10-Q/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q/A

Amendment No. 1

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2011

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 333-172772

DIAMOND RESORTS CORPORATION

(Exact name of registrant as specified in its charter)

Maryland	95-4582157
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

10600 West Charleston Boulevard
Las Vegas, Nevada 89135
(Address of principal executive offices and zip code)
Tel: (702) 684-8000
(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 o No þ

     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 o 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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act). (Check One):

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

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

     There is no public trading market for the common stock of Diamond Resorts Corporation. As of August 9, 2011, there were 100 outstanding shares of the common stock, par value $0.01 per share, of Diamond Resorts Corporation.

DIAMOND RESORTS PARENT, LLC AND SUBSIDIARIES

TABLE OF CONTENTS

     PART II. OTHER INFORMATION

Item 6. Exhibits	3
Signatures	4
Index to Exhibits	5
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

1

Explanatory Note

     Diamond Resorts Corporation is filing this Amendment No. 1 (the “Form 10-Q/A”) to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 (the “Form 10-Q”), filed with the U.S. Securities and Exchange Commission on August 15, 2011, for the sole purpose of furnishing the Interactive Data File as Exhibit 101 in accordance with Rule 405 (a)(2) of Regulation S-T.

     No other changes have been made to the Form 10-Q. This Form 10-Q/A continues to speak as of the original filing date of the Form 10-Q, does not reflect events that may have occurred subsequent to the original filing date and does not modify or update any related disclosures made in the Form 10-Q.

     Users of this data are advised that pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

2

PART II — OTHER INFORMATION

ITEM 6. EXHIBITS

Exhibit	Description
10.1	Amended and Restated Inventory Loan and Security Agreement, dated as of June 30, 2011, by and among Textron Financial Corporation, Mystic Dunes Myrtle Beach, LLC and Mystic Dunes, LLC*
10.2	Loan and Security Agreement, dated as of June 30, 2011, by and between Resort Finance America, LLC and Mystic Dunes Receivables, LLC*
10.3	Loan and Security Agreement, dated as of June 30, 2011, by and among Tempus Acquisition, LLC, the Lenders party thereto and Guggenheim Corporate Funding, LLC, as administrative agent*
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended*
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended*
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101	The following materials from Diamond Resorts Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Member Capital (Deficit) and Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements, furnished herewith.

* Previously filed.

3

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.

		DIAMOND RESORTS CORPORATION
Date: September 14, 2011	By:	/s/ STEPHEN J. CLOOBECK  Stephen J. Cloobeck
		Chairman of the Board and Chief Executive Officer
		(Principal Executive Officer)
Date: September 14, 2011	By:	/s/ DAVID F. PALMER  David F. Palmer
		President and Chief Financial Officer
		(Principal Financial Officer)

4

INDEX TO EXHIBITS

Exhibit	Description
10.1	Amended and Restated Inventory Loan and Security Agreement, dated as of June 30, 2011, by and among Textron Financial Corporation, Mystic Dunes Myrtle Beach, LLC and Mystic Dunes, LLC*
10.2	Loan and Security Agreement, dated as of June 30, 2011, by and between Resort Finance America, LLC and Mystic Dunes Receivables, LLC*
10.3	Loan and Security Agreement, dated as of June 30, 2011, by and among Tempus Acquisition, LLC, the Lenders party thereto and Guggenheim Corporate Funding, LLC, as administrative agent*
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended*
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as amended*
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101	The following materials from Diamond Resorts Corporation’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011, formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Member Capital (Deficit) and Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Cash Flows, and (v) Notes to the Condensed Consolidated Financial Statements, furnished herewith.

* Previously filed.

5

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data	Jun. 30, 2011	Dec. 31, 2010
ASSETS
Mortgages and contracts receivable, net of allowance	$ 51,356	$ 55,151
LIABILITIES AND MEMBER CAPITAL (DEFICIT)
Senior secured notes, net of unamortized original issue discount	$ 9,882	$ 10,278
Redeemable preferred units, shares authorized	1,133	1,000
Redeemable preferred units, shares issued	1,133	1,000
Redeemable preferred units, shares outstanding	1,133	1,000
Member capital (deficit):
Member capital, par value
Member capital, shares authorized	1,115	1,115
Member capital, shares issued	1,115	1,090

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Revenues:
Vacation Interest sales	$ 52,470	$ 54,236	$ 94,403	$ 102,318
Provision for uncollectible Vacation Interest sales revenue	(3,753)	754	(6,743)	(868)
Vacation Interest, net	48,717	54,990	87,660	101,450
Management, member and other services	27,936	25,723	59,721	50,448
Consolidated resort operations	7,242	6,993	14,188	13,494
Interest	9,801	9,671	19,630	19,487
Gain on mortgage repurchase	91	56	120	92
Total revenues	93,787	97,433	181,319	184,971
Costs and Expenses:
Vacation Interest cost of sales	(5,681)	11,240	(5,614)	21,865
Advertising, sales and marketing	33,197	27,799	61,633	53,264
Vacation Interest carrying cost, net	7,347	6,747	15,907	14,182
Management, member and other services	6,034	5,652	12,294	12,174
Consolidated resort operations	7,106	6,648	13,274	12,525
Loan portfolio	2,539	2,627	5,157	5,230
General and administrative	18,670	16,572	37,723	31,892
Gain on disposal of assets	(363)	(758)	(372)	(760)
Depreciation and amortization	3,142	2,651	6,312	5,448
Interest	19,908	15,731	38,280	31,410
Impairments and other write-offs	240	980	323	980
Total costs and expenses	92,139	95,889	184,917	188,210
Income (loss) before (benefit) provision for income taxes	1,648	1,544	(3,598)	(3,239)
(Benefit) provision for income taxes	(891)	720	582	1,425
Net income (loss)	$ 2,539	$ 824	$ (4,180)	$ (4,664)

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2011

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 16—Commitments and Contingencies

Lease Agreements

     The Company conducts a significant portion of its operations from leased facilities, which include regional and global administrative facilities as well as off-premise booths and tour centers near active sales centers. The longest of these obligations extends into 2019. Many of these agreements have renewal options, subject to adjustments for inflation. In most cases, the Company expects that in the normal course of business, such leases will be renewed or replaced by other leases. Typically, these leases call for a minimum lease payment that increases over the life of the agreement by a fixed percentage or an amount based upon the change in a designated index. All of the facilities lease agreements are classified as operating leases.

     In addition, the Company leases office and other equipment under both long-term and short-term lease arrangements, which are generally classified as operating leases.

Purchase Obligations

     The Company has entered into various purchase obligations relating to sales center remodeling and property amenity improvement projects. The total remaining commitment was $0.1 million as of June 30, 2011.

Litigation and Other

     From time to time, the Company or its subsidiaries are subject to certain legal proceedings and claims in the ordinary course of business, including claims or proceedings relating to the Company’s Vacation Interest sales and consumer finance business.

     One of the Company’s subsidiaries, FLRX, Inc., is a defendant in a lawsuit originally filed in July 2003, alleging the breach of certain contractual terms relating to the obligations under a stock purchase agreement for the acquisition of FLRX in 1998, as well as certain violations under applicable consumer protection acts. FLRX currently conducts no operations and has no material assets other than an indirect interest in two undeveloped real estate parcels in Mexico. In January 2010, following a jury trial, a Washington state court entered a judgment against FLRX, awarded plaintiffs damages of $30.0 million plus attorney’s fees of approximately $1.5 million, and ordered specific performance of certain ongoing contractual obligations pursuant to the breach of contract claim. FLRX has appealed the verdict. Any liability in this matter would not be covered by insurance and the ultimate liability of FLRX, if any, is uncertain at this time. Neither Diamond Resorts Corporation nor any of its other subsidiaries are party to this lawsuit. Sunterra Corporation was originally named as a defendant in this matter, but it was later dismissed from the case. Depending upon developments in the lawsuit, it is possible that FLRX may at some point determine to file for protection under the Federal Bankruptcy Code. Although we believe that we will not have any material liability when this matter is ultimately resolved, there can be no assurance that this will be the case. During the quarters ended June 30, 2011 and June 30, 2010, the Company increased the estimated litigation accrual by $0.1 million and $0.5 million, respectively. At June 30, 2011, the $1.7 million liability represents the write-down of FLRX’s investment in its subsidiaries to zero.

     Two separate cases have been filed in St. Maarten against AKGI St. Maarten NV, or AKGI, one of the Company’s subsidiaries, challenging AKGI’s title to seven whole ownership units at the Royal Palm Resort, and alleging the breach of certain agreements that existed prior to AKGI’s acquisition of the resort. AKGI purchased the resort at auction in 1995. Each claimant alleges that, between 1989 and 1991, he purchased certain units from the prior owner of Royal Palm Resort, and that he holds, in perpetuity, legal title to, or a leasehold interest in, the respective units and is entitled to a refund of the purchase price and an annual 12% return on the purchase price (which totaled $1.2 million in one case and $1.3 million in the other case). Due to the nature of the AKGI purchase and the underlying St. Maarten laws, the Company believes that the obligations to the claimants would only be enforceable if the agreement between the claimant and AKGI’s predecessor was either a timeshare agreement or a lease agreement. AKGI has answered that the claimants’ agreements were, in fact, investment contracts, and therefore not enforceable under St. Maarten law. In February 2011, the case that was pending in the highest and final court of appeal was dismissed as to all claims, with the Company having no obligations, financial or otherwise, to claimant. The other case is currently pending in the intermediate court of appeal. A lien has been placed on AKGI’s interest in the Royal Palm Resort while the remaining action is pending.

     In 1989, the Predecessor Company paid an advance deposit to acquire buildings/common areas on a resort owned by it in Europe. The seller of the property subsequently raised promissory notes in favor of two other entities (the “Mansilla Companies”) which the Company believes are related to the seller. Having asserted that the seller had breached its obligations by failing to honor the promissory notes, the Mansilla Companies then obtained a charge against the buildings forming the subject matter of the 1989 agreement. In 1994, the Predecessor Company filed two sets of civil proceedings against the seller and the Mansilla Companies opposing the charge based on its belief that the seller had agreed to transfer ownership to the Predecessor Company in accordance with the 1989 sales agreement. The Predecessor Company also commenced criminal proceedings against the owner and officers of the seller. These criminal proceedings concluded without a conviction despite the Predecessor Company’s unequivocal belief that the promissory notes between the seller and the Mansilla companies had been falsified and had not been executed by the seller. The rulings in both cases were affirmed on appeal. Both cases have now been concluded. The Company remains in occupation of the premises, which occupation has not been challenged by the new owners who allegedly acquired the property at auction. The Company intends to acquire the property by adverse possession after the passage of the time as required by law. The property has not been reflected as an asset on the condensed consolidated balance sheets. In 2005, the Company recorded the remaining balance of the purchase price as a legal expense and accrued liability due to the uncertainty of the outcome. The accrued liability balance of $1.0 million and $0.9 million is included in the accompanying condensed consolidated balance sheets as of June 30, 2011 and December 31, 2010, respectively.

     The Company has entered into contracts with individual contractors and certain key management employees that specify severance payments upon termination of the contracts.

     In 2008, an arbitration demand was filed against the Company for enforcement of a $4.0 million settlement agreement entered into by the Company and a Board of Director’s family member. On October 2, 2009, the arbitrator entered an arbitration award against the Company in the amount of $4.0 million plus interest. On December 8, 2009, a court in District Court, Clark County, Nevada confirmed the arbitration award plus pre-judgment interest and costs. At March 31, 2010, the $4.5 million balance related to this settlement agreement was recorded under due to related parties in the Company’s condensed consolidated balance sheet. On June 10, 2010, the award was paid in full for $4.4 million.

     In addition, the Company is also currently subject to litigation and claims regarding employment, tort, contract, construction, sales taxes and commission disputes, among others. The Company believes that none of these actions, including the actions described above, will have a material adverse effect on its consolidated financial position or results of operations.

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Document and Entity Information	6 Months Ended
	Jun. 30, 2011	Aug. 09, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	Diamond Resorts Corp
Entity Central Index Key	0001514608
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		100

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Business Combination

6 Months Ended

Jun. 30, 2011

Business Combination [Abstract]

Business Combination

Note 19—Business Combination

     On August 31, 2010, ILXA acquired a majority of the assets of ILX Resorts, Inc. for an aggregate cash purchase price of $30.7 million. The ILX Acquisition added ten additional resorts and more than 25,000 owners to the Diamond Resorts family. These assets complement Diamond Resorts’ existing resort network and are expected to increase the Company’s value proposition to its owner base. The ILX Acquisition was financed through the ILXA Inventory Loan and the ILXA Receivables Loan. See Note 12—Borrowings for additional details. In addition, ILXA assumed $4.0 million in liabilities as part of the purchase price based on the final appraisal. The acquisition resulted in no goodwill or gain from business combinations due to the fact the fair value of assets acquired and liabilities assumed equals the purchase price.

     The Company accounted for this acquisition under the purchase method in accordance with ASC 805, “Business Combinations” (“ASC 805”). As of December 31, 2010, the acquisition was recorded based on a preliminary appraisal. During the quarter ended March 31, 2011, adjustments were recorded to the respective accounts to reflect the values included in the final appraisal. The following table summarizes the consideration paid and the amounts of the assets acquired and liabilities assumed at the acquisition date based on the preliminary and final appraisals (in thousands):

			Adjustments
	Based on		Recorded
	Preliminary		During the
	Appraisal as		Quarter Ended			Based on
	Previously		March 31,			Final
	Reported		2011			Appraisal
Consideration:
Cash	$	30,722	$	—		$	30,722
Fair value of total consideration transferred	$	30,722	$	—		$	30,722
Recognized amounts of identifiable assets and liabilities assumed as of August 31, 2010:
Cash in escrow and restricted cash	$	54	$	—		$	54
Mortgages and contracts receivable		9,802		(1,660	)		8,142
Prepaid expenses and other assets		365		(31	)		334
Unsold Vacation Interests		10,100		—			10,100
Property and equipment		5,705		1,679			7,384
Intangible assets		8,850		(100	)		8,750
Total assets		34,876		(112	)		34,764
Current liabilities		4,154		(112	)		4,042
Total identifiable net assets	$	30,722	$	—		$	30,722

     Acquired intangible assets consist of the following (dollar amounts in thousands):

			Based on		Recorded
	Weighted		Preliminary		During the
	Average		Appraisal as		Quarter Ended			Based on
	Useful Life		Previously		March 31,			Final
	in Years		Reported		2011			Appraisal
Member relationships		10	$	1,100	$	(100	)	$	1,000
Management contracts		5		7,120		—			7,120
Trade name		5		600		—			600
Domain name		5		30		—			30
Total acquired intangible assets			$	8,850	$	(100	)	$	8,750

     The ILX management contracts have automatic renewals for a weighted average term of approximately ten years. The weighted average period before the next renewal or extension is approximately five years.

     These notes to the condensed consolidated financial statements do not present supplemental pro forma information to include revenue and earnings of ILX for all periods presented, as the Company deems that it is impracticable to obtain this information. The historical ILX financial statements include segments of operations that were not acquired by the Company. These financial statements co-mingle all activities. As such, management cannot reasonably estimate and carve out the amounts related to the assets acquired and the liabilities assumed by the Company. Additionally, based on the criteria included in ASC 805, the ILX Acquisition is not material in relation to the total assets included on the condensed consolidated balance sheets and the net loss reported on the condensed consolidated statements of operations.

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Transactions with Related Parties

6 Months Ended

Jun. 30, 2011

Transactions with Related Parties [Abstract]

Transactions with Related Parties

Note 5—Transactions with Related Parties

Due from Related Parties, Net and Due to Related Parties, Net

     Amounts due from related parties, net and due to related parties, net consist primarily of transactions with HOAs at properties at which the Company acts as the management company or Collections that hold the real estate underlying the Vacation Interests that the Company sells. Due from related parties, net transactions include management fees for the Company’s role as the management company, certain expenses reimbursed by HOAs, and the allocation of a portion of the Company’s resort management and general and administrative expenses according to a pre-determined schedule approved by the board of directors at each HOA. Due to related parties, net transactions include (1) the amounts due to HOAs under inventory recovery agreements the Company enters into regularly with certain HOAs and similar agreements with the Collections pursuant to which the Company recaptures Vacation Interests, either in the form of vacation points or vacation intervals, and brings them into the Company’s inventory for sale to customers; (2) the maintenance fee and special assessment fee liability owed to HOAs for Intervals or to the Collections for points owned by the Company; (3) cleaning fees owed to HOAs for room stays incurred by the Company’s customers; and (4) subsidy liabilities owed to certain HOAs to fund the negative cash flows at these HOAs according to certain subsidy agreements, which ceased as of December 31, 2008. Amounts due from related parties and due to related parties are due on demand and carry no interest. Due to the fact that the right of offset exists between the Company and the HOAs, the Company evaluates amounts due to and from each HOA at each reporting period to present the balances as either a net due to or a net due from related parties in accordance with the requirements of ASC 210-20, “Balance Sheet — Offsetting.”

     In 2008, an arbitration demand was filed against the Company for enforcement of a $4.0 million settlement agreement entered into by the Company and a Board of Director’s family member. On October 2, 2009, the arbitrator entered an arbitration award against the Company in the amount of $4.0 million plus interest. On December 8, 2009, a court in District Court, Clark County, Nevada confirmed the arbitration award plus pre-judgment interest and costs. At March 31, 2010, the $4.5 million balance related to this settlement agreement was recorded under due to related parties in the condensed consolidated balance sheet. On June 10, 2010, the award was paid in full for $4.4 million.

     Due from related parties, net consisted of the following as of June 30, 2011 and December 31, 2010 (in thousands):

	June 30,		December 31,
	2011		2010
Amounts due from HOAs	$	19,272	$	19,941
Amounts due from trusts		3,905		1,017
Total due from related parties, net	$	23,177	$	20,958

     Due to related parties, net consisted of the following as of June 30, 2011 and December 31, 2010 (in thousands):

	June 30,		December 31,
	2011		2010
Amounts due to HOAs	$	49,046	$	30,377
Amounts due to trusts		26,505		5,874
Total due to related parties, net	$	75,551	$	36,251

Management Services

     Included within the amounts reported as management, member and other services revenue are revenues from resort management services provided to the HOAs, which totaled $9.0 million and $7.6 million for the three months ended June 30, 2011 and 2010, respectively, and $17.5 million and $14.9 million for the six months ended June 30, 2011 and 2010, respectively. See “Due from Related Parties, Net and Due to Related Parties, Net” section above for detail of these services performed.

     Also included within the amount reported as management, member and other services revenue are revenues earned from managing the trusts which hold legal title to the vacation property real estate out of which the Company conveys vacation points to its customers. These amounts total $4.7 million and $4.1 million for the three months ended June 30, 2011 and 2010, respectively, and $9.5 million and $8.3 million for the six months ended June 30, 2011 and 2010, respectively.

Allocation of Expenses

     In addition to management services revenues, the Company also has entered into agreements with the HOAs to be reimbursed for a portion of the Company’s resort management and general and administrative expenses to the HOAs. The following table presents the amounts passed through to the HOAs for the three months and six months ended June 30, 2011 and 2010, respectively (in thousands):

	Three Months Ended				Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2011		2010		2011		2010
Reduction of management, member and other services expenses	$	2,192	$	1,646	$	4,401	$	3,322
Reduction of general and administrative expenses		6,556		5,896		13,063		11,916
Total allocation of expenses	$	8,748	$	7,542	$	17,464	$	15,238

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Segment Reporting

6 Months Ended

Jun. 30, 2011

Segment Reporting/Geographic Financial Information [Abstract]

Segment Reporting

Note 20—Segment Reporting

     The Company presents its results of operations in two segments: (1) Hospitality and Management Services, which includes operations related to the management of resort properties, the Collections and revenue from its operation of THE Club and the provision of other services; and (2) Vacation Interest Sales and Financing, which includes operations relating to the marketing and sales of Vacation Interests, as well as the consumer financing activities related to such sales. While certain line items reflected on the statement of operations fall completely into one of these business segments, other line items relate to revenues or expenses which are applicable to more than one segment. For line items that are applicable to more than one segment, revenues or expenses are allocated by management, which involves significant estimates. Certain expense items (principally corporate interest expense and depreciation and amortization) are not, in management’s view, allocable to either of these business segments as they apply to the entire Company. In addition, general and administrative expenses are not allocated to either of these business segments because historically management has not allocated these expenses for purposes of evaluating the Company’s different operational divisions. Accordingly, these expenses are presented under Corporate and Other.

     Management believes that it is impracticable to allocate specific assets and liabilities related to each business segment. In addition, management does not review balance sheets by business segment as part of their evaluation of operating segment performances. Consequently, no balance sheet segment reports have been presented.

     Information about the Company’s operations in different business segments is as follows:

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS BY BUSINESS SEGMENT
For the three months ended June 30, 2011 and 2010
(In thousands)

	Three Months Ended											Three Months Ended
	June 30, 2011											June 30, 2010
	Hospitality and		Vacation									Hospitality and		Vacation
	Management		Interest Sales			Corporate and						Management		Interest Sales		Corporate and
	Services		and Financing			Other			Total			Services		and Financing		Other			Total
Revenues:
Vacation Interest sales	$	—	$	52,470		$	—		$	52,470		$	—	$	54,236	$	—		$	54,236
Provision for uncollectible Vacation Interest sales revenue		—		(3,753	)		—			(3,753	)		—		754		—			754
Vacation Interest, net		—		48,717			—			48,717			—		54,990		—			54,990
Management, member and other services		25,235		2,701			—			27,936			22,929		2,794		—			25,723
Consolidated resort operations		7,242		—			—			7,242			6,993		—		—			6,993
Interest		—		9,298			503			9,801			—		9,655		16			9,671
Gain on mortgage repurchase		—		91			—			91			—		56		—			56
Total revenues		32,477		60,807			503			93,787			29,922		67,495		16			97,433
Costs and Expenses:
Vacation Interest cost of sales		—		(5,681	)		—			(5,681	)		—		11,240		—			11,240
Advertising, sales and marketing		—		33,197			—			33,197			—		27,799		—			27,799
Vacation Interest carrying cost, net		—		7,347			—			7,347			—		6,747		—			6,747
Management, member and other services		5,547		487			—			6,034			5,125		527		—			5,652
Consolidated resort operations		7,106		—			—			7,106			6,648		—		—			6,648
Loan portfolio		260		2,279			—			2,539			264		2,363		—			2,627
General and administrative		—		—			18,670			18,670			—		—		16,572			16,572
Gain on sale of assets		—		—			(363	)		(363	)		—		—		(758	)		(758	)
Depreciation and amortization		—		—			3,142			3,142			—		—		2,651			2,651
Interest		—		4,378			15,530			19,908			—		4,608		11,123			15,731
Impairments and other write-offs		—		—			240			240			—		—		980			980
Total costs and expenses		12,913		42,007			37,219			92,139			12,037		53,284		30,568			95,889
Income (loss) before provision for income taxes		19,564		18,800			(36,716	)		1,648			17,885		14,211		(30,552	)		1,544
(Benefit) provision for income taxes		—		—			(891	)		(891	)		—		—		720			720
Net income (loss)	$	19,564	$	18,800		$	(35,825	)	$	2,539		$	17,885	$	14,211	$	(31,272	)	$	824

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS BY BUSINESS SEGMENT
For the six months ended June 30, 2011 and 2010
(In thousands)

	Six Months Ended											Six Months Ended
	June 30, 2011											June 30, 2010
	Hospitality and		Vacation									Hospitality and		Vacation
	Management		Interest Sales			Corporate and						Management		Interest Sales			Corporate and
	Services		and Financing			Other			Total			Services		and Financing			Other			Total
Revenues:
Vacation Interest sales	$	—	$	94,403		$	—		$	94,403		$	—	$	102,318		$	—		$	102,318
Provision for uncollectible Vacation Interest sales revenue		—		(6,743	)		—			(6,743	)		—		(868	)		—			(868	)
Vacation Interest, net		—		87,660			—			87,660			—		101,450			—			101,450
Management, member and other services		54,878		4,843			—			59,721			44,920		5,528			—			50,448
Consolidated resort operations		14,188		—			—			14,188			13,494		—			—			13,494
Interest		—		18,713			917			19,630			—		19,449			38			19,487
Gain on mortgage repurchase		—		120			—			120			—		92			—			92
Total revenues		69,066		111,336			917			181,319			58,414		126,519			38			184,971
Costs and Expenses:
Vacation Interest cost of sales		—		(5,614	)		—			(5,614	)		—		21,865			—			21,865
Advertising, sales and marketing		—		61,633			—			61,633			—		53,264			—			53,264
Vacation Interest carrying cost, net		—		15,907			—			15,907			—		14,182			—			14,182
Management, member and other services		11,552		742			—			12,294			11,182		992			—			12,174
Consolidated resort operations		13,274		—			—			13,274			12,525		—			—			12,525
Loan portfolio		439		4,718			—			5,157			516		4,714			—			5,230
General and administrative		—		—			37,723			37,723			—		—			31,892			31,892
Gain on sale of assets		—		—			(372	)		(372	)		—		—			(760	)		(760	)
Depreciation and amortization		—		—			6,312			6,312			—		—			5,448			5,448
Interest		—		8,433			29,847			38,280			—		9,535			21,875			31,410
Impairments and other write-offs		—		—			323			323			—		—			980			980
Total costs and expenses		25,265		85,819			73,833			184,917			24,223		104,552			59,435			188,210
Income (loss) before provision for income taxes		43,801		25,517			(72,916	)		(3,598	)		34,191		21,967			(59,397	)		(3,239	)
Provision for income taxes		—		—			582			582			—		—			1,425			1,425
Net income (loss)	$	43,801	$	25,517		$	(73,498	)	$	(4,180	)	$	34,191	$	21,967		$	(60,822	)	$	(4,664	)

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Common and Preferred Units

6 Months Ended

Jun. 30, 2011

Common and Preferred Units [Abstract]

Common and Preferred Units

Note 18 — Common and Preferred Units

     On April 26, 2007, the Company entered into agreements with an institutional investor (“Investor”). Pursuant to the agreements, the Investor contributed an initial capital contribution of $62.4 million to the Company in exchange for 212 common units and 1,000 preferred units.

     These agreements also contained a provision to allow the Company, at its discretion, to redeem the preferred units at redemption premiums that vary depending on the redemption date. In addition, these agreements allowed the Investor to require the Company to redeem all or any portion of the preferred units it held under the following circumstances: (1) simultaneously with the Company’s initial public stock offering; (2) at any time after August 13, 2019; (3) upon the acceleration of payment of principal by any lender of senior indebtedness; and (4) in the event of certain uncured breaches of the agreements governing the preferred units. The redemption price varied depending on the event leading to the redemption.

     The Company applied the guidance enumerated in ASC 480-10, “Distinguishing Liabilities from Equity,” when determining the classification and measurement of preferred stock. In addition, the Company classified the $62.4 million of conditionally redeemable preferred units as temporary member capital due to the fact that the preferred units contained redemption rights that were either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control. Furthermore, the preferred units had a priority return of 17.0% per annum, compounded quarterly, as well as a redemption preference with respect to the common equity securities.

     In accordance with ASC 480-10, the Company was required to record the redemption premiums and accrete for the priority returns periodically as it was probable that the preferred units would be redeemed by the Investor. Both the redemption premiums and the priority returns were recorded as an increase to accumulated deficits and a corresponding increase to redeemable preferred units in temporary member capital.

     On June 17, 2010, the Company and the Investor entered into a redemption agreement whereby the Investor redeemed 70.67 common units and 333.33 preferred units for $25 million on the same date and 108.63 common units and 666.67 preferred units for $50 million on August 13, 2010. Upon these redemptions, the recorded value of the equity investment, including the accumulated priority returns and redemption premiums, totaled $111.7 million. The difference between the recorded value and the $75 million that was paid to the Investor was recorded as a credit to the accumulated deficit account in the accompanying condensed consolidated balance sheet.

     Also on June 17, 2010, the Company entered into agreements with DRP Holdco, LLC, an investment vehicle managed by an affiliate of Guggenheim Partners, LLC (“Guggenheim”). These agreements provided for Guggenheim to make a $75 million investment in common and preferred units of the Company. An initial investment of $25 million was made on June 17, 2010 and the remaining investment of $50 million was received on August 13, 2010. The proceeds of this investment were used to repurchase the equity securities previously held by the Investor and, therefore, the Company did not retain any net proceeds from these transactions. At December 31, 2010, costs associated with this transaction totaled $2.9 million and have been recorded to the accumulated deficit account in the accompanying condensed consolidated balance sheet.

     These agreements also contained a provision to allow the Company, at its discretion, to redeem any of the preferred units at any time after August 13, 2012, for any reason or no reason, at optional redemption premiums ranging from 100% to 103% depending on the redemption date. In addition, Guggenheim may have required the Company to redeem all or any portion of the preferred units it held under the following circumstances: (1) simultaneously with the Company’s initial public stock offering; (2) at any time after August 13, 2019; (3) upon the acceleration of payment of principal by any lender of senior indebtedness; and (4) in the event of certain uncured breaches of the agreements that governed the preferred units. The preferred redemption premiums varied from 100% to 105% depending on the event leading to the redemption.

     The Company applied the guidance enumerated in ASC 480-10 when determining the classification and measurement of preferred stock. In addition, the Company classified the $75 million of conditionally redeemable preferred units as temporary member capital due to the fact that the preferred units contained redemption rights that were either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control.

     Furthermore, the preferred units had a priority return of 17.0% per annum from June 17, 2010 to August 13, 2010 and had a priority return of 16.5% per annum from August 14, 2010 through redemption, compounded quarterly, as well as a liquidation preference with respect to the common equity securities.

     In accordance with ASC 480-10, the Company was required to record the redemption premiums and accrete for the priority returns periodically as it was probable that the preferred units would be redeemed by Guggenheim. Both the redemption premiums and the priority returns were recorded as an increase to accumulated deficits and a corresponding increase to redeemable preferred units in temporary member capital.

     Prior to any distributions to the common unit holders, the holders of the preferred units were entitled to receive from the Company the product of (a) an amount equal to the sum of (i) such holder’s contribution with respect to the preferred units reduced by any distributions to such holders, and (ii) accrued but unpaid distributions of priority returns, and (b) the relevant redemption premiums based on the date of redemption. Once the sum of any unpaid priority returns and the unreturned contributions with respect to the preferred units was reduced to zero, the preferred units would have been deemed cancelled. The balance, if any, would have been distributed to the common unit holders on a pro rata basis.

     On February 18, 2011, DRP entered into various agreements with four new equity investors to issue an aggregate of 25.1 common units and 133.33 preferred units in exchange for $10.1 million. This transaction brought the total number of issued and outstanding common units to 1,115.1 and issued and outstanding preferred units to 1,133.33. The terms of the new equity investor agreements were consistent with the terms included in the Guggenheim agreements discussed above.

     Also on February 18, 2011, DRP entered into a warrant purchase agreement to repurchase certain warrants issued by Diamond Resorts Corporation from various holders of the warrants. These warrants were originally issued to holders of DRP’s Second Lien Facility but became detached and transferrable to other parties when the Second Lien Facility was extinguished in August 2010. DRP purchased warrants that were exercisable into approximately 52.4% of the shares of common stock of Diamond Resorts Corporation, in exchange for approximately $10.1 million in cash.

     On July 21, 2011, DRP consummated a recapitalization transaction pursuant to which it sold 280.89 common units to certain institutional accredited investors in exchange for $136.5 million. DRP used $108.7 million of the proceeds and issued 26.56 common units to redeem all of its issued and outstanding preferred units (including accrued and unpaid priority returns). In addition, DRP paid $16.4 million to CDP, a related party of the Company, to redeem 34.74 common units previously held by CDP. DRP also purchased warrants that are exercisable into 3.3% of the common stock of Diamond Resorts Corporation for approximately $6.4 million in cash. See Note 24—Subsequent Events for further details.

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Intangible Assets, Net

6 Months Ended

Jun. 30, 2011

Intangible Assets, Net [Abstract]

Intangible Assets, Net

Note 10—Intangible Assets, Net

     Intangible assets, net consisted of the following as of June 30, 2011 (in thousands):

	Gross
	Carrying		Accumulated			Net Book
	Cost		Amortization			Value
Management contracts	$	49,342	$	(11,419	)	$	37,923
Member relationships		26,943		(22,486	)		4,457
Distributor relationships and other		1,249		(309	)		940
	$	77,534	$	(34,214	)	$	43,320

     Intangible assets, net consisted of the following as of December 31, 2010 (in thousands):

	Gross
	Carrying		Accumulated			Net Book
	Cost		Amortization			Value
Management contracts	$	48,700	$	(9,239	)	$	39,461
Member relationships		26,953		(21,753	)		5,200
Distributor relationships and other		1,227		(175	)		1,052
	$	76,880	$	(31,167	)	$	45,713

     In connection with the ILX Acquisition in August 2010, the Company recorded $8.9 million of intangible assets based on a preliminary appraisal. During the quarter ended March 31, 2011, the ILXA intangible assets were decreased by $0.1 million based on the final appraisal. See Note 19— Business Combination for further details.

     Amortization expense for management contracts is recognized on a straight-line basis over the estimated useful lives ranging from five to twenty-five years. Amortization expense for management contracts was $1.0 million and $0.6 million for the three months ended June 30, 2011 and 2010, respectively, and $1.9 million and $1.2 million for the six months ended June 30, 2011 and 2010, respectively. Amortization expense for member relationships, distributor relationships and other is amortized over the period of time that the relationships are expected to produce cash flows. Amortization expense for member relationships, distributor relationships and other intangibles was $0.4 million and $0.5 million for the three months ended June 30, 2011 and 2010, respectively, and $0.8 million and $1.1 million for the six months ended June 30, 2011 and 2010, respectively. Membership relationships and distributor relationships have estimated useful lives ranging from ten to thirty years. However, the Company expects to generate significantly more cash flows during the earlier years of the relationships than the later years. Consequently, amortization expenses on these relationships decrease significantly over the lives of the relationships.

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Background, Business and Basis of Presentation

6 Months Ended

Jun. 30, 2011

Background, Business and Basis of Presentation [Abstract]

Background, Business and Basis of Presentation

Note 1—Background, Business and Basis of Presentation

Business and Background

     Diamond Resorts Parent, LLC is a Nevada limited liability company created on March 28, 2007 through the contribution of $62.4 million cash by a third-party investor and $7.1 million of net assets from Cloobeck Diamond Parent, LLC (“CDP”), the Company’s majority equity holder. The third-party investor was issued common and preferred units with a liquidation preference as well as a priority return of 17% per annum, compounded quarterly, payable upon certain events. The preferred units did not provide to the holder any participation or conversion rights. The common and preferred members’ liability was limited to their respective capital contributions. Diamond Resorts Parent, LLC (“DRP”), together with its wholly-owned subsidiaries, is hereafter referred to as “Diamond Resorts” or the “Company.” The capitalization of the Company occurred on April 27, 2007 simultaneously with the acquisition of and merger with Sunterra Corporation (“Sunterra” or the “Predecessor Company”) and cancellation of Sunterra’s outstanding common stock for $16.00 per share (the “Merger” or the “April 27, 2007 Merger”). On July 21, 2011, DRP completed an equity recapitalization transaction, pursuant to which it repurchased all of its preferred units and issued and redeemed common units in a series of private placement transactions. See Note 24—Subsequent Events for further details.

     The Company operates in the vacation ownership industry, with an ownership base of more than 380,000 families (excluding owners acquired as a part of the July 1, 2011 Tempus Resorts acquisition discussed below) and a network of 207 destinations located in 28 countries including the United States, Canada, Mexico, and throughout the Caribbean, Europe, Asia, Australia and Africa. The Company’s resort network includes 71 Diamond Resorts International-branded and managed properties and 132 affiliated resorts and four cruise ships, which are a part of the Company’s network and available for its members to use as vacation destinations, although the Company does not manage them. As referenced in these financial statements, Diamond Resorts International^® and THE Club^® are trademarks of the Company.

     The Company’s operations consist of three interrelated businesses: (i) hospitality and management services; (ii) marketing and sales of Vacation Ownership Interests (“VOI” or “Vacation Interests”); and (iii) consumer financing for purchasers of the Company’s Vacation Interests.

• Hospitality and Management Services. The Company manages 71 branded resort properties, which are located in the continental United States, Hawaii, the Caribbean and Europe. The Company also manages five multi-resort trusts or similar arrangements (the “Collections”). Each Collection holds real estate in the Company’s resort properties underlying the Vacation Interests that the Company sells. As manager of the Company’s branded resorts and Collections, it provides billing services, account collections, accounting and treasury functions and information technology services. In addition, for branded resorts, the Company also provides an online reservation system and customer service contact center, operates the front desks and amenities and furnishes housekeeping, maintenance and human resources services. Management contracts typically have an initial term of three to five years with automatic renewals and are structured on a cost-plus basis, thereby providing the Company with a recurring and stable revenue stream. In addition, the Company earns recurring fees by operating THE Club, the points-based exchange and member services program that enables members to vacation at any of the 207 resorts in the Company’s network. These items are included in management, member and other services revenue and expense in the accompanying condensed consolidated statements of operations.

In addition, the Company serves as the homeowners’ association (“HOA”) for its two resorts in St. Maarten and earns maintenance fees and incurs operating expenses at these two resorts. At certain resorts, the Company also operates golf courses, food and beverage venues, retail shops, a campground and a marina and earns incidental revenue and incurs operating expense. Finally, the Company provides cable, telephone, and technology services to HOAs. These items are included in consolidated resort operations revenue and expense in the accompanying condensed consolidated statements of operations.

• Marketing and Sales of Vacation Interests. The Company markets and sells Vacation Interests in its resort network. Sales prospects are generated by utilizing a variety of marketing programs. Currently, the Company sells Vacation Interests only in the form of points, which can be utilized for vacations for varying lengths of stay at any resort in its network. In the past, the Company also sold Vacation Interests in the form of deeded intervals, which provide the right to vacation at a particular resort for a specified length of time.

• Consumer Financing of Vacation Interests. The Company provides loans to eligible customers who purchase Vacation Interests through sales centers and choose to finance their purchase. These loans are collateralized by the underlying Vacation Interests and bear interest at a fixed rate. The Company’s consumer finance servicing operations include underwriting, collection and servicing of its consumer loan portfolio.

Basis of Presentation

     The following is a list of entities included in the accompanying condensed consolidated financial statements:

AKGI St. Maarten, NV and subsidiaries

Citrus Insurance Company, Inc.

DRI Quorum 2010 LLC

Diamond Resorts (Europe) Ltd. and subsidiaries

Diamond Resorts Centralized Services Company

Diamond Resorts Corporation

Diamond Resorts Developer and Sales Holding Company and subsidiaries

Diamond Resorts Finance Holding Company and subsidiaries

Diamond Resorts Holdings, LLC

Diamond Resorts Issuer 2008, LLC

Diamond Resorts Management and Exchange Holding Company and subsidiaries

Diamond Resorts Owner Trust 2009-1

Diamond Resorts Owner Trust 2011-1

Diamond Resorts Polo Development, LLC

Diamond Resorts Services, LLC

FLRX, Inc. and subsidiaries

George Acquisition Subsidiary, Inc.

ILX Acquisition, Inc. and subsidiaries

Sunterra Owner Trust 2004-1

Tempus Acquisition, LLC and subsidiaries

     Some of the above entities, which include corporations, limited liability companies and partnerships, each have several subsidiaries. On August 31, 2010, the Company acquired a majority of the assets and assumed certain liabilities of ILX Resorts, Inc. (the “ILX Acquisition”) through its wholly-owned subsidiary, ILX Acquisition, Inc. (“ILXA”). See Note 19—Business Combination for further details.

     On July 1, 2011, the Company completed the acquisition of certain assets of Tempus Resorts International, Ltd. and certain of its affiliates (the “Tempus Resorts Acquisition”) through Mystic Dunes, LLC, a wholly-owned subsidiary of Tempus Acquisition, LLC (“Tempus Acquisition”). Prior to the consummation of the acquisition, Tempus Acquisition entered into the Credit and Security Agreement on November 23, 2010 for the revolving loan facility (“Tempus Acquisition Loan”) as the borrower and the Post-Petition Term Credit and Security Agreement for the debtor-in-possession financing (“DIP Financing” or “Tempus Note Receivable”) as the lender. See Note 6—Other Receivables, Net, Note 12—Borrowings and Note 24—Subsequent Events for further details.

     The accompanying condensed consolidated financial statements of Diamond Resorts Parent, LLC and its subsidiaries have been prepared in accordance with the accounting policies described in the Company’s prospectus filed with the Securities and Exchange Commission (the “SEC”) on July 8, 2011, pursuant to Rule 424(b)(3) of the Securities Act of 1933 as amended (the “Prospectus”). Certain information and footnote disclosures normally included in annual condensed consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although the Company believes that the disclosures are adequate to make the information presented not misleading. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal and recurring nature. The accompanying condensed consolidated financial statements should be reviewed in conjunction with the Company’s annual condensed consolidated financial statements as of December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008 included in the Prospectus. Operating results for the three months and six months ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

Reclassifications

     Certain prior period balances were reclassified from previously issued reports to conform to current period presentation.

Liquidity

     Vacation Interest receivables collateralizing the Company’s borrowings were $231.0 million at June 30, 2011. At June 30, 2011, the Company had $3.5 million outstanding under its 2008 conduit facility. On April 27, 2011, the Company completed a securitization transaction with a face value of $64.5 million. A portion of the net proceeds from this transaction was used to pay off in full the $36.4 million outstanding principal balance under the 2008 conduit facility on April 27, 2011. During the period from April 28 to June 30, 2011, the Company borrowed $3.5 million under the 2008 Conduit Facility. See Note 12—Borrowings for further details.

     Cash provided by operations was $14.0 million for the six months ended June 30, 2011, compared to $32.9 million for the six months ended June 30, 2010. Cash and cash equivalents were $28.6 million and $27.3 million as of June 30, 2011 and December 31, 2010, respectively. The Company believes there will be sufficient existing cash resources and cash flows from operations, in addition to future refinancing activities, to meet the anticipated debt maturities and the Company’s other cash requirements during 2011. If cash flows from operations are less than expected, the Company would need to curtail its sales and marketing operations or raise additional capital.

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Prepaid Expenses and Other Assets, Net

6 Months Ended

Jun. 30, 2011

Prepaid Expenses and Other Assets, Net [Abstract]

Prepaid Expenses and Other Assets, Net

Note 7—Prepaid Expenses and Other Assets, Net

     The nature of selected balances included in prepaid expenses and other assets, net of the Company includes:

     Prepaid and unamortized maintenance fees—unamortized portion of annual maintenance fees billed by the HOAs on unsold Vacation Interests owned by the Company, which are charged to expense ratably over the year.

     Deferred commissions—commissions paid to sales agents related to deferred mini-vacations and sampler program revenue, which are charged to expense as the associated revenue is recognized.

     Vacation Interest purchases in transit—purchases of vacation points from prior owners for which the titles have not been officially transferred to the Company. These Vacation Interest purchases in transit are reclassified to unsold Vacation Interest, net, upon successful transfer of title.

     Prepaid rent—portion of rent paid in advance and charged to expense in accordance with lease agreements.

     Unamortized exchange fees—unamortized portion of annual membership fees billed by an exchange company, which is amortized ratably over a one-year period.

     Prepaid payroll expense—Payroll expense for pay days ended after the balance sheet date that is required to be funded one day in advance.

     Prepaid expenses and other assets, net consisted of the following as of June 30, 2011 and December 31, 2010 (in thousands):

	June 30,		December 31,
	2011		2010
Debt issuance costs, net	$	24,065	$	24,098
Prepaid and unamortized maintenance fees		29,797		5,663
Other inventory/consumables		3,183		3,019
Deferred commissions		2,885		2,494
Deposits and advances		1,733		2,457
Assets to be disposed (not actively marketed)		2,252		2,169
Prepaid insurance		3,636		2,061
Vacation Interest purchases in transit		1,101		1,099
Prepaid rent		259		255
Prepaid sales and marketing costs		251		239
Unamortized exchange fees		4,237		—
Deferred interval recovery and remarketing agreement expenses		1,758		—
Prepaid payroll expense		2,413		—
Other		4,391		2,694
Total prepaid expenses and other assets, net	$	81,961	$	46,248

     With the exception of Vacation Interest purchases in transit, prepaid expenses are expensed as the underlying assets are used or amortized. Debt issuance costs incurred in connection with obtaining funding for the Company have been capitalized and are being amortized over the lives of the related funding agreements as a component of interest expense using a method which approximates the effective interest method. Amortization of capitalized debt issuance costs included in interest expense was $1.9 million and $0.2 million for the three months ended June 30, 2011 and 2010, respectively, and $2.8 million and $0.5 million for the six months ended June 30, 2011 and 2010, respectively. See Note 12—Borrowings for more detail.

     Debt issuance costs, net of amortization as of June 30, 2011 were comprised of $15.6 million related to the senior secured notes, $5.4 million related to the Diamond Resorts Owners Trust Series 2009-1 Class A and Class B Notes, $2.0 million related to the Diamond Resorts Owners Trust Series 2011-1 Notes, $0.7 million related to the ILXA loans, $0.3 million related to the 2008 conduit facility, and $0.1 million related to the Quorum Facility.

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Borrowings

6 Months Ended

Jun. 30, 2011

Borrowings [Abstract]

Borrowings

Note 12—Borrowings

Diamond Resorts Owners Trust Series 2011-1 Timeshare Loan Backed Notes, Series 2011-1

     On April 27, 2011, the Company completed a securitization transaction and issued Diamond Resorts Owners Trust Series 2011-1 Timeshare Loan Backed Notes, Series 2011-1 (the “DROT 2011 Notes”), with a face value of $64.5 million. The DROT 2011 Notes mature March 20, 2023 and have an interest rate of 4.0%. The net proceeds were used to pay off in full the $36.4 million outstanding principal balance under the 2008 conduit facility, to paydown approximately $7 million of the Quorum Facility, to pay requisite accrued interest and fees associated with both facilities, and to pay certain expenses incurred in connection with the issuance of the DROT 2011 Notes, including the funding of a reserve account required thereby.

     The net proceeds received were $64.1 million compared to the $64.5 million face value and the Company recorded the $0.4 million difference as an original issue discount on the securitization notes payable. The Company incurred $2.1 million in placement, structuring, legal and professional fees in connection with this transaction, which will be amortized over the term of the DROT 2011 Notes. Amortization of $0.1 million of debt issuance costs and debt discount related to the DROT 2011 Notes was recorded and is included in interest expense in the accompanying condensed consolidated statement of operations for the six months ended June 30, 2011.

Tempus Acquisition Loan

     On November 23, 2010, Tempus Acquisition entered into the Tempus Acquisition Loan with an affiliate of Guggenheim, as the lender, and Guggenheim Corporate Funding, LLC, as administrative agent. The Tempus Acquisition Loan was a revolving loan facility with a maximum principal amount of $8 million, the proceeds of which were used exclusively to provide Tempus Acquisition with funds to lend to Tempus Resorts International, Ltd. and certain of its affiliates, pursuant to a debtor-in-possession financing order entered by the United States Bankruptcy Court for the Middle District of Florida and for general working capital purposes and other lawful purposes as permitted under the agreements governing the DIP Financing.

     The term of the Tempus Acquisition Loan ended on July 1, 2011, when the Tempus Note Receivable was discharged in connection the Tempus Resorts Acquisition. The Company incurred additional indebtedness under new credit facilities to fund such acquisition. See Note 24—Subsequent Events for further details.

Polo Towers Lines of Credit and Securitization Notes Payable

     In connection with the acquisition of Sunterra Corporation in April 2007, a subsidiary formerly owned by Stephen J. Cloobeck assigned revolving lines of credit to Diamond Resorts Parent, LLC. The lines of credit were collateralized by retail contracts receivable and related VOIs. The revolving feature of the lines of credit expired when they were assigned. One of the lines of credit was paid off and terminated on July 30, 2010 upon its final maturity date, and the remaining line of credit was paid off and terminated on January 3, 2011.

     Securitized loans that were collateralized by consumer contracts and related VOIs were also assigned in April 2007 by a company controlled by Mr. Cloobeck. These loans were paid in full and terminated on March 4, 2011.

Notes Payable

     The Company finances premiums on certain insurance policies under unsecured notes. Certain of the notes, which carried interest rates of 4.0% per annum, matured in January 2011. During the six months ended June 30, 2011, the Company renewed certain insurance policies and financed $5.7 million in policy premiums under an unsecured note.

     The following table presents selected information on the Company’s borrowings as of June 30, 2011 and December 31, 2010 (dollars in thousands):

				June 30,					December 31,
	2011								2010
				Weighted
				Average
	Principal			Interest					Principal
	Balance			Rate			Maturity		Balance
Senior Secured Notes	$	425,000			12.0	%		8/15/18	$	425,000
Original issue discount related to Senior Secured Notes		(9,882	)							(10,278	)
Diamond Resorts Owners Trust Series 2009-1		102,112			9.5	%		3/20/26		121,843
Original issue discount related to Diamond Resorts Owners Trust Series 2009-1		(746	)							(899	)
Diamond Resorts Owners Trust Series 2011-1		60,935			4.0	%		3/20/23		—
Original issue discount related to Diamond Resorts Owners Trust Series 2011-1		(433	)							—
2008 Conduit Facility		3,486			5.5	%		8/30/11		39,467
ILXA Inventory Loan		18,178			7.5	%		8/31/15		18,541
Quorum Facility		12,146			7.4	%		4/30/12		12,942
ILXA Receivables Loan		8,552			10.0	%		8/31/15		10,292
Tempus Acquisition Loan*		6,500			10.0	%		7/1/11		3,300
Polo Towers Lines of Credit		—			N/A			N/A		2,060
Notes payable-insurance policies		3,068			3.2	%	Various			1,366
Polo Towers Securitization Notes Payable		—			N/A			N/A		1,138
Notes payable-other		44			3.6	%	Various			66
Total borrowings	$	628,960							$	624,838

*  Paid in full on July 1, 2011; however, additional debt was issued on the same date in connection with the Tempus Resorts Acquisition.

Derivative Instruments

     In September 2007, the Company entered into an interest rate swap agreement (the “Credit Suisse Swap”) to manage its exposure to the fluctuation in interest rates. The Company paid interest at a fixed rate of 4.7% and received interest based on one-month LIBOR until the Credit Suisse Swap matured on March 20, 2011. Also in September 2007, the Company paid $0.1 million for an interest rate cap (“2007 Cap”) to further limit its exposure to interest rate increases. The 2007 Cap bore a strike rate of 5.5% and a one-month LIBOR and carried a variable notional amount according to a pre-determined amortization schedule until it was terminated on March 20, 2011 on its scheduled maturity date. The Company paid zero and $0.1 million in cash settlements under the 2008 conduit facility for the three months ended June 30, 2011 and 2010, respectively. The Company paid $0.1 million and $0.2 million in cash settlements under the 2008 conduit facility for the six months ended June 30, 2011 and 2010, respectively.

     In July 2010, the Company took additional measures to limit its exposure to interest rate increases by entering into a second interest rate cap (the “2010 Cap”). The 2010 Cap bears a strike rate of 5.5% and a one-month LIBOR and carries a notional amount of $30 million. The Company paid $0.1 million for the 2010 Cap, which will terminate on July 20, 2013.

     In March 2011, the Company entered into another interest rate cap (the “2011 Cap”) to limit its exposure to interest rate increases. The 2011 Cap bears a strike rate of 5.5% and a one-month LIBOR and carries a notional amount of $5 million. The Company paid $0.002 million for the 2011 Cap, which will terminate on August 20, 2011.

     The swaps and the interest rate caps did not qualify for hedge accounting under ASC 815, “Derivatives and Hedging.” Consequently, the Company recorded $0.002 million and $0.1 million for the three months ended June 30, 2011 and 2010, respectively, and $0.1 million and $0.2 million for the six months ended June 30, 2011 and 2010, respectively, in reduction of interest expense associated with the fair value adjustment of the derivative instruments with a corresponding decrease in derivative liabilities or assets.

     As of June 30, 2011, the fair value of the derivative assets and derivative liabilities was zero. The fair value of the derivative assets, which consisted of the 2010 Cap and 2011 Cap, was calculated to be zero based on the discounted cash flow model. The Company had no derivative liabilities at June 30, 2011 as the Credit Suisse Swap was terminated in March 2011.

Borrowing Restrictions and Limitations

     All of the Company’s borrowing under the senior secured notes, securitization notes, and 2008 conduit facility contain various restrictions and limitations that may affect its business and affairs. These include, but are not limited to, restrictions and limitations relating to its ability to incur indebtedness and other obligations, to make investments and acquisitions and to pay dividends. The Company is also required to maintain certain financial ratios and comply with other financial and performance covenants. The failure of the Company to comply with any of these provisions, or to pay its obligations, could result in foreclosure by the lenders of their security interests in the Company’s assets, and could otherwise have a material adverse effect on the Company. The Company was in compliance with all financial covenants as of June 30, 2011.

Capitalized Interest

     The interest cost associated with major development and construction projects is capitalized and included in the cost of the project. Interest capitalization ceases once a project is substantially complete or no longer under construction to prepare for its intended use. When no debt is specifically identified as being incurred in connection with a construction project, the Company capitalizes interest on amounts expended on the project at the Company’s weighted average cost of borrowed money. No interest was capitalized during the three and six months ended June 30, 2011 and 2010.

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Unsold Vacation Interests, Net

6 Months Ended

Jun. 30, 2011

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note 8—Unsold Vacation Interests, Net

     Unsold Vacation Interests, net consisted of the following as of June 30, 2011 and December 31, 2010 (in thousands):

	June 30,		December 31,
	2011		2010
Completed unsold Vacation Interests, net	$	188,704	$	157,491
Undeveloped land		32,568		32,159
Vacation Interest construction in progress		1,291		914
Unsold Vacation Interests, net	$	222,563	$	190,564

     Unsold VOIs are valued at the lower of cost or fair market value. The cost of unsold VOIs includes acquisition costs, hard and soft construction costs (which are comprised of architectural and engineering costs incurred during construction), the cost incurred to recover inventory and other carrying costs (including interest, real estate taxes and other costs incurred during the construction period). Costs are expensed to Vacation Interest cost of sales under the relative sales value method. In accordance with ASC 978, under the relative sales value method, cost of sales is calculated as a percentage of Vacation Interest sales revenue using a cost of sales percentage ratio of total estimated development costs to total estimated Vacation Interest sales revenue, including estimated future revenue and incorporating factors such as changes in prices and the recovery of VOIs generally as a result of maintenance fee and contracts receivable defaults. In accordance with ASC 978-340-25, the selling, marketing and administrative costs associated with any sale, whether the original sale or subsequent resale of recovered inventory, are expensed as incurred.

     The costs capitalized for recovered intervals differ based on a variety of factors, including the method of recovery and the timing of the original sale and/or loan origination. Interest, real estate taxes and other carrying costs incurred during the construction period are capitalized and such costs incurred on completed Vacation Interests are expensed.

     In accordance with ASC 978, on a quarterly basis, the Company calculates the total estimated Vacation Interest sales revenue and total estimated costs. The effects of changes in these estimates are accounted for as a current period adjustment so that the balance sheet at the end of the period of change and the accounting in subsequent periods are as they would have been if the revised estimates had been the original estimates. These adjustments can be material.

     The changes in these estimates resulted in an increase in unsold Vacation Interests, net and a corresponding decrease in Vacation Interest cost of sales of $15.5 million and $1.9 million for the three months ended June 30, 2011 and June 30, 2010, respectively, and $24.4 million and $2.7 million for the six months ended June 30, 2011 and June 30, 2010, respectively, which were primarily the result of an increase in the estimated sales price per point and a decline in average inventory cost per point related to recoveries.

     During the quarter ending December 31, 2011, the Company expects to receive an invoice for a special assessment to cover major repairs at one of its managed resorts. Such assessment relates to the intervals and points equivalent owned by the Company at this resort and is expected to be approximately $7 million. The assessment will be recorded as Vacation Interest carrying cost upon receipt of the invoice from the HOA. The Company is currently negotiating with the HOA regarding an installment payment plan for the special assessment and believes that cash flows will be sufficient to fulfill this obligation.

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Other Receivables, Net

6 Months Ended

Jun. 30, 2011

Other Receivables, Net [Abstract]

Other Receivables, Net

Note 6—Other Receivables, Net

     Other receivables, net consisted of the following as of June 30, 2011 and December 31, 2010 (in thousands):

	June 30,			December 31,
	2011			2010
THE Club dues receivable	$	11,218		$	29,534
Mortgage interest receivable		3,149			3,651
Tempus Note Receivable		6,498			3,005
Rental receivables and other resort management-related receivables		4,108			2,893
Owner maintenance fee receivable		3,835			2,097
THE Club conversion receivable		920			1,409
Mini-vacation and sampler programs receivable		1,128			1,060
Proceeds from ILXA Inventory Loan in Transit		—			1,028
Insurance claims receivable		195			533
Other receivables		1,938			2,970
Total other receivables, gross		32,989			48,180
Allowance for doubtful accounts		(12,955	)		(12,200	)
Total other receivables, net	$	20,034		$	35,980

     On November 23, 2010, Tempus Acquisition entered into the Tempus Note Receivable with Tempus Resorts International, Ltd. and certain of its affiliates (the “Borrower”) to provide debtor-in-possession financing. The Tempus Note Receivable was a term loan facility with a maximum principal amount of $6.5 million. The Borrower used the proceeds for general working capital purposes and other purposes as permitted under the Tempus Note Receivable Agreement. The term of the Tempus Acquisition Loan ended on July 1, 2011, when the Tempus Note Receivable was discharged in connection with the Tempus Resorts Acquisition. See Note 12—Borrowings for details related to the Tempus Acquisition Loan.

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Condensed Consolidated Statements of Member Capital Equity (Deficit) and Comprehensive Income (Loss) (Unaudited) (Parenthetical) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Tax on currency translation adjustment	$ 0	$ 0
Permanent Capital Accumulated Other Comprehensive Income (Loss)
Tax on currency translation adjustment	0	0
Permanent Capital Comprehensive Loss
Tax on currency translation adjustment	$ 0	$ 0

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2011

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2—Summary of Significant Accounting Policies

     Principles of Consolidation— The accompanying condensed consolidated financial statements include all subsidiaries of the Company. With the exception of the hotel properties in Europe that the Company owns and provides to a trust in Europe under a rental agreement, the Company does not have any interests in any variable interest entities for which the Company is considered the primary beneficiary under Accounting Standards Codification (“ASC”) 810, “Consolidation.” All significant intercompany transactions and balances have been eliminated from the accompanying condensed consolidated financial statements.

     Use of Estimates— The preparation of financial statements in conformity with U.S. GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates were used by the Company to estimate the fair value of the assets acquired and liabilities assumed in the ILX Acquisition. These estimates included projections of future cash flows derived from sales of Vacation Interests, mortgages and contracts receivable, management services revenue and rental income. Additionally, the Company made significant estimates of costs associated with such projected revenues including but not limited to loan defaults, recoveries and discount rates.

     In preparation of its condensed consolidated financial statements, the Company also made significant estimates which include: (1) allowance for loan and contract losses, and provision for uncollectible Vacation Interest sales revenue; (2) useful lives of property and equipment; (3) estimated useful lives of intangible assets acquired; (4) estimated costs to build or acquire any additional Vacation Interests, estimated total revenues expected to be earned on a project, related estimated provision for uncollectible Vacation Interest sales revenue and sales incentives, estimated projected future cost and volume of recoveries of Vacation Interests, estimated sales price per point and estimated number of points sold used to allocate certain unsold Vacation Interests to Vacation Interest cost of sales under the relative sales value method; and (5) the valuation allowance recorded against deferred tax assets. It is at least reasonably possible that a material change in one or more of these estimates may occur in the near term and that such change may materially affect actual results.

Recently Adopted Accounting Pronouncements

     In January 2010, the FASB issued Accounting Standards Update (“ASU”) No. 2010-06, Improving Disclosures about Fair Value Measurements, which, among other things, amends ASC 820, “Fair Value Measurements and Disclosures” to require entities to separately present purchases, sales, issuances, and settlements in their reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and which clarifies existing disclosure requirements provided by ASC 820 regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy. ASU No. 2010-06 is effective for interim and annual periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances and settlements in the roll forward of activity in Level 3 fair value measurements which are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years. The Company adopted ASU No. 2010-06 on January 1, 2011. The adoption did not have a material impact on the Company’s condensed consolidated financial statements or the disclosures, as the Company did not have any transfers between Level 1 and Level 2 fair value measurements and did not have material classes of assets and liabilities that required additional disclosure.

     In December 2010, the FASB issued ASU 2010-28, Intangibles—Goodwill and Other (Topic 350): When to Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts. The amendments in this update modify Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists. For SEC reporting companies, the amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2010. Early adoption is not permitted. The Company adopted ASU 2010-28 as of January 1, 2011, which did not have a material impact on the Company’s financial statements.

     In December 2010, the FASB issued ASU 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations. The amendments in this update specify that if a SEC reporting company presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. The amendments affect any SEC reporting company as defined by Topic 805 that enters into business combinations that are material on an individual or aggregate basis. The amendments in this update are effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. Early adoption is permitted. The Company will adopt ASU 2010-29 for all business combinations for which the acquisition date is on or after January 1, 2011. The Company believes that the adoption of this update will primarily result in increased disclosures, but will not have a material impact on the Company’s financial statements.

     In April 2011, the FASB issued ASU 2011-02, Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. The amendments in this update provide additional guidance to assist creditors in determining whether a restructuring of a receivable meets the criteria to be considered a troubled debt restructuring. The amendments in this update are effective for the first interim or annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption. As a result of applying these amendments, an entity may identify receivables that are newly considered impaired. For purposes of measuring impairment of those receivables, an entity should apply the amendments prospectively for the first interim or annual period beginning on or after June 15, 2011. The Company adopted ASU 2011-02 as of the Company’s interim period ended June 30, 2011. The adoption of this update did not have a material impact on its financial statements.

     In May 2011, the FASB issued ASU 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendments in this update generally represent clarifications of Topic 820, but also include some instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. This update results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRSs. The amendments in this update are to be applied prospectively. For SEC reporting companies, the amendments are effective during interim and annual periods beginning after December 15, 2011. The Company will adopt ASU 2011-04 as of the Company’s interim period ending March 31, 2012. The Company believes that the adoption of this update will not have a material impact on its financial statements.

     In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income. Under the amendments to Topic 220, Comprehensive Income, in this update, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. This update eliminates the option to present the components of other comprehensive income as part of the statement of changes in member capital. The amendments in this update do not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The amendments in this update should be applied retrospectively. For SEC reporting companies, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted, because compliance with the amendments is already permitted. The amendments do not require any transition disclosures. The Company will adopt ASU 2011-05 as of the Company’s interim period ending March 31, 2012. The Company believes that the adoption of this update will not have a material impact on its financial statements.

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Subsequent Events

6 Months Ended

Jun. 30, 2011

Subsequent Events [Abstract]

Subsequent Events

Note 24—Subsequent Events

     On July 1, 2011, the Company completed the Tempus Resorts Acquisition through Mystic Dunes, LLC, a wholly-owned subsidiary of Tempus Acquisition; concurrently, the term of the Tempus Acquisition Loan ended. In order to fund the Tempus Resorts Acquisition, Tempus Acquisition entered into a Loan and Security Agreement with Guggenheim Corporate Funding, LLC, as administrative agent for the lender parties thereto (the “Tempus Guggenheim Loan”). The Tempus Guggenheim Loan is collateralized by all assets of Tempus Acquisition. The Tempus Guggenheim Loan is in an aggregate amount of $41.1 million (which includes a $5.5 million revolving loan), has an interest rate of 18.0% (of which 10.0% is paid currently and the remaining may be paid in cash or accrued and added to the principal amount of the Tempus Guggenheim Loan), and matures on June 30, 2015. An aggregate of $7.5 million of the Tempus Guggenheim Loan was used by Tempus Acquisition to purchase a 10% participating interest in the Loan and Security Agreement with Resort Finance America, LLC (the “Tempus Receivables Loan”) and the remaining proceeds were loaned to Mystic Dunes, LLC pursuant to a Loan and Security Agreement having payment terms identical to the Tempus Guggenheim Loan (the “Mystic Dunes Loan”). The Mystic Dunes Loan is collateralized by all assets of Mystic Dunes, LLC. The proceeds of the Mystic Dunes Loan were used to pay off certain existing indebtedness and closing costs associated with the Tempus Resorts Acquisition.

     In connection with the Tempus Resorts Acquisition, a subsidiary of Mystic Dunes, LLC entered into the Tempus Receivables Loan. The Tempus Receivables Loan is a receivables credit facility in the amount of $74.5 million, collateralized by mortgages and contracts receivable acquired in the Tempus Resorts Acquisition. The Tempus Receivables Loan has an interest rate which is the higher of (i) one-month LIBOR plus 7.0% and (ii) 10%, adjusted monthly, and matures on July 1, 2015. Another subsidiary of Mystic Dunes, LLC entered into an Amended and Restated Inventory Loan and Security Agreement with Textron Financial Corporation (the “Tempus Inventory Loan”) in the maximum amount of $4.3 million, collateralized by certain VOI inventory acquired in the Tempus Resorts Acquisition. The Tempus Inventory Loan has an interest rate of three-month LIBOR plus 5.5% (with a floor of 2.0%) and matures on June 30, 2016, subject to extension to June 30, 2018.

     Each of Tempus Acquisition, Mystic Dunes, LLC and its wholly-owned subsidiaries are special purpose subsidiaries and unrestricted subsidiaries.

     The Company is unable to include any pro forma financial statements in connection with the Tempus Resorts Acquisition as part of this quarterly report due to the fact that initial accounting for the business combination is incomplete. The Company is currently in the process of obtaining an initial valuation report from a third party valuation firm.

     On July 21, 2011, DRP consummated a recapitalization transaction pursuant to which it sold 280.89 common units to certain institutional accredited investors in exchange for $136.5 million. DRP paid approximately $4.5 million in fees in conjunction with the recapitalization transactions. DRP used $108.7 million of the proceeds and issued 26.56 common units to redeem all of the issued and outstanding preferred units (including accrued and unpaid priority returns). In addition, DRP paid $16.4 million to CDP, a related party of the Company, to redeem 34.74 common units previously held by CDP. Immediately after the transaction above, CDP owns approximately 54.3% of the issued and outstanding common units with the remainder owned by various institutional investors. DRP also purchased warrants that are exercisable into approximately 3.3% of common stock of Diamond Resorts Corporation for approximately $6.4 million in cash.

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Cash in Escrow and Restricted Cash

6 Months Ended

Jun. 30, 2011

Cash in Escrow and Restricted Cash [Abstract]

Cash in Escrow and Restricted Cash

Note 3—Cash in Escrow and Restricted Cash

     Cash in escrow and restricted cash consisted of the following as of June 30, 2011 and December 31, 2010 (in thousands):

	June 30,		December 31,
	2011		2010
Securitization and conduit collection and reserve cash	$	11,505	$	14,040
Collected on behalf of HOAs and other		8,949		5,447
Escrow		5,063		4,615
Rental trust		5,506		3,717
Bonds and deposits		2,347		2,229
Total cash in escrow and restricted cash	$	33,370	$	30,048

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Condensed Consolidating Financial Statements

6 Months Ended

Jun. 30, 2011

Condensed Consolidating Financial Statements [Abstract]

Condensed Consolidating Financial Statements

Note 21—Condensed Consolidating Financial Statements

     The following condensed consolidating financial statements present, on a supplemental basis, the financial position, results of operations, and statements of cash flow for (1) those subsidiaries of the Company which have been designated “Unrestricted Subsidiaries” for purposes of the 2010 Note Indenture; and (2) the Company and all of its other subsidiaries. As of June 30, 2011 and December 31, 2010, the only such Unrestricted Subsidiaries were FLRX, Inc. and its subsidiaries, ILX Acquisition and its subsidiaries, and Tempus Acquisition and its subsidiaries. As of March 31, 2010, the only such Unrestricted Subsidiaries were FLRX, Inc. and its subsidiaries. For purposes of the 2010 Note Indenture, the financial position, results of operations, and statements of cash flow of Unrestricted Subsidiaries are excluded from the Company’s financial results to determine whether the Company is in compliance with the financial covenants governing the senior secured notes. Accordingly, management believes that the following presentation is helpful to current and potential investors in the senior secured notes as well as others.

CONDENSED CONSOLIDATING BALANCE SHEET
June 30, 2011 and December 31, 2010
(In thousands)

	June 30, 2011												December 31, 2010
	(Unaudited)												(Audited)
	Diamond												Diamond
	Resorts												Resorts
	Parent, LLC												Parent, LLC
	and Restricted			Unrestricted									and Restricted			Unrestricted
	Subsidiaries			Subsidiaries			Elimination			Total			Subsidiaries			Subsidiaries			Elimination			Total
ASSETS
Cash and cash equivalents	$	28,341		$	277		$	—		$	28,618		$	27,163		$	166		$	—		$	27,329
Cash in escrow and restricted cash		33,192			178			—			33,370			29,868			180			—			30,048
Mortgages and contracts receivable, net of allowance of $47,508, $3,848, $0, $51,356, $51,551, $3,600, $0 and $55,151, respectively		224,364			5,408			(7	)		229,765			236,846			8,454			(13	)		245,287
Due from related parties, net		22,889			301			(13	)		23,177			20,789			223			(54	)		20,958
Other receivables, net		13,149			6,885			—			20,034			31,650			4,330			—			35,980
Income tax receivable		26			209			(209	)		26			10			—			—			10
Prepaid expenses and other assets, net		77,795			5,831			(1,665	)		81,961			45,260			2,662			(1,674	)		46,248
Unsold Vacation Interests, net		209,621			12,942			—			222,563			180,464			10,100			—			190,564
Property and equipment, net		27,046			7,022			—			34,068			23,468			5,629			—			29,097
Assets held for sale		6,786			—			—			6,786			9,517			—			—			9,517
Intangible assets, net		35,945			7,375			—			43,320			37,411			8,302			—			45,713
Total assets	$	679,154		$	46,428		$	(1,894	)	$	723,688		$	642,446		$	40,046		$	(1,741	)	$	680,751
LIABILITIES AND MEMBER CAPITAL (DEFICIT)
Accounts payable	$	8,480		$	115		$	—		$	8,595		$	7,409		$	246		$	—		$	7,655
Due to related parties, net		51,532			31,204			(7,185	)		75,551			29,197			13,724			(6,670	)		36,251
Accrued liabilities		70,162			6,517			(1,692	)		74,987			62,367			6,853			(1,687	)		67,533
Income taxes payable		5,235			—			(209	)		5,026			3,936			—			—			3,936
Deferred revenues		59,458			249			—			59,707			67,706			—			—			67,706
Senior secured notes, net of original issue discount of $9,882, $0, $0, $9,882, $10,278, $0, $0 and $10,278, respectively		415,118			—			—			415,118			414,722			—			—			414,722
Securitization notes of conduit facility, net		177,500			8,552			—			186,052			176,551			10,292			—			186,843
Derivative liabilities		—			—			—			—			79			—			—			79
Notes payable		3,112			24,678			—			27,790			1,432			21,841			—			23,273
Total liabilities	$	790,597		$	71,315		$	(9,086	)	$	852,826		$	763,399		$	52,956		$	(8,357	)	$	807,998
Redeemable preferred units		103,065			—			—			103,065			84,502			—			—			84,502
Member capital		7,162			9,675			(9,675	)		7,162			7,335			9,675			(9,675	)		7,335
Accumulated deficit		(206,289	)		(34,309	)		16,614			(223,984	)		(195,044	)		(22,197	)		15,903			(201,338	)
Accumulated other comprehensive loss		(15,381	)		(253	)		253			(15,381	)		(17,746	)		(388	)		388			(17,746	)
Total member capital (deficit)		(214,508	)		(24,887	)		7,192			(232,203	)		(205,455	)		(12,910	)		6,616			(211,749	)
Total liabilities and member capital (deficit)	$	679,154		$	46,428		$	(1,894	)	$	723,688		$	642,446		$	40,046		$	(1,741	)	$	680,751

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the three months ended June 30, 2011 and 2010
(In thousands)

	Three Months Ended												Three Months Ended
	June 30, 2011												June 30, 2010
	Diamond												Diamond
	Resorts												Resorts
	Parent, LLC												Parent, LLC
	and Restricted			Unrestricted									and Restricted			Unrestricted
	Subsidiaries			Subsidiaries			Elimination			Total			Subsidiaries			Subsidiaries			Elimination		Total
Revenues:
Vacation Interest sales	$	50,508		$	1,962		$	—		$	52,470		$	54,236		$	—		$	—	$	54,236
Provision for uncollectible Vacation Interest sales revenue		(3,754	)		1			—			(3,753	)		754			—			—		754
Vacation Interest, net		46,754			1,963			—			48,717			54,990			—			—		54,990
Management, member and other services		28,650			1,015			(1,729	)		27,936			25,723			—			—		25,723
Consolidated resort operations		7,012			230			—			7,242			6,993			—			—		6,993
Interest		9,357			444			—			9,801			9,670			1			—		9,671
Gain on mortgage repurchase		91			—			—			91			56			—			—		56
Total revenues		91,864			3,652			(1,729	)		93,787			97,432			1			—		97,433
Costs and Expenses:
Vacation Interest cost of sales		(5,759	)		78			—			(5,681	)		11,240			—			—		11,240
Advertising, sales and marketing		32,009			1,332			(144	)		33,197			27,799			—			—		27,799
Vacation Interest carrying cost, net		6,554			1,161			(368	)		7,347			6,747			—			—		6,747
Management, member and other services		5,644			1,651			(1,261	)		6,034			5,652			—			—		5,652
Consolidated resort operations		6,838			268			—			7,106			6,648			—			—		6,648
Loan portfolio		2,460			79			—			2,539			2,627			—			—		2,627
General and administrative		15,743			2,892			35			18,670			15,836			736			—		16,572
Gain on disposal of assets		(363	)		—			—			(363	)		(758	)		—			—		(758	)
Depreciation and amortization		2,602			540			—			3,142			2,651			—			—		2,651
Interest		18,655			1,253			—			19,908			15,731			—			—		15,731
Impairments and other write-offs		230			10			—			240			980			—			—		980
Total costs and expenses		84,613			9,264			(1,738	)		92,139			95,153			736			—		95,889
Income (loss) before (benefit) provision for income taxes		7,251			(5,612	)		9			1,648			2,279			(735	)		—		1,544
(Benefit) provision for income taxes		(795	)		(96	)		—			(891	)		720			—			—		720
Net income (loss)	$	8,046		$	(5,516	)	$	9		$	2,539		$	1,559		$	(735	)	$	—	$	824

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
For the six months ended June 30, 2011 and 2010
(In thousands)

	Six Months Ended												Six Months Ended
	June 30, 2011												June 30, 2010
	Diamond												Diamond
	Resorts												Resorts
	Parent, LLC												Parent, LLC
	and Restricted			Unrestricted									and Restricted			Unrestricted
	Subsidiaries			Subsidiaries			Elimination			Total			Subsidiaries			Subsidiaries			Elimination		Total
Revenues:
Vacation Interest sales	$	91,959		$	2,443		$	1		$	94,403		$	102,318		$	—		$	—	$	102,318
Provision for uncollectible Vacation Interest sales revenue		(6,671	)		(72	)		—			(6,743	)		(868	)		—			—		(868	)
Vacation Interest, net		85,288			2,371			1			87,660			101,450			—			—		101,450
Management, member and other services		60,487			1,780			(2,546	)		59,721			50,448			—			—		50,448
Consolidated resort operations		13,796			392			—			14,188			13,494			—			—		13,494
Interest		18,733			897			—			19,630			19,485			2			—		19,487
Gain on mortgage repurchase		120			—			—			120			92			—			—		92
Total revenues		178,424			5,440			(2,545	)		181,319			184,969			2			—		184,971
Costs and Expenses:
Vacation Interest cost of sales		(5,723	)		109			—			(5,614	)		21,865			—			—		21,865
Advertising, sales and marketing		60,096			1,711			(174	)		61,633			53,264			—			—		53,264
Vacation Interest carrying cost, net		13,645			2,631			(369	)		15,907			14,182			—			—		14,182
Management, member and other services		11,162			3,214			(2,082	)		12,294			12,174			—			—		12,174
Consolidated resort operations		12,782			492			—			13,274			12,525			—			—		12,525
Loan portfolio		5,007			150			—			5,157			5,230			—			—		5,230
General and administrative		31,798			5,856			69			37,723			31,104			788			—		31,892
(Gain) loss on disposal of assets		(500	)		128			—			(372	)		(760	)		—			—		(760	)
Depreciation and amortization		5,268			1,044			—			6,312			5,448			—			—		5,448
Interest		35,864			2,416			—			38,280			31,410			—			—		31,410
Impairments and other write-offs		313			10			—			323			980			—			—		980
Total costs and expenses		169,712			17,761			(2,556	)		184,917			187,422			788			—		188,210
Income (loss) before provision (benefit) for income taxes		8,712			(12,321	)		11			(3,598	)		(2,453	)		(786	)		—		(3,239	)
Provision (benefit) for income taxes		791			(209	)		—			582			1,425			—			—		1,425
Net income (loss)	$	7,921		$	(12,112	)	$	11		$	(4,180	)	$	(3,878	)	$	(786	)	$	—	$	(4,664	)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
Six months ended June 30, 2011 and 2010
(In thousands)

	Six Months Ended												Six Months Ended
	June 30, 2011												June 30, 2010
	Diamond												Diamond
	Resorts												Resorts
	Parent, LLC												Parent, LLC
	and Restricted			Unrestricted									and Restricted			Unrestricted
	Subsidiaries			Subsidiaries			Elimination			Total			Subsidiaries			Subsidiaries			Elimination			Total
Operating Activities:
Net income (loss)	$	7,921		$	(12,112	)	$	11		$	(4,180	)	$	(3,878	)	$	(786	)	$	—		$	(4,664	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		5,268			1,044			—			6,312			5,448			—			—			5,448
Provision for uncollectible Vacation Interest sales revenue		6,671			72			—			6,743			868			—			—			868
Amortization of capitalized financing costs and original issue discounts		3,252			82			—			3,334			1,436			—			—			1,436
Amortization of capitalized loan origination costs and portfolio discount		1,145			—			—			1,145			550			—			—			550
Gain on foreign currency exchange		(17	)		—			—			(17	)		(1	)		—			—			(1	)
(Gain) loss on disposal of assets		(500	)		128			—			(372	)		(760	)		—			—			(760	)
Gain on mortgage repurchase		(120	)		—			—			(120	)		(92	)		—			—			(92	)
Deferred income taxes		—			—			—			—			80			—			—			80
Unrealized gain on derivative instruments		(79	)		—			—			(79	)		(201	)		—			—			(201	)
Gain on insurance settlement		(3,535	)		—			—			(3,535	)		—			—			—			—
Impairments and other write-offs		313			10			—			323			980			—			—			980
Changes in operating assets and liabilities excluding acquisitions:
Mortgages and contracts receivable		4,590			1,314			(6	)		5,898			10,054			5			(5	)		10,054
Due from related parties, net		(205	)		(59	)		(41	)		(305	)		7,835			—			—			7,835
Other receivables, net		17,568			929			—			18,497			18,815			—			—			18,815
Prepaid expenses and other assets, net		(31,821	)		(3,283	)		(47	)		(35,151	)		(26,776	)		—			—			(26,776	)
Unsold Vacation Interests, net		(25,445	)		(2,842	)		—			(28,287	)		1,865			—			—			1,865
Accounts payable		973			(131	)		—			842			(2,213	)		—			—			(2,213	)
Due to related parties, net		25,594			17,615			88			43,297			14,968			781			5			15,754
Accrued liabilities		7,458			(228	)		(5	)		7,225			467			—			—			467
Income taxes payable		1,156			(209	)		—			947			4,932			—			—			4,932
Deferred revenues		(8,716	)		222			—			(8,494	)		(1,456	)		—			—			(1,456	)
Net cash provided by operating activities		11,471			2,552			—			14,023			32,921			—			—			32,921
Investing activities:
Property and equipment capital expenditures		(3,245	)		(59	)		—			(3,304	)		(2,214	)		—			—			(2,214	)
Disbursement of Tempus Acquisition note receivable		—			(3,493	)		—			(3,493	)		—			—			—			—
Proceeds from sale of assets		2,003			1			—			2,004			2			—			—			2
Net cash used in investing activities	$	(1,242	)	$	(3,551	)	$	—		$	(4,793	)	$	(2,212	)	$	—		$	—		$	(2,212	)

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS — Continued
Six months ended June 30, 2011 and 2010
(In thousands)

	Six Months Ended											Six Months Ended
	June 30, 2011											June 30, 2010
	Diamond											Diamond
	Resorts											Resorts
	Parent, LLC											Parent, LLC
	and Restricted			Unrestricted								and Restricted			Unrestricted
	Subsidiaries			Subsidiaries			Elimination		Total			Subsidiaries			Subsidiaries		Elimination		Total
Financing activities:
Changes in cash in escrow and restricted cash	$	(3,287	)	$	2		$	—	$	(3,285	)	$	759		$	—	$	—	$	759
Proceeds from issuance of Diamond Resorts Owners Trust 2011-1		64,065			—			—		64,065			—			—		—		—
Proceeds from issuance of Quorum Facility		11,515			—			—		11,515			863			—		—		863
Proceeds from issuance of Tempus Acquisition Loan		—			3,200			—		3,200			—			—		—		—
Proceeds from issuance of 2008 Conduit Facility		4,974			—			—		4,974			2,264			—		—		2,264
Payments on Diamond Resorts Owners Trust 2011-1		(3,575	)		—			—		(3,575	)		—			—		—		—
Payments on Quorum Facility		(12,311	)		—			—		(12,311	)		—			—		—		—
Payments on Diamond Resorts Owners Trust 2009-1		(19,731	)		—			—		(19,731	)		(25,427	)		—		—		(25,427	)
Payments on 2008 Conduit Facility		(40,955	)		—			—		(40,955	)		(932	)		—		—		(932	)
Payments on Credit Suisse terms loans		—			—			—		—			(1,138	)		—		—		(1,138	)
Payments on ILXA Receivables and Inventory Loans		—			(2,103	)		—		(2,103	)		—			—		—		—
Payments on Polo Towers lines of credit and securitization notes		(3,198	)		—			—		(3,198	)		(4,668	)		—		—		(4,668	)
Payments on 2004 Securitization Notes		—			—			—		—			(4,525	)		—		—		(4,525	)
Payments on notes payable		(4,034	)		—			—		(4,034	)		(4,285	)		—		—		(4,285	)
Payments of debt issuance costs		(2,751	)		11			—		(2,740	)		(559	)		—		—		(559	)
Proceeds from equity investment		10,151			—			—		10,151			25,000			—		—		25,000
Repurchase of a portion of outstanding warrants		(10,151	)		—			—		(10,151	)		—			—		—		—
Repurchase of equity previously held by another minority institutional investor		—			—			—		—			(25,000	)		—		—		(25,000	)
Payments of costs related to issuance of common and preferred units		(76	)		—			—		(76	)		(721	)		—		—		(721	)
Net cash (used) provided in financing activities		(9,364	)		1,110			—		(8,254	)		(38,369	)		—		—		(38,369	)
Net increase (decrease) in cash and cash equivalents		865			111			—		976			(7,660	)		—		—		(7,660	)
Effect of changes in exchange rates on cash and cash equivalents		313			—			—		313			(355	)		—		—		(355	)
Cash and cash equivalents, beginning of period		27,163			166			—		27,329			17,186			—		—		17,186
Cash and cash equivalents, end of period	$	28,341		$	277		$	—	$	28,618		$	9,171		$	—	$	—	$	9,171
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	$	33,850		$	1,370		$	—	$	35,220		$	31,220		$	—	$	—	$	31,220
Cash tax refunds, net of cash paid for taxes	$	(340	)	$	—		$	—	$	(340	)	$	(3,612	)	$	—	$	—	$	(3,612	)
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Priority returns and redemption premiums on preferred units	$	8,412		$	—		$	—	$	8,412		$	5,722		$	—	$	—	$	5,722
Insurance premiums financed through issuance of note payable	$	5,713		$	—		$	—	$	5,713		$	6,052						$	6,052
Assets held for sale reclassified to unsold vacation interests	$	3,082		$	—		$	—	$	3,082		$	—		$	—	$	—	$	—

XML



Impairments and Other Write-offs

6 Months Ended

Jun. 30, 2011

Impairments and Other Write-offs [Abstract]

Impairments and Other Write-offs

Note 23—Impairments and other write-offs

     During the quarter ended June 30, 2011, the Company wrote off $0.2 million of costs related to a sales and marketing project that was no longer viable. During the quarter ended June 30, 2010, the Company recorded a $0.9 million write-down on a receivable related to an HOA management contract that the Company terminated.

XML



Assets Held for Sale

6 Months Ended

Jun. 30, 2011

Assets Held For Sale [Abstract]

Assets Held for Sale

Note 11—Assets Held for Sale

     Assets held for sale are recorded at the lower of cost or their estimated fair value less costs to sell and are not subject to depreciation. Sale of the assets classified as such is probable, and transfer of the assets is expected to qualify for recognition as a completed sale, generally within one year of the balance sheet date. During 2010, the Company made the decision to sell certain resorts and certain units in its European operations. A portion of the units were sold by June 30, 2011. The $6.8 million balance in assets held for sale as of June 30, 2011 consisted of unsold units and points equivalent that are either held for sale or pending the consummation of sale. During the six months ended June 30, 2011, the Company entered into sales contracts for approximately $3.7 million of units that are classified as held for sale. The proceeds will be paid over several years and the Company will retain title to the properties until the full amounts due under the sales contracts are received. According to guidance included in ASC 360, “Property, Plant, and Equipment,” the sales shall not be considered consummated until all consideration has been exchanged. Consequently, the assets pending consummation of sale will continue to be included in assets held for sale until all proceeds are received.

XML



Mortgages and Contracts Receivable and Allowance for Loan and Contract Losses

6 Months Ended

Jun. 30, 2011

Mortgages and Contracts Receivable and Allowance for Loan and Contract Losses [Abstract]

Mortgages and Contracts Receivable and Allowance for Loan and Contract Losses

Note 4—Mortgages and Contracts Receivable and Allowance for Loan and Contract Losses

     The Company provides financing to purchasers of Vacation Interests at U.S. sales centers that is collateralized by their Vacation Interests. Eligibility for this financing is determined based on the customers’ Fair Isaac Corporation (“FICO”) credit scores. The mortgages and contracts, excluding those held by the Company’s unrestricted subsidiaries (principally ILXA as of June 30, 2011 and December 31, 2010) (“Diamond Resorts mortgages and contracts”), bear interest at fixed rates between 6.0% and 17.9%. The term of the Diamond Resorts mortgages and contracts are from five years to fifteen years and may be prepaid at any time without penalty. The weighted average interest rate of outstanding Diamond Resorts mortgages and contracts receivable was 15.5% and 15.4% at June 30, 2011 and December 31, 2010, respectively. Diamond Resorts mortgages and contracts receivable in excess of 90 days past due at June 30, 2011 and December 31, 2010 were 3.7% and 3.6%, respectively, of gross Diamond Resorts mortgages and contracts receivable.

     The mortgages and contracts receivable of the unrestricted subsidiaries bear interest at fixed rates between 0% and 17.9% and had an aggregate balance of $13.8 million on August 31, 2010, the date of the ILX Acquisition. The term of the mortgages and contracts under the unrestricted subsidiaries are from nine months to ten years, and may be prepaid at any time without penalty. The weighted average interest rate of mortgages and contracts receivable of the unrestricted subsidiaries was 15.8% and 15.5% at June 30, 2011 and December 31, 2010, respectively. Mortgages and contracts receivable of the unrestricted subsidiaries in excess of 90 days past due at June 30, 2011 and December 31, 2010 were 8.5% and 8.9%, respectively, of gross mortgages and contracts receivable of the unrestricted subsidiaries.

     At both June 30, 2011 and December 31, 2010, 3.9% of the combined portfolios of all of the Company’s mortgages and contracts receivable was in excess of 90 days past due.

     Mortgages and contracts receivable originated by the Company are recorded at amortized cost, including deferred loan and contract origination costs, less the related allowance for loan and contract losses. Loan and contract origination costs incurred in connection with providing financing for Vacation Interests are capitalized and amortized over the estimated life of the mortgages or contracts receivable based on historical prepayments as a decrease to interest revenue using the effective interest method. Amortization of deferred loan and contract origination costs charged to interest revenue was $0.7 million and $0.8 million for the three months ended June 30, 2011 and 2010, respectively, and $1.3 million and $1.7 million for the six months ended June 30, 2011 and 2010, respectively.

     The Company recorded a $3.3 million discount at April 27, 2007 on the acquired mortgage pool, which is being amortized over the life of the related acquired mortgage pool. At June 30, 2011 and December 31, 2010, the net unamortized discount was $0.6 million and $0.8 million, respectively. During the three months ended June 30, 2011 and 2010, amortization of $0.1 million and $0.1 million, respectively, was recorded as an increase to interest revenue. During the six months ended June 30, 2011 and 2010, amortization of $0.2 million and $0.2 million, respectively, was recorded as an increase to interest revenue.

     Mortgages and contracts receivable, net, consisted of the following as of June 30, 2011 and December 31, 2010 (in thousands):

	June 30,			December 31,
	2011			2010
Mortgages and contracts receivable, acquired — April 27, 2007 Merger	$	61,982		$	71,200
Mortgages and contracts receivable, contributed		4,796			11,125
Mortgages and contracts receivable, originated		197,308			198,959
Mortgages and contracts receivable, purchased (unrestricted subsidiaries)		8,872			12,043
Mortgages and contracts receivable, originated (unrestricted subsidiaries)		605			—
Mortgages and contracts receivable, gross		273,563			293,327
Allowance for loan and contract losses		(47,509	)		(51,551	)
Allowance for loan and contract losses (unrestricted subsidiaries)		(3,847	)		(3,600	)
Deferred profit on Vacation Interest transactions		(2,255	)		(2,349	)
Deferred loan and contract origination costs, net of accumulated amortization		2,552			2,823
Inventory value of defaulted mortgages that were previously contributed and acquired		7,900			7,439
Discount on mortgages and contracts receivable, net of accumulated amortization		(639	)		(802	)
Mortgages and contracts receivable, net	$	229,765		$	245,287

     At June 30, 2011 and December 31, 2010, $222.7 million and $235.4 million, respectively, of the gross amount of the Diamond Resorts mortgages and contracts receivable were collateralized against the Company’s various debt instruments. At June 30, 2011 and December 31, 2010, $8.3 million and $12.0 million of mortgages and contracts receivable of the unrestricted subsidiaries served as collateral for the outstanding balance of $8.6 million and $10.3 million under the non-revolving credit facility of the unrestricted subsidiaries, respectively, which is included in “Securitization notes and conduit facilities” caption in the accompanying condensed consolidated balance sheets. See Note 12 — Borrowings for further details.

     Deferred profit on Vacation Interest transactions represents the revenues less the related direct costs (sales commissions, sales incentives, cost of revenues and allowance for loan losses) related to sales that do not qualify for revenue recognition under the provisions of ASC 978, “Real Estate-Time-Sharing Activities.” See Note 2—Summary of Significant Accounting Policies of the Company’s annual condensed consolidated financial statements included in the Prospectus for a description of revenue recognition criteria.

     Inventory value of defaulted mortgages that were previously contributed and acquired represents the inventory underlying mortgages that have defaulted. Upon recovery of the inventory, the value is transferred to unsold Vacation Interests, net.

     Activity in the allowance for loan and contract losses associated with the Company’s mortgages and contracts receivable for the three and six months ended June 30, 2011 and 2010 is as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2011			2010			2011			2010
Balance, beginning of period	$	52,992		$	56,806		$	55,149		$	60,911
Provision for uncollectible Vacation Interest sales revenue		3,774			(705	)		6,640			719
Provision for uncollectible Vacation Interest sales revenue (unrestricted subsidiaries)		10			—			83			—
Mortgages and contracts receivable charged off		(5,950	)		(4,171	)		(12,665	)		(9,589	)
Mortgages and contracts receivable charged off (unrestricted subsidiaries)		(679	)		—			(1,497	)		—
Recoveries		1,210			—			1,973			—
Increase in allowance based on final ILX appraisal (unrestricted subsidiaries)		—			—			1,660			—
Effect of translation rate		(1	)		—			13			(111	)
Balance, end of period	$	51,356		$	51,930		$	51,356		$	51,930

     A summary of credit quality as of June 30, 2011 is as follows (in thousands):

	Diamond		Unrestricted
	Resorts		Subsidiaries
	Mortgages and		Mortgages and
FICO Scores	Contracts		Contracts		Total
>799	$	14,729	$	289	$	15,018
700 - 799		115,397		2,819		118,216
600 - 699		90,750		3,563		94,313
<600		36,889		2,196		39,085
No FICO Scores		6,320		611		6,931
	$	264,085	$	9,478	$	273,563

     A summary of credit quality as of December 31, 2010 is as follows (in thousands):

	Diamond		Unrestricted
	Resorts		Subsidiaries
	Mortgages and		Mortgages and
FICO Scores	Contracts		Contracts		Total
>799	$	17,055	$	90	$	17,145
700 - 799		123,558		2,888		126,446
600 - 699		96,087		3,977		100,064
<600		38,373		2,128		40,501
No FICO Scores		6,211		2,960		9,171
	$	281,284	$	12,043	$	293,327

     FICO credit scores were updated in January 2011 for all existing mortgages and contracts.

     As of December 31, 2010, the ILXA mortgages and contracts receivable acquired on August 31, 2010 were recorded at an aggregate balance of $13.8 million, with an allowance for loan and contract losses of $4.0 million, based on a preliminary appraisal. During the quarter ended March 31, 2011, the allowance for loan and contract losses related to the ILXA mortgages and contracts receivable was increased by $1.7 million based on the issuance of the final appraisal.

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Deferred Revenues

6 Months Ended

Jun. 30, 2011

Deferred Revenues [Abstract]

Deferred Revenues

Note 14—Deferred Revenues

     The Company records deferred revenues for payments received or billed but not earned for various activities.

     THE Club deferred revenue—THE Club annual membership fees paid or billed to members and amortized ratably over a one-year period and optional reservation protection fees recognized over an approximate life of the member’s reservation (generally six months on average).

     Deferred maintenance and reserve fee revenue—maintenance fees billed as of January first of each year and earned ratably over the year in the Company’s capacity as the HOA for the two resorts in St. Maarten. In addition, the HOA will periodically bill the owners for capital project assessments to repair and replace the amenities or to reserve the out-of-pocket deductibles for hurricanes and other natural disasters. These assessments are deferred until refurbishment activity occurs, at which time the amounts collected are recognized as a direct reduction to refurbishment expense in consolidated resort operations expense. See Note 5—Transactions with Related Parties for further discussion.

     Deferred mini-vacations and sampler programs revenue—sold but unused trial Vacation Interests, ranging from three days to one week. This revenue is recognized when the purchaser completes their respective stay at one of the Company’s resorts or the trial period expires, whichever is earlier. Such revenue is recorded as a reduction to Vacation Interest carrying cost in accordance with ASC 978, with the exception of the Company’s European sampler product, which is three years in duration and is treated as Vacation Interest sales revenue.

     Deferred revenue from an exchange company—in consideration for several agreements entered into with an exchange company in 2008 that provide the Company with call center services and exchange services, the Company received $5 million in consideration for the exclusive right to provide those services to the Company. In accordance with ASC 605-50 — Revenue Recognition — Customer Payments and Incentives, the $5 million will be recognized over the 10-year term of the agreements as a reduction of the costs incurred for the services provided by the exchange company during this time frame.

     Deferred revenues consisted of the following as of June 30, 2011 and December 31, 2010 (in thousands):

	June 30,		December 31,
	2011		2010
THE Club deferred revenue	$	17,881	$	36,535
Deferred maintenance fee revenue		22,291		13,491
Deferred mini-vacations and sampler program revenue		13,369		11,465
Deferred revenue from an exchange company		3,046		3,246
Other		3,120		2,969
Total deferred revenues	$	59,707	$	67,706

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Geographic Financial Information

6 Months Ended

Jun. 30, 2011

Segment Reporting/Geographic Financial Information [Abstract]

Geographic Financial Information

Note 22—Geographic Financial Information

     The Company conducts its Hospitality and Management Services and Vacation Interest Sales and Financing operations in two geographic areas: North America and Europe. The Company’s North America operations include the Company’s branded resorts in the continental United States, Hawaii, Mexico, Canada and the Caribbean, and the Company’s Europe operations include the Company’s branded resorts in the United Kingdom, Ireland, Italy, Spain, Portugal, Austria, Norway, Malta, Germany and France. The following table reflects total revenue and assets by geographic area for the periods presented (in thousands):

	Three months		Three months		Six months		Six months
	ended		ended		ended		ended
	June 30,		June 30,		June 30,		June 30,
	2011		2010		2011		2010
Revenue
North America	$	82,516	$	85,792	$	161,026	$	163,697
Europe		11,271		11,641		20,293		21,274
Total Revenues	$	93,787	$	97,433	$	181,319	$	184,971

	As of		As of
	June 30,		December 31,
	2011		2010
Mortgages and contracts receivable, net North America	$	228,440	$	244,541
Europe		1,325		746
Total mortgages and contracts receivable, net	$	229,765	$	245,287
Unsold Vacation Interest, net North America	$	199,494	$	174,642
Europe		23,069		15,922
Total unsold Vacation Interest, net	$	222,563	$	190,564
Property and equipment, net North America	$	28,944	$	24,248
Europe		5,124		4,849
Total property and equipment, net	$	34,068	$	29,097
Intangible assets, net North America	$	38,551	$	40,926
Europe		4,769		4,787
Total intangible assets, net	$	43,320	$	45,713
Total long-term assets, net North America	$	495,429	$	484,357
Europe		34,287		26,304
Total long-term assets, net	$	529,716	$	510,661

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Condensed Consolidated Statements of Member Capital Equity (Deficit) and Comprehensive Income (Loss) (Unaudited) (USD $) In Thousands, except Share data	Total	Temporary Capital Redeemable Preferred Units	Permanent Capital Common Units	Permanent Capital Accumulated Deficit	Permanent Capital Accumulated Other Comprehensive Income (Loss)	Permanent Capital Comprehensive Loss
Permanent Capital, Beginning Balance at Dec. 31, 2009	$ (207,389)		$ 7,335	$ (198,317)	$ (16,407)
Temporary Capital, Beginning Balance at Dec. 31, 2009		103,528
Permanent Capital, Beginning Balance, Shares at Dec. 31, 2009			1,000
Temporary Capital, Beginning Balance, Shares at Dec. 31, 2009		1,000
Guggenheim equity investment		25,000
Repurchase of equity previously held by another minority institutional investor		(25,000)
Fee related to 2010 Equity recapitalization	(721)			(721)
Net loss	(4,664)			(4,664)		(4,664)
Other comprehensive income (loss):
Currency translation adjustments, net of tax of $0	(2,604)				(2,604)	(2,604)
Priority returns and redemption premiums	(5,722)	5,722		(5,722)
Comprehensive loss for the six months ended June 30, 2010/2011						(7,268)
Permanent Capital, Ending Balance at Jun. 30, 2010	(221,100)		7,335	(209,424)	(19,011)
Temporary Capital, Ending Balance at Jun. 30, 2010		109,250
Permanent Capital, Ending Balance, Shares at Jun. 30, 2010			1,000
Temporary Capital, Ending Balance, Shares at Jun. 30, 2010		1,000
Permanent Capital, Beginning Balance at Dec. 31, 2010	(211,749)		7,335	(201,338)	(17,746)
Temporary Capital, Beginning Balance at Dec. 31, 2010	84,502	84,502
Permanent Capital, Beginning Balance, Shares at Dec. 31, 2010			1,090
Temporary Capital, Beginning Balance, Shares at Dec. 31, 2010	1,000	1,000
Guggenheim equity investment		10,151
Temporary Capital, Equity Investment, Shares		133
Permanent Capital, Equity Investment, Shares			25.1
Repurchase of a portion of outstanding warrants	(10,151)		(97)	(10,054)
Costs related to issuance of common and preferred units	(76)		(76)
Net loss	(4,180)			(4,180)		(4,180)
Other comprehensive income (loss):
Currency translation adjustments, net of tax of $0	2,365				2,365	2,365
Priority returns and redemption premiums	(8,412)	8,412		(8,412)
Comprehensive loss for the six months ended June 30, 2010/2011						(1,815)
Permanent Capital, Ending Balance at Jun. 30, 2011	(232,203)		7,162	(223,984)	(15,381)
Temporary Capital, Ending Balance at Jun. 30, 2011	$ 103,065	$ 103,065
Permanent Capital, Ending Balance, Shares at Jun. 30, 2011			1,115
Temporary Capital, Ending Balance, Shares at Jun. 30, 2011	1,133	1,133

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Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes [Abstract]

Income Taxes

Note 15—Income Taxes

     The provision for income taxes for the three and six months ended June 30, 2011 and 2010 was determined based on pre-tax book loss (adjusted for book-tax differences) for the three and six month periods. However, because the Company includes U.S. entities not taxed at the corporate level, non-U.S. disregarded entities, differences in tax rates between the U.S. and foreign jurisdictions, foreign currency and rate change adjustments, and is currently subject to the alternative minimum tax, the Company’s estimated effective tax rate, for the periods presented, differs significantly from the federal statutory rate of 35%.

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Fair Value Measurements

6 Months Ended

Jun. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 17—Fair Value Measurements

     ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:

• Level 1: Quoted prices for identical instruments in active markets.

• Level 2: Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs or significant value drivers are observable.

• Level 3: Unobservable inputs used when little or no market data is available.

     As of June 30, 2011 and December 31, 2010, the Company’s derivative instruments were the only financial assets and liabilities that were measured at fair value on a recurring basis. See Note 12—Borrowings for further details.

     The cap derivative instruments as of June 30, 2011 and the swap derivative instruments and the cap derivative instruments as of December 31, 2010 were valued internally due to the immateriality of the balances based on cash flow models that discount the future cash flows based on a discount rate that factors in a credit risk premium and the volatility of forward rates. These instruments are classified as Level 3, based on the fact that the credit risk data used for the valuation is not directly observable and cannot be corroborated by observable market data. The Company’s assessment of the significant inputs to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

     The following table presents the effects of the changes in the mark-to-market valuations of the derivative instruments (in thousands):

	Derivative Liabilities
Balance at December 31, 2010	$	79
Total change in fair value as a reduction to interest expense		(79	)
Balance at June 30, 2011	$	—

     At June 30, 2011, the mortgages and contracts receivable had a balance of $229.8 million, net of allowance. The allowance for loan and contract losses against the mortgages and contracts receivable is derived using a static pool analysis to develop historical default percentages to apply to the mortgage and contract population. The Company evaluates other factors such as the credit scores of the individual customers, economic conditions, industry trends, default rates and past due aging reports. The Company believes that this balance approximates the fair value of the mortgages and contracts based on the recent closing of the Company’s securitization transaction on April 27, 2011. See Note 12—Borrowings for further details.

     At June 30, 2011, all of the Company’s securitization notes and 2008 conduit facility are classified as Level 2 since they are either recently-completed transactions or measured using other significant observable inputs including the current refinancing activities.

     At June 30, 2011, the DROT 2011 Notes, the Quorum Facility, the ILXA Receivables Loan, and the ILXA Inventory Loan had an aggregate balance of $99.4 million, net of unamortized original issue discount, in the accompanying condensed consolidated balance sheet, which the Company believes approximates their fair value due to the fact that these transactions were recently completed. The DROT 2011 Notes were issued on April 27, 2011, the Quorum Facility was issued in April 2010 and the ILXA Receivables Loan and ILXA Inventory Loan were issued in August 2010.

     At June 30, 2011, the DROT 2009 Notes (net of unamortized original issue discount) had an aggregate balance of $101.4 million. The fair value of the DROT 2009 Notes was determined to be $109.2 million based on a valuation performed by an investment banking firm.

     The borrowings under the senior secured notes are classified as Level 2 as they are actively traded on the open market. At June 30, 2011, the fair value of the senior secured notes was $449.4 million based on its quoted price of 105.8.

     The carrying value related to the notes payable balance, excluding the ILXA Inventory Loan, was $9.6 million as of June 30, 2011. The fair value was not calculated based on the fact that the components of the notes payable were either due within one year or were immaterial.

     In accordance with ASC 820-10, the Company also applied the provisions of fair value measurement to various non-recurring measurements for the Company’s financial and non-financial assets and liabilities and recorded the impairment charges, which were immaterial for the quarters ended June 30, 2011 and 2010. The Company’s non-financial assets consist of property and equipment, which are recorded at cost, net of depreciation unless impaired, and assets held for sale, which are recorded at the lower of cost or their estimated fair value less costs to sell.

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Operating Activities:
Net loss	$ (4,180)	$ (4,664)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	6,312	5,448
Provision for uncollectible Vacation Interest sales revenue	6,743	868
Amortization of capitalized financing costs and original issue discounts	3,334	1,436
Amortization of capitalized loan origination costs and portfolio discount	1,145	550
Gain on foreign currency exchange	(17)	(1)
Gain on disposal of assets	(372)	(760)
Gain on mortgage repurchase	(120)	(92)
Deferred income taxes		80
Unrealized gain on derivative instruments	(79)	(201)
Gain on insurance settlement	(3,535)
Impairments and other write-offs	323	980
Changes in operating assets and liabilities excluding acquisitions:
Mortgages and contracts receivable	5,898	10,054
Due from related parties, net	(305)	7,835
Other receivables, net	18,497	18,815
Prepaid expenses and other assets, net	(35,151)	(26,776)
Unsold Vacation Interests, net	(28,287)	1,865
Accounts payable	842	(2,213)
Due to related parties, net	43,297	15,754
Accrued liabilities	7,225	467
Income taxes payable	947	4,932
Deferred revenues	(8,494)	(1,456)
Net cash provided by operating activities	14,023	32,921
Investing activities:
Property and equipment capital expenditures	(3,304)	(2,214)
Disbursement of Tempus Acquisition note receivable	(3,493)
Proceeds from sale of assets	2,004	2
Net cash used in investing activities	(4,793)	(2,212)
Financing activities:
Changes in cash in escrow and restricted cash	(3,285)	759
Proceeds from issuance of securitization notes and conduit facility	80,554	3,127
Proceeds from issuance of notes payable	3,200
Payments on securitization notes and conduit facility	(81,510)	(35,552)
Payments on line of credit agreements		(1,138)
Payments on notes payable	(4,397)	(4,285)
Payments of debt issuance costs	(2,740)	(559)
Proceeds from equity investment	10,151	25,000
Repurchase of a portion of outstanding warrants	(10,151)
Repurchase of equity previously held by another minority institutional investor		(25,000)
Payments of costs related to issuance of common and preferred units	(76)	(721)
Net cash used in financing activities	(8,254)	(38,369)
Net increase (decrease) in cash and cash equivalents	976	(7,660)
Effect of changes in exchange rates on cash and cash equivalents	313	(355)
Cash and cash equivalents, beginning of period	27,329	17,186
Cash and cash equivalents, end of period	28,618	9,171
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest	35,220	31,220
Cash tax refunds, net of cash paid for taxes	(340)	(3,612)
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Priority returns and redemption premiums on preferred units	8,412	5,722
Insurance premiums financed through issuance of note payable	5,713	6,052
Assets held for sale reclassified to unsold Vacation Interests	$ 3,082

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Property and Equipment, Net

6 Months Ended

Jun. 30, 2011

Property and Equipment, Net [Abstract]

Property and Equipment, Net

Note 9—Property and Equipment, Net

     Property and equipment are recorded at historical cost. The costs of improvements that extend the useful life of property and equipment are capitalized when incurred. These capitalized costs may include structural costs, equipment, fixtures, floor, and wall coverings. All repair and maintenance costs are expensed as incurred.

     Buildings and leasehold improvements are depreciated using the straight-line method over the lesser of the estimated useful lives, which range from four to forty years, or the remainder of the lease terms. Furniture, office equipment, computer software and computer equipment are depreciated using the straight-line method over their estimated useful lives, which range from three to seven years.

     Property and equipment, net consisted of the following as of June 30, 2011 and December 31, 2010 (in thousands):

	June 30,			December 31,
	2011			2010
Land and improvements	$	5,705		$	4,021
Buildings and leasehold improvements		22,685			18,468
Furniture and office equipment		9,387			8,674
Computer software		9,618			9,110
Computer equipment		5,517			4,776
Construction in progress		551			433
Property and equipment, gross		53,463			45,482
Less accumulated depreciation		(19,395	)		(16,385	)
Property and equipment, net	$	34,068		$	29,097

     Depreciation expense related to property and equipment was $1.8 million and $1.5 million for the three months ended June 30, 2011 and 2010, respectively, and $3.6 million and $3.1 million for the six months ended June 30, 2011 and 2010, respectively.

     As of December 31, 2010, the ILXA property and equipment acquired on August 31, 2010 were recorded at $5.7 million based on a preliminary appraisal. During the quarter ended March 31, 2011, the ILXA property and equipment were increased by $1.7 million based on the final appraisal.

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Accrued Liabilities

6 Months Ended

Jun. 30, 2011

Accrued Liabilities Disclosure [Abstract]

Accrued Liabilities

Note 13—Accrued Liabilities

     The Company records estimated amounts for certain accrued liabilities at each period end. Accrued liabilities are obligations to transfer assets or provide services to other entities in the future as a result of past transactions or events. The nature of selected balances included in accrued liabilities of the Company includes:

     Accrued marketing expenses—expenses for travel vouchers and certificates used as sales incentives to buyers as well as attraction tickets as tour incentives.

     Accrued liability related to business combinations—estimated liability related to business combinations in accordance with ASC 805. As part of the ILX Acquisition, the Company recorded a $3.7 million estimated liability related to certain parcels of land owned by a third party. Upon the sale of the parcels, ILXA is obligated to pay approximately $3.7 million to the seller.

     Accrued exchange company fees—estimated liability owed to an exchange company.

     Accrued contingent litigation liabilities—estimated settlement costs for existing litigation cases.

     Accrued operating lease liabilities—difference between straight-line operating lease expenses and cash payments associated with any equipment, furniture, or facilities leases classified as operating leases.

     Accrued call center cost—expenses associated with the out-sourced customer service call center operations.

     Accrued construction costs—estimated remaining costs accrued for construction renovation projects.

     Accrued liabilities consisted of the following as of June 30, 2011 and December 31, 2010 (in thousands):

	June 30,		December 31,
	2011		2010
Accrued interest	$	20,169	$	20,365
Accrued payroll and related		13,953		14,953
Accrued marketing expenses		4,996		5,405
Accrued commissions		7,046		4,787
Accrued liability related to business combinations		3,744		3,744
Accrued other taxes		4,145		3,299
Accrued insurance		2,112		2,766
Accrued professional fees		2,035		2,648
Accrued contingent litigation liabilities		2,693		2,642
Accrued operating lease liabilities		2,080		2,046
Accrued exchange company fees		5,958		1,206
Accrued call center costs		1,521		1,114
Accrued construction costs		446		247
Other		4,089		2,311
Total accrued liabilities	$	74,987	$	67,533

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Condensed Consolidated Balance Sheets (USD $) In Thousands	Jun. 30, 2011	Dec. 31, 2010
ASSETS
Cash and cash equivalents	$ 28,618	$ 27,329
Cash in escrow and restricted cash	33,370	30,048
Mortgages and contracts receivable, net of allowance of $51,356 and $55,151, respectively	229,765	245,287
Due from related parties, net	23,177	20,958
Other receivables, net	20,034	35,980
Income tax receivable	26	10
Prepaid expenses and other assets, net	81,961	46,248
Unsold Vacation Interests, net	222,563	190,564
Property and equipment, net	34,068	29,097
Assets held for sale	6,786	9,517
Intangible assets, net	43,320	45,713
Total assets	723,688	680,751
LIABILITIES AND MEMBER CAPITAL (DEFICIT)
Accounts payable	8,595	7,655
Due to related parties, net	75,551	36,251
Accrued liabilities	74,987	67,533
Income taxes payable	5,026	3,936
Deferred revenues	59,707	67,706
Senior secured notes, net of unamortized original issue discount of $9,882 and $10,278, respectively	415,118	414,722
Securitization notes and conduit facility, net	186,052	186,843
Derivative liabilities	0	79
Notes payable	27,790	23,273
Total liabilities	852,826	807,998
Commitments and contingencies
Redeemable preferred units (1,133.33 and 1,000 shares authorized, issued and outstanding, respectively)	103,065	84,502
Member capital (deficit):
Member capital (authorized 1,115.1 common units, no par value; issued 1,115.1 and 1090 common units, respectively)	7,162	7,335
Accumulated deficit	(223,984)	(201,338)
Accumulated other comprehensive loss	(15,381)	(17,746)
Total member capital (deficit)	(232,203)	(211,749)
Total liabilities and member capital (deficit)	$ 723,688	$ 680,751