10-Q

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As filed with the Securities and Exchange Commission on November 5, 2013

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, 2013
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 1, 2013, 57,358,142 shares of the registrant's common stock were outstanding.

PART 1—FINANCIAL STATEMENTS

Item 1.    Consolidated Financial Statements

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenue	$	119,156		$	117,195		$	379,020		$	362,602
Cost of sales (exclusive of depreciation and amortization shown separately below)		41,991			41,741			131,788			127,793
Gross profit		77,165			75,454			247,232			234,809
Selling and marketing expense		12,951			13,282			40,958			41,323
General and administrative expense		27,387			26,626			81,917			79,032
Amortization expense of intangibles		1,950			6,669			5,858			21,001
Depreciation expense		3,499			3,311			10,859			9,839
Operating income		31,378			25,566			107,640			83,614
Other income (expense):
Interest income		60			535			282			1,538
Interest expense		(1,295	)		(6,485	)		(4,559	)		(23,874	)
Other income (expense), net		(65	)		(915	)		893			(2,408	)
Loss on extinguishment of debt		—			(17,925	)		—			(18,527	)
Total other expense, net		(1,300	)		(24,790	)		(3,384	)		(43,271	)
Earnings before income taxes and noncontrolling interest		30,078			776			104,256			40,343
Income tax provision		(12,973	)		(624	)		(41,571	)		(14,911	)
Net income		17,105			152			62,685			25,432
Net income attributable to noncontrolling interest		(4	)		(3	)		(10	)		(6	)
Net income attributable to common stockholders	$	17,101		$	149		$	62,675		$	25,426
Earnings per share attributable to common stockholders:
Basic	$	0.30		$	0.00		$	1.10		$	0.45
Diluted	$	0.29		$	0.00		$	1.09		$	0.45
Weighted average number of shares of common stock outstanding:
Basic		57,353			56,714			57,199			56,448
Diluted		57,986			57,364			57,738			57,120
Dividends declared per share of common stock	$	0.11		$	0.10		$	0.22		$	0.30

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

2

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013			2012
Net income attributable to common stockholders	$	17,101	$	149	$	62,675		$	25,426
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		1,666		2,392		(1,524	)		3,501
Total other comprehensive income (loss), net of tax		1,666		2,392		(1,524	)		3,501
Comprehensive income	$	18,767	$	2,541	$	61,151		$	28,927

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

3

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	September 30, 2013			December 31, 2012
	(Unaudited)
ASSETS
Cash and cash equivalents	$	103,563		$	101,162
Restricted cash and cash equivalents		5,828			7,348
Accounts receivable, net of allowance of $340 and $409, respectively		35,854			31,964
Deferred income taxes		16,535			16,107
Deferred membership costs		9,957			12,349
Prepaid income taxes		9,435			12,973
Prepaid expenses and other current assets		20,655			27,592
Total current assets		201,827			209,495
Property and equipment, net		53,130			53,348
Goodwill		505,774			505,774
Intangible assets, net		93,270			98,678
Deferred membership costs		11,196			11,058
Deferred income taxes		4,566			4,571
Other non-current assets		11,852			23,996
TOTAL ASSETS	$	881,615		$	906,920
LIABILITIES AND EQUITY
LIABILITIES:
Accounts payable, trade	$	10,963		$	11,086
Deferred revenue		95,228			93,367
Interest payable		157			386
Accrued compensation and benefits		18,153			16,526
Member deposits		9,549			9,463
Accrued expenses and other current liabilities		38,766			44,575
Total current liabilities		172,816			175,403
Long-term debt		190,000			260,000
Other long-term liabilities		1,068			1,493
Deferred revenue		103,218			111,273
Deferred income taxes		87,373			86,259
Total liabilities		554,475			634,428
Redeemable noncontrolling interest		435			426
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; $.01 par value; issued 59,052,950 and 58,553,265 shares, respectively		591			586
Treasury stock—1,697,360 shares at cost		(20,913	)		(20,913	)
Additional paid-in capital		188,576			182,131
Retained earnings		170,873			121,160
Accumulated other comprehensive loss		(12,422	)		(10,898	)
Total stockholders' equity		326,705			272,066
TOTAL LIABILITIES AND EQUITY	$	881,615		$	906,920

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

4

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(In thousands, except share data)

(Unaudited)

				Common Stock				Treasury Stock											Accumulated Other Comprehensive Loss
	Total Stockholders' Equity												Additional Paid-in Capital			Retained Earnings
				Amount		Shares		Amount			Shares
Balance as of December 31, 2012	$	272,066		$	586		58,553,265	$	(20,913	)		1,697,360	$	182,131		$	121,160		$	(10,898	)
Net income attributable to common stockholders		62,675															62,675
Other comprehensive loss, net of tax		(1,524	)																	(1,524	)
Non-cash compensation expense		7,753												7,753
Issuance of common stock upon exercise of stock options		403					29,544							403
Issuance of common stock upon vesting of restricted stock units, net of withholding taxes		(4,478	)		5		470,141							(4,483	)
Change in excess tax benefits from stock-based awards		2,598												2,598
Deferred stock compensation expense		(171	)											(171	)
Dividends declared on common stock		(12,617	)											345			(12,962	)
Balance as of September 30, 2013	$	326,705		$	591		59,052,950	$	(20,913	)		1,697,360	$	188,576		$	170,873		$	(12,422	)

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

5

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine Months Ended September 30,
	2013			2012
	(In thousands)
Cash flows from operating activities:
Net income	$	62,685		$	25,432
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization expense of intangibles		5,858			21,001
Amortization of debt issuance costs		587			1,180
Depreciation expense		10,859			9,839
Accretion of original issue discount		—			1,840
Non-cash compensation expense		7,753			8,733
Non-cash interest expense		277			338
Non-cash interest income		—			(651	)
Deferred income taxes		656			1,370
Excess tax benefits from stock-based awards		(2,602	)		(3,014	)
Loss (gain) on disposal of property and equipment		163			(256	)
Loss on extinguishment of debt		—			18,527
Change in fair value of contingent consideration		485			(670	)
Changes in operating assets and liabilities:
Accounts receivable		(4,189	)		(2,803	)
Prepaid expenses and other current assets		6,863			2,845
Prepaid income taxes and income taxes payable		5,824			(11,272	)
Accounts payable and other current liabilities		(3,761	)		(14,942	)
Deferred revenue		(3,852	)		3,942
Other, net		1,696			2,683
Net cash provided by operating activities		89,302			64,122
Cash flows from investing activities:
Acquisition, net of cash acquired		—			(39,963	)
Acquisition of assets		(1,952	)		—
Capital expenditures		(9,338	)		(10,425	)
Proceeds from disposal of property and equipment		7			230
Investment in financing receivables		—			(9,480	)
Payments received on financing receivables		9,876			16,989
Net cash used in investing activities		(1,407	)		(42,649	)
Cash flows from financing activities:
Principal payments on term loan		—			(56,000	)
Redemption of senior notes		—			(300,000	)
Payments on revolving credit facility		(70,000	)		—
Borrowings on revolving credit facility		—			290,000
Payments of debt issuance costs		—			(3,912	)
Dividend payments		(12,617	)		(16,996	)
Withholding taxes on vesting of restricted stock units		(4,478	)		(6,174	)
Proceeds from the exercise of stock options		399			634
Excess tax benefits from stock-based awards		2,602			3,014
Net cash used in financing activities		(84,094	)		(89,434	)
Effect of exchange rate changes on cash and cash equivalents		(1,400	)		4,401
Net increase (decrease) in cash and cash equivalents		2,401			(63,560	)
Cash and cash equivalents at beginning of period		101,162			195,517
Cash and cash equivalents at end of period	$	103,563		$	131,957
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized	$	4,068		$	29,528
Income taxes, net of refunds	$	35,091		$	24,813

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

6

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2013

(Unaudited)

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION

Company Overview

        Interval Leisure Group, Inc., or ILG, is a leading global provider of membership and leisure services to the vacation industry. ILG consists of two operating segments. Membership and Exchange offers leisure and travel-related products and services to owners of vacation interests and others primarily through various membership programs, as well as related services to resort developer clients. Management and Rental provides hotel, condominium resort, timeshare resort and homeowners association management, and rental services to both vacation property owners and vacationers.

        On February 28, 2012, we acquired all of the equity of Vacation Resorts International, or VRI, a non-developer provider of resort and homeowners association management services to the shared ownership industry. VRI was consolidated into our financial statements as of the acquisition date with its assets and results of operations primarily included in our Management and Rental operating segment.

        The Membership and Exchange operating segment consists of Interval International Inc.'s businesses, referred to as Interval, and the membership and exchange related line of business of Trading Places International, or TPI, and VRI. The Management and Rental operating segment consists of Aston Hotels & Resorts, LLC and Maui Condo and Home, LLC, referred to as Aston, and the management and rental related line of business of VRI and TPI.

Basis of Presentation

        The accompanying unaudited 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 consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2012 Annual Report on Form 10-K.

Seasonality

        Revenue at ILG is influenced by the seasonal nature of travel. The Membership and 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. The Management and Rental businesses recognize rental revenue based on occupancy, with the first and third quarters generally generating higher revenue and the second and fourth quarters generally generating lower revenue. The timeshare and homeowners' association management part of this business does not experience significant seasonality.

7

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

        Our significant accounting policies were described in Note 2 to our audited consolidated financial statements included in our 2012 Annual Report on Form 10-K. There have been no significant changes in our significant accounting policies for the nine months ended September 30, 2013.

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 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 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 0.8 million stock options and RSUs for the three and nine months ended September 30, 2013, respectively, and 0.9 million and 1.0 million stock options and RSUs for the three and nine months ended September 30, 2012, 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, 2013 and 2012, 0.9 million of stock options remained outstanding.

8

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES (Continued)

        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,
	2013		2012		2013		2012
Basic weighted average shares of common stock outstanding		57,353		56,714		57,199		56,448
Net effect of common stock equivalents assumed to be vested related to RSUs		627		636		532		657
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees		6		14		7		15
Diluted weighted average shares of common stock outstanding		57,986		57,364		57,738		57,120

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 2012 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 July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-10, "Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate, ("OIS")) as a Benchmark Interest Rate for Hedge Accounting Purposes (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2013-10)"). ASU 2013-10 ratified the Task Force's consensus to allow the Fed Funds effective swap rate to serve as a benchmark interest rate in the United States, which was previously defined in ASC 815 as either (1) a rate on direct obligations of the U.S. Department of the Treasury (UST) or (2) the LIBOR swap rate. ASU 2013-10 does not add to the disclosure requirements in ASC 815-10-50; however, in order to comply with the required disclosures related to fair value in ASC 820 a separate process for determining the fair value hierarchy of derivatives when the OIS rate is an input may be required. The ASU is required to be applied prospectively for qualifying new or re-designated hedging relationships entered into on or after July 17, 2013. We do not currently anticipate the adoption of this guidance, as of the effective date, will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements.

        In March 2013, the FASB issued ASU 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment ("CTA") upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2013-05"). ASU 2013-05 applies to the release of the CTA into net income when a parent either sells a part or all of its investment in a

9

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES (Continued)

foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. The ASU does not change the requirement to release a pro rata portion of the CTA of the foreign entity into earnings for a partial sale of an equity method investment in a foreign entity. The ASU is effective for fiscal years beginning after December 15, 2013 (and interim periods within those fiscal years) and shall be applied prospectively, with early adoption permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements.

        In February 2013, the FASB issued ASU 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date" ("ASU 2013-04"). ASU 2013-04 provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date. The ASU requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangements among its co-obligors as well as any additional amount the reporting entity expects to pay on behalf of its co-obligors. ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations. The ASU is effective for fiscal years beginning after December 15, 2013 (and interim periods within those years), and shall be applied retrospectively, with early adoption permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements.

Adopted Accounting Pronouncements

        In February 2013, the FASB issued ASU 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" ("ASU 2013-02"). ASU 2013-02 adds new disclosure requirements for items reclassified out of accumulated other comprehensive income/loss ("AOCI"), including (1) disaggregating and separately presenting changes in AOCI balances by component and (2) presenting significant items reclassified out of AOCI either on the face of the statement where net income is presented or as a separate disclosure in the notes to the financial statements. It does not amend any existing requirements for reporting net income or other comprehensive income in the financial statements. The ASU is effective for fiscal years beginning after December 15, 2012 (and interim periods within those years), and shall be applied prospectively. The adoption of ASU 2013-02 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

        In January 2013, the FASB issued ASU 2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities" ("ASU 2013-01"). ASU 2013-01 clarifies the offsetting disclosure requirements in ASU 2011-11, "Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities" ("ASU 2011-11"). Under ASU 2013-01, the disclosure requirements

10

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES (Continued)

would apply to derivative instruments accounted for in accordance with ASC 815, "Derivatives and Hedging," including bifurcated embedded derivatives. The ASU is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those years. Retrospective application is required for all comparative periods presented. The adoption of ASU 2013-01 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

        In October 2012, the FASB issued ASU 2012-04, "Technical Corrections and Improvements" ("ASU 2012-04"). ASU 2012-04 makes certain technical corrections, clarifications and conforming fair value amendments to the FASB Accounting Standard Codification (the "Codification") that affects various Codification topics. The amendments in this ASU are effective upon issuance, except for amendments that are subject to transition guidance, which became effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

        In December 2011, the FASB issued ASU 2011-11 that creates new disclosure requirements about the nature of an entity's rights of setoff and related arrangements associated with its financial instruments and derivative instruments. The ASU is designed to make financial statements that are prepared under GAAP more comparable to those prepared under International Financial Reporting Standards ("IFRS"). The ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. The adoption of ASU 2011-11 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

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. ILG determined our Membership and Exchange and Management and Rental operating segments are individual reporting units which are also individual reportable segments of ILG pursuant to ASC 280, Segment Reporting ("ASC 280"). ILG tests goodwill and other indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if events or changes in circumstances indicate that the assets might be impaired. Goodwill is tested for impairment based on either a qualitative assessment or a two-step impairment test, as more fully described in Note 2 of our 2012 Annual Report on Form 10-K. When performing the two-step impairment test, if the carrying amount of a reporting unit's goodwill exceeds its implied fair value, an impairment loss equal to the excess is recorded.

        As of October 1, 2012, we reviewed the carrying value of goodwill and other intangible assets of each of our two reporting units. Goodwill assigned to the Membership and Exchange and Management and Rental reporting units as of that date was $483.5 million and $22.3 million, respectively. We performed a qualitative assessment on both our reporting units and concluded that it was more-likely-than-not that the fair value exceeded its carrying value and, therefore, a two-step impairment test was not necessary. As of September 30, 2013, we did not identify any triggering events

11

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

which required an interim impairment test subsequent to our annual impairment test on October 1, 2012.

        The balance of goodwill and other intangible assets, net is as follows (in thousands):

	September 30, 2013		December 31, 2012
Goodwill	$	505,774	$	505,774
Intangible assets with indefinite lives		40,916		40,916
Intangible assets with definite lives, net		52,354		57,762
Total goodwill and other intangible assets, net	$	599,044	$	604,452

        There were no changes in the carrying amount of goodwill for the nine months ended September 30, 2013. Goodwill related to the Membership and Exchange and Management and Rental reportable segments (each a reporting unit) was $483.5 million and $22.3 million, respectively, as of September 30, 2013 and December 31, 2012.

Other Intangible Assets

        Intangible assets with indefinite lives relate principally to trade names and trademarks. At September 30, 2013, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	129,500	$	(129,500	)	$	—
Purchase agreements		75,879		(74,848	)		1,031
Resort management contracts		73,116		(25,695	)		47,421
Technology		25,076		(25,071	)		5
Other		17,826		(13,929	)		3,897
Total	$	321,397	$	(269,043	)	$	52,354

        At December 31, 2012, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	129,500	$	(129,500	)	$	—
Purchase agreements		75,879		(74,491	)		1,388
Resort management contracts		72,666		(21,225	)		51,441
Technology		25,076		(24,988	)		88
Other		17,826		(12,981	)		4,845
Total	$	320,947	$	(263,185	)	$	57,762

12

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

        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 $2.0 million and $6.7 million for the three months ended September 30, 2013 and 2012, respectively, and $5.9 million and $21.0 million for the nine months ended September 30, 2013 and 2012, respectively. Based on September 30, 2013 balances, amortization expense for the next five years and thereafter is estimated to be as follows (in thousands):

Twelve month period ending September 30,
2014	$	7,734
2015		7,591
2016		6,610
2017		6,176
2018		5,487
2019 and thereafter		18,756
	$	52,354

NOTE 4—PROPERTY AND EQUIPMENT

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

	September 30, 2013			December 31, 2012
Computer equipment	$	19,987		$	18,269
Capitalized software		82,547			78,036
Land, buildings and leasehold improvements		25,517			23,781
Furniture and other equipment		13,575			12,419
Projects in progress		5,906			6,372
		147,532			138,877
Less: accumulated depreciation and amortization		(94,402	)		(85,529	)
Total property and equipment, net	$	53,130		$	53,348

NOTE 5—LONG-TERM DEBT

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

	September 30, 2013		December 31, 2012
Revolving credit facility (interest rate of 1.69% at September 30, 2013 and 1.97% at December 31, 2012)	$	190,000	$	260,000
Total long-term debt	$	190,000	$	260,000

13

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 5—LONG-TERM DEBT (Continued)

Credit Facility

        On June 21, 2012, we entered into an amended and restated credit agreement (the "Amended Credit Agreement") which, among other things (1) provides for a $500 million revolving credit facility, (2) extends the maturity of the credit facility to June 21, 2017, (3) provides for an interest rate on borrowings, commitment fees and letter of credit fees based on our consolidated leverage ratio, and (4) may be increased to up to $700 million, subject to certain conditions. As of September 30, 2013, there was $190 million outstanding on the revolving credit facility. Any principal amounts outstanding under the revolving credit facility are due at maturity. The interest rate on the Amended Credit Agreement is based on (at our election) either LIBOR plus a predetermined margin that ranges from 1.25% to 2.25%, or the Base Rate as defined in the Amended Credit Agreement plus a predetermined margin that ranges from 0.25% to 1.25%, in each case based on our consolidated leverage ratio. As of September 30, 2013, the applicable margin was 1.50% per annum for LIBOR revolving loans and 0.50% per annum for Base Rate loans. The revolving credit facility has a commitment fee on undrawn amounts that ranges from 0.25% to 0.375% per annum based on our consolidated leverage ratio and as of September 30, 2013, the commitment fee was 0.275%.

        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.

Restrictions and Covenants

        The Amended Credit Agreement has 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 Amended Credit Agreement requires us to meet certain financial covenants regarding the maintenance of a maximum consolidated leverage ratio of consolidated debt, less credit given for a portion of foreign cash, over consolidated Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as defined in the Amended Credit Agreement, of 3.50 through December 31, 2013 and 3.25 thereafter. Additionally, we are required to maintain a minimum consolidated interest coverage ratio of consolidated EBITDA over consolidated interest expense, as defined in the Amended Credit Agreement, of 3.0. As of September 30, 2013, ILG was in compliance in all material respects with the requirements of all applicable financial and operating covenants and our consolidated leverage ratio and consolidated interest coverage ratio under the Amended Credit Agreement were 1.00 and 33.30, respectively.

14

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 5—LONG-TERM DEBT (Continued)

Debt Issuance Costs

        In connection with entering into the Amended Credit Agreement, we incurred $3.9 million of lender and third-party debt issuance costs. As of September 30, 2013 and December 31, 2012, total unamortized debt issuance costs on outstanding debt were $2.9 million, net of $0.6 million of accumulated amortization, and $3.5 million, net of $0.4 million of accumulated amortization, respectively, which were included in "Other non-current assets" in our consolidated balance sheets. Debt issuance costs are amortized to "Interest expense" on a straight-line basis for our Amended Credit Agreement.

NOTE 6—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

        As part of an acquisition in November 2010, we are obligated to pay contingent consideration in an amount ranging from zero up to a total of $5.0 million to the former owners during the three year period subsequent to the acquisition should the company meet certain earnings targets. In our determination of the fair value of this contingent consideration, we utilize a probability-weighted income approach, which includes certain significant inputs not observable in the market, such as a discount rate of 18.5% as well as actual and estimated probability-weighted cash flows pertaining to the periods subject to the contingent consideration. We believe these inputs represent Level 3 measurements within the fair value hierarchy.

        As of September 30, 2013, the fair value of the remaining contingent consideration was $1.9 million, an increase of $0.7 million from December 31, 2012, of which $0.5 million is due to revisions to the estimated earnings used in our calculation of the fair value of the contingent consideration and $0.2 million is due to the accretion of interest. The revision to estimated earnings and the accretion of interest have been reflected in "General and administrative expense" and "Interest expense", respectively, in our consolidated statement of income for the nine months ended September 30, 2013. The total contingent consideration of $1.9 million is included in "Accrued expenses and other current liabilities" in our consolidated balance sheet as of September 30, 2013.

15

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 6—FAIR VALUE MEASUREMENTS (Continued)

        As a measure of sensitivity, a downward and upward change of 10% to all of the aforementioned Level 3 inputs would have resulted in a change ranging from zero to $0.1 million (favorable) to the estimated contingent consideration liability as of September 30, 2013. There have been no transfers of inputs used in measuring fair value between the three tiers within the fair value hierarchy since December 31, 2012.

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 three and nine months ended September 30, 2013. Our financial instruments include guarantees, letters of credit and surety bonds.

	September 30, 2013						December 31, 2012
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
	(In thousands)
Cash and cash equivalents	$	103,563		$	103,563		$	101,162		$	101,162
Restricted cash and cash equivalents	$	5,828		$	5,828		$	7,348		$	7,348
Financing receivable	$	—		$	—		$	9,876		$	9,876
Total debt	$	(190,000	)	$	(190,000	)	$	(260,000	)	$	(260,000	)
Guarantees, surety bonds and letters of credit		N/A		$	(23,051	)		N/A		$	(36,747	)

        The carrying amounts of cash and cash equivalents and restricted cash and cash equivalents reflected in the accompanying 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). As of December 31, 2012, the financing receivable was presented in our consolidated balance sheets within "Other non-current assets" and pertained to a secured real estate related loan issued to a third party in 2012 with an original maturity in 2015. During the first quarter 2013, the loan was repaid in full at 100% of the original principal amount plus accrued interest. The carrying value at December 31, 2012 of this financing receivable approximated fair value through inputs inherent to the originating value of the 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 was comparable to market rate. Interest was recognized within our "Interest income" line item in our consolidated statements of income for the nine months ended September 30, 2013 and 2012.

        The carrying value of the outstanding balance under our $500 million revolving credit facility approximates fair value as of September 30, 2013 through inputs inherent to the debt such as variable interest rates and credit risk (Level 2).

16

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 6—FAIR VALUE MEASUREMENTS (Continued)

        The guarantees, surety bonds, and letters of credit represent liabilities that are carried on our balance sheet only when a future related contingent event becomes probable and reasonably estimable. These commitments are in place to facilitate our commercial operations. The related fair value of these liabilities is estimated at the minimum expected cash flows contractually required to satisfy the related liabilities in the future upon occurrence of the applicable contingent events (Level 2).

NOTE 7—STOCKHOLDERS' EQUITY

        ILG has 300 million authorized shares of common stock, par value of $.01 per share. At September 30, 2013, there were 59.1 million shares of ILG common stock issued, of which 57.4 million are outstanding with 1.7 million shares held as treasury stock. At December 31, 2012, there were 58.6 million shares of ILG common stock issued, of which 56.9 million were outstanding with 1.7 million shares held as treasury stock.

        ILG has 25 million authorized shares of preferred stock, par value $.01 per share, none of which are issued or outstanding as of September 30, 2013 and December 31, 2012. 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.

Dividends Declared

        In May and August 2013, our Board of Directors declared quarterly dividend payments of $0.11 per share paid in June and September 2013, respectively, of $6.3 million each.

        In November 2013, our Board of Directors declared a $0.11 per share dividend payable December 18, 2013 to shareholders of record on December 4, 2013.

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.

17

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 7—STOCKHOLDERS' EQUITY (Continued)

Share Repurchase Program

        Effective August 3, 2011, ILG's Board of Directors authorized a share repurchase program for up to $25.0 million, excluding commissions, of our outstanding common stock. Acquired shares of our common stock are held as treasury shares carried at cost on our 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.

        There were no repurchases of common stock during the year ended December 31, 2012 and the nine months ended September 30, 2013. As of September 30, 2013, the remaining availability for future repurchases of our common stock was $4.1 million.

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 for ILG, including (1) changes in AOCL balances by component and (2) significant items reclassified out of AOCL in the period. For the nine months ended September 30, 2013, 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 consolidated statements of comprehensive income.

NOTE 8—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 $0.4 million and $1.2 million for the three and nine months ended September 30, 2013, respectively, and approximately $0.4 million and $1.1 million for the three and nine months ended September 30, 2012, 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 41,180 share units were outstanding at September 30, 2013. ILG does not provide

18

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 8—BENEFIT PLANS (Continued)

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.

NOTE 9—STOCK-BASED COMPENSATION

        On May 21, 2013, ILG adopted the Interval Leisure Group, Inc. 2013 Stock and Incentive Plan to replace the ILG 2008 Stock and Annual 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, 2013, ILG has 3.3 million shares available for future issuance under the 2013 Stock and Incentive Compensation Plan.

        During the first quarter of 2013 and 2012, the Compensation Committee granted approximately 657,000 and 586,000 RSUs, respectively, vesting over three to four years, to certain officers and employees of ILG and its subsidiaries. Of these RSUs granted in 2013 and 2012, approximately 300,000 and 130,000 cliff vest in three years and approximately 58,000 and 73,000 of these RSUs, respectively,

19

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 9—STOCK-BASED COMPENSATION (Continued)

are subject to performance criteria that could result between 0% and 200% of these awards being earned either based on defined EBITDA or relative total shareholder return targets over the respective performance period, as specified in the award document.

        For the 2013 and 2012 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 $29.61 for 2013 and $17.34 for 2012 per unit grant date fair value 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, 2013 and 2012 was $2.6 million, respectively. For the nine months ended September 30, 2013 and 2012, non-cash compensation expense related to RSUs was $7.8 million and $8.7 million, respectively. At September 30, 2013, there was approximately $17.3 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 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 consolidated statements of income for the three and nine months ended September 30, 2013 and 2012 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Cost of sales	$	160	$	155	$	519	$	471
Selling and marketing expense		292		257		906		787
General and administrative expense		2,157		2,152		6,328		7,475
Non-cash compensation expense	$	2,609	$	2,564	$	7,753	$	8,733

20

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 9—STOCK-BASED COMPENSATION (Continued)

        The following table summarizes RSU activity during the nine months ended September 30, 2013:

	Shares			Weighted-Average Grant Date Fair Value
	(In thousands)
Non-vested RSUs at January 1		1,569		$	13.29
Granted		707			20.75
Vested		(688	)		11.63
Forfeited		(13	)		18.10
Non-vested RSUs at September 30		1,575		$	17.29

        In connection with the acquisition of Aston by ILG in 2007, a member of Aston's management purchased a noncontrolling interest in Aston and, additionally, was granted non-voting restricted common equity. This award was granted on May 31, 2007 and was initially measured at fair value, which was amortized over the vesting period. This award vests ratably over four and a half years, or earlier based upon the occurrence of certain prescribed events. These shares are subject to a put right by the holder and a call right by ILG, which became exercisable for the first time in the first quarter of 2013 for a period of 60 days subsequent to the filing of our 2012 Annual Report on Form 10-K and is exercisable annually thereafter.

        The value of these shares upon exercise of the put or call is equal to their fair market value, determined by negotiation or arbitration, reduced by the accreted value of the preferred interest that was taken by ILG upon the purchase of Aston. The initial value of the preferred interest was equal to the acquisition price of Aston. The preferred interest accretes at a 10% annual rate. Upon exercise of the put or call, the consideration payable can be denominated in ILG shares, cash or a combination thereof at ILG's option. An additional put right by the holder and call right by ILG would require, upon exercise, the purchase of these non-voting common shares by ILG immediately prior to a registered public offering by Aston, at the public offering price. As of September 30, 2013, the estimated redemption value of this redeemable interest is lower than the current carrying value on our consolidated balance sheet. Consequently, pursuant to the applicable accounting guidance, no adjustment to the balance of this noncontrolling interest was recorded for the nine months ended September 30, 2013.

NOTE 10—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.

21

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 10—INCOME TAXES (Continued)

        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, 2013, ILG recorded an income tax provision for continuing operations of $13.0 million and $41.6 million, respectively, which represents effective tax rates of 43.1% and 39.9% 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. During the three months ended September 30, 2013, the effective tax rate increased due to income taxes associated with the effect of changes in tax laws in certain states and other income tax items, the most significant of which related to the effect of changes in tax laws in the U.K, as discussed further below, that were enacted during the third quarter of 2013. During the nine months ended September 30, 2013, the effective tax rate increased due to the shift in the projections of the proportion of income earned and taxed between the various jurisdictions and the effect of changes in tax laws in certain states and in the U.K. that were enacted during the third quarter of 2013. However, this increase was partially offset by the U.S. tax consequences of foreign operations and the decrease during the first quarter of 2013 in unrecognized tax benefits associated with the expiration of the statute of limitations related to foreign taxes.

        For the three and nine months ended September 30, 2012, ILG recorded an income tax provision for continuing operations of $0.6 million and $14.9 million, respectively, which represents effective tax rates of 80.5% and 37.0% for the respective periods. The higher effective tax rate for the three months ended September 30, 2012 was primarily attributable to reduced income before income taxes, driven by the loss on the extinguishment of debt related to the redemption of the Interval Senior Notes, which magnified the impact of other income tax items, the most significant of which related to the effect of changes in tax laws in the U.K., as discussed further below, that were enacted during the third quarter of 2012. For the nine months ended September 30, 2012, the tax rate was 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. During the nine months ended September 30, 2012, the effective tax rate decreased due to other income tax items, the most significant of which related to the tax impact of ILG's redemption of the Interval Senior Notes offset by the effect of changes in tax laws in the U.K., that were enacted during the third quarter of 2012.

22

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 10—INCOME TAXES (Continued)

        As of September 30, 2013 and December 31, 2012, ILG had unrecognized tax benefits of $1.7 million and $0.7 million, respectively, of which $1.2 million and $0.7 million, if recognized, would favorably affect the effective tax rate. There were no material increases or decreases in unrecognized tax benefits for the three months ended September 30, 2013. During the nine months ended September 30, 2013, the unrecognized tax benefits increased by a net amount of approximately $1.0 million, primarily attributable to an increase recorded during the first quarter of 2013 of approximately $1.1 million related to state income tax items offset by approximately $0.2 million recorded during the first quarter of 2013 related to the decrease in unrecognized tax benefits as a result of the expiration of the statute of limitations related to foreign taxes. The increase of $1.1 million for state income tax items did not have an overall impact on the effective tax rate as it is entirely offset by a related state refund claim filed during the first quarter of 2013.

        ILG recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. There were no material accruals for interest for the three and nine months ended September 30, 2013. During the nine months ended September 30, 2013, interest and penalties decreased by approximately $0.2 million during the first quarter of 2013 as a result of the expiration of the statute of limitations related to foreign taxes. As of September 30, 2013, ILG had accrued $0.4 million for interest and penalties.

        ILG believes that it is reasonably possible that its unrecognized tax benefits could decrease by approximately $1.3 million within twelve months of the current reporting date due primarily to binding technical advice expected to be issued by state taxing authorities on state income tax items and the expiration of the statute of limitations related to foreign taxes. An estimate of other changes in unrecognized tax benefits cannot be made, but is not expected to be significant.

        ILG has routinely been under audit by federal, state, local and foreign taxing authorities. These audits include questioning the timing and the amount of deductions and the allocation of income among various tax jurisdictions. Income taxes payable include amounts considered sufficient to pay assessments that may result from examination of prior year returns; however, the amount paid upon resolution of issues raised may differ from the amount provided. Differences between the reserves for tax contingencies and the amounts owed by ILG are recorded in the period they become known. Under the Tax Sharing Agreement, IAC indemnifies ILG for all consolidated tax liabilities and related interest and penalties for the pre-spin period.

        The IRS has completed its review of IAC's consolidated tax returns for the years ended December 31, 2001 through 2009, which includes our operations from September 24, 2002, our date of acquisition by IAC, until the spin-off in August 2008. On August 28, 2013, the Joint Committee of Taxation completed its review and approved the audit settlement. Various IAC consolidated tax returns that include our operations, filed with state and local jurisdictions, are currently under examination, the most significant of which are California, New York and New York City for various tax years beginning with 2006. No other open tax years are currently under examination by the IRS or any state and local jurisdictions.

23

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 10—INCOME TAXES (Continued)

        During 2012, the U.K. Finance Act of 2012 was enacted, which further reduced the U.K. corporate income tax rate to 24%, effective April 1, 2012 and 23%, effective April 1, 2013. The impact of the U.K. rate reduction to 24% and 23%, which reduced our U.K. net deferred tax asset and increased income tax expense, was reflected in the reporting period when the law was enacted. During the third quarter of 2013, the U.K. Finance Act of 2013 was enacted which further reduced the U.K. corporate income tax rate to 21%, effective April 1, 2014 and 20%, effective April 1, 2015. The impact of the U.K. rate reduction to 21% and 20% has been reflected in the current reporting period. It reduced our U.K. net deferred tax asset and increased income tax expense by approximately $0.6 million. The change in the corporate tax rate initially negatively impacts income tax expense as the future benefit expected to be realized from our U.K. net deferred tax assets decreases; however, going forward, the lower corporate tax rate will decrease income tax expense and favorably impact our effective tax rate.

        Subsequent to September 30, 2013, we received the expected favorable binding technical advice issued by a state taxing authority on state income tax items. This advice will allow us to decrease our unrecognized tax benefits by approximately $1.1 million in the fourth quarter of 2013, and additionally will lower state income taxes and favorably impact our effective tax rate in the fourth quarter of 2013 and going forward.

NOTE 11—SEGMENT INFORMATION

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. ILG consists of two operating segments which are also reportable segments. Membership and Exchange offers leisure and travel-related products and services to owners of vacation interests and others mostly through various membership programs, as well as related services to resort developer clients. Management and Rental provides hotel, condominium resort, timeshare resort and homeowners association management, and vacation rental services to both vacation property owners and vacationers.

24

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 11—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,
	2013		2012		2013		2012
Membership and Exchange
Revenue	$	86,615	$	86,092	$	284,227	$	276,725
Cost of sales		20,442		20,538		68,679		68,384
Gross profit		66,173		65,554		215,548		208,341
Selling and marketing expense		11,919		12,345		37,973		38,472
General and administrative expense		21,519		21,819		64,211		65,960
Amortization expense of intangibles		337		4,968		1,011		15,808
Depreciation expense		3,186		3,011		9,872		9,025
Segment operating income	$	29,212	$	23,411	$	102,481	$	79,076

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Management and Rental
Management fee revenue	$	16,209	$	15,117	$	47,825	$	41,165
Pass-through revenue		16,332		15,986		46,968		44,712
Total revenue		32,541		31,103		94,793		85,877
Cost of sales		21,549		21,203		63,109		59,409
Gross profit		10,992		9,900		31,684		26,468
Selling and marketing expense		1,032		937		2,985		2,851
General and administrative expense		5,868		4,807		17,706		13,072
Amortization expense of intangibles		1,613		1,701		4,847		5,193
Depreciation expense		313		300		987		814
Segment operating income	$	2,166	$	2,155	$	5,159	$	4,538

25

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 11—SEGMENT INFORMATION (Continued)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Consolidated
Revenue	$	119,156	$	117,195	$	379,020	$	362,602
Cost of sales		41,991		41,741		131,788		127,793
Gross profit		77,165		75,454		247,232		234,809
Direct segment operating expenses		45,787		49,888		139,592		151,195
Operating income	$	31,378	$	25,566	$	107,640	$	83,614

        Selected financial information by reportable segment is presented below (in thousands):

	September 30, 2013		December 31, 2012
Total Assets:
Membership and Exchange	$	766,890	$	789,451
Management and Rental		114,725		117,469
Total	$	881,615	$	906,920

Geographic Information

        We conduct operations through offices in the U.S. and 16 other countries. For the nine months ended September 30, 2013, revenue is sourced from over 100 countries worldwide. Other than the United States, 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, 2013 and 2012.

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

26

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 11—SEGMENT INFORMATION (Continued)

revenue sourced from the United States versus all other countries for the three and nine months ended September 30, 2012 have been reclassified to conform to current period presentation.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Revenue:
United States	$	98,252	$	96,710	$	310,722	$	294,408
All other countries(a)		20,904		20,485		68,298		68,194
Total	$	119,156	$	117,195	$	379,020	$	362,602

(a)

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

	September 30, 2013		December 31, 2012
Long-lived assets (excluding goodwill and other intangible assets):
United States	$	51,002	$	51,059
All other countries		2,128		2,289
Total	$	53,130	$	53,348

NOTE 12—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 10 for a discussion of income tax contingencies.

        Other items, such as certain purchase commitments and guarantees are not recognized as liabilities in our 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, 2013, guarantees, surety bonds and letters of credit totaled $23.1 million, with the highest annual amount of $12.7 million occurring in year one. The total includes maximum exposure under guarantees of $19.8 million, which primarily relates to the Management and Rental segment's hotel and resort management agreements of Aston, including those with guaranteed dollar amounts, and accommodation leases supporting the

27

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 12—COMMITMENTS AND CONTINGENCIES (Continued)

management activities of Aston, entered into on behalf of the property owners for which either party may terminate such leases upon 60 days prior written notice to the other party. In addition, certain of the Management and Rental segment's hotel and resort management agreements of Aston provide that owners receive specified percentages of the 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, and the Management and Rental segment either retains the balance (if any) as its management fee or makes up the deficit. Although such deficits are reasonably possible in a few of these agreements, as of September 30, 2013, future amounts are not expected to be significant, individually or in the aggregate.

        The purchase obligations primarily relate to future guaranteed purchases of rental inventory, operational support services and membership fulfillment benefits. Aston also enters into agreements, as principal, for services purchased on behalf of property owners for which it is subsequently reimbursed. As such, Aston is the primary obligor and may be liable for unreimbursed costs. As of September 30, 2013, 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 the Membership and Exchange segment accounts for VAT on its revenues as well as to which EU country VAT is owed. As of September 30, 2013 and December 31, 2012, ILG had an accrual of $2.9 million and $4.5 million, respectively, representing the net exposure of any VAT reclaim refund receivable and accrued VAT liabilities related to this matter. The net change of $1.6 million in the accrual from December 31, 2012 primarily relates to a decrease in the change in estimate primarily to update the periods for which the accrued VAT liabilities are due and to refine the VAT accrual calculation for certain other countries, including $0.5 million in payments, and the effect of foreign currency remeasurements. The change in estimate resulted in favorable adjustments to our consolidated statements of income for the three and nine months ended September 30, 2013. 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 may range from $2.9 million up to approximately $4.2 million based on quarter-end exchange rates. ILG believes that the $2.9 million accrual at September 30, 2013 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.

28

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

SEPTEMBER 30, 2013

(Unaudited)

NOTE 13—SUBSEQUENT EVENT

        In August 2013, Interval Leisure Group and its subsidiary, VRI Europe Limited, entered into a definitive agreement with CLC World Resorts and Hotels (CLC). On November 4, 2013, VRI Europe Limited purchased the European shared ownership resort management business of CLC, for approximately £56 million (or approximately $90 million) in cash (subject to adjustment for working capital, actual 2013 results and other specified items) and issuance to CLC of shares totaling 24.5% of VRI Europe Limited. In connection with this arrangement, ILG has agreed to issue a convertible secured loan for approximately $15 million to CLC which matures in five years with interest payable monthly.

29

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. 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; impairment of assets; the restrictive covenants in our revolving credit facility; 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; 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 2012 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, 2013. This section should be read in conjunction with the consolidated financial statements and accompanying notes included in this report as well as our 2012 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

30

MANAGEMENT OVERVIEW

General Description of our Business

        ILG is a leading global provider of membership and leisure services to the vacation industry. We operate in two operating segments: Membership and Exchange and Management and Rental. Membership and Exchange offers leisure and travel- related products and services to owners of vacation interests and others primarily through various membership programs, as well as related services to resort developer clients. Management and Rental provides hotel, condominium resort, timeshare resort and homeowners association management, and rental services to both vacation property owners and vacationers.

Membership and Exchange Services

        Interval, the principal business comprising our Membership and Exchange segment, has been a leader in the membership and exchange services industry since its founding in 1976. As of September 30, 2013, 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 approximately 2,800 resorts located in over 75 countries, including both leading independent resort developers and branded hospitality companies; 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 (generally for a period of one week) for the right to occupy accommodations at a different resort participating in an 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.

        The Membership and Exchange segment earns most of its revenue from (i) fees paid for membership in the Interval Network and (ii) Interval Network transactional and service fees paid primarily for exchanges, Getaways, reservation servicing, and related transactions collectively referred to as "transaction revenue."

Management and Rental Services

        We also provide management and rental services to hotels as well as condominium and timeshare resorts and their homeowners associations through Aston, Vacation Resorts International, or VRI, and Trading Places International, or TPI. Such vacation properties and hotels are not owned by us. Aston is based in Hawaii and concentrates largely on hotel and condominium resort management primarily in Hawaii, as well as vacation property rental and related services (including common area and owner association management services for condominium projects). TPI provides property management, vacation rental and homeowners association management services to timeshare resorts in the United States, Canada and Mexico. On February 28, 2012, we acquired VRI, a non-developer provider of resort and homeowners association management services to the shared ownership industry.

31

        As of September 30, 2013, the businesses that comprise our Management and Rental segment provided management and rental services at over 200 vacation properties, resorts and club locations in North America as well as more limited management services to certain additional properties.

        Revenue from the Management and Rental segment is derived principally from fees for hotel, condominium resort, timeshare resort and homeowners association management and rental services. Management fees consist of a base management fee and, in some instances for hotels or condominium resorts, 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. A majority of Aston's hotel and condominium resort management agreements provide that owners receive either specified percentages of the revenue generated under our management or 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 amounts, and the Management and Rental segment either retains the balance (if any) as its management fee or makes up the deficit.

International Revenue

        International revenue increased in the three and nine months ended September 30, 2013 by 2.0% and 0.2%, respectively, compared to the same periods in 2012. As a percentage of our total revenue, international revenue remained relatively consistent at 17.5% in the three months ended September 30, 2013 and decreased in the nine months ended September 30, 2013 to 18.0%, from 18.8% in the same period in 2012. The decrease in international revenue as a percentage of total revenue is largely attributable to the February 2012 acquisition of VRI which operates entirely in the United States.

Other Factors Affecting Results

Membership and Exchange

        The consolidation of resort developers driven by bankruptcies and the lack of receivables financing has resulted in a decrease in the flow of new members from point of sale to our exchange networks. While access to receivables financing has recovered, financing standards for consumers remain higher than those required several years ago. Additionally, a high proportion of sales by developers are to their existing owners, which does not result in new members to the Interval Network.

        Our 2013 results to-date continue to be negatively affected by a shift in the percentage mix of our membership base from traditional, 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, 2013 included 60.5% traditional and 39.5% corporate members, compared to 62.3% and 37.7%, respectively, as of September 30, 2012. Consequently, where possible, we structure our corporate membership arrangements to include reservation servicing and/or other revenue streams to mitigate the anticipated lower transaction propensity.

Management and Rental

        Our Management and Rental segment results are susceptible to variations in economic conditions, particularly in its largest market, Hawaii. According to the Hawaii Tourism Authority, visitor arrivals by air in Hawaii increased 2.2% and 4.3% for the three and nine months ended September 30, 2013, respectively, compared to the same periods in the prior year. The increase in visitors correlates with an overall increase of 11.2% and 11.8% in revenue per available room ("RevPAR") in Hawaii for the three and nine months ended September 30, 2013, respectively, compared to the same periods in 2012. The increases in RevPAR in Hawaii were driven by higher average daily rates.

32

        As of the latest forecast (August 2013), the Hawaii Department of Business, Economic Development and Tourism forecasts increases of 4.3% in visitors to Hawaii and 5.3% in visitor expenditures in 2013 over 2012.

Business Acquisitions

        On February 28, 2012, we acquired VRI, a non-developer provider of resort and homeowners association management services to the shared ownership industry. VRI was consolidated into our financial statements as of the acquisition date and the financial effect of this acquisition was not material to our consolidated financial statements; however, the year-over-year comparability for the nine month period ending September 30, 2013 was affected as further discussed in our Results of Operations section.

        In August 2013, Interval Leisure Group and its subsidiary, VRI Europe Limited, entered into a definitive agreement with CLC World Resorts and Hotels. On November 4, 2013, VRI Europe Limited purchased the European shared ownership resort management business of CLC, for approximately £56 million (or approximately $90 million) in cash (subject to adjustment for working capital, actual 2013 results and other specified items) and issuance to CLC of shares totaling 24.5% of VRI Europe Limited. In connection with this arrangement, ILG has agreed to issue a convertible secured loan for approximately $15 million to CLC which matures in five years with interest payable monthly.

Outlook

        The vacation ownership industry remains in a period of transition that resulted in the bankruptcy, restructuring and consolidation of developers as well as continued modifications to their business models. We expect additional consolidation and reorganizations within the industry. Additionally, we anticipate continued margin compression and increased competition in our membership and exchange business.

        For the Management and Rental segment, we expect Aston's RevPAR to continue to show year-over-year improvement as its largest market, Hawaii, continues its tourism recovery and benefits from increases in airlift into the island chain; however, increases in the cost of a Hawaiian vacation may negatively impact visitor arrivals and temper growth. Additionally, our completion of the VRI Europe transaction will affect the year-over-year comparability of our results of operations for the year ended December 31, 2014 and, to a lesser extent, the fourth quarter of 2013. The VRI Europe transaction also will affect international revenue as a percentage of total revenue

33

RESULTS OF OPERATIONS

Revenue

For the three months ended September 30, 2013 compared to the three months ended September 30, 2012

	Three Months Ended September 30,
	2013		% Change			2012
	(Dollars in thousands)
Membership and Exchange
Transaction revenue	$	46,039		(1.2	)%	$	46,588
Membership fee revenue		32,289		(0.7	)%		32,518
Ancillary member revenue		1,751		(3.2	)%		1,808
Total member revenue		80,079		(1.0	)%		80,914
Other revenue		6,536		26.2	%		5,178
Total Membership and Exchange revenue		86,615		0.6	%		86,092
Management and Rental
Management fee and rental revenue		16,209		7.2	%		15,117
Pass-through revenue		16,332		2.2	%		15,986
Total Management and Rental revenue		32,541		4.6	%		31,103
Total revenue	$	119,156		1.7	%	$	117,195

        Revenue for the three months ended September 30, 2013 increased $2.0 million, or 1.7%, from the comparable period in 2012. Membership and Exchange segment revenue increased $0.5 million, or 0.6%, and Management and Rental segment revenue increased $1.4 million, or 4.6%, in the quarter compared to 2012.

Membership and Exchange

        Membership and Exchange revenue increased $0.5 million, or 0.6%, in the third quarter of 2013 compared to 2012. This increase is primarily driven by an increase in other revenue of $1.4 million, partly offset by lower transaction and membership fee revenue of $0.5 million and $0.2 million, respectively. Other revenue consists primarily of revenue generated from non-Interval Network activities. The increase in other revenue for the current period is primarily attributable to transaction activity and other membership programs outside of the Interval Network, coupled with an increase in sales of marketing materials primarily for point-of-sale developer use.

        The drop in transaction revenue is a result of lower revenue from exchanges and Getaways of $1.0 million, partly offset by an increase in other transaction related fees and reservation servicing revenue of $0.3 million and $0.2 million, respectively. Lower transaction revenue from exchanges and Getaways was due to a 3.2% decrease in related transaction volume, partly offset by a 2.1% increase in average fee per transaction. The contraction in transaction volume is related to the continued shift in percentage mix of the membership base from traditional to corporate, which reduced transaction propensity, as well as, less inventory available for use in Getaways.

        Total active members in the Interval Network at September 30, 2013 decreased 2.2% to approximately 1.82 million members as compared to approximately 1.86 million members at September 30, 2012. Overall Interval Network average revenue per member was $44.06 for the third quarter of 2013, an increase of 1.2% over prior year average revenue per member of $43.54.

34

Management and Rental

        The increase of $1.1 million, or 7.2%, in management fee and rental revenue was primarily driven by higher fee income earned from managed hotel and condominium resort properties at Aston of $0.8 million, or 11.4%, in the third quarter of 2013. This increase was driven by a year-over-year increase of 8.2% in RevPAR to $145.53 attributable to a 9.9% higher average daily rate, partly offset by a 1.5% drop in occupancy rates during the quarter compared to the prior year.

        Pass-through revenue 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 association without mark-up. Pass-through revenue increased $0.3 million, or 2.2%, during the quarter compared to prior year is due to an increase in average operational headcount resulting primarily from the addition of new Aston properties under management.

For the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012

	Nine Months Ended September 30,
	2013		% Change			2012
	(Dollars in thousands)
Membership and Exchange
Transaction revenue	$	157,361		0.3	%	$	156,822
Membership fee revenue		102,471		4.9	%		97,652
Ancillary member revenue		5,487		(1.0	)%		5,542
Total member revenue		265,319		2.0	%		260,016
Other revenue		18,908		13.2	%		16,709
Total Membership and Exchange revenue		284,227		2.7	%		276,725
Management and Rental
Management fee and rental revenue		47,825		16.2	%		41,165
Pass-through revenue		46,968		5.0	%		44,712
Total Management and Rental revenue		94,793		10.4	%		85,877
Total revenue	$	379,020		4.5	%	$	362,602

        Revenue for the first nine months ended September 30, 2013 increased $16.4 million, or 4.5%, from the comparable period in 2012. Membership and Exchange segment revenue increased $7.5 million, or 2.7%, in the period compared to the prior year and Management and Rental segment revenue increased $8.9 million, or 10.4%, from 2012.

Membership and Exchange

        Membership and Exchange revenue increased $7.5 million, or 2.7%, in first nine months of 2013 compared to 2012. This increase is primarily driven by increases in membership fee revenue of $4.8 million and other revenue of $2.2 million, coupled with a rise in transaction revenue of $0.5 million. The increase of $4.8 million in membership fee revenue in 2013 compared to 2012 is mainly a result of a correction of an immaterial prior period understatement of membership revenue amounting to $4.1 million during the second quarter of 2013, coupled with greater adoption of Platinum and Club Interval products.

        The rise in transaction revenue is mainly related to higher other transaction related fees and reservation servicing revenue of $0.6 million and $0.3 million, respectively, partly offset by a drop in revenue from exchanges and Getaways of $0.4 million. Lower transaction revenue from exchanges and

35

Getaways was caused by a decrease in transaction volume of 1.4%, partly offset by a rise of 1.8% in average fee per transaction. Lower transaction volume is related to the continued shift in percentage mix of the membership base from traditional to corporate, which reduced transaction propensity.

        The increase in other revenue for the current period is primarily attributable to transaction activity and other membership programs outside of the Interval Network, coupled with higher sales of marketing materials primarily for point-of-sale developer use. Overall Interval Network average revenue per member was $145.48 in 2013, which was higher by 3.2% over the prior year period.

Management and Rental

        The increase of $6.7 million, or 16.2%, in management fee and rental revenue includes $4.6 million of incremental VRI management fee revenue subsequent to our February 2012 acquisition. Fee income earned from managed hotel and condominium resort properties at Aston increased $1.9 million, or 9.3%, in the first nine months of 2013 driven by a year-over-year increase of 11.3% in RevPAR to $146.74 attributable to an 11.9% higher average daily rate during the current nine month period compared to prior year.

        The increase in pass-through revenue of $2.3 million, or 5.0%, in the first nine months of 2013 is related to our acquisition of VRI and an increase in average operational headcount resulting primarily from the addition of new Aston properties under management.

Cost of Sales

For the three months ended September 30, 2013 compared to the three months ended September 30, 2012

	Three Months Ended September 30,
	2013			% Change			2012
	(Dollars in thousands)
Membership and Exchange	$	20,442			(0.5	)%	$	20,538
Management and Rental
Management fee and rental expenses		5,217			NM			5,217
Pass-through expenses		16,332			2.2	%		15,986
Total Management and Rental cost of sales		21,549			1.6	%		21,203
Total cost of sales	$	41,991			0.6	%	$	41,741
As a percentage of total revenue		35.2	%		(1.1	)%		35.6	%
As a percentage of total revenue excluding pass-through revenue		40.8	%		(1.0	)%		41.2	%
Gross margin		64.8	%		0.6	%		64.4	%
Gross margin without pass-through revenue/expenses		75.0	%		0.7	%		74.6	%

        Cost of sales consists primarily of compensation and other employee-related costs (including stock-based compensation) for personnel engaged in servicing members of the Membership and Exchange segment and providing services to property owners and/or guests of the Management and Rental segment's managed vacation properties, as well as cost of rental inventory used primarily for Getaways included within the Membership and Exchange segment.

        Cost of sales in the third quarter of 2013 increased $0.3 million from 2012, consisting of an increase of $0.3 million from our Management and Rental segment, partly offset by a decrease of $0.1 million from our Membership and Exchange segment. Overall gross margin of 64.8% remained relatively consistent year-over-year.

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        Gross margin for the Membership and Exchange segment in the third quarter of 2013 improved by 25 basis points to 76.4% when compared to the prior year. Cost of sales for this segment in the current quarter was relatively in line with the prior year, decreasing $0.1 million, or 0.5%.

        Cost of sales for our Management and Rental segment was relatively consistent with the prior period, increasing by $0.3 million, or 1.6%, as a result of higher pass-through expenses. Gross margin for this segment increased by 195 basis points to 33.8% in the third quarter of 2013 compared to 2012. Our Management and Rental segment has lower gross margins than our Membership and Exchange segment largely due to the effect of pass-through revenue. Excluding the effect of pass-through revenue, gross margin for this segment increased by 232 basis points to 67.8% during the quarter compared to the prior year.

For the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012

	Nine Months Ended September 30,
	2013			% Change			2012
	(Dollars in thousands)
Membership and Exchange	$	68,679			0.4	%	$	68,384
Management and Rental
Management fee and rental expenses		16,141			9.8	%		14,697
Pass-through expenses		46,968			5.0	%		44,712
Total Management and Rental cost of sales		63,109			6.2	%		59,409
Total cost of sales	$	131,788			3.1	%	$	127,793
As a percentage of total revenue		34.8	%		(1.3	)%		35.2	%
As a percentage of total revenue excluding pass-through revenue		39.7	%		(1.3	)%		40.2	%
Gross margin		65.2	%		0.7	%		64.8	%
Gross margin without pass-through revenue/expenses		74.5	%		0.8	%		73.9	%

        Cost of sales increased $4.0 million, or 3.1%, in the first nine months of 2013 compared to 2012, consisting of an increase of $0.3 million from our Membership and Exchange segment and $3.7 million from our Management and Rental segment. Overall gross margin of 65.2% remained relatively consistent year-over-year.

        Gross margin for the Membership and Exchange segment in the first nine months of 2013 was relatively consistent when compared to the prior year. Cost of sales for this segment increased $0.3 million, or 0.4%, primarily due to an increase of $1.0 million in purchased inventory expense, partly offset by lower costs pertaining to our membership fulfillment activities. The increase in purchased inventory expense was due to a higher proportion of purchased inventory utilized during 2013, coupled with an increase in the average cost per unit of this purchased inventory.

        The increase of $3.7 million in cost of sales from the Management and Rental segment was primarily attributable to an increase of $2.3 million in segment pass-through revenue and of $1.2 million in other incremental expenses related to the additional two months of VRI's results included in the 2013 period, as well as higher compensation and other employee related costs. Gross margin for this segment increased by 260 basis points to 33.4% in the first nine months of 2013 compared to 2012. Excluding the effect of pass-through revenue, gross margin for this segment increased by 195 basis points to 66.2% during 2013 compared to the prior year.

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Selling and marketing expense

For the three months ended September 30, 2013 compared to the three months ended September 30, 2012

	Three Months Ended September 30,
	2013			% Change			2012
	(Dollars in thousands)
Selling and marketing expense	$	12,951			(2.5	)%	$	13,282
As a percentage of total revenue		10.9	%		(4.1	)%		11.3	%
As a percentage of total revenue excluding pass-through revenue		12.6	%		(4.0	)%		13.1	%

        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. Advertising and promotional expenditures primarily include printing costs of directories and magazines, promotions, tradeshows, agency fees, marketing fees and related commissions.

        Selling and marketing expense in the third quarter of 2013 was lower by $0.3 million, or 2.5%, when compared to the prior year. The year-over-year decrease in sales and marketing expenses relates largely to a shift in the timing of an industry tradeshow and lower marketing related commissions incurred during the quarter. As a percentage of total revenue and total revenue excluding pass-through revenue, sales and marketing expense decreased 46 and 53 basis points, respectively, during the third quarter of 2013 compared to the prior year.

For the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012

	Nine Months Ended September 30,
	2013			% Change			2012
	(Dollars in thousands)
Selling and marketing expense	$	40,958			(0.9	)%	$	41,323
As a percentage of total revenue		10.8	%		(5.2	)%		11.4	%
As a percentage of total revenue excluding pass-through revenue		12.3	%		(5.1	)%		13.0	%

        Selling and marketing expense for the first nine months of 2013 remained relatively in-line with 2012. As a percentage of total revenue and total revenue excluding pass-through revenue, sales and marketing expense decreased 59 and 66 basis points, respectively, during 2013 compared to the prior year.

General and administrative expense

For the three months ended September 30, 2013 compared to the three months ended September 30, 2012

	Three Months Ended September 30,
	2013			% Change			2012
	(Dollars in thousands)
General and administrative expense	$	27,387			2.9	%	$	26,626
As a percentage of total revenue		23.0	%		1.2	%		22.7	%
As a percentage of total revenue excluding pass-through revenue		26.6	%		1.2	%		26.3	%

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        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 2013 increased $0.8 million from 2012. The year-over-year increase was primarily due to higher professional fees of $1.4 million primarily related to accounting and legal services provided largely in connection with the purchase of 75.5% of the European shared ownership resort management business of CLC. In addition, general and administrative expense reflects an unfavorable year-over-year net change of $0.8 million in the estimated fair value of contingent consideration related to an acquisition. These increases were partly offset by lower health and welfare insurance expense principally resulting from a drop in self-insured claim activity during 2013 compared to prior year.

For the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012

	Nine Months Ended September 30,
	2013			% Change			2012
	(Dollars in thousands)
General and administrative expense	$	81,917			3.7	%	$	79,032
As a percentage of total revenue		21.6	%		(0.8	)%		21.8	%
As a percentage of total revenue excluding pass-through revenue		24.7	%		(0.8	)%		24.9	%

        General and administrative expense in the first nine months of 2013 increased $2.9 million from 2012, primarily due to incremental expenses of $1.8 million in the 2013 period from the addition of VRI, higher professional fees of $2.9 million, and an unfavorable year-over-year net change of $1.2 million related to the estimated fair value of contingent consideration for an acquisition. These cost increases were partly offset by lower overall compensation and other employee related costs of $3.1 million, excluding VRI incremental expenses.

        The $2.9 million increase in professional fees primarily related to accounting and legal services provided largely in connection with the purchase of 75.5% of the European shared ownership resort management business of CLC, as well as to certain IT initiatives.

        The $3.1 million decrease in overall compensation and other employee-related costs, excluding incremental VRI expense, was primarily due to a decrease of $1.2 million in non-cash compensation expense mainly relating to certain awards vesting fully during the third quarter of 2012 through the first quarter of 2013, which was partially offset by the incremental expense related to new awards granted in the first quarter of 2013. Additionally, lower overall compensation reflects higher capitalized internal labor costs of $1.1 million pertaining to internally developed software, and $2.2 million of lower health and welfare insurance expense primarily resulting from a drop in self-insured claim activity during 2013 compared to prior year. These decreases were partly offset by higher salary and incentive related compensation.

        As a percentage of total revenue and total revenue excluding pass-through revenue, general and administrative expense during the first nine months of 2013 was in-line with the prior year.

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Amortization Expense of Intangibles

For the three and nine months ended September 30, 2013 compared to the three and nine months ended September 30, 2012

	Three Months Ended September 30,									Nine Months Ended September 30,
	2013			% Change			2012			2013			% Change			2012
	(Dollars in thousands)									(Dollars in thousands)
Amortization expense of intangibles	$	1,950			(70.8	)%	$	6,669		$	5,858			(72.1	)%	$	21,001
As a percentage of total revenue		1.6	%		(71.2	)%		5.7	%		1.5	%		(73.3	)%		5.8	%
As a percentage of total revenue excluding pass-through revenue		1.9	%		(71.2	)%		6.6	%		1.8	%		(73.3	)%		6.6	%

        Amortization expense of intangibles for the three and nine months ended September 30, 2013 decreased $4.7 million and $15.1 million, respectively, from the comparable period in 2012 primarily due to certain intangible assets related to the acquisition by IAC of our Interval International business in 2002 being fully amortized by the end of the third quarter of 2012, partly offset by the incremental amortization expense in the nine month period of 2013 pertaining to intangible assets resulting from the acquisition of VRI in February 2012.

Depreciation Expense

For the three and nine months ended September 30, 2013 compared to the three and nine months ended September 30, 2012

	Three Months Ended September 30,									Nine Months Ended September 30,
	2013			% Change			2012			2013			% Change			2012
	(Dollars in thousands)									(Dollars in thousands)
Depreciation expense	$	3,499			5.7	%	$	3,311		$	10,859			10.4	%	$	9,839
As a percentage of total revenue		2.9	%		3.9	%		2.8	%		2.9	%		5.6	%		2.7	%
As a percentage of total revenue excluding pass-through revenue		3.4	%		4.0	%		3.3	%		3.3	%		5.7	%		3.1	%

        Depreciation expense for the three and nine months ended September 30, 2013 increased $0.2 million and $1.0 million, respectively, over the comparable 2012 period largely due to additional depreciable assets being placed in service subsequent to September 30, 2012. These depreciable assets pertain primarily to software and related IT hardware.

Operating Income

For the three months ended September 30, 2013 compared to the three months ended September 30, 2012

	Three Months Ended September 30,
	2013			% Change			2012
	(Dollars in thousands)
Membership and Exchange	$	29,212			24.8	%	$	23,411
Management and Rental		2,166			0.5	%		2,155
Total operating income	$	31,378			22.7	%	$	25,566
As a percentage of total revenue		26.3	%		20.7	%		21.8	%
As a percentage of total revenue excluding pass-through revenue		30.5	%		20.8	%		25.3	%

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        Operating income in the third quarter of 2013 increased $5.8 million from the comparable period in 2012 as a result of the $5.8 million incremental contribution from our Membership and Exchange segment. Operating income from our Management and Rental segment was flat with the third quarter of 2012.

        Operating income for our Membership and Exchange segment increased $5.8 million to $29.2 million in the third quarter compared to prior year. This increase was primarily driven by $4.6 million of lower amortization expense of intangibles and by an increase in revenue that resulted in higher gross profit of $0.6 million, largely due to an increase in transaction activity and other membership programs outside of the Interval Network, as well as a decrease in other operating expenses.

        Operating income for our Management and Rental segment came in at $2.2 million for the third quarter of 2013, which is in-line with the prior year. Operating income in the quarter was negatively impacted by $1.2 million of higher professional fees during the period largely related to the purchase of 75.5% of the European shared ownership resort management business of CLC. This increase in general and administrative expense was offset by stronger gross profit contribution on a quarter-over-quarter basis.

For the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012

	Nine Months Ended September 30,
	2013			% Change			2012
	(Dollars in thousands)
Membership and Exchange	$	102,481			29.6	%	$	79,076
Management and Rental		5,159			13.7	%		4,538
Total operating income	$	107,640			28.7	%	$	83,614
As a percentage of total revenue		28.4	%		23.2	%		23.1	%
As a percentage of total revenue excluding pass-through revenue		32.4	%		23.2	%		26.3	%

        Operating income in the first nine months of 2013 increased $24.0 million from the comparable period in 2012, consisting of increases of $23.4 million from our Membership and Exchange segment and $0.6 million from our Management and Rental segment.

        Operating income for our Membership and Exchange segment increased $23.4 million to $102.5 million in the nine month period compared to prior year. The rise in operating income was driven primarily by $14.8 million of lower amortization expense of intangibles, a drop of $1.7 million in general and administrative expense mainly resulting from lower overall compensation and employee related costs, coupled with stronger year-over-year gross profit contribution.

        The increase in operating income of $0.6 million in our Management and Rental segment is primarily due to the incremental contribution from VRI and improved operating results at Aston during the current nine month period. These increases were partly offset by higher professional fees largely related to the purchase of 75.5% of the European shared ownership resort management business of CLC and an unfavorable year-over-year net change of $0.6 million related to the estimated fair value of contingent consideration for an acquisition.

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 recasted to conform to the current period definition of Adjusted EBITDA.

41

For the three months ended September 30, 2013 compared to the three months ended September 30, 2012

	Three Months Ended September 30,
	2013			% Change			2012
	(Dollars in thousands)
Membership and Exchange	$	35,276			4.9	%	$	33,644
Management and Rental		5,597			37.4	%		4,074
Total adjusted EBITDA	$	40,873			8.4	%	$	37,718
As a percentage of total revenue		34.3	%		6.6	%		32.2	%
As a percentage of total revenue excluding pass-through revenue		39.8	%		6.7	%		37.3	%

        Adjusted EBITDA in the third quarter of 2013 increased by $3.2 million, or 8.4%, from 2012, consisting of an increase of $1.6 million from our Membership and Exchange and $1.5 million from our Management and Rental segments.

        Adjusted EBITDA of $35.3 million from our Membership and Exchange segment grew by $1.6 million, or 4.9%, compared to the prior year. The improvement in adjusted EBITDA is primarily driven by an increase in transaction activity and other membership programs outside of the Interval Network, as well as lower general and administrative expenses after adjusting for acquisition related and restructuring costs.

        Adjusted EBITDA from our Management and Rental increased by 37.4% to $5.6 million in the third quarter of 2013 from $4.1 million in 2012. The year-over-year growth in adjusted EBITDA for this segment is driven by stronger gross profit contribution in the quarter, largely as a result of an increase in RevPAR at Aston.

For the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012

	Nine Months Ended September 30,
	2013			% Change			2012
	(Dollars in thousands)
Membership and Exchange	$	117,186			4.7	%	$	111,942
Management and Rental		14,220			29.0	%		11,019
Total adjusted EBITDA	$	131,406			6.9	%	$	122,961
As a percentage of total revenue		34.7	%		2.2	%		33.9	%
As a percentage of total revenue excluding pass-through revenue		39.6	%		2.3	%		38.7	%

        Adjusted EBITDA in the first nine months of 2013 increased by $8.4 million, or 6.9%, from 2012, consisting of increases of $5.2 million from our Membership and Exchange segment and $3.2 million from our Management and Rental segment.

        Adjusted EBITDA of $117.2 million from our Membership and Exchange segment grew by $5.2 million, or 4.7%, compared to the prior year. The improvement in adjusted EBITDA is primarily driven by stronger revenue during the first nine months of 2013, largely due to the positive contributions from our Platinum and Club Interval products and higher transaction revenue from the Interval Network, as well as an increase in transaction activity and other membership programs outside of the Interval Network. Additionally, adjusted EBITDA in the period benefitted from lower sales and marketing costs, partly related to a shift in the timing of an industry tradeshow, as well as a decrease in compensation and employee-related costs within general and administrative expense.

42

        Adjusted EBITDA from our Management and Rental segment rose by $3.2 million in the first nine months of 2013 to $14.2 million from $11.0 million in 2012. The growth in adjusted EBITDA in this segment is primarily driven by the incremental contribution from VRI in the 2013 period together with delivering higher gross profit on a year-over-year comparable basis, in addition to improvement in Aston's RevPAR during the year. These drivers of adjusted EBITDA were partly offset by higher professional fees incurred for services provided in connection with the property management infrastructure at Aston.

Other income (expense), net

For the three months ended September 30, 2013 compared to the three months ended September 30, 2012

	Three Months Ended September 30,
	2013			% Change			2012
	(Dollars in thousands)
Interest income	$	60			(88.8	)%	$	535
Interest expense	$	(1,295	)		(80.0	)%	$	(6,485	)
Other income, net	$	(65	)		(92.9	)%	$	(915	)
Loss on extinguishment of debt	$	—			(100	)%	$	(17,925	)

        Interest income decreased $0.5 million in the third quarter of 2013 compared to 2012 primarily as a result of the repayment of certain loans receivable subsequent to August 2012.

        Interest expense in the third quarter of 2012 primarily relates to interest and amortization of debt costs on our senior notes, which were extinguished on September 4, 2012. Interest expense in the third quarter of 2013 relates to interest and amortization of debt costs on our amended and restated revolving credit facility entered into on June 21, 2012. Lower interest expense in the third quarter of 2013 is primarily due to lower average balance outstanding and interest rate under the revolving credit facility compared to the senior notes.

        Other expense, net primarily relates to net gains and losses on foreign currency exchange related to cash held in certain countries in currencies other than their local currency. Non-operating foreign exchange for the three months ended September 30, 2013 resulted in a net loss of $0.1 million compared to a net loss of $0.9 million in the third quarter of 2012. The unfavorable fluctuations during the current quarter were principally driven by U.S. dollar positions held at September 30, 2013 affected by the weaker dollar compared to the British pound and the Colombian peso. The unfavorable fluctuations during the third quarter of 2012 were principally driven by U.S. dollar positions held at September 30, 2012 affected by the weaker dollar compared to the Mexican peso.

For the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012

	Nine Months Ended September 30,
	2013			% Change			2012
	(Dollars in thousands)
Interest income	$	282			(81.7	)%	$	1,538
Interest expense	$	(4,559	)		(80.9	)%	$	(23,874	)
Other income (expense), net	$	893			(137.1	)%	$	(2,408	)
Loss on extinguishment of debt	$	—			(100	)%	$	(18,527	)

        Interest income decreased $1.3 million in the first nine months of 2013 compared to 2012 primarily as a result of the repayment of certain loans receivable subsequent to August 2012.

        Interest expense in the first nine months of 2012 primarily relates to interest and amortization of debt costs on our term loan and senior notes, which were extinguished on June 21, 2012 and

43

September 4, 2012, respectively. Interest expense in the first nine months of 2013 relates to interest and amortization of debt costs on our amended and restated revolving credit facility entered into on June 21, 2012. Lower interest expense in 2013 is primarily due to lower average balance outstanding and interest rate under the revolving credit facility compared to the term loan and senior notes.

        Other income (expense), net primarily relates to net gains and losses on foreign currency exchange related to cash held in certain countries in currencies other than their local currency. Non-operating foreign exchange for the nine months ended September 30, 2013 resulted in a net gain of $1.2 million compared to a net loss of $2.1 million in 2012. The favorable fluctuations during the 2013 period were principally driven by U.S. dollar positions held at September 30, 2013 affected by the stronger dollar compared to the Colombian and Mexican pesos and the Egyptian pound. The unfavorable fluctuations during 2012 were principally driven by U.S. dollar positions held at September 30, 2012 affected by the weaker dollar compared to the Mexican and Colombian pesos.

Income Tax Provision

For the three months ended September 30, 2013 compared to the three months ended September 30, 2012

        For the three months ended September 30, 2013 and 2012, ILG recorded income tax provisions for continuing operations of $13.0 million and $0.6 million, respectively, which represent effective tax rates of 43.1% and 80.5%, respectively. For the three months ended September 30, 2013, the tax rate is 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. During the three months ended September 30, 2013, the effective tax rate further increased due to income taxes associated with the effect of changes in tax laws in certain states and other income tax items, the most significant of which related to the effect of changes in tax laws in the U.K, as discussed further below, that were enacted during the third quarter of 2013. The higher effective tax rate for the period ended September 30, 2012, was primarily attributable to reduced income before income taxes, driven by the loss on the extinguishment of debt related to the redemption of the senior notes, which magnified the impact of other income tax items, the most significant of which related to the effect of changes in tax laws in the U.K that were enacted during the third quarter of 2012.

For the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012

        For the nine months ended September 30, 2013 and 2012, ILG recorded income tax provisions for continuing operations of $41.6 million and $14.9 million, respectively, which represent effective tax rates of 39.9% and 37.0%, respectively. 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. For the nine months ended September 30, 2013, the effective tax rate is higher than the prior year period primarily due to the shift in the projections of the proportion of income earned and taxed between the various jurisdictions and the effect of changes in tax laws in certain states and in the U.K. that were enacted during the third quarter of 2013. Additionally, the 2012 period benefitted from the one-time permanent difference attributable to ILG's ability to redeem the senior notes.

        As of September 30, 2013 and December 31, 2012, ILG had unrecognized tax benefits of $1.7 million and $0.7 million, respectively, of which $1.2 million and $0.7 million, if recognized, would favorably affect the effective tax rate. There were no material increases or decreases in unrecognized tax benefits for the three months ended September 30, 2013. During the nine months ended September 30, 2013, the unrecognized tax benefits increased by a net amount of approximately $1.0 million, primarily attributable to an increase recorded during the first quarter of 2013 of approximately $1.1 million related to state income tax items offset by approximately $0.2 million recorded during the first quarter of 2013 related to the decrease in unrecognized tax benefits as a result of the expiration of the statute of limitations related to foreign taxes. The increase of

44

$1.1 million for state income tax items did not have an overall impact on the effective tax rate as it is entirely offset by a related state refund claim filed during the first quarter of 2013.

        ILG recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. There were no material accruals for interest for the three and nine months ended September 30, 2013. During the nine months ended September 30, 2013, interest and penalties decreased by approximately $0.2 million during the first quarter of 2013 as a result of the expiration of the statute of limitations related to foreign taxes. As of September 30, 2013, ILG had accrued $0.4 million for interest and penalties.

        ILG believes that it is reasonably possible that its unrecognized tax benefits could decrease by approximately $1.3 million within twelve months of the current reporting date due primarily to binding technical advice expected to be issued by state taxing authorities on state income tax items and the expiration of the statute of limitations related to foreign taxes. An estimate of other changes in unrecognized tax benefits cannot be made, but is not expected to be significant.

        ILG has routinely been under audit by federal, state, local and foreign taxing authorities. These audits include questioning the timing and the amount of deductions and the allocation of income among various tax jurisdictions. Income taxes payable include amounts considered sufficient to pay assessments that may result from examination of prior year returns; however, the amount paid upon resolution of issues raised may differ from the amount provided. Differences between the reserves for tax contingencies and the amounts owed by ILG are recorded in the period they become known. Under a Tax Sharing Agreement, IAC indemnifies ILG for all consolidated tax liabilities and related interest and penalties for the pre-spin period.

        During 2012, the U.K. Finance Act of 2012 was enacted, which further reduced the U.K. corporate income tax rate to 24%, effective April 1, 2012 and 23%, effective April 1, 2013. The impact of the U.K. rate reduction to 24% and 23%, which reduced our U.K. net deferred tax asset and increased income tax expense, was reflected in the reporting period when the law was enacted. During the third quarter of 2013, the U.K. Finance Act of 2013 was enacted which further reduced the U.K. corporate income tax rate to 21%, effective April 1, 2014 and 20%, effective April 1, 2015. The impact of the U.K. rate reduction to 21% and 20% has been reflected in the current reporting period. It reduced our U.K. net deferred tax asset and increased income tax expense by approximately $0.6 million. The change in the corporate tax rate initially negatively impacts income tax expense as the future benefit expected to be realized from our U.K. net deferred tax assets decreases; however, going forward, the lower corporate tax rate will decrease income tax expense and favorably impact our effective tax rate.

        Subsequent to September 30, 2013, we received the expected favorable binding technical advice issued by a state taxing authority on state income tax items. This advice will allow us to decrease our unrecognized tax benefits by approximately $1.1 million in the fourth quarter of 2013, and additionally will lower state income taxes and favorably impact our effective tax rate in the fourth quarter of 2013 and going forward.

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FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

        As of September 30, 2013, we had $103.6 million of cash and cash equivalents, including $94.9 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, $61.8 million is held in foreign jurisdictions, principally the U.K. Earnings of foreign subsidiaries, except Venezuela, are permanently reinvested. Additional tax provisions would be required should such earnings be repatriated to the U.S. Cash generated by operations is used as our primary source of liquidity. 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, 2013 and, as of September 30, 2012, the respective cash balances were immaterial to our overall cash on hand.

        We believe that our cash on hand along with our anticipated operating future cash flows and availability under our $500 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.

Cash Flows Discussion

        Net cash provided by operating activities increased to $89.3 million in the nine months ended September 30, 2013 from $64.1 million in the same period of 2012. The increase of $25.2 million from 2012 was principally due to lower interest paid as well as higher cash receipts and lower net cash expenses in 2013 compared to 2012, partly offset by an increase in income taxes paid primarily related to higher actual pre-tax book income in 2013.

        Net cash used in investing activities of $1.4 million in the nine months ended September 30, 2013 primarily related to capital expenditures of $9.3 million principally pertaining to IT initiatives and to the acquisition of certain property management contracts and other assets by our management and rental segment, partially offset by the early repayment of an existing loan receivable totaling $9.9 million. Net cash used in investing activities of $42.6 million in the nine months ended September 30, 2012 primarily related to the VRI acquisition, net of cash acquired, of $40.0 million, disbursements totaling $9.5 million for additional investments in loans receivable and capital expenditures of $10.4 million principally pertaining to IT initiatives, all partially offset by payments totaling $17.0 million received on an existing loan.

        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, 2013 and 2012, free cash flow was $80.0 million and $53.7 million, respectively. The change is mainly a result of the variance in net cash provided by operating activities as discussed above.

        Net cash used in financing activities of $84.1 million in the nine months ended September 30, 2013 primarily related to principal payments of $70 million on our revolving credit facility, $12.6 million of dividends paid, and withholding taxes on the vesting of restricted stock units. These uses of cash were partially offset by excess tax benefits from stock-based awards and the proceeds from the exercise of stock options. In the nine months ended September 30, 2012, net cash used in financing activities of $89.4 million was primarily due to the redemption of our senior notes, principal payments of $56.0 million on the term loan, of which we paid $51.0 million from cash on-hand in June 2012 to fully extinguish the term loan, cash dividends totaling $17.0 million, payments of debt issuance costs of $3.9 million in connection with entering into our amended and restated credit agreement in June 2012, and withholding taxes on the vesting of restricted stock units. These uses of cash were partially offset

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by the $290.0 million drawn on our revolving credit facility to fund the redemption, and proceeds from excess tax benefits from stock-based awards and the exercise of stock options.

        On June 21, 2012, we entered into an amended and restated credit agreement which, among other things (1) provides for a $500 million revolving credit facility, (2) extends the maturity of the credit facility to June 21, 2017, (3) provides for an interest rate on borrowings, commitment fees and letter of credit fees based on ILG and its subsidiaries' consolidated leverage ratio, and (4) may be increased to up to $700 million, subject to certain conditions. As of September 30, 2013, $190 million of borrowings were outstanding under the revolving credit facility, with $310 million available to be drawn.

        Any principal amounts outstanding under the revolving credit facility are due at maturity. The interest rate on the amended credit agreement is based on (at our election) either LIBOR plus a predetermined margin that ranges from 1.25% to 2.25%, or the Base Rate as defined in the amended credit agreement plus a predetermined margin that ranges from 0.25% to 1.25%, in each case based on our consolidated leverage ratio. As of September 30, 2013, the applicable margin was 1.50% per annum for LIBOR revolving loans and 0.50% per annum for Base Rate loans. The revolving credit facility has a commitment fee on undrawn amounts that ranges from 0.25% to 0.375% per annum based on our consolidated leverage ratio and as of September 30, 2013, the commitment fee was 0.275%.

        The revolving credit facility has 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 revolving credit facility requires us to meet certain financial covenants regarding the maintenance of a maximum consolidated leverage ratio of consolidated debt, less credit given for a portion of foreign cash, over consolidated Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as defined in the amended credit agreement, of 3.50 through December 31, 2013 and 3.25 thereafter. Additionally, we are required to maintain a minimum consolidated interest coverage ratio of consolidated EBITDA over consolidated interest expense, as defined in the Amended Credit Agreement, of 3.0. As of September 30, 2013, ILG was in compliance in all material respects with the requirements of all applicable financial and operating covenants and our consolidated leverage ratio and consolidated interest coverage ratio under the amended credit agreement were 1.00 and 33.30, respectively.

Dividends

        In May and August 2013, our Board of Directors declared quarterly dividend payments of $0.11 per share paid in June and September 2013, respectively, of $6.3 million each.

        In November 2013, our Board of Directors declared a $0.11 per share dividend payable December 18, 2013 to shareholders of record on December 4, 2013.

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, 2013, guarantees, surety bonds and letters of credit totaled $23.1 million. The total includes maximum exposure under guarantees of $19.8 million, which primarily relates to the Management and Rental segment's hotel and resort management agreements of Aston, including those with guaranteed dollar amounts, and accommodation leases supporting the Aston management activities, entered into on behalf of the property owners for which either party may terminate such leases upon 60 days prior written notice to the other. In addition, certain of the Management and Rental segment's hotel and resort management

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agreements of Aston provide that owners receive specified percentages of the revenue generated under Aston 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 the Management and Rental segment either retains the balance (if any) as its management fee or makes up the deficit. Although such deficits are reasonably possible in a few of these agreements, as of September 30, 2013 amounts are not expected to be significant, individually or in the aggregate. Aston also enters into agreements, as principal, for services purchased on behalf of property owners for which it is subsequently reimbursed. As such, Aston is the primary obligor and may be liable for unreimbursed costs. As of September 30, 2013, amounts pending reimbursements are not significant.

        Contractual obligations and commercial commitments at September 30, 2013 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)	$	190,000	$	—	$	—	$	190,000	$	—
Debt interest(a)		15,341		4,109		8,252		2,980		—
Purchase obligations(b)		27,550		7,408		14,757		4,835		550
Operating leases		51,332		12,003		16,838		11,622		10,869
Total contractual obligations	$	284,223	$	23,520	$	39,847	$	209,437	$	11,419

(a)

Debt principal and projected debt interest represent principal and interest to be paid on our revolving credit facility based on the balance outstanding as of September 30, 2013. 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, 2013. Interest on the revolving credit facility is calculated using the prevailing rates as of September 30, 2013.

(b)

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

	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	$	23,051	$	12,688	$	6,793	$	2,609	$	961

(c)

Commercial commitments include minimum revenue guarantees related to Aston's hotel and resort management agreements, Aston's 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.

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        Included in other liabilities, both current and long-term, as presented in our consolidated balance sheet as of September 30, 2013, are certain unconditional recorded contractual obligations. These obligations and the future periods in which such obligations are expected to settle in cash are as follows (in thousands):

Twelve Month Period Ending December 31,
2013	$	3,857
2014		—
2015		—
2016		—
2017		—
Thereafter		—
Total	$	3,857

Off-Balance Sheet Arrangements

        Except for the off-balance sheet items disclosed above in our Contractual Obligations and Commercial Commitments (which excludes "Debt principal"), as of September 30, 2013 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 consolidated financial statements for a description of recent accounting pronouncements.

Seasonality

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

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 2012 Annual Report on Form 10-K. There have been no material changes to our critical accounting policies in the interim period.

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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 excluding, if applicable: (1) 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) the impact of correcting prior period items.

Non-GAAP net income is defined as net income attributable to common stockholders excluding the impact of correcting an immaterial prior period net understatement in the current year-to-date financials and excluding the prior year non-cash loss on extinguishment of our indebtedness, net of tax.

Non-GAAP earnings per share (EPS) is defined as non-GAAP 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.

        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-cash 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; including non-cash compensation for adjusted EBITDA. We endeavor to compensate for the limitations of the non-GAAP 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.

Pro Forma Results

        We will only present EBITDA and/or adjusted EBITDA on a pro forma basis if we view a particular transaction as significant in size or transformational in nature. For the periods presented in this report, there are no transactions that we have included on a pro forma basis.

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

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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.

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RECONCILIATIONS OF NON-GAAP MEASURES

        The following tables reconcile adjusted EBITDA and EBITDA to operating income for our operating segments, and to net income attributable to common stockholders in total for the three and nine months ended September 30, 2013 and 2012 (in thousands). The noncontrolling interest relates to the Management and Rental segment.

	For the Three Months Ended September 30, 2013
	Membership and Exchange			Management and Rental			Consolidated
Adjusted EBITDA	$	35,276		$	5,597		$	40,873
Non-cash compensation expense		(2,354	)		(255	)		(2,609	)
Other non-operating income (expense), net		(70	)		5			(65	)
Acquisition related and restructuring costs		(187	)		(1,250	)		(1,437	)
EBITDA		32,665			4,097			36,762
Amortization expense of intangibles		(337	)		(1,613	)		(1,950	)
Depreciation expense		(3,186	)		(313	)		(3,499	)
Less: Other non-operating income (expense), net		70			(5	)		65
Operating income	$	29,212		$	2,166			31,378
Interest income								60
Interest expense								(1,295	)
Other non-operating expense, net								(65	)
Income tax provision								(12,973	)
Net income								17,105
Net income attributable to noncontrolling interest								(4	)
Net income attributable to common stockholders							$	17,101

	For the Three Months Ended September 30, 2012
	Membership and Exchange			Management and Rental			Consolidated
Adjusted EBITDA	$	33,644		$	4,074		$	37,718
Non-cash compensation expense		(2,311	)		(253	)		(2,564	)
Other non-operating income, net		(915	)		—			(915	)
Acquisition related and restructuring costs		57			335			392
Loss on extinguishment of debt		(17,925	)		—			(17,925	)
EBITDA		12,550			4,156			16,706
Amortization expense of intangibles		(4,968	)		(1,701	)		(6,669	)
Depreciation expense		(3,011	)		(300	)		(3,311	)
Less: Other non-operating income, net		915			—			915
Less: Loss on extinguishment of debt		17,925			—			17,925
Operating income	$	23,411		$	2,155			25,566
Interest income								535
Interest expense								(6,485	)
Other non-operating expense, net								(915	)
Loss on extinguishment of debt								(17,925	)
Income tax provision								(624	)
Net income								152
Net income attributable to noncontrolling interest								(3	)
Net income attributable to common stockholders							$	149

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	For the Nine Months Ended September 30, 2013
	Membership and Exchange			Management and Rental			Consolidated
Adjusted EBITDA	$	117,186		$	14,220		$	131,406
Non-cash compensation expense		(6,962	)		(791	)		(7,753	)
Other non-operating income (expense), net		1,061			(168	)		893
Prior period item		3,496			—			3,496
Acquisition related and restructuring costs		(356	)		(2,436	)		(2, 792	)
EBITDA		114,425			10,825			125,250
Amortization expense of intangibles		(1,011	)		(4,847	)		(5,858	)
Depreciation expense		(9,872	)		(987	)		(10,859	)
Less: Other non-operating income (expense), net		(1,061	)		168			(893	)
Operating income	$	102,481		$	5,159			107,640
Interest income								282
Interest expense								(4,559	)
Other non-operating income, net								893
Income tax provision								(41,571	)
Net income								62,685
Net income attributable to noncontrolling interest								(10	)
Net income attributable to common stockholders							$	62,675

	For the Nine Months Ended September 30, 2012
	Membership and Exchange			Management and Rental			Consolidated
Adjusted EBITDA	$	111,942		$	11,019		$	122,961
Non-cash compensation expense		(7,954	)		(779	)		(8,733	)
Other non-operating expense, net		(2,259	)		(149	)		(2,408	)
Acquisition related and restructuring costs		(79	)		305			226
Loss on extinguishment of debt		(18,527	)		—			(18,527	)
EBITDA		83,123			10,396			93,519
Amortization expense of intangibles		(15,808	)		(5,193	)		(21,001	)
Depreciation expense		(9,025	)		(814	)		(9,839	)
Less: Other non-operating expense, net		2,259			149			2,408
Less: Loss on extinguishment of debt		18,527			—			18,527
Operating income	$	79,076		$	4,538			83,614
Interest income								1,538
Interest expense								(23,874	)
Other non-operating expense, net								(2,408	)
Loss on extinguishment of debt								(18,527	)
Income tax provision								(14,911	)
Net income								25,432
Net income attributable to noncontrolling interest								(6	)
Net income attributable to common stockholders							$	25,426

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        The following table reconciles cash provided by operating activities to free cash flow for the nine months ended September 30, 2013 and 2012 (in thousands).

	For the Nine Months Ended September 30,
	2013			2012
Net cash provided by operating activities	$	89,302		$	64,122
Less: Capital expenditures		(9,338	)		(10,425	)
Free cash flow	$	79,964		$	53,697

        The following table reconciles net income attributable to common stockholders to non-GAAP net income, and to non-GAAP earnings per share for the three and nine months ended September 30, 2013 and 2012 (in thousands).

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013		2012			2013			2012
Net income attributable to common stockholders	$	17,101	$	149		$	62,675		$	25,426
Prior period item		—		—			(3,496	)		—
Income tax provision on prior period item		—		—			1,387			—
Loss on extinguishment of debt		—		17,925			—			18,527
Income tax benefit of loss on extinguishment of debt		—		(7,032	)		—			(7,269	)
Non-GAAP net income	$	17,101	$	11,042		$	60,566		$	36,684
Non-GAAP earnings per share				`
Basic	$	0.30	$	0.19		$	1.06		$	0.65
Diluted	$	0.29	$	0.19		$	1.05		$	0.64

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, 2013 and 2012 resulted in a net gain of $0.1 million and a net loss of $25,000, respectively, attributable to foreign currency remeasurements of operating assets and liabilities denominated in a currency other than their functional currency. Operating foreign currency exchange for the nine months ended September 30, 2013 and 2012 resulted in net losses of $0.1 million in each period.

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        Non-operating foreign exchange for the three months ended September 30, 2013 and 2012 resulted in net losses of $0.1 million and $0.9 million, respectively, attributable to cash held in certain countries in currencies other than their functional currency. Non-operating foreign exchange for the nine months ended September 30, 2013 and 2012 resulted in a net gain of $1.2 million and a net loss of $2.1 million, respectively.

        The unfavorable fluctuations in the third quarter of 2013 were principally driven by U.S. dollar positions held at September 30, 2013 affected by the weaker dollar compared to the Columbia peso and the British pound. The unfavorable fluctuations in the third quarter of 2012 were principally driven by U.S. dollar positions held at September 30, 2012 affected by the weaker dollar compared to the Mexican peso. The favorable fluctuations in the nine months ended September 30, 2013 were principally driven by U.S. dollar positions held at September 30, 2013 affected by the stronger dollar compared to the Colombian and Mexican pesos and the Egyptian pound. The unfavorable fluctuations in the nine months ended September 30, 2012 were principally driven by U.S. dollar positions held at September 30, 2012 affected by the weaker 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, 2013 would result in an approximate change to revenue of $0.7 million and $2.3 million, respectively. There have been no material quantitative changes in market risk exposures since December 31, 2012.

Interest Rate Risk

        We are exposed to interest rate risk through borrowings under our June 21, 2012 amended credit agreement which bears interest at variable rates. The interest rate on the amended credit agreement is based on (at our election) either LIBOR plus a predetermined margin that ranges from 1.25% to 2.25%, or the Base Rate as defined in the amended credit agreement plus a predetermined margin that ranges from 0.25% to 1.25%, in each case based on ILG's leverage ratio. As of September 30, 2013, the applicable margin was 1.50% per annum for LIBOR revolving loans and 0.50% per annum for Base Rate loans. During the third quarter of 2013, we had at least $190 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 $0.5 million for the current quarter. While we currently do not hedge our interest rate exposure, this risk is somewhat mitigated by variable interest rates earned on our cash balances.

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

55

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, 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.

56

PART II
OTHER INFORMATION

Item 1.    Legal Proceedings

        Not applicable

Item 1A.    Risk Factors

        See Part I, Item IA., "Risk Factors," of ILG's 2012 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.

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, 2013 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 2013		—		—		1,697,360	$	4,120,479
August 2013		—		—		1,697,360	$	4,120,479
September 2013		—		—		1,697,360	$	4,120,479

(1)

On August 4, 2011, 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.

57

Item 6.    Exhibits

Exhibit Number			Description	Location
	2.1	†	Business Transfer Deed, dated August 3, 2013, among CLC Resort Management Limited, Gorvines Limited, VRI Europe Limited and the other parties thereto*
	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		Third 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 14, 2011.
	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

58

Exhibit Number		Description	Location
	101.CAL	XBRL Taxonomy Calculation Linkbase Document
	101.LAB	XBRL Taxonomy Label Linkbase Document
	101.PRE	XBRL Taxonomy Presentation Linkbase Document
	101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

†

Filed herewith.

††

Furnished herewith.

*

Schedules and other similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The company hereby undertakes to furnish supplementally copies of any of the omitted schedules and attachments upon request by the U.S. Securities and Exchange Commission.

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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 4, 2013

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

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QuickLinks

PART 1—FINANCIAL STATEMENTS

Item 1. Consolidated Financial Statements

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited)
INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited)
INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data)
INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (In thousands, except share data) (Unaudited)
INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2013 (Unaudited)

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

GENERAL
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

Item 3. Quantitative and Qualitative Disclosures about Market Risk
Item 4. Controls and Procedures

PART II OTHER INFORMATION

Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Items 3-5. Not applicable.

Item 6. Exhibits

SIGNATURES

EX-2.1

Exhibit 2.1

DATED 3 August 2013

CLC Resort Management Limited (1)

- and -

Gorvines Limited (2)

- and -

VRI Europe Limited (3)

and

the Other Sellers (4)

- and -

the Other Buyers (5)

Business Transfer Deed

TABLE OF CONTENTS

1.	Interpretation	4
2.	Conditions	21
3.	Agreement to sell and purchase	22
4.	Consideration	24
5.	Retention Account	24
6.	[Intentionally Deleted]	27
7.	[Intentionally Deleted]	27
8.	Completion	27
9.	Adjustment in relation to the Cash Consideration	29
10.	Warranties	30
11.	Buyers’ remedies	31
12.	Buyer Warranties	31
13.	Limitations on claims	33
14.	Indemnities	36
15.	Gross Up	36
16.	External Claims	37
17.	Tax Covenant	38
18.	Risk and insurance	38
19.	Liabilities of the Sellers and the Buyers	38
20.	Restrictions on the Sellers	40
21.	Rescission	41
22.	Indirect Tax	42
23.	The Employees	45
24.	Consents for transfer of certain Assets	47
25.	The Business Contracts	48
26.	Undertakings and apportionments	49
27.	Data protection	50
28.	Confidentiality and announcements	51
29.	Further assurance	52
30.	Assignment	52
31.	Whole agreement	52
32.	Variation and waiver	52
33.	Costs	53
34.	Notice	53
35.	Interest on late payment	55

36.	Severance	55
37.	Agreement survives completion	55
38.	Third party rights	55
39.	Successors	55
40.	Counterparts	55
41.	Deed	55
42.	Language	55
43.	Governing law and jurisdiction	56
44.	Process Agent	56
SCHEDULE 1		57
	Other Sellers	54
SCHEDULE 2		55
	Other Buyers	55
SCHEDULE 3		56
	Transaction Documents	56
SCHEDULE 4		59
	Conditions	59
SCHEDULE 5		60
	Completion Obligations	60
SCHEDULE 6		64
	Sellers, Buyers and Apportionment of Consideration and Allocation of Assets	64
SCHEDULE 7		65
	The Employees and the Resort Solutions Employees	65
SCHEDULE 8		72
	Certain assets	72
SCHEDULE 9		78
	The intellectual property rights	78
SCHEDULE 10		79
	The properties	79
SCHEDULE 11		86
	The Supplier Contracts	86
SCHEDULE 12		92
	The Motor Vehicles	92
SCHEDULE 13		93
	Information technology	93

SCHEDULE 14		94
	Warranties	94
SCHEDULE 15		121
	Indemnities	121
SCHEDULE 16		122
	Management Agreements	122
SCHEDULE 17		133
	Buyer Individuals and Seller Individuals	133
SCHEDULE 18		134
	Completion accounts	134
SCHEDULE 19		138
	Conduct between signing and Completion	138
SCHEDULE 20		141
	Conduct between Completion and 31 December 2013	141
SCHEDULE 21		144
	Tax Covenant	144
SCHEDULE 22		161
	Fixed Clubs	161
SCHEDULE 23		162
	Option in respect of Option Entity	162
SCHEDULE 24		164
	Announcements	164
APPENDIX 1		172
	Template form of Combined Accounts	172

THIS DEED is dated3 August 2013

PARTIES

(1)CLC RESORT MANAGEMENT LIMITED incorporated and registered in Isle of Man with company number 003261V whose registered office is at 33 North Quay, Douglas IM1 4LB, Isle of Man (Primary Seller);

(2)GORVINES LIMITED incorporated and registered in Isle of Man with company number 127152C whose registered office is at 34 North Quay, Douglas IM1 4LB, Isle of Man (Gorvines);

(3)VRI EUROPE LIMITED, incorporated and registered in England & Wales with company number 8592090 whose registered office is at Coombe Hill House Beverley Way London, SW20 0AR (Primary Buyer);

(4)those companies whose details are set out in Schedule 1 (Other Sellers); and

(5)those companies whose details are set out in Schedule 2 (Other Buyers).

BACKGROUND

(A)The Business is now and has for some time, in aggregate, been carried on by the Sellers.

(B)The Sellers have agreed to sell and transfer, and the Buyers have agreed to purchase and acquire, the Resort Solutions Shares and the Business (together with the Assets) as a going concern on the terms and conditions of this deed and in particular on the basis of the warranties, undertakings, agreements and indemnities set out in this deed.

AGREED TERMS

1.Interpretation

1.1The definitions and rules of interpretation in clause 1 apply in this deed.

2012 Accounts:	unaudited pro-forma accounts relating to the Business for the 2012 Accounts Period, comprising a balance sheet, profit and loss account and a cash flow statement, a copy of which is attached to the Disclosure Letter.
2012 Accounts Period:	the year that commenced on 01 January 2012 and that ended on 31 December 2012.
2013 Budget:	the budget (broken down on a monthly basis) in respect of the Business based on the Interim Accounts plus forecasts for the period from 1 June 2013 to 31 December 2013 a copy of which is attached to the Disclosure Letter.

2014 Budget:	the budget in respect of the Business in respect of the period from 1 January 2014 to 31 December 2014 a copy of which is attached to the Disclosure Letter.
Accounts:	the 2012 Accounts and/or the Interim Accounts (as relevant).
Actual 2013 EBITDA:	has the meaning given to such term in Schedule 18.
Actual Working Capital:	has the meaning given to such term in Schedule 18.
Agreed Amendments:	in respect of the applicable Management Agreement, the amendments set out in Part 2 of Schedule 16.
Assets:	the property, rights and assets of the Business (other than the Excluded Assets), agreed to be sold and purchased pursuant to clause 3.1, excluding for the avoidance of doubt the Resort Solutions Shares and the Resort Solutions Business.
Assumed Liabilities:	all Liabilities and obligations of the relevant Sellers in relation to the Business or in relation to the Assets to the extent that they arise after the Effective Time.
Bank Instruction Letter:	the letter, in agreed form, from the Escrow Agents to the Escrow Bank.
Business:	the business of managing Shared Ownership Resorts (including pursuant to the Fixed Club Management Agreements and the Developer Management Agreements, but excluding management of the Multi Clubs) as carried on by the relevant Sellers immediately prior to the Effective Time, excluding for the avoidance of doubt the Resort Solutions Business.
Business Contracts:	the Fixed Club Management Agreements, the Supplier Contracts, IT Contracts and all other contracts, arrangements, licences and other commitments relating mostly to the Business entered into on or before, and which remain to be performed in whole or in part at, the Effective Time, which have been entered into by or for the benefit of the relevant Sellers, or the benefit of which is held in trust for or has been assigned or subcontracted to the relevant Sellers, but excluding for the purposes of this definition any and all employment contracts and those contracts which are Excluded Assets.

Business Day:	a day (other than a Saturday, Sunday or public holiday) when banks in London, England and the Isle of Man are open for business.
Business Information:	all information, know-how and techniques (whether or not confidential and in whatever form held) to the extent they relate to:
	1)all or any part of the Business and Assets; or
	2)any services rendered by the Business; or
	3)any documentation, formulae, designs, specifications, drawings, data, manuals or instructions relating to 1) or 2) above; or
	4)the operations, management, administration or financial affairs of the Business (including any business plans or forecasts, information relating to future business development or planning and information relating to litigation or legal advice); or
	5)the sale or marketing of any of the products sold or services rendered by the Business, including all customer names and lists, sales and marketing information (including targets, sales and market share statistics, market surveys and reports on research).
Buyer Individuals:	the persons listed in Part 1 of Schedule 17.
Buyer Rescission Event:	has the meaning given to such term in clause 21.1.
Buyer’s Account:	such account as may be notified in writing to the Primary Seller by the Primary Buyer.
Buyers’ Group:	the Buyer, its holding companies and all companies and undertakings which are now or in the future become Subsidiaries or subsidiary undertakings of the Buyer or of any such holding companies.
Buyers	the Primary Buyer and the Other Buyers (each a Buyer).
Buyer’s Solicitors:	HowardKennedyFsi LLP of 19 Cavendish Square, London, W1A 2AW.
Cash Consideration:	Initial Cash Consideration as adjusted pursuant to clause 9 and Schedule 18.

Claim:	as the context requires, any Relevant Claim against any Seller or Proceedings (brought by any of the Sellers) against the Buyer.
Clubs:	the Fixed Clubs and the Multi Clubs.
Commercial Warranties:	the Warranties, other than the Fundamental Warranties.
Commercial Warranty Claim:	any Proceedings in respect of any of the Commercial Warranties.
Companies Acts:	the Companies Act 1985 and the Companies Act 2006.
Completion:	the completion of the sale and purchase of the Business and the Assets and the Resort Solutions Shares in accordance with this deed.
Completion Accounts:	has the meaning given to such term in Schedule 18.
Completion Date:	the date that completion of the sale and purchase of the Business and the Assets and the Resort Solutions Shares in accordance with this deed occurs which shall be the first Business Day of a calendar month.
Completion Date Balance Sheet:	the balance sheet of the Business and the Resort Solutions Business as at the Completion Date, as derived from the Completion Accounts.
Conditions:	those conditions specified in Schedule 4.
Consideration:	has the meaning given to such term in clause 4.1.
Consideration Shares:	the 24,500 ordinary shares of £0.10 each in the share capital of the Buyer to be issued to the Primary Seller credited as fully paid.
Constitutions:	the constitutional or other documents governing the structure of a Shared Ownership Programme, and the respective rights and obligations of the Owners governed by that Constitution. For the Fixed Clubs and the Multi Clubs, the term Constitution includes the deed of trust and the management agreements.
Convenios:	the Spanish collective bargaining agreements which apply to the Employees.
Co-operation Agreement:	has the meaning given to such term in Schedule 3.
COTS:	in respect of software, software that is available commercially “off-the-shelf” and includes shrink-wrap and click-wrap software.

Creditors:	all trade debts and accrued charges owing by the relevant Sellers, solely in respect of the Business, to the trade creditors of the relevant Sellers, solely in respect of the Business, in the ordinary course of the Business (but excluding any Excluded Liabilities).
CTA 2010:	the Corporation Tax Act 2010.
Current Use:	in relation to each Property, the current use as identified for that Property in Part 4 of Schedule 10.
Customer Data:	the Customer personal data (as defined in the applicable Data Protection Laws) which form part of the Customer Database.
Customer Database:	the database owned by the Sellers for the purpose of providing services to Customers and all rights in the same from time to time.
Customers:	the customers of the Business, but solely in relation to the Business, including Owners at Fixed Clubs, Multi Clubs and Resort Solutions Managed Properties.
Data Controller:	as defined in the applicable Data Protection Laws.
Data Protection Laws:	DPA 1998, LOPD and any analogous legislation in any other applicable jurisdiction.
Demand:	any action, award, claim or other legal recourse, complaint, cost, debt, demand, expense, fine, liability, loss, outgoing, penalty or proceeding.
Developer Management Agreements:	has the meaning given to such term in Schedule 3.
Disclosed:	disclosed (or deemed to have been disclosed) with sufficient detail to identify the nature and scope of the matters disclosed.
Disclosure Letter:	has the meaning given to such term in Schedule 3.
DPA 1998:	the Data Protection Act 1998.
Due Amount:	the amount (if any) due to the Buyer on a Relevant Claim being settled less the amount of any Saving, overprovision or overpayment set off against such amount pursuant to paragraph 9.2 or paragraph 10.1 of Schedule 21 (Tax Covenant).

Due Diligence Reports:	the due diligence reports dated 10 July 2013 and prepared by Deloittes LLP, and the due diligence reports dated 24 May and 25 May 2013 and prepared by Jones Lang LaSalle.
EBITDA Excess:	has the meaning given to such term in Schedule 18.
EBITDA Shortfall:	has the meaning given to such term in Schedule 18.
Effective Time:	00.01am GMT on the Completion Date.
Employee Data:	the personal data (as defined in the applicable Data Protection Laws) of the Employees, the Resort Solutions Employees and Former Employees which form part of the Employee Database.
Employee Database:	the database owned by the Sellers in connection with the Employees, the Resort Solutions Employees and the Former Employees.
Employees:	the individuals wholly or mainly employed by the relevant Sellers in the Business immediately prior to the Effective Time that are being transferred in connection with this deed, at the date of this deed, consists of those individuals whose details are set out in Part 1 of Schedule 7.
Encumbrance:	any mortgage, charge (fixed or floating), pledge, lien, hypothecation, guarantee, trust, right of set-off or other third party right or interest (legal or equitable) including any assignment by way of security, reservation of title or other security interest of any kind, howsoever created or arising, or any other agreement or arrangement (including a sale and repurchase agreement) having similar effect.
Escrow Agents:	The Law Debenture Trust Corporation p.l.c. or such other person as the Primary Seller and the Primary Buyer may agree.
Escrow Bank:	such bank as shall be agreed between the Escrow Agents and the Primary Seller and Primary Buyer.
Escrow Letter:	has the meaning given to such term in Schedule 3.
Europe:	any of the 28 Member States of the European Union at the date of this deed (and not, as amended from time to time) comprising of: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,

	Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden and the United Kingdom.
Excluded Assets:	the assets and rights used in the Business set out in clause 3.4 as being excluded from the sale and purchase pursuant to this deed.
Excluded Liabilities:	any and all obligations and Liabilities of the Sellers in respect of the Business, the Transaction, the Assets or the Employees (including, for the avoidance of doubt, all obligations and liabilities pursuant to the Management Agreements, other than the Resort Solutions Management Agreements), relating to the period prior to the Effective Time any and all contingent liabilities or obligations accruing prior to the Effective Time and all bank and other overdrafts and loans owing by the Sellers, but Excluded Liabilities shall not include any liabilities of Resort Solutions Holdings Limited or Resort Solutions Limited.
Extension of Interval International Master Affiliation Agreement:	has the meaning given to such term in Schedule 3.
Extension of Interval International Master Services Agreement:	has the meaning given to such term in Schedule 3.
Extension of Interval Resort and Financial Services Inc. Owner Services Agreement:	has the meaning given to such term in Schedule 3.
Final Management Agreement Retention Release Date:	the date falling 30 months after Completion.
Finance Documents:	has the meaning ascribed to it the Loan Agreement.
Fixed Assets:	all of the fixed plant and machinery, furniture, utensils, templates, tooling, implements, chattels and equipment, the loose plant including moveable plant, machinery and equipment, fixtures and fittings, desktop computers, spare parts, items of office equipment, trooling, the Motor Vehicles, promotional materials, furniture and furnishings wherever situated and used or intended for use solely in connection with the Business attached or

	fixed to the Properties as at the Effective Time, including all those items described in Part 1 of Schedule 8.
Fixed Club Management Agreements:	the management agreements in relation to each of the Fixed Clubs.
Fixed Clubs:	each of the single site Shared Ownership Programmes operating from a single Shared Ownership Resort with a fixed or floating week usage structure listed on Schedule 22.
FMRH Shareholders’ Deed:	has the meaning given to such term in Schedule 3.
Former Employees:	the former employees of the relevant Sellers and of Resort Solutions Limited.
Freehold Properties:	the freehold properties, particulars of which are set out in Part 1 of Schedule 10.
Fundamental Warranties:	the warranties set out in Paragraphs 1 (Capacity of the Sellers), 5 (Title to the Assets), 16 (Insolvency of the Sellers) and 20 (Resort Solutions Holdings Limited) of Schedule 14.
Fundamental Warranty Claim:	any Proceedings in respect of any of the Fundamental Warranties.
General Retention:	the sum of £2,798,400 (being 5% of the Initial Cash Consideration).
General Retention Release Date:	the date falling 30 months after the Completion Date.
Glinton:	a company incorporated and registered in Isle of Man with company number 003260V whose registered office is at 33 North Quay, Douglas IM1 4LB, Isle of Man and being a member of the Sellers’ Group.
Goodwill:	the goodwill, reputation, custom and connection of the relevant Sellers solely in relation to the Business, together with the exclusive right for the Buyer and its successors and assigns to carry on the Business and respectively to represent themselves as carrying on the Business in succession to the Sellers including the benefit, solely in relation to the Business, of all pending contracts, orders and engagements and the

	right to all lists of Customers and suppliers of the Business.
ILG Master Guarantee Deed:	has the meaning given to such term in Schedule 3.
Indemnities:	the indemnities set out in clause 14 and Schedule 15.
Indemnity Claim:	any Proceedings in respect of any of the Indemnities.
Indirect Tax:	any system of value added tax as provided for in Council Directive 2006/112/EC applied in any Member State of the European Union, the Value Added Tax Act 1996 of the Isle of Man and Impuesto General Indirecto Canario levied in the Canary Islands.
Indirect Tax Free Transfer:	has the meaning given to such expression in clause 22.2.
Indirect Tax Records:	records relating to Indirect Tax required to be maintained under applicable law.
Initial Cash Consideration:	£55,967,999.
Intellectual Property Rights:	copyright and related rights, trade marks and service marks, trade names and domain names, rights to goodwill or to sue for passing off or unfair competition, rights in designs, rights in computer software, database rights, rights in confidential information (including know-how and trade secrets) and any other intellectual property rights, in each case whether registered or unregistered and including all applications (or rights to apply) for, and renewals or extensions of, such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world.
Interest Rate:	interest at a rate of 4 per cent per annum above the base lending rate from time to time of Barclays Bank plc.
Interim Accounts:	unaudited pro-forma accounts relating to the Business and the Resort Solutions Business in respect of the Interim Accounts Period comprising a balance sheet, profit and loss account and a cash flow statement, a copy of which is attached to the Disclosure Letter.
Interim Accounts Period:	the 5 month period that and commenced on 1 January 2013 and that ended on 31 May 2013.

Inventory:	the global term for any unit of accommodation (including Units, resort units, condominium units, hotel rooms, cruise berths and other holiday accommodations) which is or has been secured for use in a Shared Ownership Programme.
IT Assets:	all material computer hardware (including network and telecommunications equipment) and software (other than software which is COTS) used exclusively by or in relation to the Business included in the Fixed Assets being transferred in Schedule 8).
IT Services Agreement:	has the meaning given to such term in Schedule 3.
IT Systems:	all goods and services provided under the IT Agreement, including the licences for software (as defined in the IT Services Agreement), together with the IT Assets.
Law or Laws:	includes all applicable legislation, statutes, directives, regulations, judgments, decisions, decrees, orders, instruments, by-laws and other legislative measures or decisions having the force of law in any applicable jurisdiction, and rules of common law, customary law and equity.
Lease:	a lease (including any supplemental documents) under which each of the Leasehold Properties is held and Leases means all of them.
Lease Effective Time:	in respect of each Leasehold Property, the later of:
	(i)the Completion Date; and
	(ii)the date the Lease is granted in respect of that Leasehold Property.
Leasehold Properties:	the leasehold properties, particulars of which are set out in Part 2 of Schedule 10.
Liabilities:	all losses, costs, expenses, liabilities, duties and obligations of every description, whether deriving from contract, common law, statute or otherwise, and “Liability” means any one of them.
Loan Agreement:	has the meaning given to such term in Schedule 3.
Longstop Date:	1 November 2013 or such later time as agreed to pursuant to clause 2.3.2.
LOPD:	Spanish Organic Law 15/1999, of 13 December on Personal Data Protection.

Managed Properties:	the properties managed pursuant to the Fixed Club Management Agreements.
Management Agreements:	the Fixed Club Management Agreements and the Developer Management Agreements and all other management agreements that are part of the Business and the Resort Solutions Business, all of which are contained in Part 1 of Schedule 16.
Management Agreement Amendment:	in respect of the applicable Management Agreement, the completion of the Agreed Amendments in respect of such Fixed Club Management Agreement.
Management Agreement Retention:	the sum of £5,596,800 (being 10% of the Initial Cash Consideration) to be held in the Retention Account pursuant to clause 5.13.
Master Guarantee Deeds:	has the meaning given to such term in Schedule 3.
Material Adverse Effect:	a reduction in the value of the Business and the Resort Solutions Business (taken for this purpose to be the amount of the Consideration payable on Completion under this deed) of at least 5%.
Material IT Contracts:	all arrangements and agreements under which any third party (including any member of the Sellers’ Group or any source code deposit agent) provides any element of, or services relating to, the IT Assets, including leasing, hire purchase, licensing, maintenance and services agreements and pursuant to the IT Agreement).
Motor Vehicles:	the motor vehicles set out in Schedule 12.
Moveable Assets:	linens, toiletries and other stock used or intended for use solely in connection with the Business, including those items listed in Part 2 of Schedule 8.
Multi Clubs:	Shared Ownership Programmes structured to give their members rights to take holidays based on a points or other redemption mechanism from a pool of Inventory in a selection of destinations where such accommodation is made up in part of Inventory from the Fixed Clubs. A Multi Club is governed by its own set of constitutional rules. Each Multi Club pays the appropriate Management Fees on the Weeks it owns in the Fixed Clubs and enjoys all the same rights, privileges and obligations as any other Owner in the Fixed Clubs. As of the Effective Time Multi

	Club includes the Vacation Club, FPOC, FDC, Destinations and Options clubs).
New Leases:	the leases to be granted by the Sellers to the Other Buyers in relation to the Properties detailed in Part 2 of Schedule 10 (Leasehold Properties).
Option Entity:	any of the Other Buyers to the extent that any Assets have been transferred to such Other Buyers.
Option Shares:	the entire issued share capital and/or other form of ownership interests of any Option Entity.
Other Sellers:	the persons identified in Schedule 1, having agreed to be bound by the terms of this deed pursuant to the Seller Deed of Adherence.
Owner:	an owner or member (individual or corporate) of a Shared Ownership Programme, as the case may be, who by virtue of their ownership or membership is entitled to the rights and privileges but subject to the obligations all as set out in the Constitution which applies to them. Owners in some of the Shared Ownership Programmes are known as “Members” but in this deed the generic term Owner is used for ease of reference.
Payroll Taxes:	any amounts in respect of United Kingdom income tax required to be accounted for to HM Revenue & Customs pursuant to pay-as-you-earn or equivalent tax in Spain or any other relevant jurisdiction.
Pre-emption Deed:	has the meaning given to such term in Schedule 3.
Proceedings:	any claim, demand, proceeding, suit or action.
Properties:	the Freehold Properties and the Leasehold Properties as detailed in Schedule 10.
Records:	the books, accounts (including the Indirect Tax Records and returns), lists of clients, Customers and suppliers (including the Customer Database), credit reports, price lists, cost records, work tickets, catalogues, advertising and all the other documents, papers and records (including the Employee Database) however stored of the Sellers relating solely to the Business, the Employees or any of the Assets but excluding any Records (including any Indirect Tax Records or Records relating to Payroll Taxes or Social Security Contributions) which are required by applicable law to be retained by the relevant Sellers or any member of the Sellers’ Group.

Relevant Claim:	any Proceedings brought against any of the Sellers pursuant to this deed, including under the Warranties, the Tax Warranties, clause 14 and Schedule 15 (Indemnities), Schedule 21 (Tax Covenant) or otherwise, but not including any claim brought against any of the Sellers pursuant to any indemnity given for the benefit of the Buyers pursuant to clause 19 or clause 26.
Relevant Management Agreement Retention Amount:	in respect of each Management Agreement, such part of the Management Agreement Retention as is detailed in part 3 of Schedule 16.
Resort Solutions Business:	the business of Resort Solutions Holdings Limited and Resort Solutions Limited.
Resort Solutions Management Agreements:	those Management Agreements which are part of the Resort Solutions Business.
Resort Solutions Employees	the individuals wholly or mainly employed by Resort Solutions Limited and/or Resort Solutions Holdings Limited, which as at the date of this deed consists of those individuals whose details are set out in Part 2 of Schedule 7.
Resort Solutions Holdings Limited:	a private company limited by shares with company number 06592173 whose registered address is St. Mary’s House, St. Mary’s Road, Market Harborough, Leicestershire LE16 7DS.
Resort Solutions Limited:	a private company limited by shares with company number 05153737, whose registered address is Hallswelle House, 1 Halleswelle Road, London NW11 0DH.
Resorts Solutions Shares:	the entire issued share capital of Resort Solutions Holdings Limited.
Resort Solutions Supplier Contracts:	all contracts, engagements or orders entered into on or before the Effective Time by or on behalf of the Sellers for services to the Sellers mostly in connection with and in the ordinary course of the Resort Solutions Business which at the Effective Time remain to be performed in whole or in part, including all the contracts described in Part 2 of Schedule 11.
Retention Account:	the joint interest-bearing bank account at the Escrow Bank to be established in accordance with the Escrow Letter.

Retention Amount:	the sum of £8,395,200 (being the aggregate of the General Retention and the Management Agreement Retention).
Seller Deed of Adherence:	the deed of adherence in the agreed form to be entered into between the Other Sellers, the Primary Seller, Gorvines, the Primary Buyer and Other Buyers.
Seller Individuals:	the persons listed in Part 2 of Schedule 17.
Sellers	the Primary Seller, Gorvines and the Other Sellers (each a Seller).
Sellers’ Account:	such account as may be notified in writing to the Primary Buyer by the Primary Seller.
Sellers’ Accountants:	Deloitte LLP.
Sellers’ Group:	the Sellers, their holding companies, or trusts which have an interest in such holding companies, and all companies and undertakings which are now or in the future become Subsidiaries or subsidiary undertakings of the Sellers or of any such holding company.
Sellers’ Solicitors:	Simmons & Simmons LLP.
Set-Off Deed:	has the meaning given to such term in Schedule 3.
Shared Intellectual Property Rights:	the shared intellectual property rights of each of the Sellers and the Buyers as set out in the Shared Services Agreement.
Shared Ownership Programme:	one or more Units of accommodation designed for occupancy in common with others for a period of at least one year (but not necessarily consecutive years) and which Units are all subject to the same timeshare, club-trustee, rotational right scheme, fractional or other vacation ownership plan, together with any other similar shared property, or rights to property appurtenant to those units, which may be evidenced by points, membership, deeded fee simple title or other certificate of ownership or right to use.
Shared Ownership Resort:	the following resorts:
	(i)a resort from which a Shared Ownership Programme operates; or
	(ii)a resort from which a Shared Ownership Programme does not operate, but 25% or

	more of the Inventory of which is used in a Shared Ownership Programme.
Shared Services Agreement:	has the meaning given to such term in Schedule 3.
Social Security Contributions:	United Kingdom national insurance contributions and equivalent contributions in Spain or elsewhere.
Spanish Ley del Suelo of 2008:	Spanish Royal Legislative Decree 2/2008 of 20 June which regulates planning and the use of land.
Subsidiary:	in relation to a company wherever incorporated (a holding company) means a subsidiary as defined in section 1159 of the Companies Act 2006 and any other company which is itself a subsidiary (as so defined) of a company which is itself a subsidiary of such holding company. Unless the context otherwise requires, the application of this definition to any company at any time will apply to the company as it was at that time, and a subsidiary undertaking shall be construed in accordance with section 1162 of that Act.
Supplier Contracts:	all contracts, engagements or orders entered into on or before the Effective Time by or on behalf of the Sellers for services to the Sellers mostly in connection with and in the ordinary course of the Business, which at the Effective Time remain to be performed in whole or in part, including all the contracts described in Part 1 of Schedule 11.
Target 2013 EBITDA:	has the meaning given to such term in Schedule 18.
Target Working Capital:	has the meaning given to such term in Schedule 18.
Taxation or Tax:	all forms of taxation and statutory, governmental, state, federal, provincial, local, government or municipal charges, duties, imposts, contributions, levies, withholdings or similar liabilities wherever chargeable and whether of the UK or any other jurisdiction; and any penalty, fine, surcharge, interest, charges or costs relating thereto.
Taxation Authority:	any government, state or municipality or any local, state, federal or other fiscal, revenue, customs or excise authority, body or official competent to impose, administer, levy, assess or collect Tax.

Tax Referee:	has the meaning given to such expression in clause 22.2.4.
Tax Related Claim:	a Relevant Claim pursuant to Schedule 21 (Tax Covenant) or in respect of breach of any of the Tax Warranties.
Tax Warranties:	the warranties set out in Part 7 of Schedule 14.
Tax Warranty Claim:	any Proceedings in respect of any of the Tax Warranties.
Third Party Consent:	a consent, licence, approval, authorisation or waiver required from a third party for the conveyance, transfer, assignment or novation in favour of the Buyer of any of the Assets.
Transaction:	the transaction contemplated by this deed or any part of that transaction.
Transaction Documents:	all or any of this deed and the documents set out in 3.
Transferred Cash:	the sum of cash required in order for the Business and the Resort Solutions Business to have the Target Working Capital immediately following the Effective Date, as calculated in accordance with Schedule 18.
TULRCA:	the Trade Union and Labour Relations (Consolidation) Act 1992.
TUPE:	the Transfer of Undertakings (Protection of Employment) Regulations 2006.
TUPE 1981:	the Transfer of Undertakings (Protection of Employment) Regulations 1981.
Unit:	the accommodation which forms part of the Shared Ownership Programme which has been secured for the use of the Shared Ownership Programme and its Owners from time to time.
Very Material Adverse Effect	a reduction in the value of the Business and the Resort Solutions Business (taken for this purpose to be the amount of the Consideration payable on Completion under this deed) of at least 10%.
VAT:	value added tax chargeable under the VATA 1994 and legislation supplemental thereto and any similar replacement or additional tax in the United Kingdom.
VATA 1994:	the United Kingdom Value Added Tax Act 1994.
VRI Europe Shareholders’ Deed:	has the meaning given to such term in Schedule 3.

Warranties:	the warranties set out in Schedule 14 (other than the Tax Warranties.
Warranty Claim:	a Fundamental Warranty Claim and/or a Commercial Warranty Claim.
Week:	the period of seven days during which an Owner has the exclusive rights to enjoy and use the occupation rights in the Shared Ownership Programme attached to the Week be it on a fixed or floating basis pursuant to the Constitution of the Shared Ownership Programme and subject to such obligations as may affect the Week.
Workers’ Statute:	the Spanish labour statute known as the Estatuto de los Trabajadores which was enacted as Royal Legislative Decree 1/1995 of 24 March, as amended from time to time.
Working Capital Excess:	the amount, if any, by which the Actual Working Capital is greater than the Target Working Capital.
Working Capital Shortfall:	an amount equal to the amount, if any, by which the Actual Working Capital is less than the Target Working Capital.

1.2Clause, schedule and paragraph headings do not affect the interpretation of this deed.

1.3A reference to a clause or a schedule is a reference to a clause of, or schedule to, this deed. A reference to a paragraph is to a paragraph of the relevant schedule, and a reference to an appendix is to the relevant appendix to this deed.

1.4A person includes a natural person, corporate or unincorporated body (including any form of partnership) (whether or not having separate legal personality) and that person’s personal representatives, successors or permitted assigns.

1.5A reference to a company shall include any company, corporation or other body corporate, wherever and however incorporated.

1.6Unless the context otherwise requires, words in the singular include the plural and in the plural include the singular.

1.7Unless the context otherwise requires, a reference to one gender includes a reference to the other gender.

1.8A reference to a particular statute, statutory provision or subordinate legislation is a reference to it as it is in force at the date of this deed, taking account of any amendment or re-enactment and includes any statute, statutory provision or subordinate legislation which it amends or re-enacts and subordinate legislation for the time being in force made under it. Provided that, as between the parties, no such amendment or re-enactment shall apply for the purposes of this deed to the extent that it would impose any new or extended obligation, liability or restriction on, or otherwise adversely affect the rights of, any party.

1.9A reference to writing or written includes faxes and e-mail.

1.10Documents in agreed form are documents in the form agreed by the parties to this deed and initialled by them or on their behalf for identification.

1.11Where the words include(s), including or in particular are used in this deed, they are deemed to have the words “without limitation” following them.

1.12Any obligation on a party not to do something includes an obligation to use the powers within its control not to allow that thing to be done.

1.13Where the context permits, other and otherwise are illustrative and shall not limit the sense of the words preceding them.

1.14References to any English legal terms, for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any other legal concept or thing shall, in respect of any jurisdiction other than England, be deemed to include a reference to what most nearly approximates to the English legal term in that jurisdiction.

1.15References to times of the day are, unless the context requires otherwise, to London, England time and references to a day are to a period of 24 hours running from midnight on the previous day.

1.16Any amount, expressed in one currency, to the extent that it requires, in whole or in part, to be expressed in any other currency in order to give full effect to this deed, shall be deemed for that purpose to have been converted into the relevant currency three days before the date on which it is required to be expressed in any other currency (or, if that is not a Business Day, the Business Day immediately before it). Subject to any applicable legal requirements governing conversions into that currency, the rate of exchange shall be the closing mid-point rate at 4:00pm London time for the purchase of the relevant currency with the applicable currency, as shown in the historical tables of the Financial Times, currently available on the internet at http://www.FT.com/marketsdata.

1.17Unless expressly provided otherwise in this deed, the Primary Seller shall, to the extent that it is permitted by law to be liable for the obligations of another entity, be jointly and severally liable for all obligations, undertakings and liabilities of the Sellers arising under this deed (including those of the Other Sellers) and the Other Sellers shall be severally liable for their respective obligations, undertakings and liabilities only.  For the avoidance of doubt, to the extent the quantum of the liability of any Seller under this deed is reduced, limited or excluded, the quantum of the Primary Seller’s liability in respect of such liability of the relevant Seller shall be correspondingly reduced, limited or excluded.

1.18As amongst themselves, each of the Other Sellers agrees to indemnify the Primary Seller to the extent of the liability of any such Other Seller that is borne by the Primary Seller pursuant to this deed (for the avoidance of doubt, subject to the limitations on liability set out in this deed (including, but not limited to those set out in clause 13)), but this indemnity may not be exercised in contravention of any provision of any guarantee or indemnity now or hereafter granted by any member of the Seller’s Group, in favour of any member of the Buyer’s Group, including, but not limited to, pursuant to any Finance Document.

1.19Documents in the agreed form are documents in the form agreed by the parties to the BTA and initialled by them or on their behalf for identification with such changes as such parties may subsequently agree prior to the execution of these documents.

2.Conditions

2.1Completion of this deed is subject to the Conditions being satisfied or waived by the date and time provided in clause 2.3.

2.2The following provisions shall continue to have effect, notwithstanding failure to waive or satisfy the Conditions:

2.2.1Clause 1 (Agreed Terms);

2.2.2Clause 2 (Conditions);

2.2.3Clause 21 (Rescission);

2.2.4Clause 31 (Whole Agreement);

2.2.5Clause 32 (Variation and Waiver);

2.2.6Clause 33 (Costs);

2.2.7Clause 34 (Notice);

2.2.8Clause 42 (Language); and

2.2.9Clause 43 (Governing Law and Jurisdiction).

2.3Each of the Sellers and each of the Buyers undertakes to use its reasonable endeavours and to provide the other parties with such co-operation and assistance as is reasonably necessary and it is reasonably able to provide, to procure the satisfaction of the Conditions as soon as is reasonably practicable and in any event no later than:

2.3.11 November 2013; or

2.3.2such later date as may be agreed in writing by the Primary Seller and the Primary Buyer.

2.4Should any of the Sellers or the Buyers become aware of anything which will prevent any of the Conditions from being satisfied on or before the Longstop Date it shall, as soon as reasonably practicable, in the case of the relevant Buyer disclose the same to the Primary Seller and in the case of the relevant Seller disclose the same to the Primary Buyer.

2.5The Primary Buyer may, to such extent as it thinks fit and is legally entitled to do so, waive in whole or in part any of the Conditions set out in paragraphs 1-4 and 6 of Schedule 4 by written notice to the Primary Seller.

2.6In the event that all the Conditions shall not have been satisfied or waived pursuant to this deed on or prior to the Longstop Date this deed (save for clause 2.2 and Schedule 23) shall lapse and no party shall make any claim again any other in respect hereof, save in respect of any antecedent breach.

3.Agreement to sell and purchase

3.1On the date of this deed, the Sellers shall deliver, or procure delivery, to the Primary Buyer of:

3.1.1a duly executed counterpart of this deed;

3.1.2the Disclosure Letter duly executed by the Sellers;

3.1.3the Seller Deed of Adherence, duly executed by the Sellers; and

3.1.4the Master Guarantee Deeds duly executed by the relevant members of the Sellers’ Group.

3.2On the date of this deed, the Buyer shall deliver, or procure delivery, to the Primary Seller of:

3.2.1a duly executed counterpart of this deed;

3.2.2the Disclosure Letter duly executed by the Buyers;

3.2.3the Seller Deed of Adherence duly executed by the Buyers; and

3.2.4the Master Guarantee Deeds duly executed by the relevant members of the Buyers’ Group.

3.3Unless expressly provided in this deed, and as detailed in Schedule 6 the Sellers shall sell with full title guarantee or, to the extent that the Sellers are not the owner thereof shall procure the sale with full title guarantee, and the Buyers, with a view to carrying on the Business as a going concern, shall purchase free from all Encumbrances (other than any finance leases in respect of certain Moveable Assets created in the ordinary course of business) with effect from the Effective Time:

3.3.1the benefit (subject to the burden) of the Business Contracts (including the Management Agreements);

3.3.2the Goodwill;

3.3.3the Properties;

3.3.4the Fixed Assets;

3.3.5the Resort Solutions Shares;

3.3.6the Moveable Assets;

3.3.7the Business Information;

3.3.8the IT Assets, excluding any supported goods or supported software as detailed in Schedule 1 of the IT Services Agreement;

3.3.9the Transferred Cash;

3.3.10the Business Intellectual Property Rights owned by the Sellers or otherwise used in connection with the Business (excluding the Shared Intellectual Property Rights);

3.3.11the Records;

3.3.12all (if any) of the other property or rights of the Sellers which relate to or are connected mainly with or belong to or used mainly in, the Business and which are not otherwise described in this clause 3.2, but not the Excluded Assets; and

3.3.13all of the Sellers’ rights against third parties, including rights under any warranties, conditions, guarantees or indemnities or under the Sale of Goods Act 1979 or any equivalent legislation in Spain or elsewhere relating to any of the Assets and the benefit of all sums to which the Sellers are entitled from third parties or insurers solely in respect of loss or damage to the Assets (except to the extent that a provision in respect of such loss or damage is made or otherwise taken into account under the provisions of clause 18.3.

3.4The following shall be excluded from the sale under this deed:

3.4.1the Excluded Liabilities;

3.4.2any IT Licences, access to which is being granted to the Buyer pursuant to the IT Services Agreement;

3.4.3those excluded assets detailed in Part 3 of Schedule 8;

3.4.4all the Sellers’ cash-in-hand or at the bank or at any other financial institution in excess of Transferred Cash; and

3.4.5the Sellers’ accounts and accounting records which do not relate to the Business.

3.5Subject to clause 3.6, the sale and purchase of each of the Assets and the Resort Solutions Shares is interdependent and shall be completed simultaneously.

3.6The Properties shall be sold, leased or made available to the relevant Buyers in accordance with the provisions of Part 3 Schedule 10.

4.Consideration

4.1The Consideration shall comprise:

4.1.1the issue and allotment of the Consideration Shares by the Primary Buyer to the Primary Seller; and

4.1.2the Initial Cash Consideration as adjusted in accordance with clause 9 and Schedule 18, and which shall be satisfied by: (i) the payment by the Buyers of the Initial Cash Consideration in cash at Completion to the Seller’s Account by telegraphic transfer for same day value (subject to the payment of the Retention Amount into the Retention Account in accordance with clause 8.2.3), to be apportioned amongst the Sellers on the basis set out in Schedule 9; and (ii) the adjustment payment(s) by the Buyers in cash (as applicable) to the Sellers (as relevant) in accordance with clause 9 and Schedule 18; and

4.1.3the assumption of the Assumed Liabilities by the Buyers.

4.2Any payment made by any of the Sellers to any of the Buyers or by any of the Buyers to any of the Sellers in respect of breach of any warranty, undertaking or covenant set out in this deed, or pursuant to any indemnity set out in this deed, shall, so far as possible, be made by way of adjustment to the Cash Consideration apportioned to such Seller.

4.3The Consideration Shares shall rank pari passu and as a single class with the ordinary shares in the Buyer in issue at the date of this deed, and shall carry the right to receive in full all dividends and other distributions declared, made or paid after the Completion Date.

5.Retention Account

5.1No amount shall be released out of the Retention Account otherwise than in accordance with this clause 5.

5.2Any interest that may accrue on the credit balance on the Retention Account shall be credited to the Retention Account and paid to the Sellers in accordance with this clause 5.

5.3The liability to Taxation on any interest on any amount in the Retention Account shall be borne by the Sellers.

General Retention

5.4If a Relevant Claim has been notified by a Buyer to the Primary Seller prior to the General Retention Release Date, no part of the General Retention shall be released to the Sellers from the Retention Account otherwise than in accordance with the provisions of this clause 5.

5.5If, prior to the General Retention Release Date, a Relevant Claim is settled and there is a Due Amount, the Primary Seller and the Primary Buyer shall, unless such Due Amount has already been paid to the a Buyer, as soon as practicable following such settlement, instruct the Escrow Agents to pay to the Primary Buyer, to the Buyer’s Account, out of the Retention Account the lesser of the Due Amount and the then remaining amount of the General Retention less any applicable bank charges.

5.6Subject to the provisions of clause 5.7 and clause 5.11, following payment to the Primary Buyer of all Due Amounts outstanding (if any) under clause 5.5, the Primary Seller and the Primary Buyer shall as soon as practicable (and in any event within 5 Business Days of the last of any such payments being made), instruct the Escrow Agents to pay the remaining balance (if any) of the General Retention (together with any interest which has accrued on the General Retention Amount less any applicable bank charges) to the Primary Seller to the Sellers’ Account.

5.7On the General Retention Release Date the parties shall instruct the Escrow Agents to pay to the Primary Buyer out of the Retention Account the lesser of the outstanding Due Amount(s) (if any)  and the General Retention Amount.

5.8In the event that the Primary Buyer or the Primary Seller does not give the instructions referred to in clauses 5.5, 5.6 or 5.7 above, within the time specified in such clause, or there is any dispute as to the payment out of the Retention Account in accordance with clause 5.14 or clause 5.15, a “Release Dispute” will be deemed to have arisen. Either Party may refer the Release Dispute to such arbitrator as is appointed by agreement between them, or in default of such agreement within five Business Days, appointed by the Chairman of the Institute of Chartered Accountants of England and Wales (the “Arbitrator”).  The Arbitrator shall determine the Release Dispute and his decision shall be binding upon the relevant

Sellers and the relevant Buyers and the relevant Sellers and the relevant Buyers shall bear the Arbitrator’s fees and expenses and any professional fees incurred by the relevant Sellers and the relevant Buyers in relation to the Release Dispute in such proportions as the Arbitrator shall determine.  The parties shall use their respective best endeavours to procure that the Arbitrator delivers his decision within such time as may be stipulated in his terms of reference, which period may be no longer than 30 days from the appointment of the Arbitrator.

5.9A Relevant Claim shall be deemed settled for the purposes of this clause 5 if:

5.9.1the Primary Buyer and the Primary Seller so agree in writing; or

5.9.2the Relevant Claim has been determined by a court of competent jurisdiction or pursuant to binding arbitration, from which in either case there is no right of appeal, or from whose judgment the Buyers or the Sellers (as the case may be) are irrevocably debarred by passage of time or otherwise from making an appeal.

5.10Save as provided elsewhere in this deed or in any other documents executed pursuant to this deed:

5.10.1the amount of the Cash Consideration paid into the Retention Account (whether as part of the General Retention or the Management Agreement Retention) shall not be regarded as imposing any limit on the amount of any claims under this deed or under any of the documents executed pursuant to this deed;

5.10.2if a Due Amount is not satisfied in full from the Retention Account, the Relevant Claim (to the extent not so satisfied) shall, subject to the other relevant provisions of this deed or any other documents executed pursuant to this deed, remain fully enforceable against the relevant Sellers; and

5.10.3nothing in this clause 5 shall prejudice, limit or otherwise affect any right, including to make any claim, or remedy the relevant Buyers may have from time to time against the relevant Sellers either under this deed or under any of the documents executed pursuant to this deed.

5.11If the Primary Buyer has notified the Primary Seller of Relevant Claims prior to the General Retention Release Date, and any of which have not been finally determined, agreed, settled or withdrawn on or prior to such date, the Primary Buyer shall be entitled to require such portion of the Held-over Proportion (as defined below) which, together with any and all Due Amounts, exceeds £812,626 to remain in the Retention Account until the relevant claims or disputes are finally determined, agreed, settled or withdrawn, when the Held-over Proportion will be allocated to or between the Buyers and the Sellers as appropriate.

5.12The “Held-over Proportion” means the proportion (including, if that is the case, the whole) of the outstanding balance of the General Retention held in the Retention Account that either:

5.12.1is agreed between the Primary Buyer and the Primary Seller in writing; or

5.12.2matches (insofar as the balance is not exhausted) the amount claimed by the Buyers, which, for this purpose only, shall be regarded as reduced to the extent that any part of the Relevant Claim, according to an opinion of

Counsel, is more likely than not to fail.  For this purpose, Counsel shall be such Queen’s Counsel as is agreed between the Primary Buyer and the Primary Seller (or, if not agreed within 15 days of the General Retention Release Date, chosen by the Chairman for the time being of the General Council of the Bar on the written application of the relevant Buyer or the relevant Seller, whichever applies first), and the relevant Sellers and the relevant Buyers shall bear Counsel’s fees and expenses and any professional fees incurred by the relevant Seller and the relevant Buyer in relation to the Held-over Proportion in such proportions as Counsel shall determine.  The parties shall use their respective best endeavours to procure that Counsel delivers his decision within 20 Business Days.

Management Agreement Retention

5.13The Management Agreement Retention shall be held in the Retention Account as security for the obligations of the Sellers to undertake the Agreed Amendments pursuant to paragraph 9 of Part 2 of Schedule 5.

5.14Every three months after the Completion Date, the Primary Seller and the Primary Buyer shall instruct the Escrow Agents to pay to the Primary Seller (to the Sellers’ Account) out of the Retention Account the Relevant Management Agreement Retention Amount (together with any interest which has accrued on the amount so paid) with respect to any Management Agreement Amendments adopted during such three-month period, and the provisions of clause 5.8 shall apply in the case of any Release Dispute.

5.15If, and to the extent that, any Management Agreement Amendments have not been completed on the Final Management Agreement Retention Release Date (any such Management Agreement Amendments being Incomplete Management Agreement Amendments), the parties shall, as soon as practicable, instruct the Escrow Agents to pay the Relevant Management Agreement Retention Amount in respect of any such Incomplete Management Agreement Amendments to the Primary Buyer provided that if, and to the extent that, such amendments have not been implemented due to any action or omission wholly on the part of a member of the Buyers’ Group, then, subject to clause 5.8 in the case of disagreement, the balance shall be paid to the Sellers (to the Sellers’ Account).  For the avoidance of doubt, the balance of any interest which has accrued on the Management Agreement Retention (less any applicable bank charges) shall be paid to the Sellers.

5.16The Buyers shall provide such co-operation, support, assistance and information as may be reasonably required from time to time by any Seller or the Primary Seller in relation to the implementation and/or adoption of the Management Agreement Amendments.

6.[Intentionally Deleted]

7.[Intentionally Deleted]

8.Completion

8.1Completion shall take place after this deed ceases to be subject to any of the Conditions and it shall take place on the Completion Date.

8.2At Completion, the Primary Buyer shall:

8.2.1allot and issue to the Primary Seller the Consideration Shares credited as fully paid and enter the Primary Seller in the register of members of the Buyer as the holder of the Consideration Shares; and

8.2.2pay the Initial Cash Consideration (less the Retention Amount) by telegraphic transfer, in same day available funds, to the Sellers’ Account.  Receipt of sum payment made in accordance with this clause shall constitute a valid discharge of the Buyer’s obligations to pay the Initial Cash Consideration under clause 4.1.2; and

8.2.3pay the Retention Amount, in cash, by telegraphic transfer into the Retention Account;

8.2.4procure the delivery of a duly executed share certificate to the Primary Seller in respect of the Consideration Shares;

8.2.5deliver to the Primary Seller a certified copy of the resolution adopted by the board of directors of the Primary Buyer authorising the Transaction and the execution and delivery by the officers specified in the resolution of this deed, and any other documents referred to in this deed as being required to be delivered by it and evidence of the authority of the persons signing the Transaction Documents and the transactions contemplated therein on behalf of the Other Buyers;

8.2.6deliver to the Primary Seller a legal opinion in respect of the Buyer’s capacity and authority to enter into the relevant Transaction Documents;

8.2.7deliver, or procure delivery, to the Sellers of or make available to the Primary Seller:

8.2.7.1the Developer Management Agreements duly executed by VRI Management Espana S.L. or VRI Canarias S.L. (as applicable);

8.2.7.2the Co-operation Agreement and all ancillary documents to be entered into thereunder duly executed by the Primary Buyer;

8.2.7.3the VRI Europe Shareholders’ Deed duly executed by the Buyer and Interval Leisure Group Management Limited;

8.2.7.4the Pre-emption Deed duly executed by ILG Lux Finance S.à r.l.;

8.2.7.5the Escrow Letter duly executed by the Primary Buyer;

8.2.7.6the FMRH Shareholders’ Deed and all ancillary documents to be entered into thereunder duly executed by ILG Lux Finance S.à r.l.;

8.2.7.7the Extension of Interval International Master Affiliation Agreement duly executed by Interval International, Inc.;

8.2.7.8the Extension of Interval International Master Services Agreement duly executed by Interval International, Inc.;

8.2.7.9the New Leases unconditionally duly executed by VRI Management Espana, S.L., and VRI Management Canarias, S.L. (as applicable);

8.2.7.10the Extension of Interval Resort Financial Services Inc. Owner Services Agreement duly executed by Interval Resort & Financial Services, Inc.;

8.2.7.11the Shared Services Agreement duly executed by the Primary Buyer;

8.2.7.12the IT Services Agreement duly executed by the Primary Buyer;

8.2.7.13the non-compete deed duly executed by the Primary Buyer and Interval Leisure Group, Inc.;

8.2.7.14the Loan Agreement and the Finance Documents, duly executed by the relevant members of the Buyers’ Group; and

8.2.7.15the Set Off Deed duly executed by the ILG Parties (as defined in the Set Off Deed).

8.3At Completion, the Sellers shall comply with their obligations set out in Schedule 5.

8.4If the Sellers do not comply with their obligations as set out in clause 8.3, the Buyers may, through the Primary Buyer, without prejudice to any other rights they have:

8.4.1proceed to Completion; or

8.4.2defer Completion to a date not more than 31 days after the date set by clause 8.1 (and so that the provisions of this clause 8.4, apart from this clause 8.4.2, shall apply to Completion as so deferred).

8.4.3rescind this deed in accordance with clause 21.

8.5If any of the Buyers do not comply with their obligations as set out in clause 8.2, the Sellers may, through the Primary Seller, without prejudice to any other rights they may have:

8.5.1proceed to Completion; or

8.5.2defer Completion to a date not more than 31 days after the date set by clause 8.1 (and so that the provisions of this clause 8.5, apart from this clause 8.5.2, shall apply to Completion as so deferred); or

8.5.3rescind this deed.

8.6Each Seller undertakes to the Buyer that it will procure that the Business and the Resort Solutions Business shall be carried on in the manner specified in Schedule 19 from the date of this deed until the Effective Time.

8.7Following Completion, the Buyer and each Seller shall each comply with their respective obligations set out in Part 2 of Schedule 5.

8.8The Buyers undertake to each of the Sellers that the Business and the Resort Solutions Business shall be carried on in the manner specified in Schedule 20 from Completion until 31 December 2013.

9.Adjustment in relation to the Cash Consideration

9.1Within ten Business Days after agreement or determination of the Completion Accounts in accordance with the provisions of Schedule 18:

9.1.1to the extent that there is a Working Capital Excess, a sum equal to the Working Capital Excess shall be added to the Initial Cash Consideration, and the Primary Buyer shall remit such additional amount to the Primary Seller; and

9.1.2to the extent that there is a Working Capital Shortfall, a sum equal to the Working Capital Shortfall shall be deducted from the Initial Cash Consideration, and the Primary Seller shall remit such amount to the Primary Buyer.

9.2Within ten Business Days after agreement or determination of the Combined Accounts in accordance with the provisions of Schedule 18:

9.2.1to the extent there is an EBITDA Excess, a sum equal to 75.5% of the EBITDA Excess shall be added to the Initial Cash Consideration, and the Primary Buyer shall remit such additional amount to the Primary Seller; and

9.2.2to the extent there is an EBITDA Shortfall, a sum equal to 75.5% of the EBITDA Shortfall shall be deducted from the Initial Cash Consideration, and the Primary Seller shall remit such amount to the Primary Buyer.

9.3Any payment or repayment to be made under clause 9.1 or clause 9.2 shall be made:

9.3.1if to the Primary Seller, in the same manner as payment made under clause 4.1.2; and

9.3.2if to the Primary Buyer, by telegraphic transfer to an account notified by the Primary Buyer to the Primary Seller not later than ten Business Days following the date on which the Completion Accounts are agreed or determined.

10.Warranties

10.1The Primary Seller (and only the Primary Seller) warrants to the Buyers that each of the Warranties is true and accurate subject to the provisions of this deed and in particular the exclusions and limitations contained in this deed.

10.2Gorvines and the Primary Seller warrant to the Primary Buyer that the Tax Warranties are true and accurate subject to the provisions of this deed and in particular the exclusions and limitations contained in this deed.

10.3Each of the Other Sellers warrants (in respect of itself only) to the Buyers that each of the Warranties is true and accurate insofar only as such Warranties relate to each such Other Seller itself or to the Assets sold by such Other Seller itself pursuant to this deed.

10.4The Warranties are given on the date of this deed and immediately prior to Completion, and the Tax Warranties are given on the date of this deed and on Completion, and any reference made to the date of this deed (whether express or implied) in relation to any Warranty or Tax Warranty shall be construed, in relation to any such repetition, as a reference to both such dates (as relevant).

10.5The Sellers agree that any information supplied by or on behalf of any of the Employees or Resort Solutions Employees to the Sellers or their advisers in connection with the Warranties, the Tax Warranties, the information Disclosed in the Disclosure Letter or otherwise shall not constitute a warranty, representation or guarantee as to the accuracy of such information in favour of the Sellers, and the Sellers hereby undertake to the Buyers that they waive any and all claims which they might otherwise have against any of the Employees or the Resort Solutions Employees in respect thereof.

10.6Without prejudice to the right of the Buyers to claim on any other basis or take advantage of any other remedies available to it, if any Warranty or Tax Warranty is breached, the Sellers undertake to pay to the relevant Buyer on demand:

10.6.1the amount necessary to put the relevant Buyer into the position it would have been in if the Warranty or Tax Warranty in question had not been breached (including, in particular, loss of profit, but excluding indirect, or consequential damages); and

10.6.2all reasonable costs and reasonable expenses (including, in particular, reasonable legal and other professional fees) directly incurred by the relevant Buyer as a result of the breach of the Warranty or Tax Warranty in question.

10.7Warranties and Tax Warranties given so far as the Sellers are aware (or given subject to any similar expression) are deemed to be given to the actual knowledge, information and belief of the Seller Individuals after they have made reasonable enquiries of such persons of whom it is reasonable to make such enquires.

10.8Each of the Warranties and Tax Warranties is separate and, unless expressly provided to the contrary, is not limited by reference to any other Warranty or Tax Warranty or anything in this deed.

11.Buyers’ remedies

11.1Each of the Buyers acknowledges that it has not been induced to enter into this deed by, and that it does not in connection with this deed or its subject matter rely on, any representation, warranty, promise or assurance by the Sellers or any other person save for those contained in this deed.  Each of the Buyers agrees that, subject only to clause 11.2 , it shall have no right or remedy in respect of, and shall not in connection with any claim arising in relation to this deed or its subject matter, plead or assert the making or existence of, any representation, warranty, promise or assurance by the Sellers or their respective directors, employees or advisers save for those contained in this deed in respect of which the Buyers shall, subject to clause 21, have no right to rescind or terminate this deed and the only remedy to the Buyers shall be contractual damages for breach of any Warranty.

11.2Nothing in this clause 11 shall exclude or affect any right or remedy available to the Buyers in respect of fraud.

11.3The Buyer acknowledges that its legal advisers have explained to it the effect of this clause 11.

12.Buyer Warranties

12.1Each of the Buyers (in respect of itself only) each warrants to the Sellers as follows:

12.1.1each Buyer is validly incorporated, in existence and duly registered, under the laws of the jurisdiction of its incorporation;

12.1.2each Buyer has the requisite power and authority to enter into and perform this deed and any other agreement referred to herein to which it is or has agreed to become a party (the Buyer Documents);

12.1.3this deed constitutes and the Buyer Documents will, when executed, constitute binding obligations of the Buyer in accordance with their respective terms;

12.1.4the Buyers have not carried on any business, have not had any assets or liabilities, have not had any employees and has not been a party to any contracts (other than the relevant Transaction Documents);

12.1.5no order has been made and no resolution has been passed for the winding up of a Buyer or for a provisional liquidator to be appointed in respect of it and no petition has been presented and no meeting has been convened for the purposes of winding up a Buyer;

12.1.6no administration order has been made and no petition has been presented and no other action for such an order has been taken in respect of a Buyer;

12.1.7no receiver (which expression shall include an administrative receiver) has been appointed in respect of a Buyer;

12.1.8each Buyer is not insolvent or unable to pay its debts within the meaning of s.123 Insolvency Act 1986 and has not stopped paying its debts as they fall due;

12.1.9no voluntary arrangement has been proposed under s.1 Insolvency Act 1986 in respect of a Buyer;

12.1.10no event analogous to any of those set out in clauses 12.1.5 — 12.1.9 has occurred in or outside England with respect to a Buyer;

12.1.11each Buyer has obtained all necessary shareholder and board approvals in respect of entering into this deed and the relevant Buyer Documents;

12.1.12the execution and delivery of, and the performance by each Buyer of its obligations under, this deed and the relevant Buyer Documents will not:

12.1.13be or result in a breach of any provision of the memorandum or articles of association (or any analogous document) of a Buyer;

12.1.14be or result in the breach of, or constitute a default under, any instrument to which a Buyer is a party or by which a Buyer is bound and which is material in the context of the transactions contemplated by this deed;

12.1.15be or result in a breach of any order, judgment or decree of any court or governmental agency to which a Buyer is a party or by which a Buyer is bound and which is material in the context of the transactions contemplated by this deed; or

12.1.16require a Buyer to obtain any consent or approval of, or give any notice to or make any registration with, any governmental or other authority which has not been obtained or made on or prior to the date hereof both on an unconditional basis which cannot be revoked;

12.1.17at Completion the Buyers will have immediately available on an unconditional basis (subject only to Completion) the necessary cash resources to meet its obligations under this deed and the Buyer Documents;

12.1.18the Primary Buyer and the directors of the Primary Buyer have the right, power and authority under the constitutional documents of the Primary Buyer to allot and issue the Consideration Shares, and have sufficient authority to do so without first offering them to existing shareholders on a pre-emptive basis;

12.1.19the Consideration Shares to be issued and allotted pursuant to this deed shall be issued fully paid, with the rights and rank as provided in the articles of association and shall, upon their issue, be free from all Encumbrances, and their issue and allotment will not be subject to any pre-emptive rights or other rights to subscribe for or purchase shares in the capital of the Primary Buyer; and

12.1.20the Consideration Shares to be issued pursuant to this deed will constitute 24.5% of the issued share capital of the Buyer immediately following Completion.

12.2Each of the warranties in clause 12.1 (the Buyer Warranties) is given on the date of this deed and immediately prior to Completion and the Primary Buyer undertakes to forthwith disclose in writing to the Primary Seller any matter or thing which may arise or become known to any of the Buyer after the date of this deed and before Completion which is inconsistent with any of the Buyer Warranties.  In the event of it becoming apparent on or before Completion that a Buyer is or will be in breach of any the Buyer Warranties or any other term of this deed the Sellers may at their option either:

12.2.1rescind this deed by notice in writing, delivered by the Primary Seller to the Primary Buyer (without prejudice to any other claims or remedies available to it, whether pursuant to this deed or otherwise); or

12.2.2proceed to Completion, provided that if the Sellers proceed to Completion, they shall not have any claim for damages or any other remedy in respect of such breach or breaches and the Sellers hereby undertake to the Buyers that

they waive any and all claims and rights of action which they might otherwise have against the Buyers in respect of such breach or breaches.

13.Limitations on claims

13.1This clause limits the liability of the Sellers in relation to any and all Relevant Claims.

13.2The aggregate liability of the Sellers under or in respect of all Relevant Claims when taken together shall not exceed the Cash Consideration received by the Sellers.

13.3Without prejudice to the provisions of clause 13.2, the total aggregate liability of each Other Seller in respect of all Relevant Claims against it shall not in any event exceed an amount equal to 100 per cent of the amount of Cash Consideration received by it, and in the case of the Primary Seller, shall not exceed an amount equal to 100 per cent of the amount of Cash Consideration.

13.4Without prejudice to clause 13.2 and clause 13.3, the aggregate liability of the Sellers for all Commercial Warranty Claims when taken together shall not exceed 40 per cent of the Cash Consideration received by them.

13.5None of the Sellers shall be liable in respect of any Warranty Claim unless the aggregate liability of the Sellers in respect of all Warranty Claims, exceeds £812,626 in which case the Sellers liability shall be limited to the amount of the excess over £812,626.

13.6Without prejudice to clause 13.2 and clause 13.3, the total aggregate liability of the Sellers in respect of an indemnity claim pursuant to:

13.6.1paragraph 3 of Schedule 15 shall not exceed the aggregate of any amounts that become due and payable by the Buyers in respect of “golden handshake” arrangements with certain Employees as at the Completion Date; and

13.6.2paragraph 4 of Schedule 15 shall not exceed £500,000.

13.7For the avoidance of doubt, none of the Sellers except the Primary Seller and Gorvines shall be liable in respect of a Tax Related Claim.

13.8For the purposes of clause13.4, clause13.5, and clause 13.6 the liability of the Sellers in respect of a Relevant Claim shall mean the amount in respect of the Relevant Claim for which the relevant Sellers agree in writing to be responsible for or for which they are found to be liable in a court of competent jurisdiction or pursuant to a binding arbitration.

13.9Where a Buyer may be entitled (whether by reason of payment, discount, credit, relief or otherwise) to recover from a third party (other than pursuant to any policy of insurance and, for the avoidance of doubt, other than from a Seller any sum for any damage or liability which is or could be the subject of a Relevant Claim (other than a Tax Related Claim, to which the provisions of Schedule 21  (Tax Covenant) shall apply) (a Third Party Recovery), the Buyer:

13.9.1shall notify the Primary Seller of the Third Party Recovery within 10 Business Days of the Buyer or any member of the Buyers’ Group becoming aware that it may be entitled to make the Third Party Recovery, and in any event, if

sooner, prior to taking any material step to enforce, compromise, settle or waive any right in relation to that Third Party Recovery; and

13.9.2shall provide the Primary Seller with such information as the Sellers may reasonably require relating to the Third Party Recovery and shall keep the Primary Seller reasonably informed of any material development in the conduct of the Third Party Recovery and shall consult with the Primary Seller in relation to the same if so requested by the Primary Seller; and

13.9.3shall before commencing any Proceedings against any of the Sellers take all reasonable steps to make a successful relevant Third Party Recovery.

13.10If, in respect of any matter which would give rise to a Relevant Claim (other than a Tax Related Claim, to which the provisions of Schedule 21  (Tax Covenant) shall apply), any of the Buyers are entitled to claim under any policy of insurance, then such Buyer agrees to use its reasonable endeavours to pursue such claim under the applicable policy of insurance, provided that the relevant Sellers shall indemnify such Buyer against all costs, liabilities and reasonable expenses incurred in relation to taking any such steps and proceedings and any amounts recovered under such insurance claim shall then extinguish or reduce by the amount so recovered any such Relevant Claim that is subsequently made.

13.11The Sellers shall not be liable for any Warranty Claim, Tax Warranty Claim (in the case of 13.11.1 and 13.11.2 only) or Indemnity Claim (in the case of 13.11.3 only) to the extent that the Warranty Claim, Tax Warranty Claim (in the case of 13.11.1 or 13.11.2 only) or Indemnity Claim (in the case of 13.11.3 only):

13.11.1relates to matters Disclosed in or under the Disclosure Letter; or

13.11.2relates to any matter which is disclosed in the Due Diligence Reports;

13.11.3relates to any matter in respect of which an allowance, provision or reserve is made in the Completion Accounts to the extent of any such allowance, provision or reserve (as relevant);

13.11.4arises as a result of any change in law occurring after the date of this deed (whether or not the change purports to be effective retrospectively in whole or in part).

13.12Subject to clause 14.2, the Sellers shall have no liability in respect of any Relevant Claim (other than a Tax Related Claim, to which the provisions of Schedule 21  (Tax Covenant) shall apply) unless the Buyers shall have given notice in writing to the Primary Seller of such claim specifying (in reasonable detail) the matter which gives rise to the claim, the nature of the claim and the amount claimed in respect thereof (detailing such Buyer’s calculation of the loss thereby alleged to have been suffered by it), such notice to be given within 60 days after the such Buyer becomes aware of the claim and in any event not later than the date 30 months after the Completion Date.

13.13All and any liability of the Sellers in respect of any Relevant Claim (other than a Tax Related Claim, to which the provisions of Schedule 21  (Tax Covenant) shall apply) notified to it in accordance with clause 13.12 shall (if such Relevant Claim has not previously been satisfied, settled or withdrawn) be extinguished on the expiry of six months from the date of such notification of the Relevant Claim unless the relevant Buyer shall within such period have

issued and validly served on the relevant Sellers Proceedings in respect of such Relevant Claim.

13.14The Seller shall not be liable in respect of a Relevant Claim to the extent that the Relevant Claim (other than a Tax Related Claim, to which the provisions of Schedule 21 (Tax Covenant) shall apply) is attributable to:

13.14.1any voluntary act, omission or transaction carried out by or at the request of or with the consent of any of the Buyers or any member of the Buyers’ Group or any of their successors in title or assigns on or after Completion other than any such act, omission or transaction carried out in the ordinary and proper course of business; or

13.14.2anything expressly required to be done or omitted to be done by the Sellers pursuant to this deed; or

13.14.3anything done by or on behalf of any of the Sellers before Completion at the request of any of the Buyers.

13.15The Sellers shall not be liable in respect of any Relevant Claim for any indirect or consequential loss whether actual or contingent.

13.16None of the Sellers shall be liable in respect of any Warranty Claim or Tax Warranty Claim to the extent that any of the Buyer Individuals have actual knowledge of the claim or of the matters giving rise to the claim prior to Completion.

13.17Nothing in this clause 13 applies to a Relevant Claim that arises or is delayed as a result of fraud by the Sellers, or any member of the Sellers’ Group, or any employee or officer (or former employee or officer) of the Sellers or any member of the Sellers’ Group.

13.18The Buyers shall take, and shall procure that all other relevant members of the Buyers’ Group shall take, all reasonable steps to mitigate any loss or liability which is or might become the subject of a Relevant Claim under this deed, or otherwise howsoever.

13.19Without prejudice to all other limitations contained in this deed, the proportionate liability of each of the Sellers (except for the Primary Seller) in respect of a Relevant Claim in respect of which more than one but not all of them are liable, shall be limited to the amount for each relevant Seller that bears the same proportion to the aggregate liability of all of those Sellers liable in respect of that Relevant Claim as the amount of the Consideration received by it bears to the aggregate Consideration received by all those relevant Sellers.

13.20Without prejudice to all other limitations contained in this deed, the proportionate liability of each of the Sellers (except for each of the Primary Seller and Gorvines) in respect of any Relevant Claim in respect of which they are all liable, shall be limited to an amount for each Seller that bears the same proportion to the aggregate liability of all Sellers in respect of such Relevant Claim as the amount of the Initial Cash Consideration received by it bears to the aggregate Initial Cash Consideration received by all the Sellers.

13.21The Sellers shall not be liable in respect of any Relevant Claim to the extent that the subject of the claim has been or is made good or is otherwise compensated for without cost to the Buyer or the relevant member of the Buyers’ Group.

13.22The Buyer shall not be entitled to recover damages or otherwise obtain reimbursement or restitution more than once in respect of the same loss.

13.23The caps on the aggregate liability of the Sellers set out in this clause 13 shall include any additional or increased amounts required to be paid pursuant to clause 15.2 (less any amounts repaid under clause 15.3) or pursuant to any other applicable grossing up obligation set out in this deed by the Sellers in respect of any payment to the Buyers in respect of a Relevant Claim.

13.24The Primary Seller’s and Gorvines’s liability in respect of Tax Related Claims shall be further limited by the provisions of Schedule 21 (Tax Covenant).

14.Indemnities

14.1Each Seller undertakes to indemnify, and to keep indemnified, the relevant Buyers against all losses or liabilities (including reasonable legal and other professional fees and costs) which may be suffered or incurred by any of them and which arise in connection with the matters set out in Schedule 15 provided that this clause 14 shall not apply in respect of any liability to Tax.

14.2The indemnity set out in paragraph 3 of Schedule 15, shall not be subject to the provisions of clause 13.12.

15.Gross Up

15.1All payments made by the Sellers or the Buyers in respect of any Claim shall, subject to clause 15.2 below, be made gross free of any right of counterclaim and without deduction or withholding of any kind other than any deduction or withholding required by Law.

15.2If any party is required to make a deduction or withholding by Law from a payment in respect of a Claim, the sum due from the party making the payment shall be increased to the extent necessary to ensure that, after the making of any deduction or withholding, the recipient receives a sum equal to the sum it would have received had no deduction or withholding been made.

15.3If the recipient of a payment made in respect of a Claim receives a credit or refund or similar benefit by reason of any deduction or withholding for or on account of Taxation then it shall reimburse to the other party or parties such part of such additional amounts paid to it under this Clause 15 as the recipient of the payment certifies to the other party or parties will leave (after such reimbursement) in no better and no worse position than it would have been if the other party or parties had not been required to make such deduction or withholding.

16.External Claims

16.1If any of the Buyers or any other member of the Buyers’ Group becomes aware of any actual or threatened claim, demand or proceeding against any member of the Buyers’ Group (an External Claim), or of any fact or matter which may give rise to an External Claim, in relation to which it appears that the Buyers or any other member of the Buyers’ Group are, or might be or become, entitled to make a Relevant Claim (other than a Tax Related Claim, to which the provisions of Schedule 21  (Tax Covenant) shall apply):

16.1.1the Primary Buyer shall as soon as reasonably practicable after so becoming aware and in any event within 30 Business Days notify the Primary Seller in writing; and

16.1.2the Primary Buyer shall thereafter consult with the Primary Seller in respect of the External Claim and permit, and procure that any relevant member of the Buyers’ Group shall permit, to the extent it is legally able to do so, the Primary Seller and its advisers reasonable access to relevant employees, premises, chattels, documents and records (including the right to take copies at the Primary Seller’s expense of such documents and records) for the purposes of investigating the matter and enabling the Primary Seller to take any action permitted by this clause 16.

16.2Subject to the relevant Sellers indemnifying the Buyers or other relevant member of the Buyers’ Group against any liabilities, losses or reasonable expenses which it may suffer or incur thereby and which it would not otherwise suffer or incur:

16.2.1the relevant Sellers shall be entitled by notice in writing to the Buyer at any time to require that the relevant Sellers shall thereafter have the sole conduct and control on behalf of the Buyer or other member of the Buyers’ Group of any External Claim and following such notice, without prejudice to the generality of the foregoing, the relevant Seller shall in its absolute discretion be entitled to avoid, dispute, resist, settle, compromise, defend or appeal the External Claim (but only to the extent of money damages, and without any admission of liability), unless in the opinion of the Buyer (acting reasonably), doing so would have a material adverse impact on the goodwill or reputation of the Business and the Resort Solutions Business, and the Buyer shall use its reasonable endeavours not to do (and shall use its reasonable endeavours to procure that no member of the Buyers’ Group shall do anything) inconsistent therewith;

16.2.2the Buyer shall and shall procure that each member of the Buyers’ Group shall give to the relevant Seller all such information and assistance as the relevant Seller may reasonably require for any purpose referred to in clause 16.2.1, including, without limitation, instructing any such solicitors, Counsel or other professional advisers as the relevant Seller may nominate to act on behalf of the Buyer or other member of the Buyers’ Group but in accordance with the relevant Seller’s instructions.

16.3The relevant Seller shall keep the Buyer informed of all material developments in relation to any External Claim in respect of which the relevant Seller has served a notice pursuant to clause 16.2.1 by providing written monthly reports containing such information as the Buyer shall reasonably require.

16.4Where the Sellers have not by a notice pursuant to clause 16.2.1 assumed sole conduct and control in relation to an External Claim, the Buyer shall and shall procure that each relevant member of the Buyers’ Group shall:

16.4.1keep the relevant Sellers informed of all material developments in relation to the External Claim by providing written quarterly reports containing such information as the relevant Sellers shall reasonably require;

16.4.2not make any admission of liability, agreement, settlement or compromise with any third party in relation to the External Claim without the prior written consent of the relevant Sellers; and

16.4.3take all actions that the relevant Sellers may reasonably request to avoid, dispute, resist, defend or appeal the External Claim, unless in the opinion of the Buyer (acting reasonably), doing so would have an adverse impact on the goodwill or reputation of the Business and the Resort Solutions Business).

17.Tax Covenant

17.1The provisions of Schedule 21 (Tax Covenant) shall apply to this deed.

18.Risk and insurance

18.1The Sellers shall continue to carry on the Business and the Resort Solutions Business for their own benefit and at their own risk up to the Effective Time. The Business, the Resort Solutions Business and the Assets shall be at the risk of the Buyer from the Effective Time.

18.2Nothing in this deed shall have the effect of making the Buyer liable in any way under any guarantees or warranties given by the Sellers to any Customer in relation to services rendered by the Sellers prior to the Effective Time, the liability for which shall remain absolutely with the Sellers.

18.3The Sellers shall maintain in force, up to and including the Effective Time, all the policies of insurance which have been Disclosed and shall procure that from the Effective Time the interest of the Buyer under or pursuant to this deed in respect of the Fixed Assets, the Moveable Assets and the Properties is noted on all such policies effected by or for the benefit of the Sellers in respect thereof. If any of the Fixed Assets, the Moveable Assets, or the Properties are lost, destroyed or damaged prior to the Effective Time, the Buyer at its option may require that the insurance monies (if any) recoverable in respect thereof shall be paid to it and the Sellers shall direct the insurance company accordingly, and in such event any such insurance monies received by the Sellers shall be held by it on trust for the Buyer absolutely.

19.Liabilities of the Sellers and the Buyers

19.1Nothing in this deed shall pass to any of the Buyers, or shall be construed as acceptance by the Buyers of, any liability, debt or other obligation of the Sellers (whether accrued, absolute, contingent, known or unknown) for anything done or omitted to be done before Completion in the course of or in connection with the Business or the Assets.

19.2The relevant Sellers shall:

19.2.1on demand, indemnify and hold the Buyers and each member of the Buyers’ Group, and their respective officers, directors and employees, harmless against any and all obligations, liabilities and Demands arising therefrom and from any losses incurred or suffered by any of them in respect of the period prior to the Effective Time, in relation to, by reason of, or resulting from or arising out of the same (including, but not limited to, the Excluded Liabilities); and

19.2.2perform any obligation falling due for performance or which should have been performed before Completion, including the Excluded Liabilities.

19.3Nothing in this clause 19 or elsewhere in this deed shall have the effect of making the Buyers liable in any way under any guarantees, warranties or representations given by the Sellers to any Customer in relation to services rendered by the Sellers before the Effective Time, the liability for which shall remain absolutely with the Sellers

19.4The relevant Sellers shall indemnify and hold the Buyers harmless from and against all Demands of whatsoever nature relating to and payable in respect of the Business or Assets purchased by such Buyer which are attributable to the period up to and including the Effective Time, including any act or omission on the part of the Sellers in relation to the Business Contracts or services provided prior to the Effective Time, and in particular any claim under any warranty.

19.5The Buyers from the Effective Time assume and shall thereafter pay, discharge and perform in accordance with their respective terms and conditions when due the Assumed Liabilities acquired by such Buyer (and such Buyer shall, in so far as legally permitted, be entitled to the benefit of, the same rights, powers, remedies, claims, defences, obligations, conditions and incidents (including rights of set-off and counterclaim) as the Sellers would have enjoyed had the Assumed Liabilities not been assumed by the relevant Buyer).

19.6For the avoidance of doubt, the Excluded Liabilities shall not transfer to any of the Buyers from the Sellers under this deed, and the Buyers shall have no liability in respect of the same.

19.7The Primary Seller shall, on demand, indemnify and hold the Buyers, each Buyer Group Company and their respective officers, directors and employees, harmless in respect of and from any losses incurred or suffered by any of them in respect of the period prior to the Effective Time in relation to, by reason of or resulting from or arising out of the Excluded Liabilities relating to it.

19.8The Primary Buyer shall, on demand, indemnify and hold the Sellers, each Seller Group Company and their respective officers, directors and employees, harmless in respect of and from any losses incurred or suffered by any of them in respect of the period at or after the Effective Time in relation to, by reason of, or resulting from or arising out of the Assumed Liabilities.

19.9Without limiting any other provisions of this deed, all moneys which are received by the Sellers or any member of the Seller’s Group on or after the Effective Time, to the extent in respect of any of the Assets and which belong to the Buyers or any member of the Buyers’ Group shall be held in trust by the relevant Sellers for the relevant Buyer provided that they shall be paid over, transferred or delivered to the relevant Buyer (as relevant) by or on behalf of the relevant Seller within 5 Business Days from receipt thereof.

19.10The foregoing provisions of this clause 19 shall not apply in respect of any liability to Tax of Resort Solutions Limited or Resort Solutions Holdings Limited (in relation to which the provisions of Schedule 21 (Tax Covenant) shall apply).

19.11The provisions of Schedule 25 (Further Excluded Liabilities) shall apply to this deed.

20.Restrictions on the Sellers

20.1Save as permitted or required pursuant to any Transaction Document, neither the Sellers nor any member of the Sellers’ Group shall (unless otherwise agreed in writing by the Buyer), during the Restricted Period, carry on or be employed in, engaged or interested in

or have any ownership interest in any business in Europe and/or the United States, and any other country where the Company is managing Shared Ownership Resorts from time to time which would be in competition with any part of the Restricted Business. The restrictions apply for a period of 5 years from the Completion Date (the “Restricted Period”).

20.2For the purposes of clause 20 the term “Restricted Business” (which shall not include the management of the Multi Clubs) shall mean, the provision of third-party management services to Shared Ownership Resorts including the provision of vacation rental services in connection with such third-party services, but excluding management of any of the Multi Clubs. For the avoidance of doubt, the Restricted Business shall not include the business of managing hotels or whole ownership units or vacation rentals for any property owned and/or developed by any member of the Sellers’ Group and designed for holiday accommodation or any property to the extent that it is generally used for primary residential purposes or any freehold developments where less than 25 per cent of such property or development is used in the Fixed Clubs or the Multi Clubs (as defined in the VRI Europe Shareholders’ Deed).

20.3The restriction in clause 20.1 shall not restrict any of the Sellers or any member of the Seller’s Group from carrying on any part of its business (other than the Business) as at the date of this deed or any business that it is required or permitted to carry out pursuant to and in accordance with the terms of any Transaction Document.

20.4During the Restricted Period neither the Sellers nor any member of the Sellers’ Group shall solicit or endeavour to entice away from the Buyer or any of its subsidiaries or from any member of the Buyers’ Group (as the case may be) any supplier who supplies, or has supplied within the previous 12 months, goods or services to the Sellers and/or Buyer (as the case may be) if that solicitation or enticement causes or would reasonably be expected to cause such supplier to cease supplying, or materially reduce its supply of, those goods or services to the Buyer or any of its subsidiaries or any member of the Buyers’ Group.

20.5During the Restricted Period, neither the Seller nor any member of the Sellers’ Group shall attempt to obtain an agreement to provide third party Shared Ownership Resort management services or vacation rental services in relation to third party Shared Ownership Resort Management Services to a property to which the Buyer, or any member of the Buyer’s Group provides such third party Shared Ownership Resort Management Services as of such date.

20.6During the Restricted Period neither the Sellers nor any member of the Sellers’ Group shall solicit or endeavour to entice away from the Buyer or any member of the Buyers’ Group any officer, director, manager, senior employee, agent or consultant of the or any of its subsidiaries or any member of the Buyers’ Group whether or not such person would commit a breach of contract by reason of leaving service or office; unless the Buyer has provided prior written consent to any action by the Sellers or any member of the Sellers’ Group.

20.7Neither the Sellers nor any member of the Sellers’ Group shall, during the Restricted Period, interfere with or cause any Owner or Club to cease or reduce its dealing with the Business or the Resort Solutions Business.

20.8Each of the undertakings in this clause are given by the Sellers to the Buyer and apply to actions carried out by the Sellers (or any member of the Sellers’ Group) in any capacity and

whether directly or indirectly, on the Sellers’ (or any member of the Sellers’ Group’s) own behalf, on behalf of any other person or jointly with any other person.

20.9Nothing in this clause shall prevent the Sellers or any member of its Group from holding for investment purposes only not more than 3% of any class of shares or securities of any company traded on a recognised investment exchange (within the meaning of the Financial Services and Markets Act 2000).

20.10The Sellers shall procure that all members of the Sellers’ Group comply with the terms of this clause.

20.11Each of the covenants in this clause 20 is a separate undertaking and shall be enforceable by the Buyer separately and independently of its right to enforce any one or more of the other covenants contained in this clause 20.

20.12Each of the covenants in this clause 20 is considered fair and reasonable by the parties but if any restriction is found to be void or unenforceable, but would be valid and enforceable if any part of it were deleted or the period or area of application reduced, the restriction shall apply with the minimum modifications necessary to make it valid and enforceable.

20.13The price for the undertakings contained in this clause 20 is included in the Consideration.

21.Rescission

21.1A “Buyer Rescission Event” shall be deemed to have arisen if it becomes apparent on or before Completion that:

21.1.1any of the following events have occurred and such event has had a Material Adverse Effect:

21.1.1.1any fact or matter constituting a breach of any of the Warranties or Tax Warranties, or a breach of the undertakings detailed in Schedule 19 (Conduct between signing and Completion) or a breach of the other covenants given by the Sellers in this deed; or

21.1.1.2any fact or matter which would constitute a breach of the Warranties or Tax Warranties if they were repeated at any time before Completion, whether by reason of a disclosure by the Sellers or in any other way;

21.1.1.3an administration order is made in respect of the Sellers or the Resort Solutions Holdings Limited and Resort Solutions Limited;

21.1.1.4an order is made or resolution passed to wind up in respect of the Sellers or Resort Solutions Holdings Limited and Resort Solutions Limited;

21.1.1.5a liquidator or provisional liquidator is appointed in respect of the Sellers or Resort Solutions Holdings Limited and Resort Solutions Limited;

21.1.1.6the Sellers or Resort Solutions Holdings Limited or Resort Solutions Limited makes a proposal under the Insolvency Act

1986 for a voluntary arrangement (or any equivalent in any other jurisdiction);

21.1.1.7any receiver (including an administrative receiver) is appointed in respect of the Sellers or Resort Solutions Holdings Limited or Resort Solutions Limited; or

21.1.1.8the Sellers or Resort Solutions Holdings Limited or Resort Solutions Limited enter into an arrangement for the benefit of their creditors; or

21.1.2any matter which, alone or together with any other fact or matter, has had or is reasonably certain to have a Very Material Adverse Effect, excluding any fact, matter, event, circumstance or change arising from:

21.1.2.1any change in stock markets, interest rates, exchange rates, commodity prices or other general economic, political or social conditions; or

21.1.2.2any changes in Law, regulations or accounting practices; or

21.1.2.3matters Disclosed in or under the Disclosure Letter.

21.2If a Buyer Rescission Event is deemed to have arisen, then the Buyers may at their option either:

21.2.1rescind this deed by notice in writing, delivered by the Primary Buyer to the Primary Seller (without prejudice to any other claims or remedies available to it, whether pursuant to this deed or otherwise); or

21.2.2proceed to Completion, provided that if the Buyers proceed to Completion, they shall not have any claim for damages or any other remedy in respect of such breach or breaches and the Buyers hereby undertake to the Sellers that they waive any and all claims and rights of action which they might otherwise have against any of the Sellers in respect of such breach or breaches.

22.Indirect Tax

22.1All amounts expressed in this deed as payable by the Buyers are expressed exclusive of Indirect Tax (if any) which may be chargeable thereon.  Subject to the following provisions of this clause 22, where any supply of goods or services made or deemed to be made by any Seller pursuant to this deed is subject to Indirect Tax, the Buyers shall (against production by the relevant Seller of an appropriate Indirect Tax invoice in respect thereof) pay the amount of such Indirect Tax to the relevant Seller unless and to the extent that the relevant Buyer is directly liable to account for the applicable Indirect Tax to the relevant Taxation Authority.

22.2As regards the transfer of the Assets and the Business, to the extent that any relevant jurisdiction provides for relief or exemption from Indirect Tax on the transfer of assets constituting a business (or part of a business) or treats the transfer as being tax-free for Indirect Tax purposes (including, without limitation, a transfer to a person outside the relevant jurisdiction such that the relevant Seller is not subject to Indirect Tax in respect thereof (including, without limitation, by way of zero-rating due to the export or removal of

goods from the relevant jurisdiction) and, in member states of the European Union, a transfer treated as neither a supply of goods nor a supply of services for the purposes of Article 19 and 29 of Council Directive 2006/112/EC) (in any such case, an “Indirect Tax Free Transfer”):

22.2.1the Sellers and the Buyers shall co-operate in good faith to agree prior to the Completion Date whether and the extent to which the transfer of Assets and the Business by each Seller qualifies as an Indirect Tax Free Transfer, subject to making any necessary elections, applications or taking any other steps required under applicable law and practice of the relevant Taxation Authority for such treatment to apply;

22.2.2where the Primary Seller and the Primary Buyer agree that a transfer of the Assets and the Business (or any part thereof) by a Seller qualifies as, or as forming part of, an Indirect Tax Free Transfer subject to making any necessary elections, applications or taking any other steps required under applicable law and practice of the relevant Taxation Authority for such treatment to apply, the relevant Seller and the relevant Buyer shall co-operate and do all such acts and things as may be reasonably necessary (including, for the avoidance of doubt, the making of an election and/or application in respect of Indirect Tax to any relevant Taxation Authority) to secure such treatment as regards the sale of such Assets and the Business in the relevant jurisdiction;

22.2.3where and to the extent that, in relation to the transfer by a Seller of some or all of the Assets and the Business being sold by such Seller pursuant to this Agreement, the Primary Seller and the Primary Buyer agree that such transfer of Assets cannot qualify as, or as forming part of, an Indirect Tax Free Transfer, the parties agree that the provisions of clause 22.1 shall apply to such transfer accordingly; and

22.2.4where and to the extent that, in relation to the transfer by a Seller of some or all of the Assets and the Business being sold by such Seller pursuant to this Agreement, the Primary Seller and the Primary Buyer are unable to agree by thirty (30) days prior to the Completion Date that such transfer qualifies as, or as forming part of, an Indirect Tax Free Transfer (subject to making any necessary elections, applications or taking any other steps required under applicable law and practice of the relevant Taxation Authority), the Tax Referee shall resolve the disputed matters as promptly as practicable and, in any event, no later than five (5) Business Days prior to the Completion Date, and clauses 22.1 to 22.7 shall apply in accordance with the Tax Referee’s determination in the absence of manifest error.  The costs, fees and expenses of the Tax Referee shall be borne as the Tax Referee directs.  For the purposes of this clause 22.2.4, “Tax Referee” shall mean such independent firm of chartered accountants agreed upon between the Primary Seller and the Primary Buyer or (failing agreement) to be selected (at the instance of either party) by the President for the time being of the Institute of Chartered Accountants in England and Wales.

22.3In the event that in order to secure that the transfer by a Seller of some or all of the Assets and the Business is treated as an Indirect Tax Free Transfer, it is necessary for the relevant Seller or the relevant Buyer to make an election for the purpose of Indirect Tax, then the

relevant party shall only be required to make such election to the extent that it is legally entitled to do so.

22.4In the event that the parties treat the sale by a Seller of all or any part of the Assets and the Business hereunder as an Indirect Free Transfer and any relevant Taxation Authority (including for the avoidance of doubt, the Isle of Man Customs & Excise) determines that Indirect Tax is chargeable on the sale of such Assets and the Business by the Seller, then the relevant Seller shall give notice to the relevant Buyer of such determination within five Business Days of its being so advised by the relevant Taxation Authority.  The relevant Buyer shall within 5 Business Days after the relevant Seller notifies the relevant Buyer of the determination pay to the applicable Seller (against production by the relevant Seller of an appropriate Indirect Tax invoice in respect thereof) pay to the relevant Seller the amount of such Indirect Tax determined by the relevant Taxation Authority to be so chargeable, together with any interest, penalty or surcharge imposed on such Indirect Tax unless such interest, penalty or surcharge was directly attributable to a default by the relevant Seller.  In the event of a dispute between the relevant Seller and the relevant Buyer as to whether interest, penalty or surcharge is attributable to a default by the relevant Seller, the matter shall be referred to a Tax Referee, the costs, fees and expenses of which shall be borne as he directs.

22.5If any payment in respect of Indirect Tax to a Seller is made under this deed in circumstances where Indirect Tax was not properly chargeable then, where the Selling Party has accounted for such Indirect Tax to the relevant Tax Authority, the relevant Seller’s obligation to repay such payment in respect of Indirect Tax shall be limited to such amount as the Seller or any member of the Sellers’ Group are entitled to recover (by way of credit, repayment or otherwise) from the relevant Taxation Authority in respect of the Indirect Tax wrongly paid, provided that the Seller uses and procures that any relevant member of the Sellers’ Group uses reasonable efforts to establish their entitlement to such recovery.  In the event of a dispute between a Seller and a Buyer regarding what is reasonable in this regard, the matter shall be referred to a Tax Referee, the costs, fees and expenses of which shall be borne as he directs.

22.6To the extent that: (a) a Seller or a Buyer is a member of a group for VAT purposes; and (b) as a result of such membership any action required to be taken by such party under clauses 22.1 to 22.5 can only be lawfully be taken by a representative or other member of such group (“Responsible Member”) which is not the relevant Seller or the relevant Buyer, the relevant Seller (in relation to steps required but for this clause 22.6 to be taken by that Seller) and the relevant Buyer (in relation to steps required but for this clause 22.6 to be taken by that Buyer) shall procure that the relevant Responsible Member takes the relevant action.

22.7The Sellers have obtained written confirmation from the Isle of Man Customs & Excise that, based on the situation and circumstances set out in the letter from Ernst & Young dated 28 May 2013, they agree that the transfer of the Fixed Club Management Agreements by CLC Resort Management Limited to VRI Europe Limited would constitute a transfer of a business as a going concern for Indirect Tax purposes in the Isle of Man and, accordingly, the parties agree that, subject to clause 22.4, the consideration allocated to the Primary Seller in respect of the Fixed Club Management Agreements in Schedule 5 to this deed shall not be subject to Indirect Tax in the Isle of Man.

22.8Notwithstanding the foregoing provisions of this clause 22, the parties agree that none of the transfers of Assets by the Other Sellers pursuant to this deed constitute a transfer of a

business as a going concern for Indirect Tax Purposes and, accordingly, clause 22.1 and not clause 22.2 shall apply to such transfers.

23.The Employees

23.1The parties agree that the sale and purchase pursuant to this deed constitutes a relevant transfer for the purposes of TUPE and/or Article 44.2 of the Workers’ Statute and that it will not operate so as to terminate the contracts of employment of any of the Employees. Such contracts shall be transferred to the Buyer pursuant to TUPE or the Workers’ Statute, as the case may be, with effect from the Effective Time.

23.2Subject to the matters permitted by Schedule 19, each Seller undertakes to the relevant Buyer, in respect of itself only, that, so far as it is aware:

23.2.1it has complied in all material respects with, and shall up to and including the Effective Time comply in all material respects with, all of their material obligations due to or in connection with the Employees or any recognised body representing them;

23.2.2it has paid and shall pay all sums due to or in relation to the Employees in respect of the period up to and including the Effective Time (whether arising under common law, statute, equity or otherwise) including all salaries, wages, employee bonus or commission, expenses, National Insurance and pension contributions and liability to Taxation in respect of the period up to and including the Effective Time;

23.2.3it has complied and shall comply in all material respects with their material obligations under regulation 11 of TUPE or Article 44.6 of the Workers’ Statute;

23.2.4it has complied and shall comply in each case in all material respects with regulation 13 of TUPE and Part IV of TULRCA or Article 44.8 of the Workers’ Statute (and that they have provided and shall provide to the Buyer such information as the Buyer may reasonably request in writing in order to verify such compliance);

23.2.5it has not terminated and shall not terminate or take any steps to terminate the employment of any of the Employees without the prior written consent of the Buyer, save where there has been gross misconduct justifying summary dismissal or in accordance with the previous practice of the Sellers;

23.2.6it has not transferred and shall not transfer any of the Employees from working within the Business or the Resort Solutions Business, it has not intentionally induced and shall not intentionally induce any Employee to resign their employment in the Business or the Resort Solutions Business, and it has not agreed and shall not agree to transfer any Employee from the Business (without the prior written consent of the Buyer);  and

23.2.7it shall not employ or transfer any person who is not an Employee to work in the Business or the Resort Solutions Business without the prior written consent of the Buyer other than in accordance with previous practice of the Sellers.

23.3Each Seller shall indemnify and hold the Buyers harmless against all Demands (including reasonably incurred legal and other professional fees and expenses) which the Buyers may suffer, sustain, incur, pay or be put to arising from or in connection with:

23.3.1any failure by such Seller to comply with its obligations under this clause 23; or

23.3.2the termination of the Employees’ employment by the Sellers on or prior to the Effective Time; or

23.3.3any act or omission in respect of the Employees before the Effective Time which, by virtue of TUPE or the Workers’ Statute, is deemed to be an act or omission of the Buyer; or

23.3.4such Seller’s failure to comply in all material respects with its obligations under regulation 13 of TUPE or Article 44.8 of the Workers’ Statute in connection with the transfer of the Business.

23.4If any contract of employment or collective agreement not Disclosed to the Buyer has effect or is alleged to have effect as if originally made between a Buyer and any person or body or their representatives as a result of the provisions of TUPE, the Workers’ Statute or otherwise:

23.4.1such Buyer may terminate such contract or agreement within 30 days of becoming aware of such allegation and, in the event of such termination and subject to clause 23.4.3 below, the relevant Seller shall indemnify and hold the Buyer harmless against all Demands (including any liability to Taxation and reasonably incurred legal and other professional fees and expenses) that the relevant Buyer may suffer, incur, sustain, pay or be put to by reason of, on account of or arising out of such termination; and

23.4.2if the relevant Buyer does not terminate such contract or collective agreement within 30 days of becoming aware of such allegation, the provisions of 23.4.1 shall not apply.

23.5The indemnity at 23.4.1 shall not include costs arising from:

23.5.1the relevant Buyer’s discriminatory acts or omissions; or

23.5.2the relevant Buyer’s failure to comply with any contractual procedure; or

23.5.3the relevant Buyer’s failure to comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures (as amended from time to time) or equivalent.

23.6Subject to clause 23.7 below, the Buyers shall fully indemnify and hold each Seller harmless against all Demands (including reasonably incurred legal and other professional fees and expenses) which such Seller may suffer, sustain, incur, pay or be put to:

23.6.1by virtue of any act, omission, obligation or liability of any of the Buyers in relation to an Employee on or after the Effective Time; or

23.6.2as a result of the failure or alleged failure of any of the Buyers to comply with their obligations to inform and consult, or both, with representatives of employees; or

23.6.3by virtue of any substantial change made or proposed by any of the Buyers in the working conditions of any of the Employees which is detrimental to any of the Employees; or

23.6.4by virtue of a change in the identity of the employer of all or any of the Employees where that change is a significant change and to the detriment of all or any of the Employees.

23.7The Buyer shall have no liability under the indemnity set out in clause 23.6 above, where such liability arises as a consequence of any act, omission or event undertaken by the Seller.

23.8Without prejudice to the other provisions of this clause 23, each of the relevant Buyers and each relevant Seller shall, at their own respective expense, give the other such assistance as they may reasonably require (on reasonable notice) to contest any relevant Demand by any person employed or engaged in the Business (whether before, at or after the Effective Time) or their representatives resulting from or in connection with the transfer of the Business under this deed, subject always to the parties’ obligations under the Data Protection Laws.

23.9Each relevant Buyer and each relevant Seller shall, on request by the other (on reasonable notice), provide such information or documents as the other may reasonably require relating to the terms of employment, pension and life assurance arrangements, health benefits, welfare or any other matter concerning any of the Employees or any trade union, employee representative or body of employees or their representatives or relating to collective agreements or collective or individual grievances in the periods before, at or after the Effective Time.

24.Consents for transfer of certain Assets

24.1Subject to clause 24.2 the Buyers shall (in consultation with the Primary Seller) use all reasonable endeavours after Completion to obtain (at the Sellers’ expense) all such consents as may be reasonably necessary for the transfer of the Assets to the relevant Buyer with effect from the Effective Time and the relevant Sellers declare themselves, with effect from the Effective Time, trustees for the relevant Buyer in respect of all such Assets until the same shall, with any necessary consents from third parties, have been finally assigned to the relevant Buyer.  The relevant Sellers undertake that until completion of such assignments they will with effect from the Effective Time act in accordance with the reasonable directions of the relevant Buyer in all matters relating to such Assets (including in relation to cooperating with the relevant Buyer in obtaining relevant consents).  The Buyers shall fully and effectively indemnify the relevant Sellers against all actions, claims, costs, expenses, liabilities or losses which the relevant Sellers suffer or incur whilst so acting.

24.2Clause 24.1 shall not apply to the Business Contracts or the Leasehold Properties.

25.The Business Contracts

25.1Each Seller shall, with effect from the Effective Time, assign or hold to the order of, to the relevant Buyer (or its nominee(s)), or procure the assignment to the relevant Buyer (or its nominee(s)) of, all the Business Contracts to which it is a party which are capable of assignment or novation without a Third Party Consent.

25.2If any of the Business Contracts cannot be assigned or novated at the Effective Time without obtaining a Third Party Consent, then the relevant Sellers shall use all reasonable endeavours to obtain at the Sellers’ cost such consents as soon as reasonably practicable after the Effective Time.

25.3Insofar as any of the Business Contracts cannot be assigned or novated to the relevant Buyer without Third Party Consent, and such consent is refused or otherwise not obtained, or where any of the Business Contracts are incapable of transfer to the relevant Buyer by assignment, novation or other means:

25.3.1the relevant Sellers shall at the relevant Buyer’s request use all reasonable endeavours with the co-operation of the relevant Buyer to procure such assignment or novation;

25.3.2unless and until any such Business Contract is assigned or novated, the relevant Sellers shall continue their corporate existence and if:

25.3.3sub-contracting is permissible and lawful under the Business Contract in question, the relevant Buyer shall (at the relevant Buyer’s cost) as the relevant Sellers’ sub-contractor, perform all the obligations of the relevant Sellers under such Business Contract (on the same terms (mutatis mutandis) and for the same remuneration as apply to the contracts concerned); and

25.3.4sub-contracting is not permissible and lawful under the Business Contract in question, the relevant Seller shall act in connection with such Business Contract in all respects as the relevant Buyer may from time to time reasonably direct in order to secure the performance of the Business Contract (and, if the services to be provided under the Business Contract in question are not of a category to be provided by the relevant Seller pursuant to the Shared Services Agreement, then the relevant Seller shall secure such performance using management, labour, plant and equipment, materials and all other necessary resources provided by the relevant Buyer and for this purpose it shall not be reasonable to require the relevant Seller to make any payment or take any other step unless the relevant Buyer has first put the relevant Seller in sufficient cleared funds or provided sufficient resources as aforesaid),

and so that the obligations and liabilities under such Business Contract shall be effectively performed by the relevant Buyer or by the relevant Seller on the relevant Buyer’s behalf and the full benefit of all contractual rights, benefits and claims thereunder arising after the Effective Time shall vest in the relevant Buyer and shall be held in trust by the relevant Seller for the relevant Buyer absolutely.  Where such holding in trust would result in the breach of any Business Contract the relevant Seller and the relevant Buyer shall make such other arrangements between themselves which will, without giving rise to such a breach, and so far as is practicable, secure

rights for the relevant Buyer equivalent to those it would enjoy from having transferred to it the benefit of the Business Contract with effect from the Effective Time, or as soon as practicable thereafter.  The Buyer shall indemnify the relevant Seller in respect of such obligations and liabilities; and

25.3.5unless and until any such Business Contract is assigned or novated, the relevant Sellers shall (so far as it lawfully may) give all such assistance as the relevant Buyer may reasonably require to enable the relevant Buyer to enforce its rights under such Business Contract and (without limitation) shall provide access, at reasonable times, to all relevant books, documents and other information to the extent in relation to such Business Contract as the relevant Buyer may reasonably require from time to time.

25.4Nothing in this deed shall be construed as an assignment or attempted assignment if such assignment or attempted assignment would constitute a breach of such Business Contract.

25.5If Third Party Consent to assignment or novation of a Business Contract is refused, or otherwise not obtained on terms reasonably satisfactory to the relevant Buyer within 90 Business Days of the Completion Date, the relevant Buyer shall be entitled, at its sole discretion, to require the Sellers to serve proper notice to terminate that Business Contract. The relevant Sellers shall cooperate to assist in getting replacement contracts on terms no less favourable to the Business than those of the original Business Contract. The Sellers shall indemnify and hold the relevant Buyer harmless from and against all Demands (including legal and other professional fees and expenses and taking account of any sums paid by the relevant Buyer in respect of the Business Contract) that the relevant Buyer may suffer, sustain, incur, pay or be put to by reason of the termination of such Business Contract and against losses caused by replacement contracts that are on terms less favourable to the Business than those of the original Business Contract.

26.Undertakings and apportionments

26.1All receipts of the Business relating to services rendered or goods supplied or delivered by or on behalf of the Business prior to the Effective Time and all income accruing in respect of any of the Assets (including, without limitation, royalties and licence fees) for all periods up to the Effective Time shall belong to the Sellers and all receipts of the Business relating to services rendered or goods supplied or delivered by or on behalf of the Business after the Effective Time, including payments made to the Sellers in advance in respect of services to be rendered or goods supplied or delivered after the Effective Time, and all such income accruing in respect of any of the Assets for all periods after the Effective Time shall belong to the relevant Buyer.

26.2All outgoings of the Business other than the Assumed Liabilities accruing in respect of all periods prior to the Effective Time, shall be borne by the relevant Sellers and all such outgoings for all periods after the Effective Time insofar as they relate to the Assets, together with the Assumed Liabilities and every other liability or obligation expressly assumed by the relevant Buyer by this deed shall be borne by the relevant Buyer.  The relevant Seller shall accordingly receive credit for its prepayments in respect of such outgoings to the extent that they relate to the period after the Effective Time.

26.3Receipts and outgoings within clauses 26.1 and 26.2 related to any period partly before and partly after the Effective Time which do not vary over the period by reason of usage or consumption or any other factor, shall be deemed to accrue evenly over the relevant period

and shall be apportioned between the Sellers and the relevant Buyer by reference to the number of days in the period in respect of which they are payable which have elapsed prior to, or after the Effective Time, respectively.  Such receipts and outgoings which do to any extent depend on volume or usage or any other like factor shall be apportioned between the Sellers and the relevant Buyer by reference to the volume, usage or other factor in respect of parts of the relevant period before and after the Effective Time, respectively.

26.4For the avoidance of doubt, the foregoing provisions of this clause 26 shall not apply in respect of costs, claims, expenses or liabilities of, or undertakings in respect of, Resort Solutions Limited or Resort Solutions Holdings Limited.

27.Data protection

27.1Notwithstanding any other provision of this deed, each of the Buyers undertakes that, on receipt of the Customer Database and Employee Database on the Completion Date:

27.1.1it shall duly observe all its obligations as a Data Controller under the Data Protection Laws which arise in connection with processing Customer Data and Employee Data;

27.1.2it shall comply with the eight Data Protection Principles set out in the DPA 1998 and any other analogous provision under any other Data Protection Law and, in particular, it shall process Customer Data and Employee Data fairly and lawfully in accordance with the First Data Protection Principle for the purpose of the continued provision of details of the services to the Customers and in connection with the employment of the Employees and Former Employees, and in accordance with the terms and conditions set out in this deed;

27.1.3it shall respond to any request made by a Data Employee or Customer in relation to the provision of details of the service in accordance with the rights of data subjects (as defined in the DPA 1998 ).

27.1.4it shall obtain, and at all times maintain, a notification under the DPA 1998 appropriate to the performance of its obligations under this deed.

27.2The relevant Buyers shall indemnify and hold the relevant Sellers harmless against, any and all Demands (including legal expenses) incurred by the Sellers which arise directly or indirectly out of or in connection with processing the Customer Data or Employee Data by the relevant Buyers, including those arising out of any third party demand, claim or action, or any breach of contract, negligence, fraud, wilful misconduct, breach of statutory duty or non-compliance with the data protection obligations set out in this clause 27 or any Data Protection Laws by the relevant Buyers, their employees, agents or sub-contractors.

28.Confidentiality and announcements

28.1The parties undertake to keep confidential the terms of this deed and all information about the Business and the Resort Solutions Business (Confidential Information), and use the Confidential Information only for the purposes contemplated by this deed.

28.2Information is not Confidential Information if:

28.2.1it is or becomes public knowledge other than as a direct or indirect result of the information being disclosed in breach of this deed; or

28.2.2the parties agree in writing is not confidential; or

28.2.3a party can establish to the reasonable satisfaction of the other party’s Group that it found out the information from a source not connected with that Group, and that it has acquired such information free from any obligation of confidence to any other person; or

28.2.4a party can establish to the reasonable satisfaction of the other Party’s Group was known to the other Party before the date of this deed and that it was not under any obligation of confidence in respect of the information.

28.3The parties shall use all reasonable endeavours to keep confidential (and ensure that its employees, agents and subsidiaries, and the employees and agents of such subsidiaries) shall keep confidential any Confidential Information and shall not use Confidential Information except:

28.3.1to such of its members of its Group and its and their respective professional advisers, consultants, auditors, bankers, financiers, employees, officers and directors who have a legitimate interest for such information, provided that the people to whom the information is disclosed are bound by confidentiality obligations; or

28.3.2with the written consent of the party or any member of its Group that the information relates to; or

28.3.3as may be required by law or by the rules of any recognised stock exchange, or governmental or other regulatory authority or by a court or other authority of competent jurisdiction, provided that, to the extent it is legally permitted to do so, it gives the other party as much notice of such disclosure as possible and, where notice of disclosure is not prohibited and is given in accordance with this clause, it takes into account the reasonable requests of the other party in relation to the content of such disclosure; or

28.3.4a party may, provided it has reasonable grounds to believe that the other party is involved in activity that may constitute a criminal offence under the Bribery Act 2010, disclose Confidential Information to the Serious Fraud Office without first informing the other party of such disclosure; or

28.3.5to any Tax Authority to the extent reasonably required for the purposes of the Tax affairs of the party concerned or any member of its Group; or

28.3.6if the information comes within the public domain (otherwise than as a result of the breach of this clause 28.3.6).

28.4The parties agree that following the entering into of this deed, announcements in the form set out in Schedule 24 shall be released by Interval Leisure Group. The parties acknowledge and agree that a further announcement shall be released after Completion, in such form as the Parties, acting reasonably, agree.

28.5Each party shall supply the other with any information about itself, its Group or this deed as the other may reasonably require for the purposes of satisfying the requirements of a law, regulatory body or securities exchange to which the requiring party is subject.

29.Further assurance

The Sellers shall at their own expense, promptly execute and deliver all such documents, and do all such things, as the Buyers may from time to time reasonably require for the purpose of giving full effect to the provisions of this deed.

30.Assignment

30.1This deed is personal to the parties and no party shall assign, transfer, mortgage, charge, sub-contract, or deal in any other manner with any or all of its rights and obligations under this deed (or any other document referred to in it) without the prior written consent of the Primary Seller and the Primary Buyer.

30.2Each person that has rights under this deed is acting on its own behalf.

31.Whole agreement

31.1This deed, and any documents referred to in it, constitute the whole agreement between the parties and supersede any previous arrangement, understanding or agreement between them relating to the subject matter they cover.

31.2Nothing in this clause 31 operates to limit or exclude any liability for fraud.

32.Variation and waiver

32.1A variation of this deed shall be in writing and signed by or on behalf of each party.

32.2Any waiver of any right under this deed is only effective if it is in writing and signed by the waiving or consenting party and it applies only in the circumstances for which it is given and shall not prevent the party who has given the waiver or consent from subsequently relying on the provision it has waived.

32.3No failure to exercise or delay in exercising any right or remedy provided under this deed or by law constitutes a waiver of such right or remedy or shall prevent any future exercise in whole or in part thereof.

32.4No single or partial exercise of any right or remedy under this deed shall preclude or restrict the further exercise of any such right or remedy.

32.5Unless specifically provided otherwise, rights arising under this deed are cumulative and do not exclude rights provided by law.

33.Costs

33.1Unless otherwise provided, all costs and expenses in connection with the negotiation, preparation, execution and performance of this deed, and any documents referred to in it, shall be borne by the party that incurred the costs.

33.2Any Taxes or fees in the nature of stamp, documentary, transfer, registration or notarial Taxes or fees (together with any interest and penalties thereon) which are payable on this deed (or any document referred to in it) or in respect of the transfer of the Business, the Resort Solution Shares, or any of the Assets shall be paid by the Buyer, save for any registration fees payable in relation to the granting of security in respect of the Loan Agreement.

34.Notice

34.1A notice given under this deed:

34.1.1shall be in writing in the English language (or be accompanied by a properly prepared translation into English);

34.1.2shall be sent for the attention of the person, and to the address or fax number, given in this clause 34 (or such other address, fax number or person as the relevant party may notify to the other party); and

34.1.3shall be:

34.1.3.1delivered personally; or

34.1.3.2delivered by commercial courier; or

34.1.3.3sent by fax or e-mail; or

34.1.3.4sent by pre-paid first-class post or recorded delivery; or

34.1.3.5(if the notice is to be served by post outside the country from which it is sent) sent by airmail,

provided that if the notice is given by fax or e-mail, such notice shall also be given (after the date of transmission in the case of a fax) by pre-paid first-class post, recorded delivery or special delivery.

34.2The addresses for service of notice are:

34.2.1Primary Seller

Address: 33 North Quay, Douglas IM1 4LB, Isle of Man

For the attention of: James Cunningham-Davis

Fax number: +44 (0)1624 679500

e-mail: James@cavendishtrust.com

34.2.2Gorvines

Address: 34 North Quay, Douglas IM1 4LB, Isle of Man

For the attention of: Petra Dudek and James Cunningham-Davis

Fax number: +44 (0)1624 679500

e-mail: pdudek@cavendishtrust.com and james@cavendishtrust.com

34.2.3Primary Buyer

Address: Coombe Hill House, Beverley Way, London SW20 0AR

For the attention of: Jose Miguel Echenagusia

Fax number: +44 (0) 20 8336 9116

with a copy to:

Interval Leisure Group, Inc.

Address: 6262 Sunset Drive, Miami, Florida 33143 USA

for the attention of: General Counsel, Victoria J. Kincke

fax number: 305 667 2072

e-mail: Victoria.Kincke@iilg.com

34.3A notice is deemed to have been received:

34.3.1if delivered personally, at the time of delivery; or

34.3.2if delivered by commercial courier, at the time of signature of the courier’s receipt; or

34.3.3if sent by fax or e-mail, at the time of transmission; or

34.3.4if sent by pre-paid first class post or recorded delivery, 48 hours from the date of posting; or

34.3.5if sent by airmail, five days from the date of posting; or

34.3.6if deemed receipt under the previous paragraphs of this clause 34.3 is not within business hours (business hours meaning 9.00 am to 5.30 pm Monday to Friday on a day that is a Business Day), when business next starts in the place of deemed receipt.

34.4To prove service, it is sufficient to prove that the notice was transmitted by fax to the fax number of the party or, in the case of post, that the envelope containing the notice was properly addressed and posted.

35.Interest on late payment

35.1Where a sum is required to be paid under this deed but is not paid before or on the date the parties agreed, the party due to pay the sum shall pay interest on that sum at the Interest Rate for the period beginning with the date on which the payment was due and ending with the date the sum is paid (and the period shall continue after as well as before judgment). Interest shall accrue on a daily basis and be compounded quarterly.

35.2This clause 35 is without prejudice to any claim for interest under the Late Payment of Commercial Debts (Interest) Act 1998.

36.Severance

36.1If any provision of this deed (or part of a provision) is found by any court or administrative body of competent jurisdiction to be invalid, unenforceable or illegal, the other provisions shall remain in force.

36.2If any invalid, unenforceable or illegal provision would be valid, enforceable or legal if some part of it were deleted, the provision shall apply with whatever modification is necessary to give effect to the commercial intention of the parties.

37.Agreement survives completion

This deed (other than obligations that have already been fully performed) remains in full force after Completion.

38.Third party rights

This deed and the documents referred to in it are made for the benefit of the parties to them and their successors and permitted assigns, and are not intended to benefit, or be enforceable by, anyone else.

39.Successors

The rights and obligations of the parties shall continue for the benefit of and shall be binding on their respective successors and assigns.

40.Counterparts

This deed may be executed in any number of counterparts, each of which is an original and which together have the same effect as if each party had signed the same document.

41.Deed

The parties each intend this Deed to be a deed and agree to execute and deliver it as a deed.

42.Language

If this deed is translated into any language other than English, the English language text shall prevail.

43.Governing law and jurisdiction

43.1This deed and any disputes or claims arising out of or in connection with its subject matter or formation (including non-contractual disputes or claims) are governed by and construed in accordance with the law of England.

43.2The parties irrevocably agree that the courts of England have exclusive jurisdiction to settle any dispute or claim that arises out of or in connection with this deed or its subject matter or formation (including non-contractual disputes or claims) and waive any objection to proceedings in such courts on the grounds of venue or on the grounds that the proceedings have been brought in an inappropriate forum.

44.Process Agent

44.1The Sellers appoint Mapa Management & Administration Services Limited of Hallswelle House, 1 Hallswelle Road, London NW11 0DH as their process agent to receive on its behalf service of process of any proceedings in England and the Other Buyers appoint Interval International Limited (Attention: Legal Department) of Coombe Hill House, Beverley Way, London SW20 0AR as their process agent to receive on its behalf service of process of any proceedings in England.  Service upon the process agent shall be good service upon the any

of the parties whether or not it is forwarded to and received by the relevant party.  If, for any reason, the process agent ceases to be able to act as process agent, or no longer has an address in England, the parties irrevocably agrees to appoint a substitute process agent with an address in England acceptable to all the parties and to deliver to the parties a copy of the substitute process agent’s acceptance of that appointment within 30 days.  In the event that a substitute process agent fails to be appointed, it shall be effective service for any of the parties to serve the process upon the last known address in England of the last known process agent for the parties notified to the parties notwithstanding that such process agent is no longer found at such address or has ceased to act provided that a copy of the Proceedings is also sent to the relevant party’s current registered office or principal place of business wherever situated.

This Deed has been executed and delivered as a deed the date and year first above written.

EXECUTED as a DEED for and on behalf of		)
CLC RESORT MANAGEMENT LIMITED		)	/s/ James Cunningham Davis.
			Director
In the presence of:
Witness Signature:	/s/ Petra Dudek
Witness Name:	Petra Dudek
Witness Address:	Douglas
	Isle of Man
Witness Occupation:	Chartered Secretary
EXECUTED as a DEED for and on behalf of		)	/s/ Petra Dudek
GORVINES LIMITED		)	Director
In the presence of:
Witness Signature:	/s/ James Cunningham Davis
Witness Name:	James Cunningham Davis
Witness Address:	3137 North Quay
	Douglas
Witness Occupation:	Solicitor

EXECUTED as a DEED for and on behalf of		)
VRI EUROPE LIMITED		)	/s/ Jeanette E. Marbert
			Director
In the presence of:
Witness Signature:	/s/ Eric Gummers
Witness Name:	Eric Gummers
Witness Address:	19 Cavendish Square
	London
Witness Occupation:	lawyer
EXECUTED as a DEED for and on behalf of		)
VRI MANAGEMENT ESPAÑA, S.L.		)	/s/ Jeanette E. Marbert.
			/s/ Jose Miguel Echenagusia
EXECUTED as a DEED for and on behalf of		)
VRI MANAGEMENT CANARIAS S.L.		)	/s/ Jeanette E. Marbert
			/s/ Jose Miguel Echenagusia

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, 2013 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 4, 2013 /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, 2013 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 4, 2013 /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, 2013 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 4, 2013 /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, 2013 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 4, 2013 /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, 2013 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 4, 2013 /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, 2013 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 4, 2013 /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

INCOME TAXES

9 Months Ended

Sep. 30, 2013

INCOME TAXES

INCOME TAXES

NOTE 10—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, 2013, ILG recorded an income tax provision for continuing operations of $13.0 million and $41.6 million, respectively, which represents effective tax rates of 43.1% and 39.9% 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. During the three months ended September 30, 2013, the effective tax rate increased due to income taxes associated with the effect of changes in tax laws in certain states and other income tax items, the most significant of which related to the effect of changes in tax laws in the U.K, as discussed further below, that were enacted during the third quarter of 2013. During the nine months ended September 30, 2013, the effective tax rate increased due to the shift in the projections of the proportion of income earned and taxed between the various jurisdictions and the effect of changes in tax laws in certain states and in the U.K. that were enacted during the third quarter of 2013. However, this increase was partially offset by the U.S. tax consequences of foreign operations and the decrease during the first quarter of 2013 in unrecognized tax benefits associated with the expiration of the statute of limitations related to foreign taxes.

        For the three and nine months ended September 30, 2012, ILG recorded an income tax provision for continuing operations of $0.6 million and $14.9 million, respectively, which represents effective tax rates of 80.5% and 37.0% for the respective periods. The higher effective tax rate for the three months ended September 30, 2012 was primarily attributable to reduced income before income taxes, driven by the loss on the extinguishment of debt related to the redemption of the Interval Senior Notes, which magnified the impact of other income tax items, the most significant of which related to the effect of changes in tax laws in the U.K., as discussed further below, that were enacted during the third quarter of 2012. For the nine months ended September 30, 2012, the tax rate was 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. During the nine months ended September 30, 2012, the effective tax rate decreased due to other income tax items, the most significant of which related to the tax impact of ILG's redemption of the Interval Senior Notes offset by the effect of changes in tax laws in the U.K., that were enacted during the third quarter of 2012.

        As of September 30, 2013 and December 31, 2012, ILG had unrecognized tax benefits of $1.7 million and $0.7 million, respectively, of which $1.2 million and $0.7 million, if recognized, would favorably affect the effective tax rate. There were no material increases or decreases in unrecognized tax benefits for the three months ended September 30, 2013. During the nine months ended September 30, 2013, the unrecognized tax benefits increased by a net amount of approximately $1.0 million, primarily attributable to an increase recorded during the first quarter of 2013 of approximately $1.1 million related to state income tax items offset by approximately $0.2 million recorded during the first quarter of 2013 related to the decrease in unrecognized tax benefits as a result of the expiration of the statute of limitations related to foreign taxes. The increase of $1.1 million for state income tax items did not have an overall impact on the effective tax rate as it is entirely offset by a related state refund claim filed during the first quarter of 2013.

        ILG recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. There were no material accruals for interest for the three and nine months ended September 30, 2013. During the nine months ended September 30, 2013, interest and penalties decreased by approximately $0.2 million during the first quarter of 2013 as a result of the expiration of the statute of limitations related to foreign taxes. As of September 30, 2013, ILG had accrued $0.4 million for interest and penalties.

        ILG believes that it is reasonably possible that its unrecognized tax benefits could decrease by approximately $1.3 million within twelve months of the current reporting date due primarily to binding technical advice expected to be issued by state taxing authorities on state income tax items and the expiration of the statute of limitations related to foreign taxes. An estimate of other changes in unrecognized tax benefits cannot be made, but is not expected to be significant.

        ILG has routinely been under audit by federal, state, local and foreign taxing authorities. These audits include questioning the timing and the amount of deductions and the allocation of income among various tax jurisdictions. Income taxes payable include amounts considered sufficient to pay assessments that may result from examination of prior year returns; however, the amount paid upon resolution of issues raised may differ from the amount provided. Differences between the reserves for tax contingencies and the amounts owed by ILG are recorded in the period they become known. Under the Tax Sharing Agreement, IAC indemnifies ILG for all consolidated tax liabilities and related interest and penalties for the pre-spin period.

        The IRS has completed its review of IAC's consolidated tax returns for the years ended December 31, 2001 through 2009, which includes our operations from September 24, 2002, our date of acquisition by IAC, until the spin-off in August 2008. On August 28, 2013, the Joint Committee of Taxation completed its review and approved the audit settlement. Various IAC consolidated tax returns that include our operations, filed with state and local jurisdictions, are currently under examination, the most significant of which are California, New York and New York City for various tax years beginning with 2006. No other open tax years are currently under examination by the IRS or any state and local jurisdictions.

        During 2012, the U.K. Finance Act of 2012 was enacted, which further reduced the U.K. corporate income tax rate to 24%, effective April 1, 2012 and 23%, effective April 1, 2013. The impact of the U.K. rate reduction to 24% and 23%, which reduced our U.K. net deferred tax asset and increased income tax expense, was reflected in the reporting period when the law was enacted. During the third quarter of 2013, the U.K. Finance Act of 2013 was enacted which further reduced the U.K. corporate income tax rate to 21%, effective April 1, 2014 and 20%, effective April 1, 2015. The impact of the U.K. rate reduction to 21% and 20% has been reflected in the current reporting period. It reduced our U.K. net deferred tax asset and increased income tax expense by approximately $0.6 million. The change in the corporate tax rate initially negatively impacts income tax expense as the future benefit expected to be realized from our U.K. net deferred tax assets decreases; however, going forward, the lower corporate tax rate will decrease income tax expense and favorably impact our effective tax rate.

        Subsequent to September 30, 2013, we received the expected favorable binding technical advice issued by a state taxing authority on state income tax items. This advice will allow us to decrease our unrecognized tax benefits by approximately $1.1 million in the fourth quarter of 2013, and additionally will lower state income taxes and favorably impact our effective tax rate in the fourth quarter of 2013 and going forward.

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
ASSETS
Cash and cash equivalents	$ 103,563	$ 101,162
Restricted cash and cash equivalents	5,828	7,348
Accounts receivable, net of allowance of $340 and $409, respectively	35,854	31,964
Deferred income taxes	16,535	16,107
Deferred membership costs	9,957	12,349
Prepaid income taxes	9,435	12,973
Prepaid expenses and other current assets	20,655	27,592
Total current assets	201,827	209,495
Property and equipment, net	53,130	53,348
Goodwill	505,774	505,774
Intangible assets, net	93,270	98,678
Deferred membership costs	11,196	11,058
Deferred income taxes	4,566	4,571
Other non-current assets	11,852	23,996
TOTAL ASSETS	881,615	906,920
LIABILITIES:
Accounts payable, trade	10,963	11,086
Deferred revenue	95,228	93,367
Interest payable	157	386
Accrued compensation and benefits	18,153	16,526
Member deposits	9,549	9,463
Accrued expenses and other current liabilities	38,766	44,575
Total current liabilities	172,816	175,403
Long-term debt	190,000	260,000
Other long-term liabilities	1,068	1,493
Deferred revenue	103,218	111,273
Deferred income taxes	87,373	86,259
Total liabilities	554,475	634,428
Redeemable noncontrolling interest	435	426
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; $.01 par value; issued 59,052,950 and 58,553,265 shares, respectively	591	586
Treasury stock-1,697,360 shares at cost	(20,913)	(20,913)
Additional paid-in capital	188,576	182,131
Retained earnings	170,873	121,160
Accumulated other comprehensive loss	(12,422)	(10,898)
Total stockholders' equity	326,705	272,066
TOTAL LIABILITIES AND EQUITY	$ 881,615	$ 906,920

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GOODWILL AND OTHER INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2013

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. ILG determined our Membership and Exchange and Management and Rental operating segments are individual reporting units which are also individual reportable segments of ILG pursuant to ASC 280, Segment Reporting ("ASC 280"). ILG tests goodwill and other indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if events or changes in circumstances indicate that the assets might be impaired. Goodwill is tested for impairment based on either a qualitative assessment or a two-step impairment test, as more fully described in Note 2 of our 2012 Annual Report on Form 10-K. When performing the two-step impairment test, if the carrying amount of a reporting unit's goodwill exceeds its implied fair value, an impairment loss equal to the excess is recorded.

        As of October 1, 2012, we reviewed the carrying value of goodwill and other intangible assets of each of our two reporting units. Goodwill assigned to the Membership and Exchange and Management and Rental reporting units as of that date was $483.5 million and $22.3 million, respectively. We performed a qualitative assessment on both our reporting units and concluded that it was more-likely-than-not that the fair value exceeded its carrying value and, therefore, a two-step impairment test was not necessary. As of September 30, 2013, we did not identify any triggering events which required an interim impairment test subsequent to our annual impairment test on October 1, 2012.

        The balance of goodwill and other intangible assets, net is as follows (in thousands):

	September 30, 2013		December 31, 2012
Goodwill	$	505,774	$	505,774
Intangible assets with indefinite lives		40,916		40,916
Intangible assets with definite lives, net		52,354		57,762
Total goodwill and other intangible assets, net	$	599,044	$	604,452

        There were no changes in the carrying amount of goodwill for the nine months ended September 30, 2013. Goodwill related to the Membership and Exchange and Management and Rental reportable segments (each a reporting unit) was $483.5 million and $22.3 million, respectively, as of September 30, 2013 and December 31, 2012.

Other Intangible Assets

        Intangible assets with indefinite lives relate principally to trade names and trademarks. At September 30, 2013, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	129,500	$	(129,500	)	$	—
Purchase agreements		75,879		(74,848	)		1,031
Resort management contracts		73,116		(25,695	)		47,421
Technology		25,076		(25,071	)		5
Other		17,826		(13,929	)		3,897
Total	$	321,397	$	(269,043	)	$	52,354

        At December 31, 2012, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	129,500	$	(129,500	)	$	—
Purchase agreements		75,879		(74,491	)		1,388
Resort management contracts		72,666		(21,225	)		51,441
Technology		25,076		(24,988	)		88
Other		17,826		(12,981	)		4,845
Total	$	320,947	$	(263,185	)	$	57,762

        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 $2.0 million and $6.7 million for the three months ended September 30, 2013 and 2012, respectively, and $5.9 million and $21.0 million for the nine months ended September 30, 2013 and 2012, respectively. Based on September 30, 2013 balances, amortization expense for the next five years and thereafter is estimated to be as follows (in thousands):

Twelve month period ending September 30,
2014	$	7,734
2015		7,591
2016		6,610
2017		6,176
2018		5,487
2019 and thereafter		18,756
	$	52,354

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PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2013

PROPERTY AND EQUIPMENT

Schedule of Property and equipment, net

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

	September 30, 2013			December 31, 2012
Computer equipment	$	19,987		$	18,269
Capitalized software		82,547			78,036
Land, buildings and leasehold improvements		25,517			23,781
Furniture and other equipment		13,575			12,419
Projects in progress		5,906			6,372
		147,532			138,877
Less: accumulated depreciation and amortization		(94,402	)		(85,529	)
Total property and equipment, net	$	53,130		$	53,348

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SEGMENT INFORMATION

9 Months Ended

Sep. 30, 2013

SEGMENT INFORMATION

SEGMENT INFORMATION

NOTE 11—SEGMENT INFORMATION

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. ILG consists of two operating segments which are also reportable segments. Membership and Exchange offers leisure and travel-related products and services to owners of vacation interests and others mostly through various membership programs, as well as related services to resort developer clients. Management and Rental provides hotel, condominium resort, timeshare resort and homeowners association management, and vacation rental services to both vacation property owners and vacationers.

        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,
	2013		2012		2013		2012
Membership and Exchange
Revenue	$	86,615	$	86,092	$	284,227	$	276,725
Cost of sales		20,442		20,538		68,679		68,384
Gross profit		66,173		65,554		215,548		208,341
Selling and marketing expense		11,919		12,345		37,973		38,472
General and administrative expense		21,519		21,819		64,211		65,960
Amortization expense of intangibles		337		4,968		1,011		15,808
Depreciation expense		3,186		3,011		9,872		9,025
Segment operating income	$	29,212	$	23,411	$	102,481	$	79,076

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Management and Rental
Management fee revenue	$	16,209	$	15,117	$	47,825	$	41,165
Pass-through revenue		16,332		15,986		46,968		44,712
Total revenue		32,541		31,103		94,793		85,877
Cost of sales		21,549		21,203		63,109		59,409
Gross profit		10,992		9,900		31,684		26,468
Selling and marketing expense		1,032		937		2,985		2,851
General and administrative expense		5,868		4,807		17,706		13,072
Amortization expense of intangibles		1,613		1,701		4,847		5,193
Depreciation expense		313		300		987		814
Segment operating income	$	2,166	$	2,155	$	5,159	$	4,538

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Consolidated
Revenue	$	119,156	$	117,195	$	379,020	$	362,602
Cost of sales		41,991		41,741		131,788		127,793
Gross profit		77,165		75,454		247,232		234,809
Direct segment operating expenses		45,787		49,888		139,592		151,195
Operating income	$	31,378	$	25,566	$	107,640	$	83,614

        Selected financial information by reportable segment is presented below (in thousands):

	September 30, 2013		December 31, 2012
Total Assets:
Membership and Exchange	$	766,890	$	789,451
Management and Rental		114,725		117,469
Total	$	881,615	$	906,920

Geographic Information

        We conduct operations through offices in the U.S. and 16 other countries. For the nine months ended September 30, 2013, revenue is sourced from over 100 countries worldwide. Other than the United States, 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, 2013 and 2012.

        Geographic information on revenue, based on sourcing, and long-lived assets, based on physical location, is presented in the table below (in thousands). Amounts in the proceeding table representing revenue sourced from the United States versus all other countries for the three and nine months ended September 30, 2012 have been reclassified to conform to current period presentation.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Revenue:
United States	$	98,252	$	96,710	$	310,722	$	294,408
All other countries(a)		20,904		20,485		68,298		68,194
Total	$	119,156	$	117,195	$	379,020	$	362,602

(a)

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

	September 30, 2013		December 31, 2012
Long-lived assets (excluding goodwill and other intangible assets):
United States	$	51,002	$	51,059
All other countries		2,128		2,289
Total	$	53,130	$	53,348

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COMMITMENTS AND CONTINGENCIES (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Guarantees, surety bonds and letters of credit
Commitments and guarantees
Guarantees and commitments amount	$ 23.1
Amount of guarantees and commitments, year one	12.7
Guarantees
Commitments and guarantees
Guarantees and commitments amount	$ 19.8
Notice period for termination of lease	60 days

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FAIR VALUE MEASUREMENTS (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2013	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Revolving credit facility	Jun. 21, 2012 Revolving credit facility	Sep. 30, 2013 Carrying Amount	Dec. 31, 2012 Carrying Amount	Sep. 30, 2013 Fair Value	Dec. 31, 2012 Fair Value
Fair Value of Financial Instruments
Cash and cash equivalents						$ 103,563,000	$ 101,162,000	$ 103,563,000	$ 101,162,000
Restricted cash and cash equivalents		5,828,000	7,348,000			5,828,000	7,348,000	5,828,000	7,348,000
Financing receivable							9,876,000		9,876,000
Total debt						(190,000,000)	(260,000,000)	(190,000,000)	(260,000,000)
Guarantees, surety bonds and letters of credit								(23,051,000)	(36,747,000)
Percentage of principal amount that was repaid on outstanding financing receivables	100.00%
Maximum borrowing capacity				$ 500,000,000	$ 500,000,000

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STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2013

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 consolidated statements of income for the three and nine months ended September 30, 2013 and 2012 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Cost of sales	$	160	$	155	$	519	$	471
Selling and marketing expense		292		257		906		787
General and administrative expense		2,157		2,152		6,328		7,475
Non-cash compensation expense	$	2,609	$	2,564	$	7,753	$	8,733

Schedule of RSU award activity

	Shares			Weighted-Average Grant Date Fair Value
	(In thousands)
Non-vested RSUs at January 1		1,569		$	13.29
Granted		707			20.75
Vested		(688	)		11.63
Forfeited		(13	)		18.10
Non-vested RSUs at September 30		1,575		$	17.29

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2013

FAIR VALUE MEASUREMENTS

Schedule of estimated fair value of financial instruments

	September 30, 2013						December 31, 2012
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
	(In thousands)
Cash and cash equivalents	$	103,563		$	103,563		$	101,162		$	101,162
Restricted cash and cash equivalents	$	5,828		$	5,828		$	7,348		$	7,348
Financing receivable	$	—		$	—		$	9,876		$	9,876
Total debt	$	(190,000	)	$	(190,000	)	$	(260,000	)	$	(260,000	)
Guarantees, surety bonds and letters of credit		N/A		$	(23,051	)		N/A		$	(36,747	)

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SEGMENT INFORMATION (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 item	Sep. 30, 2012	Dec. 31, 2012
SEGMENT INFORMATION
Number of operating segments which are also reportable segments			2
SEGMENT INFORMATION
Revenue	$ 119,156	$ 117,195	$ 379,020	$ 362,602
Cost of sales	41,991	41,741	131,788	127,793
Gross profit	77,165	75,454	247,232	234,809
Selling and marketing expense	12,951	13,282	40,958	41,323
General and administrative expense	27,387	26,626	81,917	79,032
Amortization expense of intangibles	1,950	6,669	5,858	21,001
Depreciation expense	3,499	3,311	10,859	9,839
Direct segment operating expenses	45,787	49,888	139,592	151,195
Operating income	31,378	25,566	107,640	83,614
Total assets
Total assets	881,615		881,615		906,920
Membership and Exchange
SEGMENT INFORMATION
Revenue	86,615	86,092	284,227	276,725
Cost of sales	20,442	20,538	68,679	68,384
Gross profit	66,173	65,554	215,548	208,341
Selling and marketing expense	11,919	12,345	37,973	38,472
General and administrative expense	21,519	21,819	64,211	65,960
Amortization expense of intangibles	337	4,968	1,011	15,808
Depreciation expense	3,186	3,011	9,872	9,025
Operating income	29,212	23,411	102,481	79,076
Total assets
Total assets	766,890		766,890		789,451
Management and Rental
SEGMENT INFORMATION
Management fee revenue	16,209	15,117	47,825	41,165
Pass-through revenue	16,332	15,986	46,968	44,712
Revenue	32,541	31,103	94,793	85,877
Cost of sales	21,549	21,203	63,109	59,409
Gross profit	10,992	9,900	31,684	26,468
Selling and marketing expense	1,032	937	2,985	2,851
General and administrative expense	5,868	4,807	17,706	13,072
Amortization expense of intangibles	1,613	1,701	4,847	5,193
Depreciation expense	313	300	987	814
Operating income	2,166	2,155	5,159	4,538
Total assets
Total assets	$ 114,725		$ 114,725		$ 117,469

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PROPERTY AND EQUIPMENT (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
PROPERTY AND EQUIPMENT
Property and equipment, gross	$ 147,532	$ 138,877
Less: accumulated depreciation and amortization	(94,402)	(85,529)
Total property and equipment, net	53,130	53,348
Computer equipment
PROPERTY AND EQUIPMENT
Property and equipment, gross	19,987	18,269
Capitalized software
PROPERTY AND EQUIPMENT
Property and equipment, gross	82,547	78,036
Land, buildings and leasehold improvements
PROPERTY AND EQUIPMENT
Property and equipment, gross	25,517	23,781
Furniture and other equipment
PROPERTY AND EQUIPMENT
Property and equipment, gross	13,575	12,419
Projects in progress
PROPERTY AND EQUIPMENT
Property and equipment, gross	$ 5,906	$ 6,372

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BENEFIT PLANS (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
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	$ 0.4	$ 0.4	$ 1.2	$ 1.1
Director 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	41,180		41,180
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%

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COMMITMENTS AND CONTINGENCIES (Details 2) (European Union Value Added Tax Matter, USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
European Union Value Added Tax Matter
COMMITMENTS AND CONTINGENCIES
Accrual of VAT liability	$ 2.9	$ 4.5
Change in estimate of VAT liability	1.6
Payment of VAT	0.5
Possible future costs to settle VAT liabilities, lower range	2.9
Possible future costs to settle VAT liabilities, higher range	$ 4.2

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SIGNIFICANT ACCOUNTING POLICIES (Details 2) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
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	57,353	56,714	57,199	56,448
Diluted weighted average shares of common stock outstanding	57,986	57,364	57,738	57,120
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)	627	636	532	657
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)	6	14	7	15

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STOCK-BASED COMPENSATION (Details 3) (USD $)	1 Months Ended	3 Months Ended	1 Months Ended	3 Months Ended		9 Months Ended	3 Months Ended
	May 31, 2007 Aston	Mar. 31, 2013 Aston	May 31, 2007 Aston Maximum	Mar. 31, 2013 Non-vested RSUs	Mar. 31, 2012 Non-vested RSUs	Sep. 30, 2013 Non-vested RSUs	Mar. 31, 2013 Non-vested RSUs Maximum	Mar. 31, 2012 Non-vested RSUs Maximum
Shares
Outstanding at the beginning of the period (in shares)				1,569,000		1,569,000
Granted (in shares)				657,000	586,000	707,000
Vested (in shares)						(688,000)
Forfeited (in shares)						(13,000)
Outstanding at the end of the period (in shares)						1,575,000
Weighted-Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share)				$ 13.29		$ 13.29
Granted (in dollars per share)						$ 20.75
Vested (in dollars per share)						$ 11.63
Forfeited (in dollars per share)						$ 18.10
Outstanding at the end of the period (in dollars per share)						$ 17.29
Additional disclosures
Award vesting period			4 years 6 months				4 years	4 years
Exercisable period of shares subsequent to the filing of entity's annual report on Form 10-K		60 days
Preferred interest accretion rate (as a percent)	10.00%

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LONG-TERM DEBT (Tables)

9 Months Ended

Sep. 30, 2013

LONG-TERM DEBT

Schedule of Long-term debt

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

	September 30, 2013		December 31, 2012
Revolving credit facility (interest rate of 1.69% at September 30, 2013 and 1.97% at December 31, 2012)	$	190,000	$	260,000
Total long-term debt	$	190,000	$	260,000

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CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Balance at Dec. 31, 2012	$ 272,066	$ 586	$ (20,913)	$ 182,131	$ 121,160	$ (10,898)
Balance (in shares) at Dec. 31, 2012	56,900,000	58,553,265	1,697,360
Increase (Decrease) in Stockholders' Equity
Net income attributable to common stockholders	62,675				62,675
Other comprehensive loss, net of tax	(1,524)					(1,524)
Non-cash compensation expense	7,753			7,753
Issuance of common stock upon exercise of stock options	403			403
Issuance of common stock upon exercise of stock options (in shares)		29,544
Issuance of common stock upon vesting of restricted stock units, net of withholding taxes	(4,478)	5		(4,483)
Issuance of common stock upon vesting of restricted stock units, net of withholding taxes (in shares)		470,141
Change in excess tax benefits from stock-based awards	2,598			2,598
Deferred stock compensation expense	(171)			(171)
Dividends declared on common stock	(12,617)			345	(12,962)
Balance at Sep. 30, 2013	$ 326,705	$ 591	$ (20,913)	$ 188,576	$ 170,873	$ (12,422)
Balance (in shares) at Sep. 30, 2013	57,400,000	59,052,950	1,697,360

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ORGANIZATION AND BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2013

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 membership and leisure services to the vacation industry. ILG consists of two operating segments. Membership and Exchange offers leisure and travel-related products and services to owners of vacation interests and others primarily through various membership programs, as well as related services to resort developer clients. Management and Rental provides hotel, condominium resort, timeshare resort and homeowners association management, and rental services to both vacation property owners and vacationers.

        On February 28, 2012, we acquired all of the equity of Vacation Resorts International, or VRI, a non-developer provider of resort and homeowners association management services to the shared ownership industry. VRI was consolidated into our financial statements as of the acquisition date with its assets and results of operations primarily included in our Management and Rental operating segment.

        The Membership and Exchange operating segment consists of Interval International Inc.'s businesses, referred to as Interval, and the membership and exchange related line of business of Trading Places International, or TPI, and VRI. The Management and Rental operating segment consists of Aston Hotels & Resorts, LLC and Maui Condo and Home, LLC, referred to as Aston, and the management and rental related line of business of VRI and TPI.

Basis of Presentation

        The accompanying unaudited 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 consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2012 Annual Report on Form 10-K.

Seasonality

        Revenue at ILG is influenced by the seasonal nature of travel. The Membership and 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. The Management and Rental businesses recognize rental revenue based on occupancy, with the first and third quarters generally generating higher revenue and the second and fourth quarters generally generating lower revenue. The timeshare and homeowners' association management part of this business does not experience significant seasonality.

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PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2013

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 4—PROPERTY AND EQUIPMENT

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

	September 30, 2013			December 31, 2012
Computer equipment	$	19,987		$	18,269
Capitalized software		82,547			78,036
Land, buildings and leasehold improvements		25,517			23,781
Furniture and other equipment		13,575			12,419
Projects in progress		5,906			6,372
		147,532			138,877
Less: accumulated depreciation and amortization		(94,402	)		(85,529	)
Total property and equipment, net	$	53,130		$	53,348

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SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2013

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 2012 Annual Report on Form 10-K. There have been no significant changes in our significant accounting policies for the nine months ended September 30, 2013.

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 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 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 0.8 million stock options and RSUs for the three and nine months ended September 30, 2013, respectively, and 0.9 million and 1.0 million stock options and RSUs for the three and nine months ended September 30, 2012, 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, 2013 and 2012, 0.9 million of stock options 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,
	2013		2012		2013		2012
Basic weighted average shares of common stock outstanding		57,353		56,714		57,199		56,448
Net effect of common stock equivalents assumed to be vested related to RSUs		627		636		532		657
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees		6		14		7		15
Diluted weighted average shares of common stock outstanding		57,986		57,364		57,738		57,120

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 2012 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 July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-10, "Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate, ("OIS")) as a Benchmark Interest Rate for Hedge Accounting Purposes (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2013-10)"). ASU 2013-10 ratified the Task Force's consensus to allow the Fed Funds effective swap rate to serve as a benchmark interest rate in the United States, which was previously defined in ASC 815 as either (1) a rate on direct obligations of the U.S. Department of the Treasury (UST) or (2) the LIBOR swap rate. ASU 2013-10 does not add to the disclosure requirements in ASC 815-10-50; however, in order to comply with the required disclosures related to fair value in ASC 820 a separate process for determining the fair value hierarchy of derivatives when the OIS rate is an input may be required. The ASU is required to be applied prospectively for qualifying new or re-designated hedging relationships entered into on or after July 17, 2013. We do not currently anticipate the adoption of this guidance, as of the effective date, will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements.

        In March 2013, the FASB issued ASU 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment ("CTA") upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2013-05"). ASU 2013-05 applies to the release of the CTA into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. The ASU does not change the requirement to release a pro rata portion of the CTA of the foreign entity into earnings for a partial sale of an equity method investment in a foreign entity. The ASU is effective for fiscal years beginning after December 15, 2013 (and interim periods within those fiscal years) and shall be applied prospectively, with early adoption permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements.

        In February 2013, the FASB issued ASU 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date" ("ASU 2013-04"). ASU 2013-04 provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date. The ASU requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangements among its co-obligors as well as any additional amount the reporting entity expects to pay on behalf of its co-obligors. ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations. The ASU is effective for fiscal years beginning after December 15, 2013 (and interim periods within those years), and shall be applied retrospectively, with early adoption permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements.

Adopted Accounting Pronouncements

        In February 2013, the FASB issued ASU 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" ("ASU 2013-02"). ASU 2013-02 adds new disclosure requirements for items reclassified out of accumulated other comprehensive income/loss ("AOCI"), including (1) disaggregating and separately presenting changes in AOCI balances by component and (2) presenting significant items reclassified out of AOCI either on the face of the statement where net income is presented or as a separate disclosure in the notes to the financial statements. It does not amend any existing requirements for reporting net income or other comprehensive income in the financial statements. The ASU is effective for fiscal years beginning after December 15, 2012 (and interim periods within those years), and shall be applied prospectively. The adoption of ASU 2013-02 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

        In January 2013, the FASB issued ASU 2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities" ("ASU 2013-01"). ASU 2013-01 clarifies the offsetting disclosure requirements in ASU 2011-11, "Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities" ("ASU 2011-11"). Under ASU 2013-01, the disclosure requirements would apply to derivative instruments accounted for in accordance with ASC 815, "Derivatives and Hedging," including bifurcated embedded derivatives. The ASU is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those years. Retrospective application is required for all comparative periods presented. The adoption of ASU 2013-01 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

        In October 2012, the FASB issued ASU 2012-04, "Technical Corrections and Improvements" ("ASU 2012-04"). ASU 2012-04 makes certain technical corrections, clarifications and conforming fair value amendments to the FASB Accounting Standard Codification (the "Codification") that affects various Codification topics. The amendments in this ASU are effective upon issuance, except for amendments that are subject to transition guidance, which became effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

        In December 2011, the FASB issued ASU 2011-11 that creates new disclosure requirements about the nature of an entity's rights of setoff and related arrangements associated with its financial instruments and derivative instruments. The ASU is designed to make financial statements that are prepared under GAAP more comparable to those prepared under International Financial Reporting Standards ("IFRS"). The ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. The adoption of ASU 2011-11 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

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STOCK-BASED COMPENSATION (Details) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended				9 Months Ended		3 Months Ended						9 Months Ended	12 Months Ended	3 Months Ended				0 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 RSUs	Mar. 31, 2013 RSUs	Sep. 30, 2012 RSUs	Mar. 31, 2012 RSUs	Sep. 30, 2013 RSUs	Sep. 30, 2012 RSUs	Mar. 31, 2013 RSUs Minimum	Mar. 31, 2012 RSUs Minimum	Mar. 31, 2013 RSUs Maximum	Mar. 31, 2012 RSUs Maximum	Mar. 31, 2013 RSUs Performance-based	Mar. 31, 2012 RSUs Performance-based	Sep. 30, 2013 RSUs Performance-based item	Dec. 31, 2012 RSUs Performance-based	Mar. 31, 2013 RSUs Performance-based Minimum	Mar. 31, 2012 RSUs Performance-based Minimum	Mar. 31, 2013 RSUs Performance-based Maximum	Mar. 31, 2012 RSUs Performance-based Maximum	May 21, 2013 2013 Stock and Incentive Compensation Plan	Sep. 30, 2013 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																								3,300,000
Awards granted (in shares)						657,000		586,000	707,000						58,000	73,000
Award vesting period											3 years	3 years	4 years	4 years
Number of shares granted expected to cliff vest						300,000		130,000
Percentage of target shares which can be earned by the participants (as a percent)																			0.00%	0.00%	200.00%	200.00%
Per unit grant date fair value (in dollars per unit)									$ 20.75								$ 29.61	$ 17.34
Number of peer groups for estimating total shareholder return ranking																	2
Non-cash compensation expense	$ 2,609,000	$ 2,564,000	$ 7,753,000	$ 8,733,000	$ 2,600,000		$ 2,600,000		$ 7,800,000	$ 8,700,000
Unrecognized compensation expense
Unrecognized compensation cost, net of estimated forfeitures					$ 17,300,000				$ 17,300,000
Weighted average period for recognition of unrecognized compensation expense									1 year 10 months 24 days

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SEGMENT INFORMATION (Tables)

9 Months Ended

Sep. 30, 2013

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,
	2013		2012		2013		2012
Membership and Exchange
Revenue	$	86,615	$	86,092	$	284,227	$	276,725
Cost of sales		20,442		20,538		68,679		68,384
Gross profit		66,173		65,554		215,548		208,341
Selling and marketing expense		11,919		12,345		37,973		38,472
General and administrative expense		21,519		21,819		64,211		65,960
Amortization expense of intangibles		337		4,968		1,011		15,808
Depreciation expense		3,186		3,011		9,872		9,025
Segment operating income	$	29,212	$	23,411	$	102,481	$	79,076

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Management and Rental
Management fee revenue	$	16,209	$	15,117	$	47,825	$	41,165
Pass-through revenue		16,332		15,986		46,968		44,712
Total revenue		32,541		31,103		94,793		85,877
Cost of sales		21,549		21,203		63,109		59,409
Gross profit		10,992		9,900		31,684		26,468
Selling and marketing expense		1,032		937		2,985		2,851
General and administrative expense		5,868		4,807		17,706		13,072
Amortization expense of intangibles		1,613		1,701		4,847		5,193
Depreciation expense		313		300		987		814
Segment operating income	$	2,166	$	2,155	$	5,159	$	4,538

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Consolidated
Revenue	$	119,156	$	117,195	$	379,020	$	362,602
Cost of sales		41,991		41,741		131,788		127,793
Gross profit		77,165		75,454		247,232		234,809
Direct segment operating expenses		45,787		49,888		139,592		151,195
Operating income	$	31,378	$	25,566	$	107,640	$	83,614

Schedule of financial information by reportable segment

 Selected financial information by reportable segment is presented below (in thousands):

	September 30, 2013		December 31, 2012
Total Assets:
Membership and Exchange	$	766,890	$	789,451
Management and Rental		114,725		117,469
Total	$	881,615	$	906,920

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,
	2013		2012		2013		2012
Revenue:
United States	$	98,252	$	96,710	$	310,722	$	294,408
All other countries(a)		20,904		20,485		68,298		68,194
Total	$	119,156	$	117,195	$	379,020	$	362,602

(a)

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

	September 30, 2013		December 31, 2012
Long-lived assets (excluding goodwill and other intangible assets):
United States	$	51,002	$	51,059
All other countries		2,128		2,289
Total	$	53,130	$	53,348

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GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $)	9 Months Ended
	Sep. 30, 2013 item	Dec. 31, 2012	Sep. 30, 2013 Membership and Exchange	Dec. 31, 2012 Membership and Exchange	Oct. 01, 2012 Membership and Exchange	Sep. 30, 2013 Management and Rental	Dec. 31, 2012 Management and Rental	Oct. 01, 2012 Management and Rental
GOODWILL AND OTHER INTANGIBLE ASSETS
Number of reporting units	2
Goodwill
Goodwill	$ 505,774,000	$ 505,774,000	$ 483,500,000	$ 483,500,000	$ 483,500,000	$ 22,300,000	$ 22,300,000	$ 22,300,000
Intangible assets with indefinite lives	40,916,000	40,916,000
Intangible assets with definite lives, net	52,354,000	57,762,000
Total goodwill and other intangible assets, net	599,044,000	604,452,000
Changes in the carrying amount of goodwill	$ 0

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FAIR VALUE MEASUREMENTS (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended		9 Months Ended
	Nov. 30, 2010	Sep. 30, 2013	Sep. 30, 2013 Level 3 Contingent consideration	Sep. 30, 2013 Level 3 Contingent consideration Minimum	Sep. 30, 2013 Level 3 Contingent consideration Maximum	Sep. 30, 2013 Level 3 Contingent consideration Accrued expenses and other current liabilities
Contingent consideration related to business acquisition
Contingent consideration payment, low end of range	$ 0
Contingent consideration payment, high end of range	5.0
Period for payment of contingent consideration	3 years
Discount rate (as a percent)			18.50%
Fair value of contingent consideration						1.9
Net change in fair value of the contingent consideration			0.7
Increase in fair value of contingent consideration due to revisions to estimated earnings			0.5
Increase in fair value of contingent consideration due to accretion of interest			0.2
Percentage of downward and upward change to inputs that would not result in a change to the estimated contingent consideration			10.00%
Favorable change in estimated consideration				0	0.1
Asset transfers in/out of Level 1, Level 2 or Level 3		0
Liability transfers in/out of Level 1, Level 2 or Level 3		$ 0

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SUBSEQUENT EVENT (Details) (Definitive agreement with CLC) In Millions, unless otherwise specified	1 Months Ended	0 Months Ended
	Aug. 31, 2013 Convertible secured loan USD ($)	Nov. 04, 2013 Subsequent event VRI Europe Limited USD ($)	Nov. 04, 2013 Subsequent event VRI Europe Limited GBP (£)
Subsequent events
Cash paid as consideration for acquisition		$ 90	£ 56
Shares of VRIE issued as consideration for acquisition (as a percent)		24.50%	24.50%
Convertible secured loan to be issued	$ 15
Convertible secured loan maturity period	5 years

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INCOME TAXES (Details 2) (USD $) In Millions, unless otherwise specified	3 Months Ended	1 Months Ended
	Sep. 30, 2013	Oct. 31, 2013 State taxing authority	Apr. 30, 2013 U.K. Finance Act of 2012	Apr. 30, 2012 U.K. Finance Act of 2012	Apr. 30, 2015 U.K. Finance Act of 2013	Apr. 30, 2014 U.K. Finance Act of 2013
Income Taxes
U.K. corporate income tax rate (as a percent)			23.00%	24.00%	20.00%	21.00%
Decrease in U.K. deferred tax asset	$ 0.6
Decrease in unrecognized tax benefits for state income tax items		$ 1.1

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income attributable to common stockholders	$ 17,101	$ 149	$ 62,675	$ 25,426
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	1,666	2,392	(1,524)	3,501
Total other comprehensive income (loss), net of tax	1,666	2,392	(1,524)	3,501
Comprehensive income	$ 18,767	$ 2,541	$ 61,151	$ 28,927

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STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2013

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

NOTE 7—STOCKHOLDERS' EQUITY

        ILG has 300 million authorized shares of common stock, par value of $.01 per share. At September 30, 2013, there were 59.1 million shares of ILG common stock issued, of which 57.4 million are outstanding with 1.7 million shares held as treasury stock. At December 31, 2012, there were 58.6 million shares of ILG common stock issued, of which 56.9 million were outstanding with 1.7 million shares held as treasury stock.

        ILG has 25 million authorized shares of preferred stock, par value $.01 per share, none of which are issued or outstanding as of September 30, 2013 and December 31, 2012. 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.

Dividends Declared

        In May and August 2013, our Board of Directors declared quarterly dividend payments of $0.11 per share paid in June and September 2013, respectively, of $6.3 million each.

        In November 2013, our Board of Directors declared a $0.11 per share dividend payable December 18, 2013 to shareholders of record on December 4, 2013.

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

        Effective August 3, 2011, ILG's Board of Directors authorized a share repurchase program for up to $25.0 million, excluding commissions, of our outstanding common stock. Acquired shares of our common stock are held as treasury shares carried at cost on our 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.

        There were no repurchases of common stock during the year ended December 31, 2012 and the nine months ended September 30, 2013. As of September 30, 2013, the remaining availability for future repurchases of our common stock was $4.1 million.

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 for ILG, including (1) changes in AOCL balances by component and (2) significant items reclassified out of AOCL in the period. For the nine months ended September 30, 2013, 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 consolidated statements of comprehensive income.

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CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Accounts receivable, allowance (in dollars)	$ 340	$ 409
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	59,052,950	58,553,265
Treasury stock, shares	1,697,360	1,697,360
Series A Junior Participating Preferred Stock
Preferred stock, authorized shares	100,000	100,000

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CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONSOLIDATED STATEMENTS OF INCOME
Revenue	$ 119,156	$ 117,195	$ 379,020	$ 362,602
Cost of sales (exclusive of depreciation and amortization shown separately below)	41,991	41,741	131,788	127,793
Gross profit	77,165	75,454	247,232	234,809
Selling and marketing expense	12,951	13,282	40,958	41,323
General and administrative expense	27,387	26,626	81,917	79,032
Amortization expense of intangibles	1,950	6,669	5,858	21,001
Depreciation expense	3,499	3,311	10,859	9,839
Operating income	31,378	25,566	107,640	83,614
Other income (expense):
Interest income	60	535	282	1,538
Interest expense	(1,295)	(6,485)	(4,559)	(23,874)
Other income (expense), net	(65)	(915)	893	(2,408)
Loss on extinguishment of debt		(17,925)		(18,527)
Total other expense, net	(1,300)	(24,790)	(3,384)	(43,271)
Earnings before income taxes and noncontrolling interest	30,078	776	104,256	40,343
Income tax provision	(12,973)	(624)	(41,571)	(14,911)
Net income	17,105	152	62,685	25,432
Net income attributable to noncontrolling interest	(4)	(3)	(10)	(6)
Net income attributable to common stockholders	$ 17,101	$ 149	$ 62,675	$ 25,426
Earnings per share attributable to common stockholders:
Basic (in dollars per share)	$ 0.30	$ 0.00	$ 1.10	$ 0.45
Diluted (in dollars per share)	$ 0.29	$ 0.00	$ 1.09	$ 0.45
Weighted average number of shares of common stock outstanding:
Basic (in shares)	57,353	56,714	57,199	56,448
Diluted (in shares)	57,986	57,364	57,738	57,120
Dividends declared per share of common stock (in dollars per share)	$ 0.11	$ 0.10	$ 0.22	$ 0.30

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ORGANIZATION AND BASIS OF PRESENTATION (Details)	9 Months Ended
	Sep. 30, 2013 item
ORGANIZATION AND BASIS OF PRESENTATION
Number of operating segments	2

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2013

GOODWILL AND OTHER INTANGIBLE ASSETS

Schedule of balance of goodwill and other intangible assets, net

 The balance of goodwill and other intangible assets, net is as follows (in thousands):

	September 30, 2013		December 31, 2012
Goodwill	$	505,774	$	505,774
Intangible assets with indefinite lives		40,916		40,916
Intangible assets with definite lives, net		52,354		57,762
Total goodwill and other intangible assets, net	$	599,044	$	604,452

Schedule of intangible assets with definite lives

At September 30, 2013, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	129,500	$	(129,500	)	$	—
Purchase agreements		75,879		(74,848	)		1,031
Resort management contracts		73,116		(25,695	)		47,421
Technology		25,076		(25,071	)		5
Other		17,826		(13,929	)		3,897
Total	$	321,397	$	(269,043	)	$	52,354

        At December 31, 2012, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	129,500	$	(129,500	)	$	—
Purchase agreements		75,879		(74,491	)		1,388
Resort management contracts		72,666		(21,225	)		51,441
Technology		25,076		(24,988	)		88
Other		17,826		(12,981	)		4,845
Total	$	320,947	$	(263,185	)	$	57,762

Schedule of amortization expense of intangible assets with definite lives

Based on September 30, 2013 balances, amortization expense for the next five years and thereafter is estimated to be as follows (in thousands):

Twelve month period ending September 30,
2014	$	7,734
2015		7,591
2016		6,610
2017		6,176
2018		5,487
2019 and thereafter		18,756
	$	52,354

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INCOME TAXES (Details) (USD $)	3 Months Ended			9 Months Ended
	Sep. 30, 2013	Mar. 31, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
INCOME TAXES
Income tax provision for continuing operations	$ 12,973,000		$ 624,000	$ 41,571,000	$ 14,911,000
Effective tax rate (as a percent)	43.10%		80.50%	39.90%	37.00%
Federal statutory rate (as a percent)	35.00%		35.00%	35.00%	35.00%
Unrecognized tax benefits	1,700,000			1,700,000		700,000
Unrecognized tax benefits that would favorably affect the effective tax rate, if recognized	1,200,000			1,200,000		700,000
Net increase in unrecognized tax benefits	0			1,000,000
Increase in unrecognized tax benefits for state income tax items		1,100,000		0
Decrease in unrecognized tax benefits due to expiration of statute of limitations related to foreign taxes		200,000
Accruals for interest	0			0
Decrease in interest and penalties				200,000
Accrued interest and penalties	400,000			400,000
Estimated decrease in unrecognized tax benefits within next twelve months	$ 1,300,000			$ 1,300,000

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STOCKHOLDERS' EQUITY (Details) (USD $)	1 Months Ended							3 Months Ended		9 Months Ended		12 Months Ended
	Nov. 30, 2013	Sep. 30, 2013	Aug. 31, 2013	Jun. 30, 2013	May 31, 2013	Aug. 31, 2011	Jun. 30, 2009	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013 item	Sep. 30, 2012	Dec. 31, 2012
STOCKHOLDERS' 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)		$ 0.01						$ 0.01		$ 0.01		$ 0.01
Shares of common stock issued		59,052,950						59,052,950		59,052,950		58,553,265
Shares of common stock outstanding		57,400,000						57,400,000		57,400,000		56,900,000
Shares held as treasury stock		1,697,360						1,697,360		1,697,360		1,697,360
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)		$ 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										1
Dividends declared per common share (in dollars per share)	$ 0.11		$ 0.11		$ 0.11			$ 0.11	$ 0.10	$ 0.22	$ 0.30
Cash dividend paid		$ 6,300,000		$ 6,300,000						$ 12,617,000	$ 16,996,000
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%
Share Repurchase Program
Amount authorized under share repurchase program						25,000,000
Number of shares of common stock repurchased										0		0
Remaining availability for future repurchases of common stock										$ 4,100,000

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LONG-TERM DEBT (Details) (Revolving credit facility, USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Revolving credit facility
LONG-TERM DEBT
Stated interest rate (as a percent)	1.69%	1.97%
Total long-term debt	$ 190,000	$ 260,000

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LONG-TERM DEBT (Details 2) (USD $)	1 Months Ended	9 Months Ended
	Jun. 30, 2012	Sep. 30, 2013	Dec. 31, 2012	Jun. 21, 2012
Senior Secured Credit Facility and Covenants
Total unamortized debt issuance costs		$ 2,900,000	$ 3,500,000
Accumulated amortization on debt issuance costs		600,000	400,000
Revolving credit facility
Senior Secured Credit Facility and Covenants
Principal amount		500,000,000		500,000,000
Maximum borrowing capacity subject to certain conditions				700,000,000
Amount outstanding		190,000,000	260,000,000
Commitment fee (as a percent)		0.275%
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%
Lender and third - party debt issuance costs incurred	$ 3,900,000
Revolving credit facility | Actual
Senior Secured Credit Facility and Covenants
Consolidated leverage ratio of debt over EBITDA		1.00
Consolidated interest coverage ratio		33.30
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		3.0
Revolving credit facility | Maximum
Senior Secured Credit Facility and Covenants
Commitment fee (as a percent)		0.375%
Revolving credit facility | Maximum | Through December 31, 2013 | Financial covenant
Senior Secured Credit Facility and Covenants
Consolidated leverage ratio of debt over EBITDA		3.50
Revolving credit facility | Maximum | After December 31, 2013 | 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)		0.50%
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)		1.25%
Revolving credit facility | LIBOR
Senior Secured Credit Facility and Covenants
Reference rate		LIBOR
Applicable margin (as a percent)		1.50%
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)		2.25%

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2013

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 6—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

        As part of an acquisition in November 2010, we are obligated to pay contingent consideration in an amount ranging from zero up to a total of $5.0 million to the former owners during the three year period subsequent to the acquisition should the company meet certain earnings targets. In our determination of the fair value of this contingent consideration, we utilize a probability-weighted income approach, which includes certain significant inputs not observable in the market, such as a discount rate of 18.5% as well as actual and estimated probability-weighted cash flows pertaining to the periods subject to the contingent consideration. We believe these inputs represent Level 3 measurements within the fair value hierarchy.

        As of September 30, 2013, the fair value of the remaining contingent consideration was $1.9 million, an increase of $0.7 million from December 31, 2012, of which $0.5 million is due to revisions to the estimated earnings used in our calculation of the fair value of the contingent consideration and $0.2 million is due to the accretion of interest. The revision to estimated earnings and the accretion of interest have been reflected in "General and administrative expense" and "Interest expense", respectively, in our consolidated statement of income for the nine months ended September 30, 2013. The total contingent consideration of $1.9 million is included in "Accrued expenses and other current liabilities" in our consolidated balance sheet as of September 30, 2013.

        As a measure of sensitivity, a downward and upward change of 10% to all of the aforementioned Level 3 inputs would have resulted in a change ranging from zero to $0.1 million (favorable) to the estimated contingent consideration liability as of September 30, 2013. There have been no transfers of inputs used in measuring fair value between the three tiers within the fair value hierarchy since December 31, 2012.

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 three and nine months ended September 30, 2013. Our financial instruments include guarantees, letters of credit and surety bonds.

	September 30, 2013						December 31, 2012
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
	(In thousands)
Cash and cash equivalents	$	103,563		$	103,563		$	101,162		$	101,162
Restricted cash and cash equivalents	$	5,828		$	5,828		$	7,348		$	7,348
Financing receivable	$	—		$	—		$	9,876		$	9,876
Total debt	$	(190,000	)	$	(190,000	)	$	(260,000	)	$	(260,000	)
Guarantees, surety bonds and letters of credit		N/A		$	(23,051	)		N/A		$	(36,747	)

        The carrying amounts of cash and cash equivalents and restricted cash and cash equivalents reflected in the accompanying 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). As of December 31, 2012, the financing receivable was presented in our consolidated balance sheets within "Other non-current assets" and pertained to a secured real estate related loan issued to a third party in 2012 with an original maturity in 2015. During the first quarter 2013, the loan was repaid in full at 100% of the original principal amount plus accrued interest. The carrying value at December 31, 2012 of this financing receivable approximated fair value through inputs inherent to the originating value of the 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 was comparable to market rate. Interest was recognized within our "Interest income" line item in our consolidated statements of income for the nine months ended September 30, 2013 and 2012.

        The carrying value of the outstanding balance under our $500 million revolving credit facility approximates fair value as of September 30, 2013 through inputs inherent to the debt such as variable interest rates and credit risk (Level 2).

        The guarantees, surety bonds, and letters of credit represent liabilities that are carried on our balance sheet only when a future related contingent event becomes probable and reasonably estimable. These commitments are in place to facilitate our commercial operations. The related fair value of these liabilities is estimated at the minimum expected cash flows contractually required to satisfy the related liabilities in the future upon occurrence of the applicable contingent events (Level 2).

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SIGNIFICANT ACCOUNTING POLICIES (Details) In Millions, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Securities not included in the computations of diluted earnings per share
Securities excluded from computation of diluted earnings per share (in shares)	0.8	0.9	0.8	1.0
Stock options
Securities not included in the computations of diluted earnings per share
Outstanding stock options (in shares)	0.9	0.9	0.9	0.9

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STOCK-BASED COMPENSATION (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Non-cash stock-based compensation expense
Non-cash compensation expense	$ 2,609	$ 2,564	$ 7,753	$ 8,733
Cost of sales
Non-cash stock-based compensation expense
Non-cash compensation expense	160	155	519	471
Selling and marketing expense
Non-cash stock-based compensation expense
Non-cash compensation expense	292	257	906	787
General and administrative expenses
Non-cash stock-based compensation expense
Non-cash compensation expense	$ 2,157	$ 2,152	$ 6,328	$ 7,475

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STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2013

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE 9—STOCK-BASED COMPENSATION

        On May 21, 2013, ILG adopted the Interval Leisure Group, Inc. 2013 Stock and Incentive Plan to replace the ILG 2008 Stock and Annual 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, 2013, ILG has 3.3 million shares available for future issuance under the 2013 Stock and Incentive Compensation Plan.

        During the first quarter of 2013 and 2012, the Compensation Committee granted approximately 657,000 and 586,000 RSUs, respectively, vesting over three to four years, to certain officers and employees of ILG and its subsidiaries. Of these RSUs granted in 2013 and 2012, approximately 300,000 and 130,000 cliff vest in three years and approximately 58,000 and 73,000 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 EBITDA or relative total shareholder return targets over the respective performance period, as specified in the award document.

        For the 2013 and 2012 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 $29.61 for 2013 and $17.34 for 2012 per unit grant date fair value 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, 2013 and 2012 was $2.6 million, respectively. For the nine months ended September 30, 2013 and 2012, non-cash compensation expense related to RSUs was $7.8 million and $8.7 million, respectively. At September 30, 2013, there was approximately $17.3 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 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 consolidated statements of income for the three and nine months ended September 30, 2013 and 2012 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Cost of sales	$	160	$	155	$	519	$	471
Selling and marketing expense		292		257		906		787
General and administrative expense		2,157		2,152		6,328		7,475
Non-cash compensation expense	$	2,609	$	2,564	$	7,753	$	8,733

        The following table summarizes RSU activity during the nine months ended September 30, 2013:

	Shares			Weighted-Average Grant Date Fair Value
	(In thousands)
Non-vested RSUs at January 1		1,569		$	13.29
Granted		707			20.75
Vested		(688	)		11.63
Forfeited		(13	)		18.10
Non-vested RSUs at September 30		1,575		$	17.29

        In connection with the acquisition of Aston by ILG in 2007, a member of Aston's management purchased a noncontrolling interest in Aston and, additionally, was granted non-voting restricted common equity. This award was granted on May 31, 2007 and was initially measured at fair value, which was amortized over the vesting period. This award vests ratably over four and a half years, or earlier based upon the occurrence of certain prescribed events. These shares are subject to a put right by the holder and a call right by ILG, which became exercisable for the first time in the first quarter of 2013 for a period of 60 days subsequent to the filing of our 2012 Annual Report on Form 10-K and is exercisable annually thereafter.

        The value of these shares upon exercise of the put or call is equal to their fair market value, determined by negotiation or arbitration, reduced by the accreted value of the preferred interest that was taken by ILG upon the purchase of Aston. The initial value of the preferred interest was equal to the acquisition price of Aston. The preferred interest accretes at a 10% annual rate. Upon exercise of the put or call, the consideration payable can be denominated in ILG shares, cash or a combination thereof at ILG's option. An additional put right by the holder and call right by ILG would require, upon exercise, the purchase of these non-voting common shares by ILG immediately prior to a registered public offering by Aston, at the public offering price. As of September 30, 2013, the estimated redemption value of this redeemable interest is lower than the current carrying value on our consolidated balance sheet. Consequently, pursuant to the applicable accounting guidance, no adjustment to the balance of this noncontrolling interest was recorded for the nine months ended September 30, 2013.

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LONG-TERM DEBT

9 Months Ended

Sep. 30, 2013

LONG-TERM DEBT

LONG-TERM DEBT

NOTE 5—LONG-TERM DEBT

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

	September 30, 2013		December 31, 2012
Revolving credit facility (interest rate of 1.69% at September 30, 2013 and 1.97% at December 31, 2012)	$	190,000	$	260,000
Total long-term debt	$	190,000	$	260,000

Credit Facility

        On June 21, 2012, we entered into an amended and restated credit agreement (the "Amended Credit Agreement") which, among other things (1) provides for a $500 million revolving credit facility, (2) extends the maturity of the credit facility to June 21, 2017, (3) provides for an interest rate on borrowings, commitment fees and letter of credit fees based on our consolidated leverage ratio, and (4) may be increased to up to $700 million, subject to certain conditions. As of September 30, 2013, there was $190 million outstanding on the revolving credit facility. Any principal amounts outstanding under the revolving credit facility are due at maturity. The interest rate on the Amended Credit Agreement is based on (at our election) either LIBOR plus a predetermined margin that ranges from 1.25% to 2.25%, or the Base Rate as defined in the Amended Credit Agreement plus a predetermined margin that ranges from 0.25% to 1.25%, in each case based on our consolidated leverage ratio. As of September 30, 2013, the applicable margin was 1.50% per annum for LIBOR revolving loans and 0.50% per annum for Base Rate loans. The revolving credit facility has a commitment fee on undrawn amounts that ranges from 0.25% to 0.375% per annum based on our consolidated leverage ratio and as of September 30, 2013, the commitment fee was 0.275%.

        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.

Restrictions and Covenants

        The Amended Credit Agreement has 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 Amended Credit Agreement requires us to meet certain financial covenants regarding the maintenance of a maximum consolidated leverage ratio of consolidated debt, less credit given for a portion of foreign cash, over consolidated Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as defined in the Amended Credit Agreement, of 3.50 through December 31, 2013 and 3.25 thereafter. Additionally, we are required to maintain a minimum consolidated interest coverage ratio of consolidated EBITDA over consolidated interest expense, as defined in the Amended Credit Agreement, of 3.0. As of September 30, 2013, ILG was in compliance in all material respects with the requirements of all applicable financial and operating covenants and our consolidated leverage ratio and consolidated interest coverage ratio under the Amended Credit Agreement were 1.00 and 33.30, respectively.

Debt Issuance Costs

        In connection with entering into the Amended Credit Agreement, we incurred $3.9 million of lender and third-party debt issuance costs. As of September 30, 2013 and December 31, 2012, total unamortized debt issuance costs on outstanding debt were $2.9 million, net of $0.6 million of accumulated amortization, and $3.5 million, net of $0.4 million of accumulated amortization, respectively, which were included in "Other non-current assets" in our consolidated balance sheets. Debt issuance costs are amortized to "Interest expense" on a straight-line basis for our Amended Credit Agreement.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net income	$ 62,685	$ 25,432
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization expense of intangibles	5,858	21,001
Amortization of debt issuance costs	587	1,180
Depreciation expense	10,859	9,839
Accretion of original issue discount		1,840
Non-cash compensation expense	7,753	8,733
Non-cash interest expense	277	338
Non-cash interest income		(651)
Deferred income taxes	656	1,370
Excess tax benefits from stock-based awards	(2,602)	(3,014)
Loss (gain) on disposal of property and equipment	163	(256)
Loss on extinguishment of debt		18,527
Change in fair value of contingent consideration	485	(670)
Changes in operating assets and liabilities:
Accounts receivable	(4,189)	(2,803)
Prepaid expenses and other current assets	6,863	2,845
Prepaid income taxes and income taxes payable	5,824	(11,272)
Accounts payable and other current liabilities	(3,761)	(14,942)
Deferred revenue	(3,852)	3,942
Other, net	1,696	2,683
Net cash provided by operating activities	89,302	64,122
Cash flows from investing activities:
Acquisition, net of cash acquired		(39,963)
Acquisition of assets	(1,952)
Capital expenditures	(9,338)	(10,425)
Proceeds from disposal of property and equipment	7	230
Investment in financing receivables		(9,480)
Payments received on financing receivables	9,876	16,989
Net cash used in investing activities	(1,407)	(42,649)
Cash flows from financing activities:
Principal payments on term loan		(56,000)
Redemption of senior notes		(300,000)
Payments on revolving credit facility	(70,000)
Borrowings on revolving credit facility		290,000
Payments of debt issuance costs		(3,912)
Dividend payments	(12,617)	(16,996)
Withholding taxes on vesting of restricted stock units	(4,478)	(6,174)
Proceeds from the exercise of stock options	399	634
Excess tax benefits from stock-based awards	2,602	3,014
Net cash used in financing activities	(84,094)	(89,434)
Effect of exchange rate changes on cash and cash equivalents	(1,400)	4,401
Net increase (decrease) in cash and cash equivalents	2,401	(63,560)
Cash and cash equivalents at beginning of period	101,162	195,517
Cash and cash equivalents at end of period	103,563	131,957
Cash paid during the period for:
Interest, net of amounts capitalized	4,068	29,528
Income taxes, net of refunds	$ 35,091	$ 24,813

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SEGMENT INFORMATION (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013 item	Sep. 30, 2012	Sep. 30, 2013 item	Sep. 30, 2012	Dec. 31, 2012
SEGMENT INFORMATION
Number of operating segments which are also reportable segments			2
Geographic Information
Number of other countries in which entity operates	16		16
Revenue:
Revenue	$ 119,156	$ 117,195	$ 379,020	$ 362,602
Long-lived assets (excluding goodwill and other intangible assets):
Total long-lived assets	53,130		53,130		53,348
Minimum
Geographic Information
Number of countries from which revenue is sourced			100
United States
Revenue:
Revenue	98,252	96,710	310,722	294,408
Long-lived assets (excluding goodwill and other intangible assets):
Total long-lived assets	51,002		51,002		51,059
All other countries
Revenue:
Revenue	20,904	20,485	68,298	68,194
Long-lived assets (excluding goodwill and other intangible assets):
Total long-lived assets	$ 2,128		$ 2,128		$ 2,289

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GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Other intangible assets
Cost	$ 321,397		$ 321,397		$ 320,947
Accumulated Amortization	(269,043)		(269,043)		(263,185)
Net	52,354		52,354		57,762
Amortization expense for intangible assets	1,950	6,669	5,858	21,001
Amortization of intangible assets
2014	7,734		7,734
2015	7,591		7,591
2016	6,610		6,610
2017	6,176		6,176
2018	5,487		5,487
2019 and thereafter	18,756		18,756
Net	52,354		52,354		57,762
Customer relationships
Other intangible assets
Cost	129,500		129,500		129,500
Accumulated Amortization	(129,500)		(129,500)		(129,500)
Purchase agreements
Other intangible assets
Cost	75,879		75,879		75,879
Accumulated Amortization	(74,848)		(74,848)		(74,491)
Net	1,031		1,031		1,388
Amortization of intangible assets
Net	1,031		1,031		1,388
Resort management contracts
Other intangible assets
Cost	73,116		73,116		72,666
Accumulated Amortization	(25,695)		(25,695)		(21,225)
Net	47,421		47,421		51,441
Amortization of intangible assets
Net	47,421		47,421		51,441
Technology
Other intangible assets
Cost	25,076		25,076		25,076
Accumulated Amortization	(25,071)		(25,071)		(24,988)
Net	5		5		88
Amortization of intangible assets
Net	5		5		88
Other
Other intangible assets
Cost	17,826		17,826		17,826
Accumulated Amortization	(13,929)		(13,929)		(12,981)
Net	3,897		3,897		4,845
Amortization of intangible assets
Net	$ 3,897		$ 3,897		$ 4,845

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2013

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 12—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 10 for a discussion of income tax contingencies.

        Other items, such as certain purchase commitments and guarantees are not recognized as liabilities in our 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, 2013, guarantees, surety bonds and letters of credit totaled $23.1 million, with the highest annual amount of $12.7 million occurring in year one. The total includes maximum exposure under guarantees of $19.8 million, which primarily relates to the Management and Rental segment's hotel and resort management agreements of Aston, including those with guaranteed dollar amounts, and accommodation leases supporting the management activities of Aston, entered into on behalf of the property owners for which either party may terminate such leases upon 60 days prior written notice to the other party. In addition, certain of the Management and Rental segment's hotel and resort management agreements of Aston provide that owners receive specified percentages of the 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, and the Management and Rental segment either retains the balance (if any) as its management fee or makes up the deficit. Although such deficits are reasonably possible in a few of these agreements, as of September 30, 2013, future amounts are not expected to be significant, individually or in the aggregate.

        The purchase obligations primarily relate to future guaranteed purchases of rental inventory, operational support services and membership fulfillment benefits. Aston also enters into agreements, as principal, for services purchased on behalf of property owners for which it is subsequently reimbursed. As such, Aston is the primary obligor and may be liable for unreimbursed costs. As of September 30, 2013, 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 the Membership and Exchange segment accounts for VAT on its revenues as well as to which EU country VAT is owed. As of September 30, 2013 and December 31, 2012, ILG had an accrual of $2.9 million and $4.5 million, respectively, representing the net exposure of any VAT reclaim refund receivable and accrued VAT liabilities related to this matter. The net change of $1.6 million in the accrual from December 31, 2012 primarily relates to a decrease in the change in estimate primarily to update the periods for which the accrued VAT liabilities are due and to refine the VAT accrual calculation for certain other countries, including $0.5 million in payments, and the effect of foreign currency remeasurements. The change in estimate resulted in favorable adjustments to our consolidated statements of income for the three and nine months ended September 30, 2013. 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 may range from $2.9 million up to approximately $4.2 million based on quarter-end exchange rates. ILG believes that the $2.9 million accrual at September 30, 2013 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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BENEFIT PLANS

9 Months Ended

Sep. 30, 2013

BENEFIT PLANS

BENEFIT PLANS

NOTE 8—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 $0.4 million and $1.2 million for the three and nine months ended September 30, 2013, respectively, and approximately $0.4 million and $1.1 million for the three and nine months ended September 30, 2012, 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 41,180 share units were outstanding at September 30, 2013. 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.

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2013

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,
	2013		2012		2013		2012
Basic weighted average shares of common stock outstanding		57,353		56,714		57,199		56,448
Net effect of common stock equivalents assumed to be vested related to RSUs		627		636		532		657
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees		6		14		7		15
Diluted weighted average shares of common stock outstanding		57,986		57,364		57,738		57,120

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SUBSEQUENT EVENT

9 Months Ended

Sep. 30, 2013

SUBSEQUENT EVENT

SUBSEQUENT EVENT

NOTE 13—SUBSEQUENT EVENT

        In August 2013, Interval Leisure Group and its subsidiary, VRI Europe Limited, entered into a definitive agreement with CLC World Resorts and Hotels (CLC). On November 4, 2013, VRI Europe Limited purchased the European shared ownership resort management business of CLC, for approximately £56 million (or approximately $90 million) in cash (subject to adjustment for working capital, actual 2013 results and other specified items) and issuance to CLC of shares totaling 24.5% of VRI Europe Limited. In connection with this arrangement, ILG has agreed to issue a convertible secured loan for approximately $15 million to CLC which matures in five years with interest payable monthly.

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Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 01, 2013
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, 2013
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		57,358,142
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2013

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 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 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 0.8 million stock options and RSUs for the three and nine months ended September 30, 2013, respectively, and 0.9 million and 1.0 million stock options and RSUs for the three and nine months ended September 30, 2012, 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, 2013 and 2012, 0.9 million of stock options 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,
	2013		2012		2013		2012
Basic weighted average shares of common stock outstanding		57,353		56,714		57,199		56,448
Net effect of common stock equivalents assumed to be vested related to RSUs		627		636		532		657
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees		6		14		7		15
Diluted weighted average shares of common stock outstanding		57,986		57,364		57,738		57,120

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 2012 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 July 2013, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2013-10, "Derivatives and Hedging (Topic 815): Inclusion of the Fed Funds Effective Swap Rate (or Overnight Index Swap Rate, ("OIS")) as a Benchmark Interest Rate for Hedge Accounting Purposes (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2013-10)"). ASU 2013-10 ratified the Task Force's consensus to allow the Fed Funds effective swap rate to serve as a benchmark interest rate in the United States, which was previously defined in ASC 815 as either (1) a rate on direct obligations of the U.S. Department of the Treasury (UST) or (2) the LIBOR swap rate. ASU 2013-10 does not add to the disclosure requirements in ASC 815-10-50; however, in order to comply with the required disclosures related to fair value in ASC 820 a separate process for determining the fair value hierarchy of derivatives when the OIS rate is an input may be required. The ASU is required to be applied prospectively for qualifying new or re-designated hedging relationships entered into on or after July 17, 2013. We do not currently anticipate the adoption of this guidance, as of the effective date, will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements.

        In March 2013, the FASB issued ASU 2013-05, "Foreign Currency Matters (Topic 830): Parent's Accounting for the Cumulative Translation Adjustment ("CTA") upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2013-05"). ASU 2013-05 applies to the release of the CTA into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights) within a foreign entity. The ASU does not change the requirement to release a pro rata portion of the CTA of the foreign entity into earnings for a partial sale of an equity method investment in a foreign entity. The ASU is effective for fiscal years beginning after December 15, 2013 (and interim periods within those fiscal years) and shall be applied prospectively, with early adoption permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements.

        In February 2013, the FASB issued ASU 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date" ("ASU 2013-04"). ASU 2013-04 provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date. The ASU requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangements among its co-obligors as well as any additional amount the reporting entity expects to pay on behalf of its co-obligors. ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations. The ASU is effective for fiscal years beginning after December 15, 2013 (and interim periods within those years), and shall be applied retrospectively, with early adoption permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements.

Adopted Accounting Pronouncements

        In February 2013, the FASB issued ASU 2013-02, "Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income" ("ASU 2013-02"). ASU 2013-02 adds new disclosure requirements for items reclassified out of accumulated other comprehensive income/loss ("AOCI"), including (1) disaggregating and separately presenting changes in AOCI balances by component and (2) presenting significant items reclassified out of AOCI either on the face of the statement where net income is presented or as a separate disclosure in the notes to the financial statements. It does not amend any existing requirements for reporting net income or other comprehensive income in the financial statements. The ASU is effective for fiscal years beginning after December 15, 2012 (and interim periods within those years), and shall be applied prospectively. The adoption of ASU 2013-02 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

        In January 2013, the FASB issued ASU 2013-01, "Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities" ("ASU 2013-01"). ASU 2013-01 clarifies the offsetting disclosure requirements in ASU 2011-11, "Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities" ("ASU 2011-11"). Under ASU 2013-01, the disclosure requirements would apply to derivative instruments accounted for in accordance with ASC 815, "Derivatives and Hedging," including bifurcated embedded derivatives. The ASU is effective for fiscal years beginning on or after January 1, 2013, and interim periods within those years. Retrospective application is required for all comparative periods presented. The adoption of ASU 2013-01 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

        In October 2012, the FASB issued ASU 2012-04, "Technical Corrections and Improvements" ("ASU 2012-04"). ASU 2012-04 makes certain technical corrections, clarifications and conforming fair value amendments to the FASB Accounting Standard Codification (the "Codification") that affects various Codification topics. The amendments in this ASU are effective upon issuance, except for amendments that are subject to transition guidance, which became effective for fiscal periods beginning after December 15, 2012. The adoption of ASU 2012-04 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

        In December 2011, the FASB issued ASU 2011-11 that creates new disclosure requirements about the nature of an entity's rights of setoff and related arrangements associated with its financial instruments and derivative instruments. The ASU is designed to make financial statements that are prepared under GAAP more comparable to those prepared under International Financial Reporting Standards ("IFRS"). The ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. The adoption of ASU 2011-11 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.