	33.00%	33.00%
Other
Schedule of Equity Method Investments [Line Items]
carrying value of investments in unconsolidated entities	$ 555	$ 555
Other | Minimum
Schedule of Equity Method Investments [Line Items]
Ownership percentages of investments in unconsolidated entities	25.00%	25.00%
Other | Maximum
Schedule of Equity Method Investments [Line Items]
Ownership percentages of investments in unconsolidated entities	43.30%	43.30%

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PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2015

PROPERTY AND EQUIPMENT

Schedule of Property and equipment, net

Property and equipment, net is as follows (in thousands):

	September 30, 2015			December 31, 2014
Computer equipment	$	22,945		$	21,389
Capitalized software (including internally developed software)		106,214			97,561
Land, buildings and leasehold improvements		50,916			50,685
Furniture and other equipment		15,841			16,638
Projects in progress		13,245			10,581
		209,161			196,854
Less: accumulated depreciation and amortization		(122,950	)		(110,253	)
Total property and equipment, net	$	86,211		$	86,601

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LONG-TERM DEBT (Tables)

9 Months Ended

Sep. 30, 2015

LONG-TERM DEBT

Schedule of Long-term debt

Long-term debt is as follows (in thousands):

	September 30, 2015			December 31, 2014
Revolving credit facility (interest rate of 2.45% at September 30, 2015 and 1.92% at December 31, 2014)	$	75,000		$	488,000
5.625% senior notes		350,000			—
Unamortized debt issuance costs (revolving credit facility)		(3,246	)		(3,617	)
Unamortized debt issuance costs (senior notes)		(6,494	)		—
Total long-term debt, net of debt issuance costs	$	415,260		$	484,383

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ORGANIZATION AND BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2015

ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION AND BASIS OF PRESENTATION

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION

Company Overview

        Interval Leisure Group, Inc., or ILG, is a leading global provider of non-traditional lodging, encompassing a portfolio of leisure businesses from exchange and vacation rental to vacation ownership. At the end of 2014, we re-aligned our operating segments to encompass the vacation ownership sales and marketing capabilities with the acquisition of the Hyatt Vacation Ownership business, or HVO, in October 2014. We operate in the following two segments: Exchange and Rental, and Vacation Ownership. Exchange and Rental offers access to vacation accommodations and other travel-related transactions and services to leisure travelers, by providing vacation exchange services and vacation rental, working with resort developers and operating vacation rental properties. Vacation Ownership engages in the management of vacation ownership resorts; sales, marketing, and financing of vacation ownership interests; and related services to owners and associations.

        The Exchange and Rental operating segment consists of Interval International (referred to as Interval), the Hyatt Residence Club (referred to as HRC), the Trading Places International (known as TPI) operated exchange business, Aqua-Aston Holdings, Inc. (referred to as Aqua-Aston), which owns Aston Hotels & Resorts LLC, Aqua Hospitality LLC and Aqua Hotels and Resorts, Inc. The Vacation Ownership operating segment consists of VRI Europe, HVO's management and vacation ownership interests (VOI) sales and financing businesses, and the management related lines of business of Vacation Resorts International (known as VRI) and TPI.

        ILG was incorporated as a Delaware corporation in May 2008 in connection with a plan by IAC/InterActiveCorp, or IAC, to separate into five publicly traded companies, referred to as the "spin-off." ILG commenced trading on The NASDAQ Stock Market in August 2008 under the symbol "IILG."

Basis of Presentation

        The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and with the rules and regulations of the Securities and Exchange Commission. Accordingly, these financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of ILG's management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Interim results are not indicative of the results that may be expected for a full year.

        The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2014 Annual Report on Form 10-K.

Seasonality

        Revenue at ILG is influenced by the seasonal nature of travel. Within our Exchange and Rental segment, our vacation exchange businesses recognize exchange and Getaway revenue based on confirmation of the vacation, with the first quarter generally experiencing higher revenue and the fourth quarter generally experiencing lower revenue. Our vacation rental businesses recognize rental revenue based on occupancy, with the first and third quarters generally generating higher revenue as a result of increased leisure travel to our Hawaii-based managed properties during these periods, and the second and fourth quarters generally generating lower revenue.

        Within our Vacation Ownership segment, our sales and financing business experiences a modest impact from seasonality, with higher sales volumes during the traditional vacation periods, largely the third quarter (summer months). Our vacation ownership management businesses by and large do not experience significant seasonality.

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2015

FAIR VALUE MEASUREMENTS

Schedule of estimated fair value of financial instruments

	September 30, 2015						December 31, 2014
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
	(In thousands)
Cash and cash equivalents	$	101,417		$	101,417		$	80,493		$	80,493
Restricted cash and cash equivalents		15,636			15,636			19,984			19,984
Financing receivables		16,134			16,134			15,896			15,896
Vacation ownership mortgages receivable		32,273			33,616			36,502			37,624
Investments in marketable securities		10,961			10,961			11,368			11,368
Revolving credit facility(1)		(71,754	)		(75,000	)		(484,383	)		(488,000	)
Senior notes(1)		(343,506	)		(344,750	)		—			—

(1)           The carrying value of our revolving credit facility and senior notes include $3.2 million and $6.5 million of debt issuance costs, which are presented as a direct reduction of the corresponding liability.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Intangibles assets, net
Intangible assets with indefinite lives	$ 129,268	$ 131,336
Intangible assets with definite lives, net	126,702	137,539
Total intangible assets, net	255,970	268,875
Change in indefinite-lived intangible assets	2,100
Resort management contracts
Intangibles assets, net
Intangible assets with indefinite lives	85,352	87,420
Trade names and trademarks
Intangibles assets, net
Intangible assets with indefinite lives	$ 43,916	$ 43,916

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STOCK-BASED COMPENSATION (Details 3) - Non-vested RSUs shares in Thousands	9 Months Ended
	Sep. 30, 2015 $ / shares shares
Shares
Outstanding at the beginning of the period (in shares) | shares	1,694
Granted (in shares) | shares	553
Vested (in shares) | shares	(547)
Forfeited (in shares) | shares	(28)
Outstanding at the end of the period (in shares) | shares	1,672
Weighted-Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share)	$ 20.23
Granted (in dollars per share)	25.72
Vested (in dollars per share)	17.34
Forfeited (in dollars per share)	21.74
Outstanding at the end of the period (in dollars per share)	$ 22.97

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Revenue	$ 174,040	$ 146,683	$ 532,337	$ 447,252
Cost of sales (exclusive of depreciation and amortization shown separately below)	75,613	58,995	238,393	182,606
Gross profit	98,427	87,688	293,944	264,646
Selling and marketing expense	18,133	14,799	54,919	43,177
General and administrative expense	39,360	31,340	110,796	94,028
Amortization expense of intangibles	3,517	2,879	10,532	8,740
Depreciation expense	4,394	3,765	12,991	11,434
Operating income	33,023	34,905	104,706	107,267
Other income (expense):
Interest income	276	55	819	154
Interest expense	(6,386)	(1,529)	(15,113)	(4,481)
Other income, net	2,197	511	3,313	95
Equity in earnings from unconsolidated entities	1,322		3,771
Total other expense, net	(2,591)	(963)	(7,210)	(4,232)
Earnings before income taxes and noncontrolling interests	30,432	33,942	97,496	103,035
Income tax provision	(10,743)	(11,838)	(34,891)	(36,843)
Net income	19,689	22,104	62,605	66,192
Net income attributable to noncontrolling interests	(589)	(809)	(1,602)	(2,822)
Net income attributable to common stockholders	$ 19,100	$ 21,295	$ 61,003	$ 63,370
Earnings per share attributable to common stockholders:
Basic (in dollars per share)	$ 0.33	$ 0.37	$ 1.06	$ 1.10
Diluted (in dollars per share)	$ 0.33	$ 0.37	$ 1.05	$ 1.09
Weighted average number of shares of common stock outstanding:
Basic (in shares)	57,477	57,098	57,369	57,424
Diluted (in shares)	58,055	57,683	57,948	57,976
Dividends declared per share of common stock (in dollars per share)	$ 0.12	$ 0.11	$ 0.36	$ 0.33

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PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
PROPERTY AND EQUIPMENT
Property and equipment, gross	$ 209,161	$ 196,854
Less: accumulated depreciation and amortization	(122,950)	(110,253)
Total property and equipment, net	86,211	86,601
Computer equipment
PROPERTY AND EQUIPMENT
Property and equipment, gross	22,945	21,389
Capitalized software (including internally developed software)
PROPERTY AND EQUIPMENT
Property and equipment, gross	106,214	97,561
Land, buildings and leasehold improvements
PROPERTY AND EQUIPMENT
Property and equipment, gross	50,916	50,685
Furniture and other equipment
PROPERTY AND EQUIPMENT
Property and equipment, gross	15,841	16,638
Projects in progress
PROPERTY AND EQUIPMENT
Property and equipment, gross	$ 13,245	$ 10,581

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands	Noncontrolling Interest	Total ILG Stockholders' Equity	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Total
Balance at Dec. 31, 2014	$ 36,305	$ 384,043	$ 595	$ (35,034)	$ 201,834	$ 235,945	$ (19,297)	$ 420,348
Balance (in shares) at Dec. 31, 2014			59,463,200	2,363,324				57,100,000
Increase (Decrease) in Stockholders' Equity
Net income	1,582	61,003				61,003		$ 62,585
Other comprehensive loss, net of tax	(899)	(5,922)					(5,922)	(6,821)
Non-cash compensation expense		10,182			10,182			10,182
Dividends paid to noncontrolling interest	(3,030)							(3,030)
Issuance of common stock upon exercise of stock options		221			221			221
Issuance of common stock upon exercise of stock options (in shares)			11,084
Issuance of common stock upon vesting of restricted stock units, net of withholding taxes		(4,333)	$ 4		(4,337)			(4,333)
Issuance of common stock upon vesting of restricted stock units, net of withholding taxes (in shares)			379,649
Change in excess tax benefits from stock-based awards		1,845			1,845			1,845
Deferred stock compensation expense		117			117			117
Dividends declared on common stock		(20,687)			594	(21,281)		(20,687)
Increase in redemption value of redeemable noncontrolling interest		(231)				(231)		(231)
Balance at Sep. 30, 2015	$ 33,958	$ 426,238	$ 599	$ (35,034)	$ 210,456	$ 275,436	$ (25,219)	$ 460,196
Balance (in shares) at Sep. 30, 2015			59,853,933	2,363,324				57,500,000

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SUBSEQUENT EVENTS (Details) - Subsequent Event $ in Millions	Oct. 27, 2015 USD ($) item
Spinco Agreement | Liberty Interactive Corp.
SUBSEQUENT EVENTS
Number of designees to be appoint by current right	3
Minimum percentage of ILG's common stock to be held	10.00%
Maximum percentage of ILG's common stock to be held	35.00%
Spinco Agreement | Forecast | Liberty Interactive Corp.
SUBSEQUENT EVENTS
Number of directors to be appoint for Board	2
Period for termination of rights under agreement (in years)	3 years
Registration Rights Agreement | Liberty Interactive Corp.
SUBSEQUENT EVENTS
Number of demand registration rights under agreement	4
Aggregate offering price threshold for demand registration statement | $	$ 50
Number of days for preparation of demand registration statement from consummation of transactions under Merger Agreement	60 days
Vistana | Forecast
SUBSEQUENT EVENTS
Distribution of amount to Starwood prior to spin-off under Merger Agreement | $	$ 132
Number of hotels are expected to be converted into vacation ownership properties by Starwood, prior to merger under Merger Agreement	5
Percentage of Starwood shareholders in combined company after spin-off under Merger Agreement	55.00%
Percentage of ownership acquired under Merger Agreement	45.00%
Termination fee associated with Merger Agreement | $	$ 40
Vistana | Forecast | Maximum
SUBSEQUENT EVENTS
Period for payment of termination fee associated with Merger Agreement (in months)	12 months
Vistana | Global license agreement | Forecast
SUBSEQUENT EVENTS
Period for an agreement (in years)	80 years
Annual base royalty fee receivable by Starwood | $	$ 30
Percentage of vacation ownership interest sales added to annual base royalty fee	2.00%
Vistana | Noncompetition Agreement | Forecast
SUBSEQUENT EVENTS
Period for restrictions with Starwood (in years)	10 years

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ORGANIZATION AND BASIS OF PRESENTATION (Details)	1 Months Ended	9 Months Ended
	May. 31, 2008 company	Sep. 30, 2015 item
ORGANIZATION AND BASIS OF PRESENTATION
Number of operating segments | item		2
Number of publicly traded companies formed upon spin-off	5

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2015

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 15—COMMITMENTS AND CONTINGENCIES

        In the ordinary course of business, ILG is a party to various legal proceedings. ILG establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. ILG does not establish reserves for identified legal matters when ILG believes that the likelihood of an unfavorable outcome is not probable. Although management currently believes that an unfavorable resolution of claims against ILG, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of ILG, these matters are subject to inherent uncertainties and management's view of these matters may change in the future. ILG also evaluates other contingent matters, including tax contingencies, to assess the probability and estimated extent of potential loss. See Note 13 for a discussion of income tax contingencies.

        Other items, such as certain purchase commitments and guarantees are not recognized as liabilities in our condensed consolidated financial statements but are required to be disclosed in the footnotes to the financial statements. These funding commitments could potentially require our performance in the event of demands by third parties or contingent events. At September 30, 2015, guarantees, surety bonds and letters of credit totaled $88.6 million, with the highest annual amount of $64.7 million occurring in year one. The total includes a guarantee by us of up to $36.7 million of the construction loan for the Maui project. This amount represents the maximum exposure under guarantee related to this construction loan from a legal perspective; however, our reasonable expectation of our exposure under this guarantee based on the agreements among guarantors is proportionally reduced by our ownership percentage in the Maui project to $18.1 million as of September 30, 2015. Additionally, the total also includes maximum exposure under guarantees of $41.5 million primarily relating to our vacation rental business's hotel and resort management agreements, including those with guaranteed dollar amounts, and accommodation leases supporting the rental management activities that are entered into on behalf of the property owners for which either party generally may terminate such leases upon 60 to 90 days prior written notice to the other party.

        In addition, certain of our rental management agreements provide that owners receive specified percentages of the rental revenue generated under its management. In these cases, the operating expenses for the rental operations are paid from the revenue generated by the rentals, the owners are then paid their contractual percentages or guaranteed amounts, and our vacation rental business either retains the balance (if any) as its fee or makes up the deficit. Although such deficits are reasonably possible in a few of these agreements, as of September 30, 2015, future amounts are not expected to be significant either individually or in the aggregate.

        Additionally, as of September 30, 2015, our letters of credit totaled $8.3 million and were principally related to our Vacation Ownership sales and financing activities. More specifically, these letter of credits provide alternate assurance on amounts required to be held in escrow which enable our developer entities to access purchaser deposits prior to closings, as well as provide a guarantee of maintenance fees owed by our developer entities during subsidy periods at a particular vacation ownership resort, among other items.

        Our operating and purchase obligations primarily relate to future guaranteed purchases of rental inventory, operational support services, marketing related benefits and membership fulfillment benefits. Certain of our vacation rental businesses also enter into agreements, as principal, for services purchased on behalf of property owners for which it is subsequently reimbursed. As such, we are the primary obligor and may be liable for unreimbursed costs. As of September 30, 2015, amounts pending reimbursements are not significant.

European Union Value Added Tax Matter

        In 2009, the European Court of Justice issued a judgment related to Value Added Tax ("VAT") in Europe against an unrelated party. The judgment affects companies who transact within the European Union ("EU"), specifically providers of vacation interest exchange services, and altered the manner in which our Exchange and Rental segment accounts for VAT on its revenues as well as to which EU country VAT is owed.

        As of September 30, 2015 and December 31, 2014, ILG had an accrual of $1.4 million and $2.3 million, respectively, representing the net exposure of any VAT reclaim refund receivable and accrued VAT liabilities related to this matter. The net change in the accrual primarily relates to the resolution with the respective taxing authority of a specific methodology that is to be utilized, and to a decrease in the change in estimate primarily to update the periods for which the accrued VAT liabilities are due, as well as the effect of foreign currency remeasurements. The net impact resulted in favorable adjustments of less than $0.1 million and of $1.2 million for the three and nine months ended September 30, 2015 respectively, and $0.1 million and $0.7 million for the three and nine months ended September 30, 2014, respectively, to our condensed consolidated statements of income.

        Because of the uncertainty surrounding the ultimate outcome and settlement of these VAT liabilities, it is reasonably possible that future costs to settle these VAT liabilities as of September 30, 2015 may range from $1.4 million up to approximately $2.9 million based on quarter-end exchange rates. ILG believes that the $1.4 million accrual at September 30, 2015 is our best estimate of probable future obligations for the settlement of these VAT liabilities. The difference between the probable and reasonably possible amounts is primarily attributable to the assessment of certain potential penalties.

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SIGNIFICANT ACCOUNTING POLICIES (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Stock options
Securities not included in the computations of diluted earnings per share
Outstanding stock options (in shares)	0.0	0.8	0.0	0.8
RSUs
Securities not included in the computations of diluted earnings per share
Securities excluded from computation of diluted earnings per share (in shares)	0.4
Stock Options and RSUs
Securities not included in the computations of diluted earnings per share
Securities excluded from computation of diluted earnings per share (in shares)		1.2	0.5	1.0

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2015

SIGNIFICANT ACCOUNTING POLICIES

Accounting Estimates

Accounting Estimates

        ILG's management is required to make certain estimates and assumptions during the preparation of its consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates.

        Significant estimates underlying the accompanying condensed consolidated financial statements include: the recovery of long-lived assets as well as goodwill and other intangible assets; purchase price allocations of business combinations; the determination of deferred income taxes including related valuation allowances; the determination of deferred revenue and membership costs; and the determination of stock-based compensation. In the opinion of ILG's management, the assumptions underlying the historical condensed consolidated financial statements of ILG and its subsidiaries are reasonable.

Earnings per Share

Earnings per Share

        Basic earnings per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per share attributable to common stockholders is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are common stock equivalents that are freely exercisable into common stock at less than market prices or otherwise dilute earnings if converted. The net effect of common stock equivalents is based on the incremental common stock that would be issued upon the assumed exercise of common stock options and the vesting of restricted stock units ("RSUs") using the treasury stock method. Common stock equivalents are not included in diluted earnings per share when their inclusion is antidilutive. The computations of diluted earnings per share available to common stockholders do not include approximately 0.4 million RSUs for the three months ended September 30, 2015 and 1.2 million stock options and RSUs for the three months ended September 30, 2014, and 0.5 million and 1.0 million stock options and RSUs for the nine months ended September 30, 2015 and 2014, respectively, as the effect of their inclusion would have been antidilutive to earnings per share.

        In connection with the spin-off, stock options to purchase ILG common stock were granted to non-ILG employees for which there is no future compensation expense to be recognized by ILG. As of September 30, 2015, there were no stock options outstanding, and as of September 30, 2014, 0.8 million remained outstanding.

        The computation of weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Basic weighted average shares of common stock outstanding		57,477		57,098		57,369		57,424
Net effect of common stock equivalents assumed to be vested related to RSUs		578		583		578		547
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees		—		2		1		5
Diluted weighted average shares of common stock outstanding		58,055		57,683		57,948		57,976

Recent Accounting Pronouncements/Adopted Accounting Pronouncements

Recent Accounting Pronouncements

        With the exception of those discussed below, there are no recent accounting pronouncements or changes in accounting pronouncements since the recent accounting pronouncements described in our 2014 Annual Report on Form 10-K that are of significance, or potential significance, to ILG based on our current operations. The following summary of recent accounting pronouncements is not intended to be an exhaustive description of the respective pronouncement.

        In September 2015, the FASB issued ASU 2015-16, "Business Combinations Topic 805)." The purpose of the ASU is to simplify the accounting for measurement-period adjustments related to business combinations. ASU 2015-16 requires an acquirer to recognize adjustments to provisional amounts that are identified during the measurement period, in the reporting period in which the adjustment amounts are determined. The amendments in this update are effective for fiscal years beginning after December 31, 2015, including interim periods within the fiscal year and should be applied prospectively. We are currently assessing the future impact of this new accounting standard update on our consolidated financial statements.

        In August 2015, the FASB issued ASU 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which defers by one year the effective date of ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)" to annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period. ASU 2014-09 supersedes revenue recognition requirements in Topic 605, "Revenue Recognition." The purpose of the ASU is to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS that would remove inconsistencies and weaknesses in revenue requirement; provide a more robust framework for addressing revenue issues; improve comparability of revenue recognition practices across entities and industries; provide more useful information to users of financial statements through improved disclosure requirements and to simplify the preparation of financial statements. We are currently assessing the future impact of this new accounting standard update on our consolidated financial statements.

        In June 2015, the FASB issued ASU 2015-10, "Technical Corrections and Improvements" ("ASU 2015-10"). The purpose of this ASU is to clarify guidance, correct unintended application of guidance, or make minor improvements to guidance that are not expected to have a significant effect on current accounting practice or create a significant administrative cost to most entities. Additionally, some of the amendments are intended to simplify guidance by making it easier to understand and easier to apply by eliminating inconsistencies, providing needed clarifications, and improving the presentation of guidance in the Codification. Transition guidance varies based on the amendments in this update. The amendments in this update that require transition guidance are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in an interim period. All other amendments will be effective upon the issuance of this update. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial statements.

        In April 2015, the FASB issued ASU 2015-05, "Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement" ("ASU 2015-05"). The FASB amended its guidance on internal use software to clarify how customers in cloud computing arrangements should determine whether the arrangement includes a software license. The guidance also eliminates the existing requirement for customers to account for software licenses they acquire by analogizing to the guidance on leases. Instead, entities will account for these arrangements as licenses of intangible assets. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial statements.

        In February 2015, the FASB issued ASU 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis" ("ASU 2015-02"). The amendments in this topic are intended to improve and simplify targeted areas of the consolidation guidance. ASU 2015-02 modifies the method for determining whether limited partnerships and similar legal entities are variable interest entities ("VIEs") or voting interest entities. Further, it eliminates the presumption that a general partner should consolidate a limited partnership and impacts the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships. The ASU is effective for fiscal years beginning after December 15, 2015 (and interim periods within those fiscal years). Early adoption is permitted. We are currently assessing the future impact, if any, this new accounting standard update may have on our consolidated financial statements.

Adopted Accounting Pronouncements

        In April 2015, the FASB issued ASU 2015-03, "Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs" ("ASU 2015-03"). ASU 2015-03 simplifies presentation of debt issuance costs, requiring debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The guidance in the standard is limited to the presentation of debt issuance costs and does not affect the recognition and measurement of debt issuance costs. The amortization of such costs are to continue being calculated using the interest method and be reported as interest expense. The ASU is effective for fiscal years beginning after December 15, 2015 (and interim periods within those fiscal years). Early adoption is permitted for financial statements that have not been previously issued and will be applied on a retrospective basis. We adopted the provisions of the ASU as of June 30, 2015 retrospectively and the adoption did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures. Other non-current assets and long-term debt on our consolidated balance sheet as of December 31, 2014 has been retrospectively adjusted by $3.6 million to effectuate the adoption of this ASU as described above.

        In April 2014, the FASB issued ASU No. 2014-08, "Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360)" ("ASU 2014-08"). The amendments in ASU 2014-08 change the requirements for reporting and disclosing discontinued operations. Among other items, this new guidance defines a discontinued operation as a disposal of a component or group of components that is disposed of or is classified as held for sale and "represents a strategic shift that has (or will have) a major effect on an entity's operations and financial results." The standard states that a strategic shift could include a disposal of (i) a major geographical area of operations, (ii) a major line of business, (iii) a major equity method investment, or (iv) other major parts of an entity. The ASU is effective for fiscal years beginning after December 15, 2014 (and interim periods within those fiscal years), with early adoption permitted. The adoption of ASU 2014-08 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

        In January 2014, the FASB issued ASU No. 2014-04, "Receivables—Troubled Debt Restructurings by Creditors (Subtopic 310-40): Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans upon Foreclosure" ("ASU 2014-04"). Current US GAAP requires a loan to be reclassified to Other Real Estate Owned ("OREO") upon a troubled debt restructuring that is "in substance a repossession or foreclosure," where the creditor receives "physical possession" of the debtor's assets regardless of whether formal foreclosure proceedings take place. The amendments in ASU 2014-04 clarify when an "in substance a repossession or foreclosure" and "physical possession" has occurred as these terms are not defined in US GAAP, in addition to requiring certain supplementary interim and annual disclosures. The ASU is effective for fiscal years beginning after December 15, 2014 (and interim periods within those fiscal years) and shall be applied prospectively, with early adoption permitted. The adoption of ASU 2014-04 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Net income	$ 62,605	$ 66,192
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization expense of intangibles	10,532	8,740
Amortization of debt issuance costs	1,088	617
Depreciation expense	12,991	11,434
Provision for loan losses	1,713
Non-cash compensation expense	10,182	8,297
Non-cash interest expense	4	11
Deferred income taxes	795	140
Equity in earnings from unconsolidated entities	(3,771)
Excess tax benefits from stock-based awards	(1,893)	(1,912)
Loss on disposal of property and equipment	217	17
Change in fair value of contingent consideration		(1,606)
Changes in operating assets and liabilities:
Accounts receivable	(7,857)	(304)
Vacation ownership mortgages receivable	2,516
Vacation ownership inventory	5,218
Prepaid expenses and other current assets	7,705	230
Prepaid income taxes and income taxes payable	15,052	3,488
Accounts payable and other current liabilities	9,697	2,823
Payments of contingent consideration		(1,184)
Deferred income	4,236	3,068
Other, net	4,328	(8,595)
Net cash provided by operating activities	135,358	91,456
Cash flows from investing activities:
Capital expenditures	(13,243)	(14,266)
Investment in financing receivables	(250)	(750)
Other	(35)
Net cash used in investing activities	(13,528)	(15,016)
Cash flows from financing activities:
Proceeds from issuance of senior notes	350,000
Borrowings (payments) on revolving credit facility, net	(413,000)	5,000
Payments of debt issuance costs	(6,703)	(1,711)
Purchases of treasury stock		(14,120)
Dividend payments to stockholders	(20,687)	(18,961)
Dividend payments to noncontrolling interest	(3,030)
Payments of contingent consideration		(7,272)
Withholding taxes on vesting of restricted stock units	(4,333)	(3,948)
Proceeds from the exercise of stock options	221	311
Excess tax benefits from stock-based awards	1,893	1,912
Net cash used in financing activities	(95,639)	(38,789)
Effect of exchange rate changes on cash and cash equivalents	(5,267)	(2,166)
Net increase in cash and cash equivalents	20,924	35,485
Cash and cash equivalents at beginning of period	80,493	48,462
Cash and cash equivalents at end of period	101,417	83,947
Cash paid during the period for:
Interest, net of amounts capitalized	4,533	3,768
Income taxes, net of refunds	$ 19,007	$ 33,215

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 19,689	$ 22,104	$ 62,605	$ 66,192
Other comprehensive loss, net of tax:
Foreign currency translation adjustments	(6,710)	(5,318)	(6,821)	(3,873)
Total comprehensive income, net of tax	12,979	16,786	55,784	62,319
Less: Net income attributable to noncontrolling interests, net of tax	(589)	(809)	(1,602)	(2,822)
Less: Other comprehensive loss attributable to noncontrolling interests	496	1,153	899	733
Total comprehensive loss (income) attributable to noncontrolling interests	(93)	344	(703)	(2,089)
Comprehensive income attributable to common stockholders	$ 12,886	$ 17,130	$ 55,081	$ 60,230

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EQUITY

9 Months Ended

Sep. 30, 2015

EQUITY

EQUITY

NOTE 10—EQUITY

        ILG has 300 million authorized shares of common stock, par value of $0.01 per share. At September 30, 2015, there were 59.9 million shares of ILG common stock issued, of which 57.5 million are outstanding with 2.4 million shares held as treasury stock. At December 31, 2014, there were 59.5 million shares of ILG common stock issued, of which 57.1 million were outstanding with 2.4 million shares held as treasury stock.

        ILG has 25 million authorized shares of preferred stock, par value of $0.01 per share, none of which are issued or outstanding as of September 30, 2015 and December 31, 2014. The Board of Directors has the authority to issue the preferred stock in one or more series and to establish the rights, preferences and dividends.

Dividend Declared

        In February, May and August of 2015, our Board of Directors declared a quarterly dividend payment of $0.12 per share paid in March, June and September of 2015, respectively, amounting to $6.9 million each.

        In November 2015, our Board of Directors declared a $0.12 per share dividend payable December 16, 2015 to shareholders of record on December 2, 2015.

Stockholder Rights Plan

        In June 2009, ILG's Board of Directors approved the creation of a Series A Junior Participating Preferred Stock, adopted a stockholders rights plan and declared a dividend of one right for each outstanding share of common stock held by our stockholders of record as of the close of business on June 22, 2009. The rights attach to any additional shares of common stock issued after June 22, 2009. These rights, which trade with the shares of our common stock, currently are not exercisable. Under the rights plan, these rights will be exercisable if a person or group acquires or commences a tender or exchange offer for 15% or more of our common stock. The rights plan provides certain exceptions for acquisitions by Liberty Interactive Corporation (formerly known as Liberty Media Corporation) in accordance with an agreement entered into with ILG in connection with its spin-off from IAC/InterActiveCorp (IAC). If the rights become exercisable, each right will permit its holder, other than the "acquiring person," to purchase from us shares of common stock at a 50% discount to the then prevailing market price. As a result, the rights will cause substantial dilution to a person or group that becomes an "acquiring person" on terms not approved by our Board of Directors.

Share Repurchase Program

        In February 2015, ILG's Board of Directors increased the remaining share repurchase authorization to a total of $25 million. Acquired shares of our common stock are held as treasury shares carried at cost on our condensed consolidated financial statements. Common stock repurchases may be conducted in the open market or in privately negotiated transactions. The amount and timing of all repurchase transactions are contingent upon market conditions, applicable legal requirements and other factors. This program may be modified, suspended or terminated by us at any time without notice.

        During the year ended December 31, 2014, we repurchased 0.7 million shares of common stock for $14.1 million, including commissions. As of September 30, 2015, the remaining availability for future repurchases of our common stock was $25.0 million. There were no repurchases of common stock during the nine months ended September 30, 2015.

Accumulated Other Comprehensive Loss

        Pursuant to final guidance issued by the FASB in February of 2013, entities are required to disclose additional information about reclassification adjustments within accumulated other comprehensive income/loss, referred to as AOCL including (1) changes in AOCL balances by component and (2) significant items reclassified out of AOCL in the period. For the three and nine months ended September 30, 2015, there were no significant items reclassified out of AOCL, and the change in AOCL pertains to current period foreign currency translation adjustments as disclosed in our accompanying condensed consolidated statements of comprehensive income.

Noncontrolling Interests

Noncontrolling Interest—VRI Europe

        In connection with the VRI Europe transaction on November 4, 2013, CLC was issued a noncontrolling interest in VRI Europe representing 24.5% of the business, which was determined based on the purchase price paid by ILG for its 75.5% ownership interest as of the acquisition date. As of September 30, 2015 and December 31, 2014, this noncontrolling interest amounts to $31.6 million and $33.3 million, respectively, and is presented on our condensed consolidated balance sheets as a component of equity. The change from December 31, 2014 to September 30, 2015 relates to the recognition of the noncontrolling interest holder's proportional share of VRI Europe's earnings and dividends, as well as the translation effect on the foreign currency based amount.

        The parties have agreed not to transfer their interests in VRI Europe or CLC's related development business for a period of five years from the acquisition. In addition, they have agreed to certain rights of first refusal, and customary drag along and tag along rights, including a right by CLC to drag along ILG's VRI Europe shares in connection with a sale of the entire CLC resort business subject to achieving minimum returns and a preemptive right by ILG. As of September 30, 2015, there have been no changes in ILG's ownership interest in VRI Europe.

        Additionally, in connection with this arrangement, ILG and CLC entered into a loan agreement whereby ILG made available to CLC a convertible secured loan facility of $15.1 million that matures five years subsequent to the funding date with interest payable monthly. This loan was funded during the fourth quarter of 2014. The outstanding loan is to be repaid in full at maturity either in cash or by means of a share option exercisable by ILG, at its sole discretion, which would allow for settlement of the loan in CLC's shares of VRI Europe for contractually determined equivalent value. ILG has the right to exercise this share option at any time prior to maturity of the loan; however, the equivalent value for these shares would be measured at a 20% premium to its acquisition date value. We have determined the value of this embedded derivative is not material to warrant bifurcating from the host instrument (loan) at this time.

Noncontrolling Interest—Hyatt Vacation Ownership

        In connection with the HVO acquisition on October 1, 2014, ILG assumed a noncontrolling interest in a joint venture entity, which we fully consolidate, formed for the purpose of developing and selling vacation ownership interests. The fair value of the noncontrolling interest at acquisition was determined based on the noncontrolling party's ownership interest applied against the fair value allocated to the respective joint venture entity. As of September 30, 2015 and December 31, 2014, this noncontrolling interest amounted to $2.3 million and $3.0 million, respectively, and is presented on our condensed consolidated balance sheets as a component of equity.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 05, 2015
Document and Entity Information
Entity Registrant Name	Interval Leisure Group, Inc.
Entity Central Index Key	0001434620
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		57,490,609
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

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BENEFIT PLANS

9 Months Ended

Sep. 30, 2015

BENEFIT PLANS

BENEFIT PLANS

NOTE 11—BENEFIT PLANS

        Under a retirement savings plan sponsored by ILG, qualified under Section 401(k) of the Internal Revenue Code, participating employees may contribute up to 50.0% of their pre-tax earnings, but not more than statutory limits. ILG provides a discretionary match under the ILG plan of fifty cents for each dollar a participant contributed into the plan with a maximum contribution of 3% of a participant's eligible earnings, subject to Internal Revenue Service ("IRS") restrictions. Matching contributions for the ILG plan were approximately $0.5 million and $0.4 million for the three months ended September 30, 2015 and 2014, respectively, and $1.7 million and $1.4 million for the nine months ended September 30, 2015 and 2014, respectively. Matching contributions were invested in the same manner as each participant's voluntary contributions in the investment options provided under the plan.

        Effective August 20, 2008, a deferred compensation plan (the "Director Plan") was established to provide non-employee directors of ILG an option to defer director fees on a tax-deferred basis. Participants in the Director Plan are allowed to defer a portion or all of their compensation and are 100% vested in their respective deferrals and earnings. With respect to director fees earned for services performed after the date of such election, participants may choose from receiving cash or stock at the end of the deferral period. ILG has reserved 100,000 shares of common stock for issuance pursuant to this plan, of which 50,920 share units were outstanding at September 30, 2015. ILG does not provide matching or discretionary contributions to participants in the Director Plan. Any deferred compensation elected to be received in stock is included in diluted earnings per share.

        Effective October 1, 2014, a non-qualified deferred compensation plan (the "DCP") was established to allow certain eligible employees of ILG an option to defer compensation on a tax-deferred basis. The establishment of the DCP was intended to receive a transfer of deferred compensation liabilities in connection with the acquisition of HVO. Participants in the DCP are currently limited to certain HVO employees. These participants make an election prior to the first of each year to defer an amount of compensation payable for services to be rendered beginning in the next calendar year, or to receive distributions. Participants are fully vested in all amounts held in their individual accounts. The DCP is fully funded in a Rabbi trust. The Rabbi trust is subject to creditor claims in the event of insolvency, but the assets held in the Rabbi trust are not available for general corporate purposes. Amounts in the Rabbi trust are invested in mutual funds, as selected by participants, which are designated as trading securities and carried at fair value. Subsequent to the acquisition of HVO, there was a net transfer of $10.6 million into the Rabbi trust related to participants acquired with the acquisition. As of September 30, 2015, the fair value of the investments in the Rabbi trust was $11.0 million which is recorded in other non-current assets with the corresponding deferred compensation liability recorded in other long-term liabilities in the condensed consolidated balance sheet. We recorded unrealized losses of $0.8 million and $0.5 million for the three and nine months ended September 30, 2015, respectively, to general and administrative expense related to the investment gains, and a charge to compensation expense also within general and administrative expense related to the increase in deferred compensation liabilities to reflect the DCP liability, in the condensed consolidated statement of income.

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
ASSETS
Cash and cash equivalents	$ 101,417	$ 80,493
Restricted cash and cash equivalents	15,636	19,984
Accounts receivable, net of allowance of $188 and $193, respectively	53,224	45,850
Vacation ownership mortgages receivable, net	6,093	7,169
Vacation ownership inventory	48,843	54,061
Deferred income taxes	16,586	16,441
Deferred membership costs	8,497	8,716
Prepaid income taxes	7,776	22,029
Prepaid expenses and other current assets	23,191	30,230
Total current assets	281,263	284,973
Vacation ownership mortgages receivable, net	26,180	29,333
Investments in unconsolidated entities	37,190	33,486
Property and equipment, net	86,211	86,601
Goodwill	561,817	562,250
Intangible assets, net	255,970	268,875
Deferred membership costs	10,082	10,948
Deferred income taxes	102	112
Other non-current assets	43,587	47,424
TOTAL ASSETS	1,302,402	1,324,002
LIABILITIES:
Accounts payable, trade	23,798	39,082
Deferred revenue	95,786	89,850
Accrued compensation and benefits	28,506	28,891
Member deposits	8,108	8,222
Accrued expenses and other current liabilities	68,210	47,923
Total current liabilities	224,408	213,968
Long-term debt	415,260	484,383
Other long-term liabilities	17,936	18,247
Deferred revenue	90,017	93,730
Deferred income taxes	93,878	92,869
Total liabilities	841,499	903,197
Redeemable noncontrolling interest	$ 707	$ 457
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock-authorized 25,000,000 shares, of which 100,000 shares are designated Series A Junior Participating Preferred Stock; $0.01 par value; none issued and outstanding
Common stock-authorized 300,000,000 shares; $0.01 par value; issued 59,853,933 and 59,463,200 shares, respectively	$ 599	$ 595
Treasury stock- 2,363,324 shares at cost	(35,034)	(35,034)
Additional paid-in capital	210,456	201,834
Retained earnings	275,436	235,945
Accumulated other comprehensive loss	(25,219)	(19,297)
Total ILG stockholders' equity	426,238	384,043
Noncontrolling interests	33,958	36,305
Total equity	460,196	420,348
TOTAL LIABILITIES AND EQUITY	$ 1,302,402	$ 1,324,002

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VACATION OWNERSHIP MORTGAGES RECEIVABLE

9 Months Ended

Sep. 30, 2015

VACATION OWNERSHIP MORTGAGES RECEIVABLE

VACATION OWNERSHIP MORTGAGES RECEIVABLE

NOTE 5—VACATION OWNERSHIP MORTGAGES RECEIVABLE

        Vacation ownership mortgages receivable is comprised of various mortgage loans related to our financing of vacation ownership interval sales. As part of our acquisition of HVO on October 1, 2014, we acquired an existing portfolio of vacation ownership mortgages receivable. These loans are accounted for using the expected cash flows method of recognizing discount accretion based on the acquired loans' expected cash flows pursuant to ASC 310-30, "Loans acquired with deteriorated credit quality." At acquisition, we recorded these acquired loans at fair value, including a credit discount which is accreted as an adjustment to yield over the loan pools' estimate life. Originated loans as of September 30, 2015 and December 31, 2014 represent vacation ownership mortgages receivable originated by ILG, or more specifically our Vacation Ownership segment, subsequent to the acquisition of HVO on October 1, 2014.

        Vacation ownership mortgages receivable carrying amounts as of September 30, 2015 and December 31, 2014 were as follows (in thousands):

	September 30, 2015			December 31, 2014
Acquired vacation ownership mortgages receivable at various stated interest rates with varying payment through 2024 (see below)	$	25,210		$	33,953
Originated vacation ownership mortgages receivable at various stated interest rates with varying payment through 2025 (see below)		8,699			2,896
Less allowance for loan losses on originated loans		(1,636	)		(347	)
Net vacation ownership mortgages receivable	$	32,273		$	36,502

        The fair value of our acquired loans of $37.5 million as of the acquisition date was determined by use of a discounted cash flow approach which calculates a present value of expected future cash flows based on scheduled principal and interest payments over the term of the respective loans, while considering anticipated defaults and early repayments determined based on historical experience. Consequently, the fair value of these acquired loans recorded on our consolidated balance sheet as of the acquisition date includes an estimate for future loan losses which is reflected in the historical cost basis for that portfolio. As of September 30, 2015 and December 31, 2014, the contractual outstanding balance of the acquired loans, which represents contractually-owed future principal amounts and accrued interest, was $29.8 million and $38.0 million, respectively.

        The table below presents a rollforward from December 31, 2014 of the accretable yield (interest income) expected to be earned related to our acquired loans, as well as the amount of non-accretable difference at the end of the period. Nonaccretable difference represents estimated contractually required payments in excess of estimated cash flows expected to be collected. The accretable yield represents the excess of estimated cash flows expected to be collected over the carrying amount of the acquired loans.

Accretable Yield	Nine Months Ended September 30, 2015
Balance, beginning of period	$	15,406
Accretion		(3,267	)
Reclassification between nonaccretable difference		583
Balance, end of period	$	12,722
Nonaccretable difference, end of period balance	$	6,345

        The accretable yield is recognized into interest income (within consolidated revenue) over the estimated life of the acquired loans using the level yield method. The accretable yield may change in future periods due to changes in the anticipated remaining life of the acquired loans, which may alter the amount of future interest income expected to be collected, and changes in expected future principal and interest cash collections which impacts the nonaccretable difference.

        Vacation ownership mortgages receivable as of September 30, 2015 are scheduled to mature as follows (in thousands):

	Vacation Ownership Mortgages Receivable
Twelve month period ending September 30,	Acquired loans	Originated loans	Total
2016	$5,600	$492	$	6,092
2017	4,874	565		5,439
2018	3,992	622		4,614
2019	3,267	690		3,957
2020	3,303	771		4,074
2021 and thereafter	8,715	5,559		14,274
Total	29,751	8,699		38,450
Less: discount on acquired loans(1)	(4,541)	—		(4,541	)
Less: allowance for losses	—	(1,636)		(1,636	)
Net vacation ownership mortgages receivable	$25,210	$7,063	$	32,273
Weighted average stated interest rate as of September 30, 2015	14.0%	13.9%
Range of stated interest rates as of September 30, 2015	12.5% to 17.9%	12.9% to 14.9%

(1)           The difference between the contractual principal amount of acquired loans of $29.8 million and the net carrying amount of $25.2 million as of September 30, 2015 is related to the application of ASC 310-30.

Collectability

        We assess our vacation ownership mortgages receivable portfolio of loans for collectability on an aggregate basis. Estimates of uncollectability pertaining to our originated loans are recorded as provisions in the vacation ownership mortgages receivable allowance for losses. For originated loans, we record an estimate of uncollectability as a reduction of sales of vacation ownership intervals in the accompanying condensed consolidated statements of income at the time revenue is recognized on a vacation ownership interval sale. We evaluate our originated loan portfolio collectively as they are largely homogeneous, smaller-balance, vacation ownership mortgages receivable. We use a technique referred to as static pool analysis, which tracks uncollectibles over the entire life of those mortgages receivable, as the basis for determining our general reserve requirements on our vacation ownership mortgages receivable. The adequacy of the related allowance is determined by management through analysis of several factors, such as current economic conditions and industry trends, as well as the specific risk characteristics of the portfolio, including defaults, aging, and historical write-offs of these receivables. The allowance is maintained at a level deemed adequate by management based on a periodic analysis of the mortgage portfolio. As of September 30, 2015, allowance for losses of $1.6 million for uncollectability was recorded to the vacation ownership mortgages receivable allowance for losses related solely to our originated loans.

        Our acquired loans are remeasured at period end based on expected future cash flows which uses an estimated measure of anticipated defaults. We consider the loan loss provision on our originated loans and estimates of defaults used in the remeasurements of our acquired loans to be adequate and based on the economic environment and our assessment of the future collectability of the outstanding loans.

        At September 30, 2015, the weighted average FICO score within our acquired and originated loan pools was 703 and 716, respectively, based upon the outstanding loan balance at time of origination. The average estimated rate for all future defaults for our outstanding pool of loans as of September 30, 2015 was 11.1%.

        On an ongoing basis, we monitor credit quality of our vacation ownership mortgages receivable portfolio based on payment activity as follows:

•           Current—The consumer's note is in good standing as payments and reporting are current per the terms contractually stipulated in the agreement.

•           Past-due—We consider a vacation ownership mortgage receivable to be past-due based on the contractual terms of each individual financing agreement.

•           Non-performing—Vacation ownership mortgages receivable are considered non-performing if interest or principal is more than 120 days past due. All non-performing loans are placed on non-accrual status and we do not resume interest accrual until the receivable becomes contractually current. We apply payments we receive for vacation ownership notes receivable on non-performing status first to interest, then to principal, and any remainder to fees.

        Our aged analysis of past-due vacation ownership mortgages receivable and the gross balance of vacation ownership mortgages receivable greater than 90 days past-due as of September 30, 2015 is as follows (in thousands):

	Vacation Ownership Mortgages
	Receivable
	Acquired		Originated
	loans		loans		Total
Receivables past due	$	752	$	28	$	780
Receivables greater than 90 days past due	$	114	$	—	$	114

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VACATION OWNERSHIP INVENTORY

9 Months Ended

Sep. 30, 2015

VACATION OWNERSHIP INVENTORY

VACATION OWNERSHIP INVENTORY

NOTE 4—VACATION OWNERSHIP INVENTORY

        As part of our acquisition of HVO on October 1, 2014, we acquired vacation ownership inventory which primarily consists of unsold vacation ownership intervals that are available for sale in their current form. As of September 30, 2015 and December 31, 2014, vacation ownership inventory is comprised of the following (in thousands):

	September 30, 2015		December 31, 2014
Completed unsold vacation ownership interests	$	48,216	$	53,434
Land held for development		627		627
Total inventory	$	48,843	$	54,061

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2015

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

NOTE 16—SUBSEQUENT EVENTS

        On October 27, 2015, we entered into an Agreement and Plan of Merger, with Starwood Hotels & Resorts Worldwide, Inc. (Starwood), Vistana Signature Experiences, Inc. (Vistana) and our newly formed subsidiary, pursuant to which we will acquire Vistana, the vacation ownership business of Starwood. The acquisition will be effected through a "Reverse Morris Trust" structure, which means that Vistana will be spun-off to Starwood's shareholders pursuant to a Separation Agreement and then merged with our subsidiary with Vistana shareholders receiving stock of ILG. Vistana will be the surviving entity of the merger. Prior to the spin-off, Vistana will distribute approximately $132 million to Starwood, subject to adjustment. Prior to the merger, Starwood will transfer to Vistana the vacation ownership business and five hotels that are expected to be converted into vacation ownership properties over time. The combination will result in Starwood shareholders owning, at the closing, approximately 55% of the combined company on a fully diluted basis, with existing shareholders of ILG owning approximately 45% of the combined company. Completion of the merger is subject to customary closing conditions, including regulatory and ILG shareholder approvals. Liberty Interactive Corp and certain of ILG's senior executives have entered into Voting and Support Agreements, which provide for them to vote in favor of the issuance of ILG shares pursuant to the merger.

        The Merger Agreement contains certain termination rights including Starwood's right to terminate if ILG's board changes its recommendation regarding issuance of ILG common stock for the merger or ILG's termination in order to enter into an agreement for a superior proposal, in each case prior to stockholder approval. For these terminations, ILG would be required to pay Starwood a termination fee of $40 million, which could also be payable for certain other terminations if ILG enters into an agreement with respect to a competing proposal within 12 months of termination of the merger agreement.

        In connection with the transaction, Vistana will enter into an 80-year exclusive global license agreement for the use of the Westin and Sheraton brands in vacation ownership in addition to the non-exclusive license for the existing St. Regis and The Luxury Collection vacation ownership properties. Under the terms of the license agreement, Starwood will receive an annual base royalty fee of $30 million plus 2% of vacation ownership interest sales. Vistana will also enter into an agreement regarding its continued participation in the Starwood Preferred Guest loyalty program. Also, Starwood and ILG will enter into a Noncompetition Agreement that will restrict, for ten years, Starwood from competing with ILG's vacation ownership business and restrict ILG from competing with Starwood's hotel business, subject to specified exceptions.

        Additional transaction-related agreements include, among others:

•           an Employee Matters Agreement, which will govern, among other things, Starwood, Vistana and ILG's obligations with respect to current and former employees of the Vistana Business; and

•           a Tax Matters Agreement, which will govern, among other things, Starwood, Vistana and ILG's respective rights, responsibilities and obligations with respect to taxes, tax attributes, the preparation and filing of tax returns, responsibility for and preservation of the expected tax-free status of the transactions contemplated by the Separation Agreement and certain other tax matters.

        In connection with the transactions contemplated by the Merger Agreement and Separation Agreement, ILG and Liberty Interactive Corp. agreed to amend and restate that certain Spinco Agreement, dated May 13, 2008, by and among Liberty, certain affiliates of Liberty and IAC/InterActive Corp., as subsequently assigned to ILG on August 20, 2008. This amended agreement provides that, at the closing of the Merger, Liberty will be entitled to appoint two directors to the Board (rather than the three designees Liberty currently has the right to appoint). So long as Liberty continues to beneficially own at least 10% of ILG's common stock, Liberty will have the right to nominate a proportionate number of directors to ILG's board of directors. The amended agreement restricts Liberty and its affiliates from acquiring in excess of 35% of ILG's outstanding shares of common stock without ILG's consent.

        The amended agreement, and the respective rights and obligations thereunder, will terminate if Liberty's beneficial ownership falls below 10% of ILG's outstanding equity, unless Liberty's ownership was reduced below 10% not in conjunction with Liberty transferring its shares. In that event, Liberty's rights will terminate three years from the date of the amended agreement.

        Also in connection with the transactions contemplated by the Merger Agreement and Separation Agreement, ILG and Liberty agreed to amend and restate that certain registration rights agreement, dated as of August 20, 2008, by and among ILG, Liberty and an affiliate of Liberty. The Amended Registration Rights Agreement provides Liberty with four demand registration rights and sets the aggregate offering price threshold for any demand registration statement at $50 million. Pursuant to the Amended Registration Rights Agreement, ILG must prepare a demand registration statement requested by Liberty on the earlier of the termination of the Merger Agreement and sixty days following the consummation of the transactions contemplated by the Merger Agreement.

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STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2015

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE 12—STOCK-BASED COMPENSATION

        On May 21, 2013, ILG adopted the Interval Leisure Group, Inc. 2013 Stock and Incentive Plan and stopped granting awards under the ILG 2008 Stock and Annual Incentive Plan ("2008 Incentive Plan"). Both plans provide for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. RSUs are awards in the form of phantom shares or units, denominated in a hypothetical equivalent number of shares of ILG common stock and with the value of each award equal to the fair value of ILG common stock at the date of grant. Each RSU is subject to service-based vesting, where a specific period of continued employment must pass before an award vests. We grant awards subject to graded vesting (i.e., portions of the award vest at different times during the vesting period) or to cliff vesting (i.e., all awards vest at the end of the vesting period). In addition, certain RSUs are subject to attaining specific performance criteria.

        ILG recognizes non-cash compensation expense for all RSUs held by ILG's employees. For RSUs to be settled in stock, the accounting charge is measured at the grant date as the fair value of ILG common stock and expensed as non-cash compensation over the vesting term using the straight-line basis for service awards and the accelerated basis for performance-based awards with graded vesting. Certain cliff vesting awards contain performance criteria which are tied to anticipated future results of operations in determining the fair value of the award, while other cliff vesting awards with performance criteria are tied to the achievement of certain market conditions. This value is recognized as expense over the service period, net of estimated forfeitures, using the straight-line recognition method. The expense associated with RSU awards to be settled in cash is initially measured at fair value at the grant date and expensed ratably over the vesting term, recording a liability subject to mark-to-market adjustments for changes in the price of the respective common stock, as compensation expense.

        Shares underlying RSUs are not issued or outstanding until vested. In relation to our quarterly dividend, unvested RSUs are credited with dividend equivalents, in the form of additional RSUs, when dividends are paid on our shares of common stock. Such additional RSUs are forfeitable and will have the same vesting dates and will vest under the same terms as the RSUs in respect of which such additional RSUs are credited. Given such dividend equivalents are forfeitable, we do not consider them to be participating securities and, consequently, they are not subject to the two-class method of determining earnings per share.

        Under the ILG 2013 Stock and Incentive Compensation Plan, the maximum aggregate number of shares of common stock reserved for issuance as of adoption is 4.1 million shares, less one share for every share granted under any prior plan after December 31, 2012. As of September 30, 2015, ILG has 2.3 million shares available for future issuance under the 2013 Stock and Incentive Compensation Plan.

        During the first quarter of 2015 and 2014, the Compensation Committee granted approximately 423,000 and 390,000 RSUs, respectively, vesting over three to five years, to certain officers and employees of ILG and its subsidiaries. Of these RSUs granted in 2015 and 2014, approximately 105,000 and 116,000 cliff vest in three to five years and approximately 54,000 and 84,000 of these RSUs, respectively, are subject to performance criteria that could result between 0% and 200% of these awards being earned either based on defined adjusted EBITDA or relative total shareholder return targets over the respective performance period, as specified in the award document.

        For the 2015 and 2014 RSUs subject to relative total shareholder return performance criteria, the number of RSUs that may ultimately be awarded depends on whether the market condition is achieved. We used a Monte Carlo simulation analysis to estimate a per unit grant date fair value of $40.71 for 2015 and $36.90 for 2014 for these performance based RSUs. This analysis estimates the total shareholder return ranking of ILG as of the grant date relative to two peer groups approved by the Compensation Committee, over the remaining performance period. The expected volatility of ILG's common stock at the date of grant was estimated based on a historical average volatility rate for the approximate three-year performance period. The dividend yield assumption was based on historical and anticipated dividend payouts. The risk-free interest rate assumption was based on observed interest rates consistent with the approximate three-year performance measurement period.

        Non-cash compensation expense related to RSUs for the three months ended September 30, 2015 and 2014 was $3.2 million and $2.8 million, respectively, and $10.2 million and $8.3 million for the nine months ended September 30, 2015 and 2014, respectively. At September 30, 2015, there was approximately $20.7 million of unrecognized compensation cost, net of estimated forfeitures, related to RSUs, which is currently expected to be recognized over a weighted average period of approximately 1.9 years.

        The amount of stock-based compensation expense recognized in the condensed consolidated statements of income is reduced by estimated forfeitures, as the amount recorded is based on awards ultimately expected to vest. The forfeiture rate is estimated at the grant date based on historical experience and revised, if necessary, in subsequent periods for any changes to the estimated forfeiture rate from that previously estimated. For any vesting tranche of an award, the cumulative amount of compensation cost recognized is at least equal to the portion of the grant-date value of the award tranche that is actually vested at that date.

        Non-cash stock-based compensation expense related to equity awards is included in the following line items in the accompanying condensed consolidated statements of income for the three and nine months ended September 30, 2015 and 2014 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Cost of sales	$	192	$	189	$	625	$	572
Selling and marketing expense		356		301		1,237		998
General and administrative expense		2,700		2,327		8,320		6,727
Non-cash compensation expense	$	3,248	$	2,817	$	10,182	$	8,297

        The following table summarizes RSU activity during the nine months ended September 30, 2015:

	Shares			Weighted-Average Grant Date Fair Value
	(In thousands)
Non-vested RSUs at January 1, 2015		1,694		$	20.23
Granted		553			25.72
Vested		(547	)		17.34
Forfeited		(28	)		21.74
Non-vested RSUs at September 30, 2015		1,672		$	22.97

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LONG-TERM DEBT

9 Months Ended

Sep. 30, 2015

LONG-TERM DEBT

LONG-TERM DEBT

NOTE 8—LONG-TERM DEBT

        Long-term debt is as follows (in thousands):

	September 30, 2015			December 31, 2014
Revolving credit facility (interest rate of 2.45% at September 30, 2015 and 1.92% at December 31, 2014)	$	75,000		$	488,000
5.625% senior notes		350,000			—
Unamortized debt issuance costs (revolving credit facility)		(3,246	)		(3,617	)
Unamortized debt issuance costs (senior notes)		(6,494	)		—
Total long-term debt, net of debt issuance costs	$	415,260		$	484,383

Credit Facility

        In April 2014, we entered into the first amendment to the June 21, 2012 amended and restated credit agreement (the "Amended Credit Agreement") which increased the revolving credit facility from $500 million to $600 million, extended the maturity of the credit facility to April 8, 2019 and provided for certain other amendments to covenants. The terms related to interest rates and commitment fees remained unchanged. In November 2014, we entered into a second amendment which primarily provides for a second letter of credit issuer and certain other amendments to covenants. Under this amendment, the financial covenants, interest rates, commitment fees and other significant terms remain unchanged. On April 10, 2015, we entered into a third amendment which changed the leverage-based financial covenant from a maximum consolidated total leverage to EBITDA ratio of 3.5 to 1.0 to a maximum consolidated secured leverage to EBITDA ratio of 3.25 to 1.0. In addition, the amendment adds an incurrence test allowing a maximum consolidated total leverage to EBITDA ratio of 4.5 to 1.0 on a pro forma basis in certain circumstances in which we make acquisitions or investments, incur additional indebtedness or make restricted payments. Also, the amendment added a new pricing level to the pricing grid applicable when the consolidated total leverage to EBITDA ratio equals or exceeds 3.5 to 1.0. This pricing level is either LIBOR plus 2.5% or the base rate plus 1.5% and requires a commitment fee on undrawn amounts of 0.4% per annum. There were no other material changes under this amendment.

        Additionally, on May 5, 2015, we entered into a fourth amendment to the Amended Credit Agreement which changed the definition of change of control to remove the provision that certain changes in the composition of the board of directors would constitute a change of control and therefore be a default under the credit agreement. The amendment also included clarifying language regarding provisions that relate to our 5.625% senior notes due in 2023. There were no other material changes under this amendment.

        As of September 30, 2015, there was $75.0 million outstanding. Any principal amounts outstanding under the revolving credit facility are due at maturity. As of September 30, 2015, the interest rate on the Amended Credit Agreement is based on (at our election) either LIBOR plus a predetermined margin that ranged from 1.25% to 2.5%, or the Base Rate as defined in the Amended Credit Agreement plus a predetermined margin that ranged from 0.25% to 1.5%, in each case based on our consolidated total leverage ratio. As of September 30, 2015, the applicable margin was 2.25% per annum for LIBOR revolving loans and 1.25% per annum for Base Rate loans. As of September 30, 2015, the Amended Credit Agreement has a commitment fee on undrawn amounts that ranged from 0.25% to 0.40% per annum based on our leverage ratio and as of September 30, 2015 the commitment fee was 0.375%.

        Pursuant to the Amended Credit Agreement, all obligations under the revolving credit facility are unconditionally guaranteed by ILG and certain of its subsidiaries. Borrowings are further secured by (1) 100% of the voting equity securities of ILG's U.S. subsidiaries and 65% of the equity in our first-tier foreign subsidiaries and (2) substantially all of our domestic tangible and intangible property.

Senior Notes

        On April 10, 2015, we completed a private offering of $350 million in aggregate principal amount of our 5.625% senior notes due in 2023. The net proceeds from the offering, after deducting offering related expenses, were $343.1 million. We used the proceeds to repay indebtedness outstanding on our revolving credit facility. As of September 30, 2015, total unamortized debt issuance costs relating to these senior notes were $6.5 million, which are presented as a direct deduction from the principal amount. Interest on the senior notes is paid semi-annually in arrears on April 15 and October 15 of each year and the senior notes are fully and unconditionally guaranteed on a joint and several basis by our domestic subsidiaries that are required to guarantee the Amended Credit Facility. Additionally, the voting stock of the issuer and the subsidiary guarantors is 100% owned by ILG. The senior notes are redeemable from April 15, 2018 at a redemption price starting at 104.219% which declines over time.

Restrictions and Covenants

        The senior notes and Amended Credit Agreement have various financial and operating covenants that place significant restrictions on us, including our ability to incur additional indebtedness, incur additional liens, issue redeemable stock and preferred stock, pay dividends or distributions or redeem or repurchase capital stock, prepay, redeem or repurchase debt, make loans and investments, enter into agreements that restrict distributions from our subsidiaries, sell assets and capital stock of our subsidiaries, enter into certain transactions with affiliates and consolidate or merge with or into or sell substantially all of our assets to another person.

        The indenture governing the senior notes restricts our ability to issue additional debt in the event we are not in compliance with the minimum fixed charge coverage ratio of 2.0 to 1.0 and limits restricted payments and investments unless we are in compliance with the minimum fixed charge coverage ratio and the amount is within a bucket that grows with our consolidated net income. We are in compliance with this covenant as of September 30, 2015. In addition, the Amended Credit Agreement requires us to meet certain financial covenants regarding the maintenance of a maximum consolidated secured leverage ratio of consolidated secured debt, over consolidated Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as defined. We are also required to maintain a minimum consolidated interest coverage ratio of consolidated EBITDA over consolidated interest expense. As of September 30, 2015, the maximum consolidated secured leverage ratio was 3.25x and the minimum consolidated interest coverage ratio was 3.0x. As of September 30, 2015, ILG was in compliance in all material respects with the requirements of all applicable financial and operating covenants, and our consolidated secured leverage ratio and consolidated interest coverage ratio under the Amended Credit Agreement were 0.45 and 10.92, respectively.

Interest Expense and Debt Issuance Costs

        Interest expense for the three months ended September 30, 2015 and 2014 was $6.4 million and $1.5 million, respectively, and for the nine months ended September 30, 2015 and 2014 was $15.1 million and $4.5 million, respectively. Interest expense for these periods is net of negligible capitalized interest relating to internally-developed software.

        As of September 30, 2015, total unamortized debt issuance costs were $9.7 million, net of $3.1 million of accumulated amortization, incurred in connection with the issuance and various amendments to our Amended Credit Agreement as well as the issuance of our senior notes in April 2015. As of December 31, 2014, total unamortized debt issuance costs were $3.6 million, net of $2.0 million of accumulated amortization. Unamortized debt issuance costs are presented as a reduction of long-term debt in the accompanying condensed consolidated balance sheets, pursuant to ASC 2015-03 as discussed in Note 2. Unamortized debt issuance costs are amortized to interest expense through the maturity date of our respective debt instruments using the effective interest method for those costs related to our senior notes, and on a straight-line basis for costs related to our Amended Credit Agreement.

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INVESTMENTS IN UNCONSOLIDATED ENTITIES

9 Months Ended

Sep. 30, 2015

INVESTMENTS IN UNCONSOLIDATED ENTITIES

INVESTMENTS IN UNCONSOLIDATED ENTITIES

NOTE 6—INVESTMENTS IN UNCONSOLIDATED ENTITIES

        Our investments in unconsolidated entities, recorded under the equity method of accounting in accordance with guidance in ASC 323, "Investments—Equity Method and Joint Ventures," primarily consist of an ownership interest in Maui Timeshare Venture, LLC, a joint venture to develop and operate a vacation ownership resort in the state of Hawaii. This joint venture was acquired in connection with our acquisition of HVO and our investment was recorded at fair value on the acquisition date. Our equity income from investments in unconsolidated entities, recorded in equity in earnings from unconsolidated entities in the accompanying condensed consolidated statement of income, was $1.3 million and $3.8 million for the three and nine months ended September 30, 2015, respectively.

        The ownership percentages and carrying value of our investments in unconsolidated entities as of September 30, 2015 were as follows:

	Ownership Interest	Carrying Value
		(in thousands)
Maui Timeshare Venture, LLC	33.0%	$	36,635
Other	25.0% - 43.3%		555
Total		$	37,190

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PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2015

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 7—PROPERTY AND EQUIPMENT

        Property and equipment, net is as follows (in thousands):

	September 30, 2015			December 31, 2014
Computer equipment	$	22,945		$	21,389
Capitalized software (including internally developed software)		106,214			97,561
Land, buildings and leasehold improvements		50,916			50,685
Furniture and other equipment		15,841			16,638
Projects in progress		13,245			10,581
		209,161			196,854
Less: accumulated depreciation and amortization		(122,950	)		(110,253	)
Total property and equipment, net	$	86,211		$	86,601

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2015

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 9—FAIR VALUE MEASUREMENTS

        In accordance with ASC Topic 820, "Fair Value Measurement," ("ASC 820") the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability's fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

Level 1—Observable inputs that reflect quoted prices in active markets

Level 2—Inputs other than quoted prices in active markets that are either directly or indirectly observable

Level 3—Unobservable inputs in which little or no market data exists, therefore requiring the company to develop its own assumptions

Fair Value of Financial Instruments

        The estimated fair value of financial instruments below has been determined using available market information and appropriate valuation methodologies, as applicable. There have been no changes in the methods and significant assumptions used to estimate the fair value of financial instruments during the nine months ended September 30, 2015. Our financial instruments are detailed in the following table.

	September 30, 2015						December 31, 2014
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
	(In thousands)
Cash and cash equivalents	$	101,417		$	101,417		$	80,493		$	80,493
Restricted cash and cash equivalents		15,636			15,636			19,984			19,984
Financing receivables		16,134			16,134			15,896			15,896
Vacation ownership mortgages receivable		32,273			33,616			36,502			37,624
Investments in marketable securities		10,961			10,961			11,368			11,368
Revolving credit facility(1)		(71,754	)		(75,000	)		(484,383	)		(488,000	)
Senior notes(1)		(343,506	)		(344,750	)		—			—

(1)           The carrying value of our revolving credit facility and senior notes include $3.2 million and $6.5 million of debt issuance costs, which are presented as a direct reduction of the corresponding liability.

        The carrying amounts of cash and cash equivalents and restricted cash and cash equivalents reflected in the accompanying condensed consolidated balance sheets approximate fair value as they are redeemable at par upon notice or maintained with various high-quality financial institutions and have original maturities of three months or less. Under the fair value hierarchy established in ASC 820, cash and cash equivalents and restricted cash and cash equivalents are stated at fair value based on quoted prices in active markets for identical assets (Level 1).

        The financing receivables as of September 30, 2015 are presented in our consolidated balance sheet within other non-current assets and principally pertains to a convertible secured loan to CLC that matures five years subsequent to the funding date with interest payable monthly. The loan was funded in October of 2014. The outstanding loan is to be repaid in full at maturity either in cash or by means of a share option exercisable by ILG, at its sole discretion. The carrying value of this financing receivable approximates fair value through inputs inherent to the originating value of this loan, such as interest rates and ongoing credit risk accounted for through non-recurring adjustments for estimated credit losses as necessary (Level 2). The stated interest rate on this loan is comparable to market rate. Interest is recognized within our "Interest income" line item in our condensed consolidated statement of income for the three and nine months ended September 30, 2015.

        We estimate the fair value of vacation ownership mortgages receivable using a discounted cash flow model. We believe this is comparable to the model that an independent third party would use in the current market. Our model incorporates default rates, prepayment rates, coupon rates and loan terms respective to the portfolio based on current market assumptions for similar types of arrangements. Based upon the availability of market data, we have classified inputs used in the valuation of our vacation ownership mortgages receivable as Level 3. The primary sensitivity in these assumptions relates to forecasted defaults and projected prepayments which could cause the estimated fair value to vary.

        Investments in marketable securities consist of marketable securities (mutual funds) related to a deferred compensation plan that is funded in a Rabbi trust as of September 30, 2015 and classified as other noncurrent assets in the accompanying condensed consolidated balance sheets. This deferred compensation plan was created and funded in connection with the HVO acquisition. Participants in the deferred compensation plan unilaterally determine how their compensation deferrals are invested within the confines of the Rabbi trust which holds the marketable securities. Consequently, management has designated these marketable securities as trading investments, as allowed by applicable accounting guidance, even though there is no intent by ILG to actively buy or sell securities with the objective of generating profits on short-term differences in market prices. These marketable securities are recorded at a fair value of $11.0 million as of September 30, 2015 based on quoted market prices in active markets for identical assets (Level 1). Unrealized trading losses for the three and nine months ended September 30, 2015 were $0.8 million and $0.5 million, respectively, with an accompanying offsetting adjustment to employee compensation expense, and are each included within general and administrative expenses in the accompanying condensed consolidated statement of income. See Note 11 for further discussion in regards to this deferred compensation plan.

        Borrowings under our senior notes (issued April 2015) and revolving credit facility are carried at historical cost and adjusted for principal payments. The fair value of our senior notes was estimated at September 30, 2015 using an input of quoted prices from an inactive market due to the infrequency at which trades occur on our senior notes (Level 2). The carrying value of the outstanding balance under our revolving credit facility, exclusive of debt issuance costs, approximates fair value as of September 30, 2015 and December 31, 2014 through inputs inherent to the debt such as variable interest rates and credit risk (Level 2).

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SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2015

SEGMENT INFORMATION

Schedule of information on reportable segments and reconciliation to consolidated operating income

Information on reportable segments and reconciliation to consolidated operating income is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Exchange and Rental:
Transaction revenue	$	46,728	$	46,868	$	150,931	$	150,294
Membership fee revenue		31,326		32,017		94,453		95,437
Ancillary member revenue		1,689		1,896		4,490		5,228
Total member revenue		79,743		80,781		249,874		250,959
Other revenue		7,815		5,825		25,386		17,932
Rental management revenue		13,626		12,973		39,236		36,932
Pass-through revenue		23,704		20,638		70,625		61,284
Total revenues		124,888		120,217		385,121		367,107
Cost of sales		47,569		44,187		148,311		137,993
Gross profit		77,319		76,030		236,810		229,114
Selling and marketing expense		14,570		14,640		45,419		42,897
General and administrative expense		26,284		25,335		78,290		75,593
Amortization expense of intangibles		2,155		1,739		6,465		5,319
Depreciation expense		3,958		3,587		11,680		10,892
Segment operating income	$	30,352	$	30,729	$	94,956	$	94,413

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Vacation Ownership:
Management fee revenue	$	25,759	$	22,123	$	75,672	$	67,118
Vacation ownership sales and financing revenue		9,002		—		28,473		—
Pass-through revenue		14,391		4,343		43,071		13,027
Total revenue		49,152		26,466		147,216		80,145
Cost of sales		28,044		14,808		90,082		44,613
Gross profit		21,108		11,658		57,134		35,532
Selling and marketing expense		3,563		159		9,500		280
General and administrative expense		13,076		6,005		32,506		18,435
Amortization expense of intangibles		1,362		1,140		4,067		3,421
Depreciation expense		436		178		1,311		542
Segment operating income	$	2,671	$	4,176	$	9,750	$	12,854

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Consolidated:
Revenue	$	174,040	$	146,683	$	532,337	$	447,252
Cost of sales		75,613		58,995		238,393		182,606
Gross profit		98,427		87,688		293,944		264,646
Direct segment operating expenses		65,404		52,783		189,238		157,379
Operating income	$	33,023	$	34,905	$	104,706	$	107,267

Schedule of financial information by reportable segment

        Selected financial information by reporting segment is presented below (in thousands).

	September 30, 2015		December 31, 2014
Total Assets:
Exchange and Rental	$	934,860	$	928,081
Vacation Ownership		367,542		395,921
Total	$	1,302,402	$	1,324,002

Schedule of geographic information on revenue, based on sourcing, and long-lived assets, based on physical location

Geographic information on revenue, based on sourcing, and long-lived assets, based on physical location, is presented in the table below (in thousands).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Revenue:
United States	$	144,610	$	112,973	$	441,636	$	345,201
Europe		16,360		18,337		50,828		55,046
All other countries(1)		13,070		15,373		39,873		47,005
Total	$	174,040	$	146,683	$	532,337	$	447,252

(1)           Includes countries within the following continents: Africa, Asia, Australia, North America and South America.

	September 30, 2015		December 31, 2014
Long-lived assets (excluding goodwill and intangible assets):
United States	$	81,276	$	81,291
Europe		4,567		4,884
All other countries		368		426
Total	$	86,211	$	86,601

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STOCK-BASED COMPENSATION (Details) $ / shares in Units, $ in Thousands		3 Months Ended				9 Months Ended
	May. 21, 2013 shares	Sep. 30, 2015 USD ($) shares	Mar. 31, 2015 shares	Sep. 30, 2014 USD ($)	Mar. 31, 2014 shares	Sep. 30, 2015 USD ($) item $ / shares shares	Sep. 30, 2014 USD ($) $ / shares
STOCK-BASED COMPENSATION
Non-cash compensation expense | $		$ 3,248		$ 2,817		$ 10,182	$ 8,297
Non-vested RSUs
STOCK-BASED COMPENSATION
New awards granted (in shares)			423,000		390,000
Number of shares granted expected to cliff vest			105,000		116,000
Per unit grant date fair value (in dollars per unit) | $ / shares						$ 25.72
Non-cash compensation expense | $		3,200		$ 2,800		$ 10,200	$ 8,300
Unrecognized compensation expense
Unrecognized compensation cost, net of estimated forfeitures | $		$ 20,700				$ 20,700
Weighted average period for recognition of unrecognized compensation expense						1 year 10 months 24 days
Non-vested RSUs | Minimum
STOCK-BASED COMPENSATION
Award vesting period			3 years		3 years
Non-vested RSUs | Maximum
STOCK-BASED COMPENSATION
Award vesting period			5 years		5 years
Non-vested RSUs | Performance-based
STOCK-BASED COMPENSATION
New awards granted (in shares)			54,000		84,000
Number of peer groups for estimating total shareholder return ranking | item						2
The estimated performance period to be considered for historical average volatility rate						3 years
The performance measurement period to be considered for risk free interest rate assumption						3 years
Non-vested RSUs | Performance-based | Minimum
STOCK-BASED COMPENSATION
Percentage of target shares which can be earned by the participants (as a percent)			0.00%		0.00%
Non-vested RSUs | Performance-based | Maximum
STOCK-BASED COMPENSATION
Percentage of target shares which can be earned by the participants (as a percent)			200.00%		200.00%
Non-vested TSRs | Performance-based
STOCK-BASED COMPENSATION
Per unit grant date fair value (in dollars per unit) | $ / shares						$ 40.71	$ 36.90
2013 Stock and Incentive Compensation Plan
STOCK-BASED COMPENSATION
Number of shares of common stock reserved for issuance	4,100,000
Reduction from common stock reserved for issuance for every share granted under prior plan	1
Remaining shares available for future issuance		2,300,000				2,300,000

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SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2015

SEGMENT INFORMATION

SEGMENT INFORMATION

NOTE 14—SEGMENT INFORMATION

        Pursuant to FASB guidance as codified in ASC 280, an operating segment is a component of a public entity (1) that engages in business activities that may earn revenues and incur expenses; (2) for which operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segments and assess its performance; and (3) for which discrete financial information is available. We also considered how the businesses are organized as to segment management, and the focus of the businesses with regards to the types of products or services offered. In the fourth quarter of 2014, as a result of the acquisition of HVO, ILG reorganized its management reporting structure resulting in the following operating and reportable segments: Exchange and Rental, and Vacation Ownership.

        Our Exchange and Rental segment offers access to vacation accommodations and other travel-related transactions and services to leisure travelers, by providing vacation exchange services and vacation rental, working with resort developers and managing vacation properties. Our Vacation Ownership segment engages in the management, sales, marketing, financing, and development of vacation ownership interests and related services to owners and associations.

        ILG provides certain corporate functions that benefit the organization as whole. Such corporate functions include corporate services relating to oversight, accounting, legal, treasury, tax, internal audit, human resources, and certain IT functions. Historically most of these costs have been borne by the Interval business. Beginning in the fourth quarter of 2014, costs relating to such corporate functions that are not directly cross-charged to individual businesses are being allocated to our two operating and reportable segments based on a pre-determined measure of profitability relative to total ILG. All such allocations relate only to general and administrative expenses. The condensed consolidated statements of income are not impacted by this cross-segment allocation. Consequently, for comparative purposes, we have recast our segment results for 2014 to include such corporate allocations.

        Information on reportable segments and reconciliation to consolidated operating income is as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Exchange and Rental:
Transaction revenue	$	46,728	$	46,868	$	150,931	$	150,294
Membership fee revenue		31,326		32,017		94,453		95,437
Ancillary member revenue		1,689		1,896		4,490		5,228
Total member revenue		79,743		80,781		249,874		250,959
Other revenue		7,815		5,825		25,386		17,932
Rental management revenue		13,626		12,973		39,236		36,932
Pass-through revenue		23,704		20,638		70,625		61,284
Total revenues		124,888		120,217		385,121		367,107
Cost of sales		47,569		44,187		148,311		137,993
Gross profit		77,319		76,030		236,810		229,114
Selling and marketing expense		14,570		14,640		45,419		42,897
General and administrative expense		26,284		25,335		78,290		75,593
Amortization expense of intangibles		2,155		1,739		6,465		5,319
Depreciation expense		3,958		3,587		11,680		10,892
Segment operating income	$	30,352	$	30,729	$	94,956	$	94,413

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Vacation Ownership:
Management fee revenue	$	25,759	$	22,123	$	75,672	$	67,118
Vacation ownership sales and financing revenue		9,002		—		28,473		—
Pass-through revenue		14,391		4,343		43,071		13,027
Total revenue		49,152		26,466		147,216		80,145
Cost of sales		28,044		14,808		90,082		44,613
Gross profit		21,108		11,658		57,134		35,532
Selling and marketing expense		3,563		159		9,500		280
General and administrative expense		13,076		6,005		32,506		18,435
Amortization expense of intangibles		1,362		1,140		4,067		3,421
Depreciation expense		436		178		1,311		542
Segment operating income	$	2,671	$	4,176	$	9,750	$	12,854

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Consolidated:
Revenue	$	174,040	$	146,683	$	532,337	$	447,252
Cost of sales		75,613		58,995		238,393		182,606
Gross profit		98,427		87,688		293,944		264,646
Direct segment operating expenses		65,404		52,783		189,238		157,379
Operating income	$	33,023	$	34,905	$	104,706	$	107,267

        Selected financial information by reporting segment is presented below (in thousands). Total assets for our Exchange and Rental segment as of December 31, 2014 have been recast pursuant to ASU 2015-03 with regards to the presentation of debt issuance costs as a contra long-term debt item. See Note 8 for additional discussion.

	September 30, 2015		December 31, 2014
Total Assets:
Exchange and Rental	$	934,860	$	928,081
Vacation Ownership		367,542		395,921
Total	$	1,302,402	$	1,324,002

Geographic Information

        We conduct operations through offices in the U.S. and 15 other countries. For the nine months ended September 30, 2015 and 2014 revenue is sourced from over 100 countries worldwide. Other than the United States and Europe, revenue sourced from any individual country or geographic region did not exceed 10% of consolidated revenue for the three and nine months ended September 30, 2015 and 2014.

        Geographic information on revenue, based on sourcing, and long-lived assets, based on physical location, is presented in the table below (in thousands).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Revenue:
United States	$	144,610	$	112,973	$	441,636	$	345,201
Europe		16,360		18,337		50,828		55,046
All other countries(1)		13,070		15,373		39,873		47,005
Total	$	174,040	$	146,683	$	532,337	$	447,252

(1)           Includes countries within the following continents: Africa, Asia, Australia, North America and South America.

	September 30, 2015		December 31, 2014
Long-lived assets (excluding goodwill and intangible assets):
United States	$	81,276	$	81,291
Europe		4,567		4,884
All other countries		368		426
Total	$	86,211	$	86,601

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2015

GOODWILL AND OTHER INTANGIBLE ASSETS

Schedule of balance of goodwill based on fair value by new reporting unit

With the assistance of a third party specialist, we allocated goodwill based on their relative fair values as of December 31, 2014 to each new reporting unit as follows (in thousands):

	Balance as of December 31, 2014
Exchange and Rental segment
Exchange reporting unit	$	495,748
Rental reporting unit		20,396
Vacation Ownership segment
VO management reporting unit		39,160
VO sales and financing reporting unit		6,946
Total goodwill	$	562,250

Schedule of balance of goodwill by reporting unit

The following tables present the balance of goodwill by reporting unit, including the changes in carrying amount of goodwill as of September 30, 2015 and December 31, 2014 (in thousands):

	Balance as of January 1, 2015		Additions		Deductions		Foreign Currency Translation			Goodwill Impairment		Balance as of September 30, 2015
Exchange	$	495,748	$	—	$	—	$	—		$	—	$	495,748
Rental		20,396		—		—		—			—		20,396
VO management		39,160		—		—		(433	)		—		38,727
VO sales and financing		6,946		—		—		—			—		6,946
Total	$	562,250	$	—	$	—	$	(433	)	$	—	$	561,817

	Balance as of January 1, 2014		Additions		Deductions		Foreign Currency Translation			Goodwill Impairment		Balance as of December 31, 2014
Exchange	$	483,462	$	12,286	$	—	$	—		$	—	$	495,748
Rental		20,396		—		—		—			—		20,396
VO management		36,981		3,307		—		(1,128	)		—		39,160
VO sales and financing		—		6,946		—		—			—		6,946
Total	$	540,839	$	22,539	$	—	$	(1,128	)	$	—	$	562,250

Schedule of balance of intangible assets, net

The balance of other intangible assets, net as of September 30, 2015 and December 31, 2014 is as follows (in thousands):

	September 30, 2015		December 31, 2014
Intangible assets with indefinite lives	$	129,268	$	131,336
Intangible assets with definite lives, net		126,702		137,539
Total intangible assets, net	$	255,970	$	268,875

Schedule of intangible assets with indefinite lives

At September 30, 2015 and December 31, 2014, intangible assets with indefinite lives relate to the following (in thousands):

	September 30, 2015		December 31, 2014
Resort management contracts	$	85,352	$	87,420
Trade names and trademarks		43,916		43,916
Total	$	129,268	$	131,336

Schedule of intangible assets with definite lives

At September 30, 2015, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	168,400	$	(131,268	)	$	37,132
Purchase agreements		75,879		(75,799	)		80
Resort management contracts		129,503		(44,208	)		85,295
Technology		25,076		(25,076	)		—
Other		21,806		(17,611	)		4,195
Total	$	420,664	$	(293,962	)	$	126,702

        At December 31, 2014, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	168,400	$	(129,942	)	$	38,458
Purchase agreements		75,879		(75,443	)		436
Resort management contracts		129,864		(36,790	)		93,074
Technology		25,076		(25,076	)		—
Other		21,815		(16,244	)		5,571
Total	$	421,034	$	(283,495	)	$	137,539

Schedule of amortization expense of intangible assets with definite lives

Based on September 30, 2015 balances, amortization expense for the next five years and thereafter is estimated to be as follows (in thousands):

Twelve month period ending September 30,
2016	$	13,077
2017		11,662
2018		10,884
2019		10,216
2020		10,061
2021 and thereafter		70,802
	$	126,702

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EQUITY (Details) $ / shares in Units, $ in Thousands		1 Months Ended								3 Months Ended		9 Months Ended		12 Months Ended
	Nov. 04, 2013 USD ($)	Nov. 30, 2015 $ / shares	Sep. 30, 2015 USD ($) $ / shares shares	Aug. 31, 2015 $ / shares	Jun. 30, 2015 USD ($)	May. 31, 2015 $ / shares	Mar. 31, 2015 USD ($)	Feb. 28, 2015 USD ($) $ / shares	Jun. 30, 2009 shares	Sep. 30, 2015 USD ($) $ / shares shares	Sep. 30, 2014 $ / shares	Sep. 30, 2015 USD ($) item $ / shares shares	Sep. 30, 2014 USD ($) $ / shares	Dec. 31, 2014 USD ($) $ / shares shares
EQUITY
Authorized shares of common stock			300,000,000							300,000,000		300,000,000		300,000,000
Par value of common stock (in dollars per share) | $ / shares			$ 0.01							$ 0.01		$ 0.01		$ 0.01
Shares of common stock issued			59,853,933							59,853,933		59,853,933		59,463,200
Shares of common stock outstanding			57,500,000							57,500,000		57,500,000		57,100,000
Shares held as treasury stock			2,363,324							2,363,324		2,363,324		2,363,324
Authorized shares of preferred stock			25,000,000							25,000,000		25,000,000		25,000,000
Par value of preferred stock (in dollars per share) | $ / shares			$ 0.01							$ 0.01		$ 0.01		$ 0.01
Preferred stock, issued shares			0							0		0		0
Preferred stock, outstanding shares			0							0		0		0
Minimum number of series to issue preferred stock | item												1
Dividends declared per common share (in dollars per share) | $ / shares		$ 0.12		$ 0.12		$ 0.12		$ 0.12		$ 0.12	$ 0.11	$ 0.36	$ 0.33
Cash dividend paid | $			$ 6,900		$ 6,900		$ 6,900
Stockholder Rights Plan
Rights per common stock share declared as dividend									1
Minimum percentage of common stock to be acquired before rights become exercisable									15.00%
Percentage of discount on prevailing market price of common stock									50.00%
Equity and Share Repurchase Program
Amount authorized under share repurchase program | $								$ 25,000
Common stock repurchased | $													$ 14,120
Stockholders' Equity Attributable to Noncontrolling Interest | $			33,958							$ 33,958		$ 33,958		$ 36,305
Repurchase program August 2011 [Member]
Equity and Share Repurchase Program
Number of shares of common stock repurchased														700,000
Common stock repurchased | $														$ 14,100
Repurchase program June 2014 [Member]
Equity and Share Repurchase Program
Remaining availability for future repurchases of common stock | $			25,000							25,000		25,000
CLC
Equity and Share Repurchase Program
Premium upon exercise of share options to settle loan (as a percent)	20.00%
CLC | Convertible Debt [Member]
Equity and Share Repurchase Program
Convertible secured loan available, subject to certain conditions being met | $	$ 15,100
Convertible secured loan maturity period	5 years
CLC | VRI Europe Limited
Equity and Share Repurchase Program
Equity of VRIE issued as consideration for acquisition (as a percent)	24.50%
Ownership interest ( as a percent)	75.50%
Stockholders' Equity Attributable to Noncontrolling Interest | $			31,600							31,600		31,600		33,300
Period from acquisition during which parties have agreed not to transfer their interests	5 years
HVO
Equity and Share Repurchase Program
Stockholders' Equity Attributable to Noncontrolling Interest | $			$ 2,300							$ 2,300		$ 2,300		$ 3,000

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GOODWILL AND OTHER INTANGIBLE ASSETS (Details 3) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Other intangible assets
Cost	$ 420,664		$ 420,664		$ 421,034
Accumulated Amortization	(293,962)		(293,962)		(283,495)
Net	126,702		126,702		137,539
Amortization expense for intangible assets	3,517	$ 2,879	10,532	$ 8,740
Amortization of intangible assets
2016	13,077		13,077
2017	11,662		11,662
2018	10,884		10,884
2019	10,216		10,216
2020	10,061		10,061
2021 and thereafter	70,802		70,802
Net	126,702		126,702		137,539
Customer relationships
Other intangible assets
Cost	168,400		168,400		168,400
Accumulated Amortization	(131,268)		(131,268)		(129,942)
Net	37,132		37,132		38,458
Amortization of intangible assets
Net	37,132		37,132		38,458
Purchase agreements
Other intangible assets
Cost	75,879		75,879		75,879
Accumulated Amortization	(75,799)		(75,799)		(75,443)
Net	80		80		436
Amortization of intangible assets
Net	80		80		436
Resort management contracts
Other intangible assets
Cost	129,503		129,503		129,864
Accumulated Amortization	(44,208)		(44,208)		(36,790)
Net	85,295		85,295		93,074
Amortization of intangible assets
Net	85,295		85,295		93,074
Technology
Other intangible assets
Cost	25,076		25,076		25,076
Accumulated Amortization	(25,076)		(25,076)		(25,076)
Other
Other intangible assets
Cost	21,806		21,806		21,815
Accumulated Amortization	(17,611)		(17,611)		(16,244)
Net	4,195		4,195		5,571
Amortization of intangible assets
Net	$ 4,195		$ 4,195		$ 5,571

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Accounts receivable, allowance (in dollars)	$ 188	$ 193
Preferred stock, authorized shares	25,000,000	25,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, authorized shares	300,000,000	300,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, issued shares	59,853,933	59,463,200
Treasury stock, shares	2,363,324	2,363,324
Series A Junior Participating Preferred Stock
Preferred stock, authorized shares	100,000	100,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01

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GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2015

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS

        Pursuant to FASB guidance as codified within ASC 350, "Intangibles—Goodwill and Other," goodwill acquired in business combinations is assigned to the reporting unit(s) expected to benefit from the combination as of the acquisition date.

        As discussed in Note 14, "Segment Information," ILG reorganized its management reporting structure in the fourth quarter of 2014 resulting in the following two operating and reportable segments: Exchange and Rental, and Vacation Ownership. As a result of the change in operating segments, ILG's reporting units were also reorganized. The Exchange and Rental, and Vacation Ownership segments now each contain two reporting units as follows:

OPERATING SEGMENTS
Exchange and Rental	Vacation Ownership
Exchange reporting unit	VO management reporting unit
Rental reporting unit	VO sales and financing reporting unit

        In accordance with ASC 350, we reassigned our existing goodwill to these new reporting units utilizing a relative fair value allocation approach as of December 31, 2014. With the assistance of a third party specialist, we allocated goodwill based on their relative fair values as of December 31, 2014 to each new reporting unit as follows (in thousands):

	Balance as of December 31, 2014
Exchange and Rental segment
Exchange reporting unit	$	495,748
Rental reporting unit		20,396
Vacation Ownership segment
VO management reporting unit		39,160
VO sales and financing reporting unit		6,946
Total goodwill	$	562,250

        As of December 31, 2014, as a result of the reorganization of our management reporting structure and reporting units (see Note 14), we assessed the carrying value of goodwill pursuant to the two-step impairment approach. The first step of the impairment test concluded the carrying value of each reporting unit did not exceed its fair value; consequently, the second step of the impairment test was not necessary and goodwill was not determined to be impaired. As of September 30, 2015, we did not identify any triggering events which required an interim impairment test subsequent to our most recent impairment test on December 31, 2014.

        The following tables present the balance of goodwill by reporting unit, including the changes in carrying amount of goodwill as of September 30, 2015 and December 31, 2014 (in thousands):

	Balance as of January 1, 2015		Additions		Deductions		Foreign Currency Translation			Goodwill Impairment		Balance as of September 30, 2015
Exchange	$	495,748	$	—	$	—	$	—		$	—	$	495,748
Rental		20,396		—		—		—			—		20,396
VO management		39,160		—		—		(433	)		—		38,727
VO sales and financing		6,946		—		—		—			—		6,946
Total	$	562,250	$	—	$	—	$	(433	)	$	—	$	561,817

	Balance as of January 1, 2014		Additions		Deductions		Foreign Currency Translation			Goodwill Impairment		Balance as of December 31, 2014
Exchange	$	483,462	$	12,286	$	—	$	—		$	—	$	495,748
Rental		20,396		—		—		—			—		20,396
VO management		36,981		3,307		—		(1,128	)		—		39,160
VO sales and financing		—		6,946		—		—			—		6,946
Total	$	540,839	$	22,539	$	—	$	(1,128	)	$	—	$	562,250

Other Intangible Assets

        The balance of other intangible assets, net as of September 30, 2015 and December 31, 2014 is as follows (in thousands):

	September 30, 2015		December 31, 2014
Intangible assets with indefinite lives	$	129,268	$	131,336
Intangible assets with definite lives, net		126,702		137,539
Total intangible assets, net	$	255,970	$	268,875

        The $2.1 million change in our indefinite-lived intangible assets during the nine months ended September 30, 2015 reflects the associated foreign currency translation of intangible assets carried on the books of an ILG entity whose functional currency is not the US dollar.

        At September 30, 2015 and December 31, 2014, intangible assets with indefinite lives relate to the following (in thousands):

	September 30, 2015		December 31, 2014
Resort management contracts	$	85,352	$	87,420
Trade names and trademarks		43,916		43,916
Total	$	129,268	$	131,336

        At September 30, 2015, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	168,400	$	(131,268	)	$	37,132
Purchase agreements		75,879		(75,799	)		80
Resort management contracts		129,503		(44,208	)		85,295
Technology		25,076		(25,076	)		—
Other		21,806		(17,611	)		4,195
Total	$	420,664	$	(293,962	)	$	126,702

        At December 31, 2014, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	168,400	$	(129,942	)	$	38,458
Purchase agreements		75,879		(75,443	)		436
Resort management contracts		129,864		(36,790	)		93,074
Technology		25,076		(25,076	)		—
Other		21,815		(16,244	)		5,571
Total	$	421,034	$	(283,495	)	$	137,539

        In accordance with our policy on the recoverability of long-lived assets, we review the carrying value of all long-lived assets, primarily property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of a long-lived asset (asset group) may be impaired. For the nine months ended September 30, 2015 and the year ended December 31, 2014, we did not identify any events or changes in circumstances indicating that the carrying value of a long lived asset (or asset group) may be impaired; accordingly, a recoverability test was not warranted.

        Amortization of intangible assets with definite lives is primarily computed on a straight-line basis. Total amortization expense for intangible assets with definite lives was $3.5 million and $2.9 million for the three months ended September 30, 2015 and 2014, respectively, and $10.5 million and $8.7 million for the nine months ended September 30, 2015 and 2014, respectively. Based on September 30, 2015 balances, amortization expense for the next five years and thereafter is estimated to be as follows (in thousands):

Twelve month period ending September 30,
2016	$	13,077
2017		11,662
2018		10,884
2019		10,216
2020		10,061
2021 and thereafter		70,802
	$	126,702

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COMMITMENTS AND CONTINGENCIES (Details 2) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
COMMITMENTS AND CONTINGENCIES
Favorable adjustments to earnings	$ 0.1	$ 0.1	$ 1.2	$ 0.7
European Union Value Added Tax Matter
COMMITMENTS AND CONTINGENCIES
Accrual of VAT liability	1.4		1.4		$ 2.3
Possible future costs to settle VAT liabilities, lower range	1.4		1.4
Possible future costs to settle VAT liabilities, higher range	$ 2.9		$ 2.9

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VACATION OWNERSHIP INVENTORY (Tables)

9 Months Ended

Sep. 30, 2015

VACATION OWNERSHIP INVENTORY

Schedule of ownership inventory

As of September 30, 2015 and December 31, 2014, vacation ownership inventory is comprised of the following (in thousands):

	September 30, 2015		December 31, 2014
Completed unsold vacation ownership interests	$	48,216	$	53,434
Land held for development		627		627
Total inventory	$	48,843	$	54,061

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SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
New Accounting Pronouncement, Early Adoption [Line Items]
Other non-current assets	$ 43,587	$ 47,424
Adjustments For Adoption Of ASU 2015 03
New Accounting Pronouncement, Early Adoption [Line Items]
Other non-current assets		3,600
Long-term debt		$ 3,600

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INCOME TAXES

9 Months Ended

Sep. 30, 2015

INCOME TAXES

INCOME TAXES

NOTE 13—INCOME TAXES

        ILG calculates its interim income tax provision in accordance with ASC 740, "Income Taxes". At the end of each interim period, ILG makes its best estimate of the annual expected effective tax rate and applies that rate to its ordinary year-to-date earnings or loss. The income tax or benefit related to significant, unusual, or extraordinary items that will be separately reported or reported net of their related tax effect are individually computed and recognized in the interim period in which those items occur. In addition, the effect of a change in enacted tax laws or rates, tax status, or judgment on the realizability of a beginning-of-the-year deferred tax asset in future years is recognized in the interim period in which the change occurs.

        The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income for the year, projections of the proportion of income (or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences, and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired, additional information is obtained or ILG's tax environment changes. To the extent that the estimated annual effective tax rate changes during a quarter, the effect of the change on prior quarters is included in tax expense for the current quarter.

        A valuation allowance for deferred tax assets is provided when it is more likely than not that certain deferred tax assets will not be realized. Realization is dependent upon the generation of future taxable income or the reversal of deferred tax liabilities during the periods in which those temporary differences become deductible. We consider the history of taxable income in recent years, the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies to make this assessment.

        For the three and nine months ended September 30, 2015, ILG recorded income tax provisions for continuing operations of $10.7 million and $34.9 million, respectively, which represent effective tax rates of 35.3% and 35.8% for the respective periods. These tax rates are higher than the federal statutory rate of 35% due principally to state and local income taxes partially offset by foreign income taxed at lower rates and the impact of favorable discrete items recorded during the current period related to tax credits and state taxes.

        For the three and nine months ended September 30, 2014, ILG recorded income tax provisions for continuing operations of $11.8 million and $36.8 million, respectively, which represent effective tax rates of 34.9% and 35.8% for the respective periods. These tax rates are different than the federal statutory rate of 35% due principally to state and local income taxes offset by foreign income taxed at lower rates. These tax rates include the effect of a shift in the projections of the proportion of income earned and taxed between the various jurisdictions and the impact of favorable discrete items recorded during the three months ended September 30, 2014.

        As of September 30, 2015, there were no material changes to ILG's unrecognized tax benefits and related interest. ILG recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense.

        ILG files income tax returns in the U.S. federal jurisdiction and various state, local, and foreign jurisdictions. As of September 30, 2015, no open tax years are currently under examination by the IRS or any material state and local jurisdictions.