10-Q

QuickLinks -- Click here to rapidly navigate through this document

As filed with the Securities and Exchange Commission on May 7, 2013

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

FORM 10-Q

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2013
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                to

Commission File No. 1-34062

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

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

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

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý    No o

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

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

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

        As of May 1, 2013, 57,308,112 shares of the registrant's common stock were outstanding.

PART 1—FINANCIAL STATEMENTS

Item 1.    Consolidated Financial Statements

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

	Three Months Ended March 31,
	2013			2012
Revenue	$	134,881		$	126,739
Cost of sales (exclusive of depreciation and amortization shown separately below)		46,376			42,791
Gross profit		88,505			83,948
Selling and marketing expense		13,735			13,773
General and administrative expense		26,305			25,426
Amortization expense of intangibles		2,012			7,043
Depreciation expense		3,664			3,306
Operating income		42,789			34,400
Other income (expense):
Interest income		151			426
Interest expense		(1,653	)		(8,564	)
Other expense, net		(520	)		(2,473	)
Total other expense, net		(2,022	)		(10,611	)
Earnings before income taxes and noncontrolling interest		40,767			23,789
Income tax provision		(15,757	)		(8,560	)
Net income		25,010			15,229
Net income attributable to noncontrolling interest		(6	)		(4	)
Net income attributable to common stockholders	$	25,004		$	15,225
Earnings per share attributable to common stockholders:
Basic	$	0.44		$	0.27
Diluted	$	0.44		$	0.27
Weighted average number of shares of common stock outstanding:
Basic		56,928			56,089
Diluted		57,435			56,676
Dividends declared per common share	$	—		$	0.10

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

2

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2013			2012
Net income attributable to common stockholders	$	25,004		$	15,225
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments		(1,773	)		2,967
Total other comprehensive income (loss), net of tax		(1,773	)		2,967
Comprehensive income	$	23,231		$	18,192

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

3

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

	March 31, 2013			December 31, 2012
	(Unaudited)
ASSETS
Cash and cash equivalents	$	132,527		$	101,162
Restricted cash and cash equivalents		8,213			7,348
Accounts receivable, net of allowance of $391 and $409, respectively		52,503			31,964
Deferred income taxes		16,660			16,107
Deferred membership costs		10,453			12,349
Prepaid income taxes		—			12,973
Prepaid expenses and other current assets		26,285			27,592
Total current assets		246,641			209,495
Property and equipment, net		52,501			53,348
Goodwill		505,774			505,774
Intangible assets, net		96,666			98,678
Deferred membership costs		12,483			11,058
Deferred income taxes		4,277			4,571
Other non-current assets		12,416			23,996
TOTAL ASSETS	$	930,758		$	906,920
LIABILITIES AND EQUITY
LIABILITIES:
Accounts payable, trade	$	13,380		$	11,086
Deferred revenue		113,950			93,367
Income taxes payable		1,266			—
Interest payable		499			386
Accrued compensation and benefits		16,760			16,526
Member deposits		9,919			9,463
Accrued expenses and other current liabilities		44,204			44,575
Total current liabilities		199,978			175,403
Long-term debt		240,000			260,000
Other long-term liabilities		1,126			1,493
Deferred revenue		107,251			111,273
Deferred income taxes		85,838			86,259
Total liabilities		634,193			634,428
Redeemable noncontrolling interest		432			426
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock—authorized 25,000,000 shares, of which 100,000 shares are designated Series A Junior Participating Preferred Stock; $0.01 par value; none issued and outstanding		—			—
Common stock—authorized 300,000,000 shares; $.01 par value; issued 59,004,890 and 58,553,265 shares, respectively		590			586
Treasury stock—1,697,360 shares at cost		(20,913	)		(20,913	)
Additional paid-in capital		182,963			182,131
Retained earnings		146,164			121,160
Accumulated other comprehensive loss		(12,671	)		(10,898	)
Total stockholders' equity		296,133			272,066
TOTAL LIABILITIES AND EQUITY	$	930,758		$	906,920

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

4

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(In thousands, except share data)

(Unaudited)

				Common Stock				Treasury Stock										Accumulated Other Comprehensive Loss
	Total Stockholders' Equity												Additional Paid-in Capital			Retained Earnings
				Amount		Shares		Amount			Shares
Balance as of December 31, 2012	$	272,066		$	586		58,553,265	$	(20,913	)		1,697,360	$	182,131		$	121,160	$	(10,898	)
Net income attributable to common stockholders		25,004			—		—		—			—		—			25,004		—
Other comprehensive loss		(1,773	)		—		—		—			—		—			—		(1,773	)
Non-cash compensation expense		2,557			—		—		—			—		2,557			—		—
Issuance of common stock upon exercise of stock options		350			—		24,882		—			—		350			—		—
Issuance of common stock upon vesting of restricted stock units, net of withholding taxes		(4,457	)		4		426,743		—			—		(4,461	)		—		—
Change in excess tax benefits from stock-based awards		2,470			—		—		—			—		2,470			—		—
Deferred stock compensation expense		(84	)		—		—		—			—		(84	)		—		—
Balance as of March 31, 2013	$	296,133		$	590		59,004,890	$	(20,913	)		1,697,360	$	182,963		$	146,164	$	(12,671	)

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

5

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2013			2012
	(In thousands)
Cash flows from operating activities:
Net income	$	25,010		$	15,229
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization expense of intangibles		2,012			7,043
Amortization of debt issuance costs		196			424
Depreciation expense		3,664			3,306
Accretion of original issue discount		—			677
Non-cash compensation expense		2,557			3,077
Non-cash interest expense		68			109
Non-cash interest income		—			(190	)
Deferred income taxes		(985	)		(526	)
Excess tax benefits from stock-based awards		(2,474	)		(2,127	)
Loss (gain) on disposal of property and equipment		156			(230	)
Change in fair value of contingent consideration		425			—
Changes in operating assets and liabilities:
Accounts receivable		(20,879	)		(16,253	)
Prepaid expenses and other current assets		1,213			(670	)
Prepaid income taxes and income taxes payable		16,510			7,922
Accounts payable and other current liabilities		93			(479	)
Deferred revenue		18,469			18,372
Other, net		1,414			1,946
Net cash provided by operating activities		47,449			37,630
Cash flows from investing activities:
Acquisition, net of cash acquired		—			(39,963	)
Capital expenditures		(3,075	)		(3,107	)
Investment in financing receivables		—			(9,480	)
Payments received on financing receivables		9,876			1,318
Proceeds from disposal of property and equipment		5			230
Net cash provided by (used in) investing activities		6,806			(51,002	)
Cash flows from financing activities:
Principal payments on term loan		—			(5,000	)
Payments on revolving credit facility		(20,000	)		—
Withholding taxes on vesting of restricted stock units		(2,680	)		(3,395	)
Proceeds from the exercise of stock options		350			201
Excess tax benefits from stock-based awards		2,474			2,127
Net cash used in financing activities		(19,856	)		(6,067	)
Effect of exchange rate changes on cash and cash equivalents		(3,034	)		3,807
Net increase (decrease) in cash and cash equivalents		31,365			(15,632	)
Cash and cash equivalents at beginning of period		101,162			195,517
Cash and cash equivalents at end of period	$	132,527		$	179,885
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized	$	1,283		$	14,646
Income taxes, net of refunds	$	231		$	1,165
Other non-cash item:
Dividends declared and unpaid	$	—		$	5,849

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

6

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2013

(Unaudited)

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION

Company Overview

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

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

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

Basis of Presentation

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

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

Seasonality

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

7

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

        Our significant accounting policies were described in Note 2 to our audited consolidated financial statements included in our 2012 Annual Report on Form 10-K. There have been no significant changes in our significant accounting policies for the three months ended March 31, 2013.

Accounting Estimates

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

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

Earnings per Share

        Basic earnings per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per share attributable to common stockholders is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are common stock equivalents that are freely exercisable into common stock at less than market prices or otherwise dilute earnings if converted. The net effect of common stock equivalents is based on the incremental common stock that would be issued upon the assumed exercise of common stock options and the vesting of restricted stock units ("RSUs") using the treasury stock method. Common stock equivalents are not included in diluted earnings per share when their inclusion is antidilutive. The computations of diluted earnings per share available to common stockholders do not include approximately 0.8 million stock options for the three months ended March 31, 2013 and 1.3 million stock options and RSUs for the three months ended March 31, 2012, as the effect of their inclusion would have been antidilutive to earnings per share.

        In connection with the spin-off, stock options to purchase ILG common stock were granted to non-ILG employees for which there is no future compensation expense to be recognized by ILG. As of March 31, 2013 and 2012, 0.9 million and 1.0 million, respectively, of stock options remained outstanding.

8

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

	Three Months Ended March 31,
	2013		2012
Basic weighted average shares of common stock outstanding		56,928		56,089
Net effect of common stock equivalents assumed to be vested related to RSUs		496		572
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees		11		15
Diluted weighted average shares of common stock outstanding		57,435		56,676

Recent Accounting Pronouncements

        With the exception of those discussed below, there are no recent accounting pronouncements or changes in accounting pronouncements since the recent accounting pronouncements described in our 2012 Annual Report on Form 10-K that are of significance, or potential significance, to ILG based on our current operations. The following summary of recent accounting pronouncements is not intended to be an exhaustive description of the respective pronouncement.

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

        In February 2013, the FASB issued ASU 2013-04, "Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date" ("ASU 2013-04"). ASU 2013-04 provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date. The ASU requires an entity to measure those obligations as the sum of the amount the reporting entity

9

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES (Continued)

agreed to pay on the basis of its arrangements among its co-obligors as well as any additional amount the reporting entity expects to pay on behalf of its co-obligors. ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations. The ASU is effective for fiscal years beginning after December 15, 2013 (and interim periods within those years), and shall be applied retrospectively, with early adoption permitted. We do not currently anticipate the adoption of this guidance will have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures; however, we will continue to assess through the effective date the future impact, if any, of this new accounting update to our consolidated financial statements.

Adopted Accounting Pronouncements

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

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

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

        In December 2011, the FASB issued ASU 2011-11 that creates new disclosure requirements about the nature of an entity's rights of setoff and related arrangements associated with its financial instruments and derivative instruments. The ASU is designed to make financial statements that are

10

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES (Continued)

prepared under GAAP more comparable to those prepared under International Financial Reporting Standards ("IFRS"). The ASU is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods therein, with retrospective application required. The adoption of ASU 2011-11 did not have a material impact on our consolidated financial position, results of operations, cash flows or related disclosures.

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS

        Pursuant to FASB guidance as codified within ASC 350, "Intangibles—Goodwill and Other," goodwill acquired in business combinations is assigned to the reporting unit(s) expected to benefit from the combination as of the acquisition date. ILG determined our Membership and Exchange and Management and Rental operating segments are individual reporting units which are also individual reportable segments of ILG pursuant to ASC 280, Segment Reporting ("ASC 280"). ILG tests goodwill and other indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if events or changes in circumstances indicate that the assets might be impaired. Goodwill is tested for impairment based on either a qualitative assessment or a two-step impairment test, as more fully described in Note 2 of our 2012 Annual Report on Form 10-K. When performing the two-step impairment test, if the carrying amount of a reporting unit's goodwill exceeds its implied fair value, an impairment loss equal to the excess is recorded.

        As of October 1, 2012, we reviewed the carrying value of goodwill and other intangible assets of each of our two reporting units. Goodwill assigned to the Membership and Exchange and Management and Rental reporting units as of that date was $483.5 million and $22.3 million, respectively. We performed a qualitative assessment on both our reporting units and concluded that it was more-likely-than-not that the fair value exceeded its carrying value and, therefore, a two-step impairment test was not necessary. As of March 31, 2013, we did not identify any triggering events which required an interim impairment test subsequent to our annual impairment test on October 1, 2012.

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

	March 31, 2013		December 31, 2012
Goodwill	$	505,774	$	505,774
Intangible assets with indefinite lives		40,916		40,916
Intangible assets with definite lives, net		55,750		57,762
Total goodwill and other intangible assets, net	$	602,440	$	604,452

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

11

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS (Continued)

Other Intangible Assets

        Intangible assets with indefinite lives relate principally to trade names and trademarks. At March 31, 2013, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	129,500	$	(129,500	)	$	—
Purchase agreements		75,879		(74,610	)		1,269
Resort management contracts		72,666		(22,735	)		49,931
Technology		25,076		(25,055	)		21
Other		17,826		(13,297	)		4,529
Total	$	320,947	$	(265,197	)	$	55,750

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

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

        Amortization of intangible assets with definite lives is primarily computed on a straight-line basis. Total amortization expense for intangible assets with definite lives was $2.0 million and $7.0 million for the three months ended March 31, 2013 and 2012, respectively. Based on March 31, 2013 balances, such amortization for the next five years and thereafter are estimated to be as follows (in thousands):

Twelve month period ending March 31,
2014	$	7,634
2015		7,504
2016		7,048
2017		6,272
2018		5,819
2019 and thereafter		21,473
	$	55,750

12

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 4—PROPERTY AND EQUIPMENT

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

	March 31, 2013			December 31, 2012
Computer equipment	$	18,877		$	18,269
Capitalized software		79,969			78,036
Land, buildings and leasehold improvements		23,809			23,781
Furniture and other equipment		12,539			12,419
Projects in progress		6,168			6,372
		141,362			138,877
Less: accumulated depreciation and amortization		(88,861	)		(85,529	)
Total property and equipment, net	$	52,501		$	53,348

NOTE 5—LONG-TERM DEBT

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

	March 31, 2013		December 31, 2012
Revolving credit facility (interest rate of 1.96% at March 31, 2013 and 1.97% at December 31, 2012)	$	240,000	$	260,000
Total long-term debt	$	240,000	$	260,000

Credit Facility

        On June 21, 2012, we entered into an amended and restated credit agreement (the "Amended Credit Agreement") which, among other things (1) provides for a $500 million revolving credit facility, (2) extends the maturity of the credit facility to June 21, 2017, (3) provides for an interest rate on borrowings, commitment fees and letter of credit fees based on our consolidated leverage ratio, and (4) may be increased to up to $700 million, subject to certain conditions. As of March 31, 2013, there was $240.0 million outstanding on the revolving credit facility. Any principal amounts outstanding under the revolving credit facility are due at maturity. The interest rate on the Amended Credit Agreement is based on (at our election) either LIBOR plus a predetermined margin that ranges from 1.25% to 2.25%, or the Base Rate as defined in the Amended Credit Agreement plus a predetermined margin that ranges from 0.25% to 1.25%, in each case based on our consolidated leverage ratio. As of March 31, 2013, the applicable margin was 1.75% per annum for LIBOR revolving loans and 0.75% per annum for Base Rate loans. The revolving credit facility has a commitment fee on undrawn amounts that ranges from 0.25% to 0.375% per annum based on our consolidated leverage ratio, and as of March 31, 2013, the commitment fee was 0.275%.

        Pursuant to the Amended Credit Agreement, all obligations under the revolving credit facility are unconditionally guaranteed by ILG and certain of its subsidiaries. Borrowings are further secured

13

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 5—LONG-TERM DEBT (Continued)

by (1) 100% of the voting equity securities of ILG's U.S. subsidiaries and 65% of the equity in our first-tier foreign subsidiaries and (2) substantially all of our domestic tangible and intangible property.

Restrictions and Covenants

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

        The Amended Credit Agreement requires us to meet certain financial covenants regarding the maintenance of a maximum consolidated leverage ratio of consolidated debt, less credit given for a portion of foreign cash, over consolidated Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as defined in the Amended Credit Agreement, of 3.50 through December 31, 2013 and 3.25 thereafter. Additionally, we are required to maintain a minimum consolidated interest coverage ratio of consolidated EBITDA over consolidated interest expense, as defined in the Amended Credit Agreement, of 3.0. As of March 31, 2013, ILG was in compliance in all material respects with the requirements of all applicable financial and operating covenants, and our consolidated leverage ratio and consolidated interest coverage ratio under the Amended Credit Agreement were 1.35 and 9.95, respectively.

Debt Issuance Costs

        In connection with entering into the Amended Credit Agreement, we incurred $3.9 million of lender and third-party debt issuance costs. As of March 31, 2013 and December 31, 2012, total unamortized debt issuance costs on outstanding debt were $3.3 million, net of $0.6 million of accumulated amortization, and $3.5 million, net of $0.4 million of accumulated amortization, respectively, which were included in "Other non-current assets" in our consolidated balance sheets. Debt issuance costs are amortized to "Interest expense" on a straight-line basis for our Amended Credit Agreement.

NOTE 6—FAIR VALUE MEASUREMENTS

        In accordance with ASC Topic 820, "Fair Value Measurement," ("ASC 820") the fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability's fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the

14

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 6—FAIR VALUE MEASUREMENTS (Continued)

liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

Level 1—	Observable inputs that reflect quoted prices in active markets
Level 2—	Inputs other than quoted prices in active markets that are either directly or indirectly observable
Level 3—	Unobservable inputs in which little or no market data exists, therefore requiring the company to develop its own assumptions

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

        As of March 31, 2013, the fair value of the remaining contingent consideration was $1.7 million, an increase of $0.5 million from December 31, 2012, of which $0.4 million is due to revisions to the estimated earnings used in our calculation of the fair value of the contingent consideration and $0.1 million is due to the accretion of interest. The revision to estimated earnings and the accretion of interest have been reflected in "General and administrative expense" and "Interest expense", respectively, in our consolidated statements of income. The total contingent consideration of $1.7 million is included in "Accrued expenses and other current liabilities" in our consolidated balance sheet as of March 31, 2013.

        As a measure of sensitivity, a change of 10% to all of the aforementioned Level 3 inputs would have resulted in a change to the estimated contingent consideration liability pertaining to this acquisition of between $0.4 million (favorable) or less than $0.1 million (unfavorable) as of March 31, 2013. There have been no transfers of inputs used in measuring fair value between the three tiers within the fair value hierarchy since December 31, 2011.

Fair Value of Financial Instruments

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

15

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 6—FAIR VALUE MEASUREMENTS (Continued)

instruments during the three months ended March 31, 2013. Our financial instruments include guarantees, letters of credit and surety bonds.

	March 31, 2013						December 31, 2012
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
	(In thousands)
Cash and cash equivalents	$	132,527		$	132,527		$	101,162		$	101,162
Restricted cash and cash equivalents		8,213			8,213			7,348			7,348
Financing receivable		—			—			9,876			9,876
Total debt		(240,000	)		(240,000	)		(260,000	)		(260,000	)
Guarantees, surety bonds and letters of credit		N/A			(34,173	)		N/A			(36,747	)

        The carrying amounts of cash and cash equivalents and restricted cash and cash equivalents reflected in the accompanying consolidated balance sheets approximate fair value as they are redeemable at par upon notice or maintained with various high-quality financial institutions and have original maturities of three months or less. Under the fair value hierarchy established in ASC 820, cash and cash equivalents and restricted cash and cash equivalents are stated at fair value based on quoted prices in active markets for identical assets (Level 1). As of December 31, 2012, the financing receivable was presented in our consolidated balance sheets within "Other non-current assets" and pertained to a secured real estate related loan issued to a third party in 2012 with an original maturity in 2015. During the first quarter 2013, the loan was repaid in full at 100% of the original principal amount plus accrued interest. The carrying value at December 31, 2012 of this financing receivable approximated fair value through inputs inherent to the originating value of the loan, such as interest rates and ongoing credit risk accounted for through non-recurring adjustments for estimated credit losses as necessary (Level 2). The stated interest rate on this loan was comparable to market rate. Interest was recognized within our "Interest income" line item in our consolidated statements of income for the three months ended March 31, 2013 and 2012.

        The carrying value of the outstanding balance under our $500 million revolving credit facility approximates fair value as of March 31, 2013 through inputs inherent to the debt such as variable interest rates and credit risk (Level 2).

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

NOTE 7—STOCKHOLDERS' EQUITY

        ILG has 300 million authorized shares of common stock, par value of $.01 per share. At March 31, 2013, there were 59.0 million shares of ILG common stock issued, of which 57.3 million are outstanding with 1.7 million shares held as treasury stock. At December 31, 2012, there were

16

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 7—STOCKHOLDERS' EQUITY (Continued)

58.6 million shares of ILG common stock issued, of which 56.9 million were outstanding with 1.7 million shares held as treasury stock.

        ILG has 25 million authorized shares of preferred stock, par value $.01 per share, none of which are issued or outstanding as of March 31, 2013 and December 31, 2012. The Board of Directors has the authority to issue the preferred stock in one or more series and to establish the rights, preferences, and dividends.

Dividend Declared

        In May 2013, our Board of Directors declared a quarterly dividend payment of $0.11 per share payable June 18, 2013 to shareholders of record on June 4, 2013.

Stockholder Rights Plan

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

Share Repurchase Program

        Effective August 3, 2011, ILG's Board of Directors authorized a share repurchase program for up to $25.0 million, excluding commissions, of our outstanding common stock. Acquired shares of our common stock are held as treasury shares carried at cost on our consolidated financial statements. Common stock repurchases may be conducted in the open market or in privately negotiated transactions. The amount and timing of all repurchase transactions are contingent upon market conditions, applicable legal requirements and other factors. This program may be modified, suspended or terminated by us at any time without notice.

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

17

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 7—STOCKHOLDERS' EQUITY (Continued)

Accumulated Other Comprehensive Loss

        Pursuant to final guidance issued by the FASB in February of 2013, entities are required to disclose additional information about reclassification adjustments within accumulated other comprehensive income/loss, referred to as AOCL for ILG, including (1) changes in AOCL balances by component and (2) significant items reclassified out of AOCL in the period. For the three months ended March 31, 2013, there were no significant items reclassified out of AOCL, and the change in AOCL pertains to current period foreign currency translation adjustments as disclosed in our accompanying consolidated statements of comprehensive income.

NOTE 8—BENEFIT PLANS

        Under a retirement savings plan sponsored by ILG, qualified under Section 401(k) of the Internal Revenue Code, participating employees may contribute up to 50.0% of their pre-tax earnings, but not more than statutory limits. ILG provides a discretionary match under the ILG plan of fifty cents for each dollar a participant contributed into the plan with a maximum contribution of 3% of a participant's eligible earnings, subject to Internal Revenue Service ("IRS") restrictions. Matching contributions for the ILG plan were approximately $0.4 million and $0.3 million for the three months ended March 31, 2013 and 2012, respectively. Matching contributions were invested in the same manner as each participant's voluntary contributions in the investment options provided under the plan.

        Effective August 20, 2008, a deferred compensation plan (the "Director Plan") was established to provide non-employee directors of ILG an option to defer director fees on a tax-deferred basis. Participants in the Director Plan are allowed to defer a portion or all of their compensation and are 100% vested in their respective deferrals and earnings. With respect to director fees earned for services performed after the date of such election, participants may choose from receiving cash or stock at the end of the deferral period. ILG has reserved 100,000 shares of common stock for issuance pursuant to this plan, of which 37,565 share units were outstanding at March 31, 2013. ILG does not provide matching or discretionary contributions to participants in the Director Plan. Any deferred compensation elected to be received in stock is included in diluted earnings per share.

NOTE 9—STOCK-BASED COMPENSATION

        On August 20, 2008, ILG established the ILG 2008 Stock and Annual Incentive Plan (the "2008 Incentive Plan") which provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. RSUs are awards in the form of phantom shares or units, denominated in a hypothetical equivalent number of shares of ILG common stock and with the value of each award equal to the fair value of ILG common stock at the date of grant. All outstanding award agreements provide for settlement, upon vesting, in stock for U.S. employees. For non-U.S. employees, all grants issued prior to the spin-off provide for settlement upon vesting in cash, while grants since the spin-off provide for settlement upon vesting in stock. Each RSU is subject to service-based vesting, where a specific period of continued employment must pass before an award vests. We grant awards subject to graded vesting (i.e. portions of the award vest at different times during the vesting period) or to cliff vesting (i.e. all awards vest at the end of the vesting period). In addition, certain RSUs are subject to attaining specific performance criteria.

18

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 9—STOCK-BASED COMPENSATION (Continued)

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

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

        In connection with the spin-off, certain prior awards under IAC's plans were adjusted to convert, in whole or in part, to awards under the 2008 Incentive Plan under which RSUs and options relating to 2.9 million shares of common stock were issued. At the time of the spin-off, an additional 5.0 million shares of common stock were reserved for issuance under the 2008 Incentive Plan. As of March 31, 2013, ILG has 1.1 million remaining shares available for future issuance under this plan.

        During the first quarter of 2013 and 2012, the Compensation Committee granted approximately 657,000 and 586,000 RSUs, respectively, vesting over three to four years, to certain officers and employees of ILG and its subsidiaries. Of these RSUs granted in 2013 and 2012, approximately 300,000 and 130,000 cliff vest in three years and approximately 58,000 and 73,000 of these RSUs, respectively, are subject to performance criteria that could result between 0% and 200% of these awards being earned either based on defined EBITDA or relative total shareholder return targets over the respective performance period, as specified in the award document.

        For the 2013 and 2012 RSUs subject to relative total shareholder return performance criteria, the number of RSUs that may ultimately be awarded depends on whether the market condition is achieved. We used a Monte Carlo simulation analysis to estimate a $29.61 for 2013 and $17.34 for 2012 per unit grant date fair value for these performance-based RSUs. This analysis estimates the total shareholder return ranking of ILG as of the grant date relative to two peer groups, approved by the Compensation Committee, over the remaining performance period. The expected volatility of ILG's common stock at the date of grant was estimated based on a historical average volatility rate for the approximate three-year performance period. The dividend yield assumption was based on historical and anticipated dividend payouts. The risk-free interest rate assumption was based on observed interest rates consistent with the approximate three-year performance measurement period.

19

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 9—STOCK-BASED COMPENSATION (Continued)

        Non-cash compensation expense related to RSUs for the three months ended March 31, 2013 and 2012 was $2.6 million and $3.1 million, respectively. At March 31, 2013, there was approximately $21.9 million of unrecognized compensation cost, net of estimated forfeitures, related to RSUs, which is currently expected to be recognized over a weighted average period of approximately 2.2 years.

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

        Non-cash stock-based compensation expense related to equity awards is included in the following line items in the accompanying consolidated statements of income for the three months ended March 31, 2013 and 2012 (in thousands):

	Three Months Ended March 31,
	2013		2012
Cost of sales	$	194	$	165
Selling and marketing expense		322		277
General and administrative expense		2,041		2,635
Non-cash compensation expense	$	2,557	$	3,077

        The following table summarizes RSU activity during the three months ended March 31, 2013:

	Shares			Weighted-Average Grant Date Fair Value
	(In thousands)
Non-vested RSUs at January 1		1,569		$	13.29
Granted		659			20.72
Vested		(643	)		11.41
Non-vested RSUs at March 31		1,585		$	17.14

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

20

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 9—STOCK-BASED COMPENSATION (Continued)

        The value of these shares upon exercise of the put or call is equal to their fair market value, determined by negotiation or arbitration, reduced by the accreted value of the preferred interest that was taken by ILG upon the purchase of Aston. The initial value of the preferred interest was equal to the acquisition price of Aston. The preferred interest accretes at a 10% annual rate. Upon exercise of the put or call, the consideration payable can be denominated in ILG shares, cash or a combination thereof at ILG's option. An additional put right by the holder and call right by ILG would require, upon exercise, the purchase of these non-voting common shares by ILG immediately prior to a registered public offering by Aston, at the public offering price. The unrecognized compensation cost related to this equity award was fully amortized at December 31, 2011.

        As of March 31, 2013, the estimated redemption value of this redeemable interest is lower than the current carrying value on our consolidated balance sheet. Consequently, pursuant to the applicable accounting guidance, no adjustment to the balance of this noncontrolling interest was recorded for the three months ended March 31, 2013.

NOTE 10—INCOME TAXES

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

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

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

        For the three months ended March 31, 2013, ILG recorded an income tax provision for continuing operations of $15.8 million, which represents an effective tax rate of 38.6%. This tax rate is higher than the federal statutory rate of 35% due principally to state and local income taxes partially offset by

21

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 10—INCOME TAXES (Continued)

foreign income taxed at lower rates. During the three months ended March 31, 2013, the effective tax rate increased due to the shift in the projections of the proportion of income earned and taxed between the various jurisdictions, partially offset by a decrease in unrecognized tax benefits associated with the expiration of the statute of limitations related to foreign taxes.

        For the three months ended March 31, 2012, ILG recorded an income tax provision for continuing operations of $8.6 million which represents an effective tax rate of 36%. This tax rate is higher than the federal statutory rate of 35% due principally to state and local income taxes partially offset by foreign income taxed at lower rates. During the three months ended March 31, 2012, the effective tax rate decreased due to other income tax items, the most significant of which related to the tax impact of ILG's ability and intention to redeem the senior notes and the decrease in unrecognized tax benefits associated with the expiration of the statute of limitations related to foreign taxes.

        As of March 31, 2013 and December 31, 2012, ILG had unrecognized tax benefits of $1.6 million and $0.7 million, respectively, which if recognized, would favorably affect the effective tax rate. During the three months ended March 31, 2013, the unrecognized tax benefits increased by a net amount of approximately $0.9 million as a result of an increase of approximately $1.1 million related to state income tax items offset by approximately $0.2 million related to the decrease in unrecognized tax benefits as a result of the expiration of the statute of limitations related to foreign taxes. The increase of $1.1 million for state income tax items did not have an overall impact on the effective tax rate as it is entirely offset by a related state refund claim filed during the quarter.

        ILG recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. There were no material accruals for interest for the three months ended March 31, 2013. During the three months ended March 31, 2013, interest and penalties decreased by approximately $0.2 million as a result of the expiration of the statute of limitations related to foreign taxes. As of March 31, 2013, ILG had accrued $0.4 million for interest and penalties.

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

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

        The IRS has substantially completed its review of IAC's consolidated tax returns for the years ended December 31, 2001 through 2009, which includes our operations from September 24, 2002, our

22

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 10—INCOME TAXES (Continued)

date of acquisition by IAC, until the spin-off in August 2008. The settlement has not yet been submitted to the Joint Committee of Taxation for approval. The statute of limitations for the years 2001 through 2009 has been extended to June 30, 2014. Various IAC consolidated tax returns that include our operations, filed with state and local jurisdictions, are currently under examination, the most significant of which are California, New York and New York City for various tax years beginning with 2006. No other open tax years are currently under examination by the IRS or any state and local jurisdictions.

        During 2012, the U.K. Finance Act of 2012 was enacted which further reduced the U.K. corporate income tax rate to 24%, effective April 1, 2012 and 23%, effective April 1, 2013. The impact of the U.K. rate reduction to 24% and 23%, which reduced our U.K. net deferred tax asset and increased income tax expense, was reflected in the reporting period when the law was enacted. The change in the corporate tax rate initially negatively impacted income tax expense as the future benefit expected to be realized from our U.K. net deferred tax assets decreases; however, going forward, the lower corporate tax rate will decrease income tax expense and favorably impact our effective tax rate.

NOTE 11—SEGMENT INFORMATION

        Pursuant to FASB guidance as codified in ASC 280, an operating segment is a component of a public entity (1) that engages in business activities that may earn revenues and incur expenses; (2) for which operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segments and assess its performance; and (3) for which discrete financial information is available. We also considered how the businesses are organized as to segment management, and the focus of the businesses with regards to the types of products or services offered. ILG consists of two operating segments which are also reportable segments. Membership and Exchange offers leisure and travel-related products and services to owners of vacation interests and others mostly through various membership programs, as well as related services to resort developer clients. Management and Rental provides hotel, condominium resort, timeshare resort and homeowners association management, and vacation rental services to both vacation property owners and vacationers.

23

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 11—SEGMENT INFORMATION (Continued)

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

	Three Months Ended March 31,
	2013		2012
Membership and Exchange
Revenue	$	102,095	$	100,907
Cost of sales		25,457		25,126
Gross profit		76,638		75,781
Selling and marketing expense		12,825		12,852
General and administrative expense		20,485		22,226
Amortization expense of intangibles		337		5,420
Depreciation expense		3,319		3,063
Segment operating income	$	39,672	$	32,220

	Three Months Ended March 31,
	2013		2012
Management and Rental
Management fee revenue	$	17,445	$	12,433
Pass-through revenue		15,341		13,399
Total revenue		32,786		25,832
Cost of sales		20,919		17,665
Gross profit		11,867		8,167
Selling and marketing expense		910		921
General and administrative expense		5,820		3,200
Amortization expense of intangibles		1,675		1,623
Depreciation expense		345		243
Segment operating income	$	3,117	$	2,180

24

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 11—SEGMENT INFORMATION (Continued)

	Three Months Ended March 31,
	2013		2012
Consolidated
Revenue	$	134,881	$	126,739
Cost of sales		46,376		42,791
Gross profit		88,505		83,948
Direct segment operating expenses		45,716		49,548
Operating income	$	42,789	$	34,400

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

	March 31, 2013		December 31, 2012
Total Assets:
Membership and Exchange	$	811,196	$	789,451
Management and Rental		119,562		117,469
Total	$	930,758	$	906,920

        We maintain operations in the United States, the United Kingdom and other international locations. Geographic information on revenue, based on sourcing, and long-lived assets, based on physical location, is presented below (in thousands):

	Three Months Ended March 31,
	2013		2012
Revenue:
United States	$	116,143	$	107,961
All other countries		18,738		18,778
Total	$	134,881	$	126,739

	March 31, 2013		December 31, 2012
Long-lived assets (excluding goodwill and other intangible assets):
United States	$	50,406	$	51,059
All other countries		2,095		2,289
Total	$	52,501	$	53,348

25

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 12—COMMITMENTS AND CONTINGENCIES

        In the ordinary course of business, ILG is a party to various legal proceedings. ILG establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. ILG does not establish reserves for identified legal matters when ILG believes that the likelihood of an unfavorable outcome is not probable. Although management currently believes that an unfavorable resolution of claims against ILG, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of ILG, these matters are subject to inherent uncertainties and management's view of these matters may change in the future. ILG also evaluates other contingent matters, including tax contingencies, to assess the probability and estimated extent of potential loss. See Note 10 for a discussion of income tax contingencies.

        Other items, such as certain purchase commitments and guarantees are not recognized as liabilities in our consolidated financial statements but are required to be disclosed in the footnotes to the financial statements. These funding commitments could potentially require our performance in the event of demands by third parties or contingent events. At March 31, 2013, guarantees, surety bonds and letters of credit totaled $34.2 million, with the highest annual amount of $14.9 million occurring in year one. The total includes maximum exposure under guarantees of $31.0 million, which primarily relates to the Management and Rental segment's hotel and resort management agreements of Aston, including those with guaranteed dollar amounts, and accommodation leases supporting the management activities of Aston, entered into on behalf of the property owners for which either party may terminate such leases upon 60 days prior written notice to the other party. In addition, certain of the Management and Rental segment's hotel and resort management agreements of Aston provide that owners receive specified percentages of the revenue generated under its management. In these cases, the operating expenses for the rental operations are paid from the revenue generated by the rentals, the owners are then paid their contractual percentages, and the Management and Rental segment either retains the balance (if any) as its management fee or makes up the deficit. Although such deficits are reasonably possible in a few of these agreements, as of March 31, 2013, future amounts are not expected to be significant, individually or in the aggregate.

        The purchase obligations primarily relate to future guaranteed purchases of rental inventory, operational support services and membership fulfillment benefits. Aston also enters into agreements, as principal, for services purchased on behalf of property owners for which it is subsequently reimbursed. As such, Aston is the primary obligor and may be liable for unreimbursed costs. As of March 31, 2013, amounts pending reimbursements are not significant.

European Union Value Added Tax Matter

        In 2009, the European Court of Justice issued a judgment related to Value Added Tax ("VAT") in Europe against an unrelated party. The judgment affects companies who transact within the European Union ("EU"), specifically providers of vacation interest exchange services, and altered the manner in which the Membership and Exchange segment accounts for VAT on its revenues as well as to which EU country VAT is owed. As of March 31, 2013 and December 31, 2012, ILG had an accrual of $3.7 million and $4.5 million, respectively, representing the net exposure of any VAT reclaim refund receivable and accrued VAT liabilities related to this matter. The net change in the accrual primarily

26

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

MARCH 31, 2013

(Unaudited)

NOTE 12—COMMITMENTS AND CONTINGENCIES (Continued)

relates to a $0.6 million decrease due to the change in estimate primarily to update the periods for which the accrued VAT liabilities are due, $0.1 million in payments, as well as the effect of foreign currency remeasurements. The change in estimate resulted in a favorable adjustment to our consolidated statement of income for the three months ended March 31, 2013. Because of the uncertainty surrounding the ultimate outcome and settlement of these VAT liabilities, it is reasonably possible that future costs to settle these VAT liabilities may range from $3.7 million up to approximately $5.1 million based on quarter-end exchange rates. ILG believes that the $3.7 million accrual at March 31, 2013 is our best estimate of probable future obligations for the settlement of these VAT liabilities. The difference between the probable and reasonably possible amounts is primarily attributable to the assessment of certain potential penalties.

27

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

Cautionary Statement Regarding Forward-Looking Information

        This quarterly report on Form 10-Q contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The use of words such as "anticipates," "estimates," "expects," "intends," "plans" and "believes," and similar expressions or future or conditional verbs such as "will," "should," "would," "may" and "could" among others, generally identify forward-looking statements. These forward-looking statements include, among others, statements relating to: our future financial performance, our business prospects and strategy, anticipated financial position, liquidity and capital needs and other similar matters. These forward-looking statements are based on management's current expectations and assumptions about future events, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.

        Actual results could differ materially from those contained in the forward-looking statements included in this quarterly report for a variety of reasons, including, among others: adverse trends in economic conditions generally or in the vacation ownership, vacation rental and travel industries; adverse changes to, or interruptions in, relationships with third parties; lack of available financing for, or insolvency of developers; consolidation of developers; decreased demand from prospective purchasers of vacation interests; travel related health concerns; changes in our senior management; regulatory changes; our ability to compete effectively and successfully add new products and services; our ability to successfully manage and integrate acquisitions; impairment of assets; the restrictive covenants in our revolving credit facility; adverse events or trends in key vacation destinations; business interruptions in connection with our technology systems; ability of managed homeowners associations to collect sufficient maintenance fees; third parties not repaying advances or extensions of credit; and our ability to expand successfully in international markets and manage risks specific to international operations. Certain of these and other risks and uncertainties are discussed in our filings with the SEC, including in Item 1A "Risk Factors" of our 2012 Annual Report on Form 10-K and in Part II of this report. In light of these risks and uncertainties, the forward looking statements discussed in this report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward looking statements, which only reflect the views of our management as of the date of this report. Except as required by applicable law, we do not undertake to update these forward-looking statements.

GENERAL

        The following Management Discussion and Analysis provides a narrative of the results of operations and financial condition of ILG for the three months ended March 31, 2013. This section should be read in conjunction with the consolidated financial statements and accompanying notes included in this report as well as our 2012 Annual Report on Form 10-K, which have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). This discussion includes the following sections:

•

Management Overview

•

Results of Operations

•

Financial Position, Liquidity and Capital Resources

•

Critical Accounting Policies and Estimates

•

ILG's Principles of Financial Reporting

•

Reconciliations of Non-GAAP Measures

28

MANAGEMENT OVERVIEW

General Description of our Business

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

Membership and Exchange Services

        Interval, the principal business comprising our Membership and Exchange segment, has been a leader in the membership and exchange services industry since its founding in 1976. As of March 31, 2013, Interval's primary operation is the Interval Network, a quality global vacation ownership membership exchange network with:

•

a large and diversified base of participating resorts consisting of approximately 2,800 resorts located in over 75 countries, including both leading independent resort developers and branded hospitality companies; and

•

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

        Interval typically enters into multi-year contracts with developers of vacation ownership resorts, pursuant to which the resort developers agree to enroll all purchasers of vacation interests at the applicable resort as members of an Interval exchange program. In return, Interval provides enrolled purchasers with the ability to exchange the use and occupancy of their vacation interest at the home resort (generally for a period of one week) for the right to occupy accommodations at a different resort participating in an Interval exchange network. Through Interval's Getaways, members may rent resort accommodations for a fee without relinquishing the use of their vacation interest. In addition, Interval offers sales, marketing and operational support, consulting and back-office services, including reservation servicing, to certain resort developers participating in the Interval Network, upon their request and for additional consideration.

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

Management and Rental Services

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

29

        As of March 31, 2013, the businesses that comprise our Management and Rental segment provided management and rental services at over 200 vacation properties, resorts and club locations in North America as well as more limited management services to certain additional properties.

        Revenue from the Management and Rental segment is derived principally from fees for hotel, condominium resort, timeshare resort and homeowners association management and rental services. Management fees consist of a base management fee and, in some instances for hotels or condominium resorts, an incentive management fee which is generally a percentage of operating profits or improvement in operating profits. Service fee revenue is based on the services provided to owners including reservations, sales and marketing, property accounting and information technology services either internally or through third party providers. A majority of Aston's hotel and condominium resort management agreements provide that owners receive either specified percentages of the revenue generated under our management or guaranteed dollar amounts. In these cases, the operating expenses for the rental operation are paid from the revenue generated by the rentals, the owners are then paid their contractual percentages or amounts, and the Management and Rental segment either retains the balance (if any) as its management fee or makes up the deficit.

International Operations

        International revenue remained relatively flat in the three months ended March 31, 2013 compared to the same period in 2012. As a percentage of our total revenue, international revenue decreased to 13.9% in the three months ended March 31, 2013 from 14.8% in 2012. The decrease in international revenue as a percentage of total revenue is principally attributable to the February 2012 acquisition of VRI which operates entirely in the United States.

Other Factors Affecting Results

Membership and Exchange

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

        Our 2013 results to-date continue to be negatively affected by a shift in the percentage mix of our membership base from traditional, direct renewal members to corporate members who are renewed directly by the respective developer and tend to have a lower propensity to transact with us. Membership mix as of March 31, 2013 included 61% traditional and 39% corporate members, compared to 65% and 35%, respectively, as of March 31, 2012. Consequently, where possible, we structure our corporate membership arrangements to include reservation servicing and/or other revenue streams to mitigate the anticipated lower transaction propensity.

Management and Rental

        Our Management and Rental segment results are susceptible to variations in economic conditions, particularly in its largest market, Hawaii. According to the Hawaii Tourism Authority, visitor arrivals by air in Hawaii increased 7.6% for the three months ended March 31, 2013 compared to the same period in the prior year. The increase in visitors correlates with an overall increase of 9.7% in revenue per available room ("RevPAR") in Hawaii for the three months ended March 31, 2013 compared to the same period in 2012. The increase in RevPAR in Hawaii was driven by higher average daily rates.

30

        As of the latest forecast (February 2013), the Hawaii Department of Business, Economic Development and Tourism forecasts increases of 5.4% in visitors to Hawaii and 7.1% in visitor expenditures in 2013 over 2012.

Business Acquisition

        On February 28, 2012, we acquired VRI, the largest non-developer provider of resort and homeowners association management services to the shared ownership industry, determined by number of properties. VRI was consolidated into our financial statements as of the acquisition date and the financial effect of this acquisition was not material to our consolidated financial statements; however, the year-over-year comparability was affected as further discussed in our Results of Operations section.

Outlook

        Throughout 2012, the vacation ownership industry remained in a period of transition that resulted in the bankruptcy, restructuring and consolidation of developers as well as continued modifications to their business models. We expect additional consolidation and reorganizations within the industry in 2013. Additionally, we anticipate margin compression and increased competition in our membership and exchange business.

        For the Management and Rental segment, we expect Aston's RevPAR to continue to show year-over-year improvement as its largest market, Hawaii, continues its tourism recovery and benefits from increases in airlift into the island chain; however, increases in the cost of a Hawaiian vacation may negatively impact visitor arrivals and temper growth.

RESULTS OF OPERATIONS

Revenue

For the three months ended March 31, 2013 compared to the three months ended March 31, 2012

	Three Months Ended March 31,
	2013		% Change			2012
	(Dollars in thousands)
Membership and Exchange
Transaction revenue	$	61,148		NM		$	61,151
Membership fee revenue		33,364		2.3	%		32,599
Ancillary member revenue		1,924		(3.4	)%		1,991
Total member revenue		96,436		0.7	%		95,741
Other revenue		5,659		9.5	%		5,166
Total Membership and Exchange revenue		102,095		1.2	%		100,907
Management and Rental
Management fee and rental revenue		17,445		40.3	%		12,433
Pass-through revenue		15,341		14.5	%		13,399
Total Management and Rental revenue		32,786		26.9	%		25,832
Total revenue	$	134,881		6.4	%	$	126,739

        Revenue for the three months ended March 31, 2013 increased $8.1 million, or 6.4%, from the comparable period in 2012. Membership and Exchange segment revenue increased $1.2 million, or 1.2%, and Management and Rental segment revenue increased $7.0 million, or 26.9%, in the quarter compared to 2012.

31

Membership and Exchange

        The increase of $1.2 million in Membership and Exchange revenue in the first quarter of 2013 is primarily driven by an increase in membership fee revenue of $0.8 million, coupled with a rise in other revenue of $0.5 million. Transaction revenue of $61.1 million for the quarter is in-line with the prior year, despite the continued shift in percentage mix of the membership base from traditional to corporate, which has negatively affected transaction propensity.

        Total active members in the Interval Network at March 31, 2013 decreased 0.8% to approximately 1.83 million members as compared to approximately 1.84 million members at March 31, 2012. Despite the decrease in total active members, greater penetration of Platinum and Club Interval products bolstered year-over-year membership fee revenue during the period.

        The increase in other revenue for the year is primarily attributable to the incremental membership and exchange related activities due to the February 2012 VRI acquisition, as well as higher sales of marketing materials and non-member vacation rentals. Overall Interval Network average revenue per member of $52.79 for the first quarter of 2013 is consistent with the prior year.

Management and Rental

        The increase of $5.0 million, or 40.3%, in management fee and rental revenue includes $4.1 million of incremental VRI management fee revenue. Fee income earned from managed hotel and condominium resort properties at Aston increased $0.7 million, or 9.3%, in the first quarter of 2013 due to a 15.8% increase in RevPAR to $166.39 driven by a 14.4% higher average daily rate and a 1.2% improvement in occupancy rates during the quarter compared to prior year.

        Pass-through revenue represents reimbursed compensation and other employee-related costs directly associated with managing properties that are included in both revenue and expenses and that are passed on to the property owners or homeowners association without mark-up. The increase of $1.9 million, or 14.5%, in pass-through revenue in the first quarter of 2013 is principally related to our acquisition of VRI.

Cost of Sales

For the three months ended March 31, 2013 compared to the three months ended March 31, 2012

	Three Months Ended March 31,
	2013			% Change			2012
	(Dollars in thousands)
Membership and Exchange	$	25,457			1.3	%	$	25,126
Management and Rental
Management fee and rental expenses		5,578			30.8	%		4,266
Pass-through expenses		15,341			14.5	%		13,399
Total Management and Rental cost of sales		20,919			18.4	%		17,665
Total cost of sales	$	46,376			8.4	%	$	42,791
As a percentage of total revenue		34.4	%		1.8	%		33.8	%
As a percentage of total revenue excluding pass-through revenue		38.8	%		2.8	%		37.8	%
Gross margin		65.6	%		(0.9	)%		66.2	%
Gross margin without pass-through revenue/expenses		74.0	%		NM			74.1	%

        Cost of sales consists primarily of compensation and other employee-related costs (including stock-based compensation) for personnel engaged in servicing members of the Membership and Exchange

32

segment and providing services to property owners and/or guests of the Management and Rental segment's managed vacation properties, as well as cost of rental inventory used primarily for Getaways included within the Membership and Exchange segment.

        Cost of sales in the first quarter of 2013 increased $3.6 million from 2012, consisting of an increase of $0.3 million from our Membership and Exchange segment and $3.3 million from our Management and Rental segment. Overall gross margin decreased by 62 basis points to 65.6% this quarter compared to 2012, primarily due to increased gross profit contribution from our lower-margin Management and Rental segment relative to total ILG gross profit.

        Gross margin for the Membership and Exchange segment in the first quarter of 2013 was consistent when compared to the prior year. Cost of sales for this segment increased $0.3 million, or 1.3%, primarily due to an increase of $0.3 million in purchased inventory expense. The increase in purchased inventory expense was due to a higher proportion of purchased inventory utilized during 2013, coupled with an increase in the average cost per unit of this purchased inventory.

        The increase of $3.3 million in cost of sales from the Management and Rental segment was primarily attributable to an increase of $1.9 million in segment pass-through revenue and of $1.1 million in other incremental expenses related to VRI. Gross margin for this segment increased by 458 basis points to 36.2% in the first quarter of 2013 compared to 2012. Our Management and Rental segment has lower gross margins than our Membership and Exchange segment largely due to the effect of pass-through revenue. Excluding the effect of pass-through revenue, gross margin for this segment increased by 233 basis points to 68.0% during the quarter compared to the prior year.

Selling and marketing expense

For the three months ended March 31, 2013 compared to the three months ended March 31, 2012

	Three Months Ended March 31,
	2013			% Change			2012
	(Dollars in thousands)
Selling and marketing expense	$	13,735			(0.3	)%	$	13,773
As a percentage of total revenue		10.2	%		(6.3	)%		10.9	%
As a percentage of total revenue excluding pass-through revenue		11.5	%		(5.4	)%		12.2	%

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

        Selling and marketing expense in the first quarter of 2013 remained relatively in-line with 2012. As a percentage of total revenue and total revenue excluding pass-through revenue, sales and marketing expense decreased 68 and 66 basis points, respectively, during the first quarter of 2013 compared to the prior year.

33

General and administrative expense

For the three months ended March 31, 2013 compared to the three months ended March 31, 2012

	Three Months Ended March 31,
	2013			% Change			2012
	(Dollars in thousands)
General and administrative expense	$	26,305			3.5	%	$	25,426
As a percentage of total revenue		19.5	%		(2.8	)%		20.1	%
As a percentage of total revenue excluding pass-through revenue		22.0	%		(1.9	)%		22.4	%

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

        General and administrative expense in the first quarter of 2013 increased $0.9 million from 2012, primarily due to incremental expenses of $1.8 million from the addition of VRI and unfavorable net changes of $0.4 million related to the estimated fair value of contingent consideration for an acquisition and of $0.4 million related to the retirement/disposal of certain assets. These cost increases were partly offset by lower overall compensation and other employee related costs of $1.8 million, excluding VRI.

        The $1.8 million decrease in overall compensation and other employee-related costs, excluding VRI, was primarily due to a decrease of $0.6 million in non-cash compensation expense mainly due to awards granted at spin-off vesting fully during the third quarter of 2012, higher capitalized internal labor costs of $0.8 million pertaining to internally developed software, and $0.6 million of lower health and welfare insurance expense resulting from a drop in self-insured claim activity during the quarter compared to prior year.

        As a percentage of total revenue and total revenue excluding pass-through revenue, general and administrative expense decreased 56 and 43 basis points, respectively, during the first quarter of 2013 compared to the prior year.

Amortization Expense of Intangibles

For the three months ended March 31, 2013 compared to the three months ended March 31, 2012

	Three Months Ended March 31,
	2013			% Change			2012
	(Dollars in thousands)
Amortization expense of intangibles	$	2,012			(71.4	)%	$	7,043
As a percentage of total revenue		1.5	%		(73.2	)%		5.6	%
As a percentage of total revenue excluding pass-through revenue		1.7	%		(72.9	)%		6.2	%

        Amortization expense of intangibles for the first quarter of 2013 decreased $5.0 million from the comparable period in 2012 primarily due to certain intangible assets related to our acquisition by IAC in 2002 being fully amortized by the end of the third quarter of 2012, partly offset by the incremental amortization expense pertaining to intangible assets resulting from the acquisition of VRI.

34

Depreciation Expense

For the three months ended March 31, 2013 compared to the three months ended March 31, 2012

	Three Months Ended March 31,
	2013			% Change			2012
	(Dollars in thousands)
Depreciation expense	$	3,664			10.8	%	$	3,306
As a percentage of total revenue		2.7	%		4.1	%		2.6	%
As a percentage of total revenue excluding pass-through revenue		3.1	%		5.1	%		2.9	%

        Depreciation expense for the three months ended March 31, 2013 increased $0.4 million over the comparable 2012 period largely due to additional depreciable assets being placed in service subsequent to March 31, 2012. These depreciable assets pertain primarily to software and related IT hardware, as well as certain website development costs.

Operating Income

For the three months ended March 31, 2013 compared to the three months ended March 31, 2012

	Three Months Ended March 31,
	2013			% Change			2012
	(Dollars in thousands)
Membership and Exchange	$	39,672			23.1	%	$	32,220
Management and Rental		3,117			43.0	%		2,180
Total operating income	$	42,789			24.4	%	$	34,400
As a percentage of total revenue		31.7	%		16.9	%		27.1	%
As a percentage of total revenue excluding pass-through revenue		35.8	%		17.9	%		30.4	%

        Operating income in the first quarter of 2013 increased $8.4 million from the comparable period in 2012, consisting of an increase of $7.5 million from our Membership and Exchange segment and an increase of $0.9 million from our Management and Rental segment.

        Operating income for our Membership and Exchange segment increased $7.5 million to $39.7 million in the first quarter compared to prior year primarily due to $5.1 million of lower amortization expense of intangibles, lower general and administrative expenses of $1.7 million, mostly related to lower compensation and employee-related costs during the quarter compared to the prior year, and an increase in revenue that resulted in higher gross profit of $0.9 million.

        The increase in operating income of $0.9 million at our Management and Rental segment is primarily due to the incremental contribution from VRI and improved operating results at Aston during the quarter. These increases were partly offset by this segment's share of an unfavorable net change in the estimated fair value of contingent consideration related to an acquisition amounting to $0.2 million, as well as higher professional fees.

Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization

        Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("adjusted EBITDA") is a non-GAAP measure and is defined in "ILG's Principles of Financial Reporting."

35

For the three months ended March 31, 2013 compared to the three months ended March 31, 2012

	Three Months Ended March 31,
	2013			% Change			2012
	(Dollars in thousands)
Membership and Exchange	$	45,607			4.8	%	$	43,511
Management and Rental		5,415			25.5	%		4,315
Total Adjusted EBITDA	$	51,022			6.7	%	$	47,826
As a percentage of total revenue		37.8	%		0.2	%		37.7	%
As a percentage of total revenue excluding pass-through revenue		42.7	%		1.1	%		42.2	%

        Adjusted EBITDA in the first quarter of 2013 increased by $3.2 million, or 6.7%, from 2012, consisting of an increase of $2.1 million from our Membership and Exchange segment and $1.1 million from our Management and Rental segment.

        Adjusted EBITDA of $45.6 million from our Membership and Exchange segment was higher by $2.1 million, or 4.8%, compared to the prior year. The improvement in adjusted EBITDA is primarily driven by stronger revenue during the quarter, largely due to the positive contributions from our Platinum and Club Interval products, and lower general and administrative compensation and employee-related costs in the segment.

        Adjusted EBITDA from our Management and Rental segment increased $1.1 million to $5.4 million in the first quarter of 2013 from $4.3 million in 2012. The improvement in adjusted EBITDA in this segment is primarily driven by the inclusion of VRI in our results of operations and improvement in Aston's RevPAR during the quarter, partly offset by an unfavorable net change of $0.2 million in the estimated fair value of contingent consideration related to an acquisition.

Other income (expense), net

For the three months ended March 31, 2013 compared to the three months ended March 31, 2012

	Three Months Ended March 31,
	2013			% Change			2012
	(Dollars in thousands)
Interest income	$	151			(64.6	)%	$	426
Interest expense		(1,653	)		(80.7	)%		(8,564	)
Other expense, net		(520	)		(79.0	)%		(2,473	)

        Interest income decreased $0.3 million in the first quarter of 2013 compared to 2012 primarily as a result of the repayment of certain loans receivable subsequent to March 31, 2012.

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

        Other expense, net primarily relates to net gains and losses on foreign currency exchange related to cash held in certain countries in currencies other than their local currency. Non-operating foreign exchange net loss was $0.2 million in the first quarter of 2013 compared to a net loss of $2.2 million in 2012. The unfavorable fluctuations during the quarter were principally driven by U.S. dollar positions held at March 31, 2013 affected by the weaker dollar compared to the Mexican peso, partly offset by a

36

stronger dollar compared to the Colombian peso and Egyptian pound. The unfavorable fluctuations for the three months ended March 31, 2012 were principally driven by U.S. dollar positions held at March 31, 2012 affected by the weaker dollar compared to the Mexican and Colombian pesos

Income Tax Provision

For the three months ended March 31, 2013 compared to the three months ended March 31, 2012

        For the three months ended March 31, 2013 and 2012, ILG recorded income tax provisions for continuing operations of $15.8 million and $8.6 million, respectively, which represent effective tax rates of 38.6% and 36.0%, respectively. These tax rates are higher than the federal statutory rate of 35% due principally to state and local income taxes partially offset by foreign income taxed at lower rates. The effective tax rate in the first quarter of 2013 is higher than the prior year period due to the shift in the projections of the proportion of income earned and taxed between the various jurisdictions. Additionally, the 2012 period benefitted from the one-time permanent difference attributable to ILG's ability to redeem the senior notes.

        As of March 31, 2013 and December 31, 2012, ILG had unrecognized tax benefits of $1.6 million and $0.7 million, respectively, which if recognized, would favorably affect the effective tax rate. During the three months ended March 31, 2013, the unrecognized tax benefits increased by a net amount of approximately $0.9 million as a result of an increase of approximately $1.1 million related to state income tax items offset by approximately $0.2 million related to the decrease in unrecognized tax benefits as a result of the expiration of the statute of limitations related to foreign taxes. The increase of $1.1 million for state income tax items did not have an overall impact on the effective tax rate as it is entirely offset by a related state refund claim filed during the quarter.

        ILG recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. There were no material accruals for interest for the three months ended March 31, 2013. During the three months ended March 31, 2013, interest and penalties decreased by approximately $0.2 million as a result of the expiration of the statute of limitations related to foreign taxes. As of March 31, 2013, ILG had accrued $0.4 million for interest and penalties.

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

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

        During 2012, the U.K. Finance Act of 2012 was enacted which further reduced the U.K. corporate income tax rate to 24%, effective April 1, 2012 and 23%, effective April 1, 2013. The impact of the U.K. rate reduction to 24% and 23%, which reduced our U.K. net deferred tax asset and increased income tax expense, was reflected in the reporting period when the law was enacted. The change in the corporate tax rate initially negatively impacted income tax expense as the future benefit expected to be realized from our U.K. net deferred tax assets decreases; however, going forward, the lower corporate tax rate will decrease income tax expense and favorably impact our effective tax rate.

37

        During the current period ended March 31, 2013, the U.K. government released its 2013 Budget, where it also indicated that it intends to enact a further U.K. rate decrease to 20% effective April 1, 2015. This rate decrease is in addition to the previously announced rate reduction of 21% effective April 1, 2014. The additional rate reductions to 21% and 20% have not yet been enacted, but are expected during 2013. These future corporate income tax rate reductions are expected to have a similar impact on our financial statements as in 2012, outlined above; however the actual impact will be dependent on the actual amount of the rate decrease enacted and on our deferred tax position at that time.

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

        As of March 31, 2013, we had $132.5 million of cash and cash equivalents, including $90.8 million of U.S. dollar equivalent or denominated cash deposits held by foreign subsidiaries which are subject to changes in foreign exchange rates. Of this amount, $60.3 million is held in foreign jurisdictions, principally the U.K. Earnings of foreign subsidiaries, except Venezuela, are permanently reinvested. Additional tax provisions would be required should such earnings be repatriated to the U.S. Cash generated by operations is used as our primary source of liquidity. Additionally, we are also exposed to risks associated with the repatriation of cash from certain of our foreign operations to the United States where currency restrictions exist, such as Venezuela and Argentina, which limit our ability to immediately access cash through repatriations. These currency restrictions had no impact on our overall liquidity during the three months ended March 31, 2013 and, as of March 31, 2013, the respective cash balances were immaterial to our overall cash on hand.

        We believe that our cash on hand along with our anticipated operating future cash flows and availability under our $500 million revolving credit facility, which may be increased to up to $700 million subject to certain conditions, are sufficient to fund our operating needs, quarterly cash dividend, capital expenditures, development and expansion of our operations, debt service, investments and other commitments and contingencies for at least the next twelve months. However, our operating cash flow may be impacted by macroeconomic and other factors outside of our control.

Cash Flows Discussion

        Net cash provided by operating activities increased to $47.4 million in the three months ended March 31, 2013 from $37.6 million in the same period of 2012. The increase of $9.8 million from 2012 was principally due to lower interest paid in the first quarter of 2013 compared to 2012, partly offset by higher net cash expenses.

        Net cash provided by investing activities of $6.8 million in the three months ended March 31, 2013 primarily related to the early repayment of an existing loan receivable totaling $9.9 million, partly offset by capital expenditures of $3.1 million primarily related to IT initiatives. In the three months ended March 31, 2012, net cash used in investing activities of $51.0 million primarily related to the VRI acquisition of $40.0 million, net of cash acquired, disbursements totaling $9.5 million for additional investments in loans receivable and capital expenditures of $3.1 million, primarily related to IT initiatives. These uses of cash were partially offset by payments totaling $1.3 million received on an existing loan.

        Free cash flow is a non-GAAP measure and is defined in "ILG's Principles of Financial Reporting." For the three months ended March 31, 2013 and 2012, free cash flow was $44.4 million and $34.5 million, respectively. The change is mainly a result of the variance in net cash provided by operating activities as discussed above.

        Net cash used in financing activities of $19.9 million in the three months ended March 31, 2013 primarily related to principal payments of $20.0 million on our revolving credit facility, and withholding taxes on the vesting of restricted stock units. These uses of cash were partially offset by excess tax

38

benefits from stock-based awards and the proceeds from the exercise of stock options. In the three months ended March 31, 2012, net cash used in financing activities of $6.1 million was principally due to a $5.0 million voluntary principal prepayment on the term loan and withholding taxes on the vesting of restricted stock units, all partially offset by excess tax benefits from stock-based awards and proceeds from the exercise of stock options.

        On June 21, 2012, we entered into an amended and restated credit agreement which, among other things (1) provides for a $500 million revolving credit facility, (2) extends the maturity of the credit facility to June 21, 2017, (3) provides for an interest rate on borrowings, commitment fees and letter of credit fees based on ILG and its subsidiaries' consolidated leverage ratio, and (4) may be increased to up to $700 million, subject to certain conditions. As of March 31, 2013, $240.0 million of borrowings were outstanding under the revolving credit facility, with $260.0 million available to be drawn.

        Any principal amounts outstanding under the revolving credit facility are due at maturity. The interest rate on the amended credit agreement is based on (at our election) either LIBOR plus a predetermined margin that ranges from 1.25% to 2.25%, or the Base Rate as defined in the amended credit agreement plus a predetermined margin that ranges from 0.25% to 1.25%, in each case based on our consolidated leverage ratio. As of March 31, 2013, the applicable margin was 1.75% per annum for LIBOR revolving loans and 0.75% per annum for Base Rate loans. The revolving credit facility has a commitment fee on undrawn amounts that ranges from 0.25% to 0.375% per annum based on our consolidated leverage ratio and as of March 31, 2013, the commitment fee was 0.275%.

        The revolving credit facility has various financial and operating covenants that place significant restrictions on us, including our ability to incur additional indebtedness, to incur additional liens, issue redeemable stock and preferred stock, pay dividends or distributions or redeem or repurchase capital stock, prepay, redeem or repurchase debt, make loans and investments, enter into agreements that restrict distributions from our subsidiaries, sell assets and capital stock of our subsidiaries, enter into certain transactions with affiliates and consolidate or merge with or into or sell substantially all of our assets to another person. The revolving credit facility requires us to meet certain financial covenants regarding the maintenance of a maximum consolidated leverage ratio of consolidated debt, less credit given for a portion of foreign cash, over consolidated Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as defined in the amended credit agreement, of 3.50 through December 31, 2013 and 3.25 thereafter. Additionally, we are required to maintain a minimum consolidated interest coverage ratio of consolidated EBITDA over consolidated interest expense, as defined in the Amended Credit Agreement, of 3.0. As of March 31, 2013, ILG was in compliance in all material respects with the requirements of all applicable financial and operating covenants and our consolidated leverage ratio and consolidated interest coverage ratio under the amended credit agreement were 1.35 and 9.95, respectively.

Dividends

        In May 2013, our Board of Directors declared a quarterly dividend payment of $0.11 per share payable June 18, 2013 to shareholders of record on June 4, 2013. Based on the number of shares of common stock outstanding as of March 31, 2013, at a dividend of $0.11 per share, the anticipated cash outflow would be $6.3 million in the second quarter of 2013. We currently expect to declare and pay quarterly dividends of similar amounts.

Contractual Obligations and Commercial Commitments

        We have funding commitments that could potentially require our performance in the event of demands by third parties or contingent events. At March 31, 2013, guarantees, surety bonds and letters of credit totaled $34.2 million. The total includes maximum exposure under guarantees of $31.0 million, which primarily relates to the Management and Rental segment's hotel and resort management

39

agreements of Aston, including those with guaranteed dollar amounts, and accommodation leases supporting the Aston management activities, entered into on behalf of the property owners for which either party may terminate such leases upon 60 days prior written notice to the other. In addition, certain of the Management and Rental segment's hotel and resort management agreements of Aston provide that owners receive specified percentages of the revenue generated under Aston management. In these cases, the operating expenses for the rental operations are paid from the revenue generated by the rentals, the owners are then paid their contractual percentages, and the Management and Rental segment either retains the balance (if any) as its management fee or makes up the deficit. Although such deficits are reasonably possible in a few of these agreements, as of March 31, 2013 amounts are not expected to be significant, individually or in the aggregate. Aston also enters into agreements, as principal, for services purchased on behalf of property owners for which it is subsequently reimbursed. As such, Aston is the primary obligor and may be liable for unreimbursed costs. As of March 31, 2013, amounts pending reimbursements are not significant.

        Contractual obligations and commercial commitments at March 31, 2013 are as follows:

	Payments Due by Period
Contractual Obligations	Total		Up to 1 year		1 - 3 years		3 - 5 years		More than 5 years
	(Dollars in thousands)
Debt principal(a)	$	240,000	$	—	$	—	$	240,000	$	—
Debt interest(a)		23,182		5,449		11,004		6,729		—
Purchase obligations(b)		29,389		10,892		13,620		4,327		550
Operating leases		54,268		12,069		17,406		11,690		13,103
Total contractual obligations	$	346,839	$	28,410	$	42,030	$	262,746	$	13,653

(a)

Debt principal and projected debt interest represent principal and interest to be paid on our revolving credit facility based on the balance outstanding as of March 31, 2013. In addition, also included are certain fees associated with our revolving credit facility based on the unused borrowing capacity and outstanding letters of credit balances, if any, as of March 31, 2013. Interest on the revolving credit facility is calculated using the prevailing rates as of March 31, 2013.

(b)

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

	Amount of Commitment Expiration Per Period
Other Commercial Commitments(c)	Total Amounts Committed		Less than 1 Year		1 - 3 Years		3 - 5 Years		More than 5 Years
	(In thousands)
Guarantees, surety bonds and letters of credit	$	34,173	$	14,941	$	13,274	$	4,426	$	1,532

(c)

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

        Included in other liabilities, both current and long-term, as presented in our consolidated balance sheet as of March 31, 2013, are certain unconditional recorded contractual obligations. These

40

obligations and the future periods in which such obligations are expected to settle in cash are as follows (in thousands):

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

Off-Balance Sheet Arrangements

        Except as disclosed above in our Contractual Obligations and Commercial Commitments (except for our Debt Principal) as of March 31, 2013, we did not have any significant off-balance sheet arrangements, as defined in Item 303(a) (4) (ii) of SEC Regulation S-K.

Recent Accounting Pronouncements

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

Seasonality

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

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

        The preparation of financial statements in conformity with GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates which are based on historical experience and on various other judgments and assumptions that we believe are reasonable under the circumstances. Actual outcomes could differ from those estimates. We have discussed those estimates that we believe are critical and required the use of significant judgment and use of estimates that could have a significant impact on our financial statements in our 2012 Annual Report on Form 10-K. There have been no material changes to our critical accounting policies in the interim period.

ILG'S PRINCIPLES OF FINANCIAL REPORTING

Definition of ILG's Non-GAAP Measures

Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") is defined as net income excluding, if applicable: (1) interest income and interest expense, (2) income taxes, (3) depreciation expense, and (4) amortization expense of intangibles.

Adjusted EBITDA is defined as EBITDA excluding, if applicable: (1) non-cash compensation expense, (2) goodwill and asset impairments and (3) other non-operating income and expense.

        Free cash flow—Cash provided by operating activities less capital expenditures.

41

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

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

Pro Forma Results

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

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

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

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

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

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

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

42

RECONCILIATIONS OF NON-GAAP MEASURES

        The following tables reconcile EBITDA and adjusted EBITDA to operating income for our operating segments and to net income attributable to common stockholders in total for the three months ended March 31, 2013 and 2012 (in thousands). The noncontrolling interest relates to the Management and Rental segment.

	For the Three Months Ended March 31, 2013
	Membership and Exchange			Management and Rental			Consolidated
Adjusted EBITDA	$	45,607		$	5,415		$	51,022
Non-cash compensation expense		(2,279	)		(278	)		(2,557	)
Other non-operating expense, net		(349	)		(171	)		(520	)
EBITDA		42,979			4,966			47,945
Amortization expense of intangibles		(337	)		(1,675	)		(2,012	)
Depreciation expense		(3,319	)		(345	)		(3,664	)
Less: Other non-operating expense, net		349			171			520
Operating income	$	39,672		$	3,117			42,789
Interest income								151
Interest expense								(1,653	)
Other non-operating expense, net								(520	)
Income tax provision								(15,757	)
Net income								25,010
Net income attributable to noncontrolling interest								(6	)
Net income attributable to common stockholders							$	25,004

	For the Three Months Ended March 31, 2012
	Membership and Exchange			Management and Rental			Consolidated
Adjusted EBITDA	$	43,511		$	4,315		$	47,826
Non-cash compensation expense		(2,808	)		(269	)		(3,077	)
Other non-operating expense, net		(2,324	)		(149	)		(2,473	)
EBITDA		38,379			3,897			42,276
Amortization expense of intangibles		(5,420	)		(1,623	)		(7,043	)
Depreciation expense		(3,063	)		(243	)		(3,306	)
Less: Other non-operating expense, net		2,324			149			2,473
Operating income	$	32,220		$	2,180			34,400
Interest income								426
Interest expense								(8,564	)
Other non-operating expense, net								(2,473	)
Income tax provision								(8,560	)
Net income								15,229
Net income attributable to noncontrolling interest								(4	)
Net income attributable to common stockholders							$	15,225

43

        The following table reconciles cash provided by operating activities to free cash flow for the three months ended March 31, 2013 and 2012 (in thousands).

	For the Three Months Ended March 31,
	2013			2012
Net cash provided by operating activities	$	47,449		$	37,630
Less: Capital expenditures		(3,075	)		(3,107	)
Free cash flow	$	44,374		$	34,523

Item 3.    Quantitative and Qualitative Disclosures about Market Risk

Foreign Currency Exchange Risk

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

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

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

        Operating foreign currency exchange resulted in a net gain of $0.1 million for the three months ended March 31, 2013 and a net loss of $0.1 million for the three months ended March 31, 2012, attributable to foreign currency remeasurements of operating assets and liabilities denominated in a currency other than their functional currency.

        Non-operating foreign exchange for the three months ended March 31, 2013 and 2012 resulted in a net loss of $0.2 million and $2.2 million, respectively, attributable to cash held in certain countries in currencies other than their functional currency.

        The unfavorable fluctuations in the first quarter 2013 were principally driven by U.S. dollar positions held at March 31, 2013 affected by the weaker dollar compared to the Mexican peso, partly offset by the strengthening of the U.S. dollar against the Colombian peso and Egyptian pound. Unfavorable fluctuations in foreign currency exchange rates caused a net loss during the three months ended March 31, 2012. The unfavorable fluctuations in the first quarter 2012 were principally driven by U.S. dollar positions held at March 31, 2012 affected by the weaker dollar compared to the Colombian and Mexican pesos.

        The Venezuelan Bolivar cash held impacted our foreign exchange net loss in 2010 given our change to the U.S. dollar as the functional currency for that entity due to highly inflationary accounting, effective that year, partially offset by a gain realized in June 2010 due to our change from the parallel market rate to the SITME rate for remeasurement purposes. In April 2010, we transferred the majority of the cash from our Venezuelan entity's Bolivar denominated bank account in Venezuela to our Venezuelan entity's U.S. dollar denominated bank account in the U.S. and consequently reduced the exposure going forward. Effective in February 2013, the Venezuelan government eliminated the

44

SITME market and concurrently devalued their currency. We do not anticipate this currency devaluation to have more than a negligible impact on our consolidated financial statements.

        Our operations in international markets are exposed to potentially volatile movements in currency exchange rates. The economic impact of currency exchange rate movements on us is often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. These changes, if material, could cause us to adjust our financing, operating and hedging strategies. A hypothetical 10% weakening/strengthening in foreign exchange rates to the U.S. dollar for the three months ended March 31, 2013 would result in an approximate change to revenue of $0.8 million. There have been no material quantitative changes in market risk exposures since December 31, 2012.

Interest Rate Risk

        We are exposed to interest rate risk through borrowings under our June 21, 2012 amended credit agreement which bears interest at variable rates. The interest rate on the amended credit agreement is based on (at our election) either LIBOR plus a predetermined margin that ranges from 1.25% to 2.25%, or the Base Rate as defined in the amended credit agreement plus a predetermined margin that ranges from 0.25% to 1.25%, in each case based on ILG's leverage ratio. As of March 31, 2013, the applicable margin was 1.75% per annum for LIBOR revolving loans and 0.75% per annum for Base Rate loans. During the first quarter of 2013, we had at least $240.0 million outstanding under our revolving credit facility; a 100 basis point change in interest rates would result in an approximate change to interest expense of $0.6 million for the current quarter. While we currently do not hedge our interest rate exposure, this risk is somewhat mitigated by variable interest rates earned on our cash balances.

Item 4.    Controls and Procedures

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

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

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

45

PART II
OTHER INFORMATION

Item 1.    Legal Proceedings

        Not applicable

Item 1A.    Risk Factors

        See Part I, Item IA., "Risk Factors," of ILG's 2012 Annual Report on Form 10-K, for a detailed discussion of the risk factors affecting ILG. There have been no material changes from the risk factors described in the Annual Report.

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

(a)

Unregistered Sale of Securities.    None



(b)

Use of Proceeds.    Not applicable



(c)

Purchases of Equity Securities by the Issuer and Affiliated Purchasers:    The following table sets forth information with respect to purchases of shares of our common stock made during the quarter ended March 31, 2013 by or on behalf of ILG or any "affiliated purchaser," as defined by Rule 10b-18(a)(3) of the Exchange Act. All purchases were made in accordance with Rule 10b-18 of the Exchange Act.

Period	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchase Under the Plans or Programs(1)
January 2013		—		—		1,697,360	$	4,120,479
February 2013		—		—		1,697,360	$	4,120,479
March 2013		—		—		1,697,360	$	4,120,479

(1)

On August 4, 2011, we announced that our Board of Directors had authorized the repurchase of up to $25 million of our common stock. There is no time restriction on this authorization and repurchases may be made in the open-market or through privately negotiated transactions.

46

Items 3-5.    Not applicable.

Item 6.    Exhibits

Exhibit Number			Description	Location
	3.1		Amended and Restated Certificate of Incorporation of Interval Leisure Group, Inc.	Exhibit 3.1 to ILG's Current Report on Form 8-K, filed on August 25, 2008.
	3.2		Certificate of Designations, Preferences and Rights to Series A Junior Participating Preferred Stock	Exhibit 3.2 to ILG's Quarterly Report on Form 10-Q, filed on August 11, 2009.
	3.3		Amended and Restated By-Laws of Interval Leisure Group, Inc.	Exhibit 3.2 to ILG's Current Report on Form 8-K, filed on September 27, 2010.
	10.1	†	Form of Terms and Conditions of Leadership Restricted Stock Unit Awards*
	31.1	†	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
	31.2	†	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
	31.3	†	Certification of the Chief Accounting Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
	32.1	††	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
	32.2	††	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
	32.3	††	Certification of the Chief Accounting Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
	101.INS	**	XBRL Instance Document
	101.SCH	**	XBRL Taxonomy Extension Schema Document

47

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

†

Filed herewith.

††

Furnished herewith.

*

Reflects management contracts and management and director compensatory plans.

**

Pursuant to applicable securities laws and regulations, the registrant is deemed to have complied with the reporting obligation relating to the submission of interactive data files in such exhibits and is not subject to liability under any anti-fraud provisions or other liability provisions of the federal securities laws as long as the registrant has made a good faith attempt to comply with the submission requirements and promptly amends the interactive data files after becoming aware that the interactive data files fail to comply with the submission requirements. In addition, users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files 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 or Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under these sections.

48

SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: May 6, 2013

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

QuickLinks

PART 1—FINANCIAL STATEMENTS

Item 1. Consolidated Financial Statements

INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited)
INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited)
INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data)
INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (In thousands, except share data) (Unaudited)
INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
INTERVAL LEISURE GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2013 (Unaudited)

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

GENERAL
MANAGEMENT OVERVIEW
RESULTS OF OPERATIONS
FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES
CRITICAL ACCOUNTING POLICIES AND ESTIMATES
ILG'S PRINCIPLES OF FINANCIAL REPORTING
RECONCILIATIONS OF NON-GAAP MEASURES

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

PART II OTHER INFORMATION

Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Items 3-5. Not applicable.
Item 6. Exhibits

SIGNATURES

EX-10.1

Exhibit 10.1

Terms and Conditions for Leadership Restricted Stock Unit Awards

Overview

These Terms and Conditions apply to the Leadership grant awarded to you by Interval Leisure Group, Inc. (“ILG” or the “Company”) pursuant to Section 7 of the Interval Leisure Group 2008 Stock and Annual Incentive Plan (the “Plan”) of restricted stock units (the “Award”). You were notified of your Award by way of an award notice (the “Award Notice”).

ALL CAPITALIZED TERMS USED HEREIN, TO THE EXTENT NOT DEFINED, SHALL HAVE THE MEANINGS SET FORTH IN THE PLAN.

Continuous Service

In order for your Award to vest, you must be continuously employed by ILG or any of its Subsidiaries during the Restriction Period (as defined below).  Nothing in your Award Notice, these Terms and Conditions, or the Plan shall confer upon you any right to continue in the employ or service of ILG or any of its Subsidiaries or interfere in any way with their rights to terminate your employment or service at any time.

Vesting

Subject to the Award Notice, these Terms and Conditions and the provisions of the Plan, the Restricted Stock Units (“RSUs”) in respect to your Award, shall vest and no longer be subject to any restriction (such period during which restrictions apply is the “Restriction Period”):

	Percentage of Total
Vesting Date	Award Vesting
Third anniversary of grant date	100	%

Termination of Employment

Subject to the provisions of your employment agreement, if any, upon the termination of your employment with ILG or any of its Subsidiaries during the Restriction Period for any reason, any RSUs still subject to restriction shall be forfeited and canceled in their entirety effective immediately upon such termination of employment.  For the avoidance of doubt, transfers of employment among the Company and its Subsidiaries, without any break in service, is not a Termination of Employment.

If your employment is terminated by ILG or any of its Subsidiaries for Cause, or if following any termination of employment between you and ILG or any of its Subsidiaries for any reason, ILG determines that during the two years prior to such termination there was an event or circumstance that would have been grounds for termination for Cause, your Award shall be forfeited and canceled in its entirety upon

such termination, and ILG may cause you, immediately upon notice, either to return the shares issued upon the settlement of RSUs that vested during the two-year period after the events or circumstances giving rise to or constituting grounds for termination for Cause or to pay ILG an amount equal to the aggregate amount, if any, that you had previously realized in respect of any and all shares issued upon settlement of RSUs that vested during the two-year period after the events or circumstances giving rise to or constituting grounds for such termination for Cause (i.e., the value of the RSUs upon vesting), in each case, including any dividend equivalents or other distributions received in respect of any such RSUs. This remedy shall be without prejudice to, or waiver of, any other remedies ILG or its Subsidiaries may have in such event.

Settlement

Subject to your satisfaction of the tax obligations described immediately below under “Taxes and Withholding,” as soon as practicable after any RSUs in respect of your Award have vested and are no longer subject to the Restriction Period, such RSUs shall be settled. In no event shall settlement occur later than two and one half months after the end of the fiscal year in which the RSUs vest.  For each RSU settled, ILG shall issue one share of Common Stock for each RSU vesting. Notwithstanding the foregoing, ILG shall be entitled to hold the shares issuable to you upon settlement of all RSUs that have vested until ILG or the agent selected by ILG to administer the Plan (the “Agent”) has received from you (i) a duly executed Form W-9 or W-8 and (ii) payment for any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such RSUs.

Taxes and Withholding

No later than the date as of which an amount in respect of any RSUs first becomes includible in your gross income for federal, state, local or foreign income or employment or other tax purposes, ILG or its Subsidiaries shall, unless prohibited by law, have the right to deduct any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount due to you, including deducting such amount from the delivery of shares issued upon settlement of the RSUs that gives rise to the withholding requirement. In the event shares are deducted to cover tax withholdings, the number of shares withheld shall generally have a Fair Market Value equal to the aggregate amount of ILG’s withholding obligation. In the event that any such deduction and/or withholding is prohibited by law, you shall, prior to or contemporaneously with the vesting of your RSUs, pay to ILG, or make arrangements satisfactory to ILG regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount.

Adjustment in the Event of Change in Stock; Change in Control

Adjustment in the Event of Change in Stock.  In the event of (i) a stock dividend, stock split, reverse stock split, share combination, or recapitalization or similar event affecting the capital structure of ILG (each, a “Share Change”), or (ii) a merger,

consolidation, acquisition of property or shares, separation, spin-off, reorganization, significant non-recurring cash dividend, stock rights offering, liquidation, Disaffiliation, or similar event affecting ILG or any of its Subsidiaries (each, a “Corporate Transaction”), the Compensation and Human Resources Committee (the “Committee”) or the Board shall make such substitutions or adjustments as it, in its good faith and sole discretion, deems appropriate and equitable to the number of RSUs and the number and kind of shares of Common Stock underlying the RSUs.  The determination of the Committee regarding any such adjustment will be final and conclusive and need not be the same for all RSU award recipients.

Change in Control.  Subject to the provisions of your employment agreement, if any, in the event you cease to be employed by either ILG or any of its Subsidiaries within the one (1) year period following a Change in Control of ILG (and not any of its Subsidiaries) as a result of (i) a termination by ILG or any of its Subsidiaries without Cause, (ii) your death or Disability or (iii) a resignation by you for Good Reason (as defined in Section 10 of the Plan), then upon the occurrence of such Termination of Employment, 100% of your Award shall automatically vest.

The Disaffiliation of the Subsidiary of ILG by which you are employed or for which you are performing services at the time of such sale or other disposition by ILG shall be considered a Termination of Employment (not a Change in Control) and shall be governed by the applicable provisions of the Plan and the provision set forth under the caption “Termination of Employment” above; provided, however, that the Committee or the Board may deem it appropriate to make an equitable adjustment to the number of RSUs and the number and kind of shares of Common Stock underlying the RSUs underlying your Award.

Non-Transferability of the RSUs

Until such time as your RSUs are ultimately settled, they shall not be transferable by you by means of sale, assignment, exchange, encumbrance, pledge, hedge or otherwise.

No Rights as a Stockholder

Except as otherwise specifically provided in the Plan, unless and until your RSUs are settled, you shall not be entitled to any rights of a stockholder with respect to the RSUs (including the right to vote the underlying shares). Notwithstanding the foregoing, if ILG declares and pays dividends on the Common Stock during the Restriction Period for particular RSUs in respect of your Award, you will be credited with additional amounts for each RSU underlying such Award equal to the dividend that would have been paid with respect to such RSU as if it had been an actual share of Common Stock, which amount shall remain subject to restrictions (and as determined by the Committee may be reinvested in RSUs or may be held in kind as restricted property) and shall vest concurrently with the vesting of the RSUs upon which such dividend equivalent amounts were paid. Notwithstanding the foregoing, dividends and distributions other than regular

quarterly cash dividends, if any, may result in an adjustment pursuant to the “Adjustment in the Event of Change in Stock; Change in Control” section above.

Other Restrictions

The RSUs shall be subject to the requirement that, if at any time the Committee shall determine that (i) the listing, registration or qualification of the shares of Common Stock subject or related thereto upon any securities exchange or under any state or federal law, or (ii) the consent or approval of any government regulatory body is necessary or desirable as a condition of, or in connection with, the delivery of shares, then in any such event, the award of RSUs shall not be effective unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee.

Conflicts and Interpretation

In the event of any conflict between these Terms and Conditions and the Plan, the Plan shall control; provided, that an action or provision that is permissive under the terms of the Plan, and required under these Terms and Conditions, shall not be deemed a conflict and these Terms and Conditions shall control.  In the event of any ambiguity in these Terms and Conditions, or any matters as to which these Terms and Conditions are silent, the Plan shall govern. In the event of any conflict between the Award Notice (or any other information posted on ILG’s extranet or given to you directly or indirectly through the Agent (including information posted on www.benefitaccess.com)) and ILG’s books and records, or (ii) ambiguity in the Award Notice (or any other information posted on ILG’s extranet or given to you directly or indirectly through the Agent (including information posted on www.benefitaccess.com)), ILG’s books and records shall control.

Amendment

ILG may modify, amend or waive the terms of your RSUs, prospectively or retroactively, but no such modification, amendment or waiver shall materially impair your rights without your consent, except as required by applicable law, NASDAQ or stock exchange rules, tax rules or accounting rules.

Data Protection

The acceptance of your RSUs constitutes your authorization of the release from time to time to ILG or any of its Subsidiaries and to the Agent (together, the “Relevant Companies”) of any and all personal or professional data that is necessary or desirable for the administration of your RSUs and/or the Plan (the “Relevant Information”). Without limiting the above, this authorization permits your employing company to collect, process, register and transfer to the Relevant Companies all Relevant Information (including any professional and personal data that may be useful or necessary for the purposes of the administration of your RSUs and/or the Plan and/or to implement or

structure any further grants of equity awards (if any)). The acceptance of your RSUs also constitutes your authorization of the transfer of the Relevant Information to any jurisdiction in which ILG, your employing company or the Agent considers appropriate. You shall have access to, and the right to change, the Relevant Information, which will only be used in accordance with applicable law.

Section 409A of the Code

Your Award is not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, and the rules and regulations issued there under (“Section 409A”).   In no event shall ILG be required to pay you any “gross-up” or other payment with respect to any taxes or penalties imposed under Section 409A with respect to any amounts or benefits paid to you in respect of your Award.

Notification of Changes

Any changes to these Terms and Conditions shall either be posted on ILG’s intranet and www.benefitaccess.com or communicated (either directly by ILG or indirectly through any of its Subsidiaries or the Agent) to you electronically via e-mail (or otherwise in writing) promptly after such change becomes effective.

EX-31.1

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.1

Certification

I, Craig M. Nash, certify that:

1.

I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2013 of Interval Leisure Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: May 6, 2013 /s/ CRAIG M. NASH
Craig M. Nash
Chairman, President and Chief Executive Officer

QuickLinks

Exhibit 31.1

Certification

EX-31.2

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.2

Certification

I, William L. Harvey, certify that:

1.

I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2013 of Interval Leisure Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: May 6, 2013 /s/ WILLIAM L. HARVEY
William L. Harvey
Chief Financial Officer

QuickLinks

Exhibit 31.2

Certification

EX-31.3

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 31.3

Certification

I, John A. Galea, certify that:

1.

I have reviewed this quarterly report on Form 10-Q for the period ended March 31, 2013 of Interval Leisure Group, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: May 6, 2013 /s/ JOHN A. GALEA
John A. Galea
Chief Accounting Officer

QuickLinks

Exhibit 31.3

Certification

EX-32.1

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        I, Craig M. Nash, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

(1)

the Quarterly Report on Form 10-Q for the period ended March 31, 2013 of Interval Leisure Group, Inc. (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and



(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Interval Leisure Group, Inc.

Dated: May 6, 2013 /s/ CRAIG M. NASH
Craig M. Nash
Chairman, President and Chief Executive Officer

QuickLinks

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EX-32.2

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        I, William L. Harvey, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

(1)

the Quarterly Report on Form 10-Q for the period ended March 31, 2013 of Interval Leisure Group, Inc. (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and



(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Interval Leisure Group, Inc.

Dated: May 6, 2013 /s/ WILLIAM L. HARVEY
William L. Harvey
Chief Financial Officer

QuickLinks

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

EX-32.3

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 32.3

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

        I, John A. Galea, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to my knowledge:

(1)

the Quarterly Report on Form 10-Q for the period ended March 31, 2013 of Interval Leisure Group, Inc. (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and



(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Interval Leisure Group, Inc.

Dated: May 6, 2013 /s/ JOHN A. GALEA
John A. Galea
Chief Accounting Officer

QuickLinks

Exhibit 32.3

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

XML

BENEFIT PLANS (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Retirement savings plan qualified under Section 401(k) of the Internal Revenue Code and other various benefit plans
Employee contribution as maximum percentage of pre-tax earnings	50.00%
Employer contribution against each dollar contributed by employee (as a percent)	50.00%
Matching contributions	$ 0.4	$ 0.3
Director Plan
Vesting percentage under deferred compensation plan	100.00%
Shares of common stock reserved for issuance pursuant to deferred compensation plan	100,000
Shares outstanding under the deferred compensation plan	37,565
Maximum
Retirement savings plan qualified under Section 401(k) of the Internal Revenue Code and other various benefit plans
Employer's maximum contribution of participant's eligible earnings (as a percent)	3.00%

XML

COMMITMENTS AND CONTINGENCIES (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Guarantees, surety bonds and letters of credit
Commitments and guarantees
Guarantees and commitments amount	$ 34.2
Amount of guarantees and commitments, year one	14.9
Guarantees
Commitments and guarantees
Guarantees and commitments amount	$ 31.0
Notice period for termination of lease	60 days

XML

PROPERTY AND EQUIPMENT (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
PROPERTY AND EQUIPMENT
Property and equipment, gross	$ 141,362	$ 138,877
Less: accumulated depreciation and amortization	(88,861)	(85,529)
Total property and equipment, net	52,501	53,348
Computer equipment
PROPERTY AND EQUIPMENT
Property and equipment, gross	18,877	18,269
Capitalized software
PROPERTY AND EQUIPMENT
Property and equipment, gross	79,969	78,036
Land, buildings and leasehold improvements
PROPERTY AND EQUIPMENT
Property and equipment, gross	23,809	23,781
Furniture and other equipment
PROPERTY AND EQUIPMENT
Property and equipment, gross	12,539	12,419
Projects in progress
PROPERTY AND EQUIPMENT
Property and equipment, gross	$ 6,168	$ 6,372

XML

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2013

FAIR VALUE MEASUREMENTS

Schedule of estimated fair value of financial instruments

	March 31, 2013						December 31, 2012
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
	(In thousands)
Cash and cash equivalents	$	132,527		$	132,527		$	101,162		$	101,162
Restricted cash and cash equivalents		8,213			8,213			7,348			7,348
Financing receivable		—			—			9,876			9,876
Total debt		(240,000	)		(240,000	)		(260,000	)		(260,000	)
Guarantees, surety bonds and letters of credit		N/A			(34,173	)		N/A			(36,747	)

XML

STOCK-BASED COMPENSATION (Details 3) (USD $)	1 Months Ended		3 Months Ended
	May 31, 2007 Aston	May 31, 2007 Aston Maximum	Mar. 31, 2013 Non-vested RSUs	Mar. 31, 2012 Non-vested RSUs	Mar. 31, 2013 Non-vested RSUs Maximum	Mar. 31, 2012 Non-vested RSUs Maximum
Shares
Outstanding at the beginning of the period (in shares)			1,569,000
Granted (in shares)			659,000	586,000
Vested (in shares)			(643,000)
Outstanding at the end of the period (in shares)			1,585,000
Weighted-Average Grant Date Fair Value
Outstanding at the beginning of the period (in dollars per share)			$ 13.29
Granted (in dollars per share)			$ 20.72
Vested (in dollars per share)			$ 11.41
Outstanding at the end of the period (in dollars per share)			$ 17.14
Additional disclosures
Award vesting period		4 years 6 months			4 years	4 years
Preferred interest accretion rate (as a percent)	10.00%

XML

FAIR VALUE MEASUREMENTS (Details 2) (USD $)	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Revolving credit facility	Jun. 21, 2012 Revolving credit facility	Mar. 31, 2013 Carrying Amount	Dec. 31, 2012 Carrying Amount	Mar. 31, 2013 Fair Value	Dec. 31, 2012 Fair Value
Fair Value of Financial Instruments
Cash and cash equivalents					$ 132,527,000	$ 101,162,000	$ 132,527,000	$ 101,162,000
Restricted cash and cash equivalents	8,213,000	7,348,000			8,213,000	7,348,000	8,213,000	7,348,000
Financing receivable						9,876,000		9,876,000
Total debt					(240,000,000)	(260,000,000)	(240,000,000)	(260,000,000)
Guarantees, surety bonds and letters of credit							(34,173,000)	(36,747,000)
Percentage of principal amount that was repaid on outstanding financing receivables	100.00%
Maximum borrowing capacity			$ 500,000,000	$ 500,000,000

XML

COMMITMENTS AND CONTINGENCIES (Details 2) (European Union Value Added Tax Matter, USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
European Union Value Added Tax Matter
COMMITMENTS AND CONTINGENCIES
Accrual of VAT liability	$ 3.7	$ 4.5
Change in estimate of VAT liability	0.6
Payment of VAT	0.1
Possible future costs to settle VAT liabilities, lower range	3.7
Possible future costs to settle VAT liabilities, higher range	$ 5.1

XML

SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2013

SIGNIFICANT ACCOUNTING POLICIES

SIGNIFICANT ACCOUNTING POLICIES

NOTE 2—SIGNIFICANT ACCOUNTING POLICIES

        Our significant accounting policies were described in Note 2 to our audited consolidated financial statements included in our 2012 Annual Report on Form 10-K. There have been no significant changes in our significant accounting policies for the three months ended March 31, 2013.

Accounting Estimates

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

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

Earnings per Share

        Basic earnings per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per share attributable to common stockholders is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are common stock equivalents that are freely exercisable into common stock at less than market prices or otherwise dilute earnings if converted. The net effect of common stock equivalents is based on the incremental common stock that would be issued upon the assumed exercise of common stock options and the vesting of restricted stock units ("RSUs") using the treasury stock method. Common stock equivalents are not included in diluted earnings per share when their inclusion is antidilutive. The computations of diluted earnings per share available to common stockholders do not include approximately 0.8 million stock options for the three months ended March 31, 2013 and 1.3 million stock options and RSUs for the three months ended March 31, 2012, as the effect of their inclusion would have been antidilutive to earnings per share.

        In connection with the spin-off, stock options to purchase ILG common stock were granted to non-ILG employees for which there is no future compensation expense to be recognized by ILG. As of March 31, 2013 and 2012, 0.9 million and 1.0 million, respectively, of stock options remained outstanding.

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

	Three Months Ended March 31,
	2013		2012
Basic weighted average shares of common stock outstanding		56,928		56,089
Net effect of common stock equivalents assumed to be vested related to RSUs		496		572
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees		11		15
Diluted weighted average shares of common stock outstanding		57,435		56,676

Recent Accounting Pronouncements

        With the exception of those discussed below, there are no recent accounting pronouncements or changes in accounting pronouncements since the recent accounting pronouncements described in our 2012 Annual Report on Form 10-K that are of significance, or potential significance, to ILG based on our current operations. The following summary of recent accounting pronouncements is not intended to be an exhaustive description of the respective pronouncement.

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

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

Adopted Accounting Pronouncements

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

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

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

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

XML

INCOME TAXES (Details) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
INCOME TAXES
Income tax provision for continuing operations	$ 15,757,000	$ 8,560,000
Effective tax rate (as a percent)	38.60%	36.00%
Federal statutory rate (as a percent)	35.00%	35.00%
Unrecognized tax benefits that would favourably affect the effective tax rate if recognized	1,600,000		700,000
Net increase in unrecognized tax benefits	900,000
Increase in unrecognized tax benefits for state income tax items	1,100,000
Decrease in unrecognized tax benefits due to expiration of statute of limitations related to foreign taxes	200,000
Accruals for interest	0
Decrease in interest and penalties	200,000
Accrued interest and penalties	400,000
Estimated decrease in unrecognized tax benefits within next twelve months	$ 1,300,000

XML

SIGNIFICANT ACCOUNTING POLICIES (Details) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Securities not included in the computations of diluted earnings per share
Securities excluded from computation of diluted earnings per share (in shares)	0.8	1.3
Stock options
Securities not included in the computations of diluted earnings per share
Outstanding stock options (in shares)	0.9	1.0

XML

ORGANIZATION AND BASIS OF PRESENTATION (Details)	3 Months Ended
	Mar. 31, 2013 item
ORGANIZATION AND BASIS OF PRESENTATION
Number of operating segments	2

XML

INCOME TAXES (Details 2) (U.K. Finance Act of 2012)	1 Months Ended
	Apr. 30, 2013	Apr. 30, 2012
U.K. Finance Act of 2012
Income Taxes
U.K. corporate income tax rate (as a percent)	23.00%	24.00%

XML

SIGNIFICANT ACCOUNTING POLICIES (Details 2) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share
Basic weighted average shares of common stock outstanding	56,928	56,089
Diluted weighted average shares of common stock outstanding	57,435	56,676
RSUs
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share
Net effect of common stock equivalents (in shares)	496	572
Stock options
Weighted average common and common equivalent shares used in the calculation of basic and diluted earnings per share
Net effect of common stock equivalents (in shares)	11	15

XML

GOODWILL AND OTHER INTANGIBLE ASSETS (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 item	Dec. 31, 2012	Mar. 31, 2013 Membership and Exchange	Dec. 31, 2012 Membership and Exchange	Oct. 02, 2012 Membership and Exchange	Mar. 31, 2013 Management and Rental	Dec. 31, 2012 Management and Rental	Oct. 02, 2012 Management and Rental
GOODWILL AND OTHER INTANGIBLE ASSETS
Number of reporting units	2
Goodwill
Goodwill	$ 505,774	$ 505,774	$ 483,500	$ 483,500	$ 483,500	$ 22,300	$ 22,300	$ 22,300
Intangible assets with indefinite lives	40,916	40,916
Intangible assets with definite lives, net	55,750	57,762
Total goodwill and other intangible assets, net	602,440	604,452
Changes in the carrying amount of goodwill	$ 0

XML

ORGANIZATION AND BASIS OF PRESENTATION

3 Months Ended

Mar. 31, 2013

ORGANIZATION AND BASIS OF PRESENTATION

ORGANIZATION AND BASIS OF PRESENTATION

NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION

Company Overview

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

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

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

Basis of Presentation

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

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

Seasonality

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

XML

GOODWILL AND OTHER INTANGIBLE ASSETS (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Other intangible assets
Cost	$ 320,947		$ 320,947
Accumulated Amortization	(265,197)		(263,185)
Net	55,750		57,762
Amortization expense for intangible assets	2,012	7,043
Amortization of intangible assets
2014	7,634
2015	7,504
2016	7,048
2017	6,272
2018	5,819
2019 and thereafter	21,473
Net	55,750		57,762
Customer relationships
Other intangible assets
Cost	129,500		129,500
Accumulated Amortization	(129,500)		(129,500)
Purchase agreements
Other intangible assets
Cost	75,879		75,879
Accumulated Amortization	(74,610)		(74,491)
Net	1,269		1,388
Amortization of intangible assets
Net	1,269		1,388
Resort management contracts
Other intangible assets
Cost	72,666		72,666
Accumulated Amortization	(22,735)		(21,225)
Net	49,931		51,441
Amortization of intangible assets
Net	49,931		51,441
Technology
Other intangible assets
Cost	25,076		25,076
Accumulated Amortization	(25,055)		(24,988)
Net	21		88
Amortization of intangible assets
Net	21		88
Other
Other intangible assets
Cost	17,826		17,826
Accumulated Amortization	(13,297)		(12,981)
Net	4,529		4,845
Amortization of intangible assets
Net	$ 4,529		$ 4,845

XML

STOCK-BASED COMPENSATION (Details) (USD $)	3 Months Ended										12 Months Ended	3 Months Ended				1 Months Ended		1 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Mar. 31, 2013 RSUs	Mar. 31, 2012 RSUs	Mar. 31, 2013 RSUs Minimum	Mar. 31, 2012 RSUs Minimum	Mar. 31, 2013 RSUs Maximum	Mar. 31, 2012 RSUs Maximum	Mar. 31, 2013 RSUs Performance-based item	Mar. 31, 2012 RSUs Performance-based	Dec. 31, 2012 RSUs Performance-based	Mar. 31, 2013 RSUs Performance-based Minimum	Mar. 31, 2012 RSUs Performance-based Minimum	Mar. 31, 2013 RSUs Performance-based Maximum	Mar. 31, 2012 RSUs Performance-based Maximum	Aug. 31, 2008 2008 Incentive Plan	Mar. 31, 2013 2008 Incentive Plan	Aug. 31, 2008 2008 Incentive Plan RSUs and options
STOCK-BASED COMPENSATION
Prior awards under IAC's plans converted (in shares)																		2,900,000
Number of additional shares of common stock reserved for issuance																5,000,000
Remaining shares available for future issuance																	1,100,000
Awards granted (in shares)			659,000	586,000					58,000	73,000
Award vesting period					3 years	3 years	4 years	4 years
Number of shares granted expected to cliff vest			300,000	130,000
Percentage of target shares which can be earned by the participants (as a percent)												0.00%	0.00%	200.00%	200.00%
Per unit grant date fair value (in dollars per unit)			$ 20.72						$ 29.61		$ 17.34
Number of peer groups for estimating total shareholder return ranking									2
Non-cash compensation expense	$ 2,557,000	$ 3,077,000	$ 2,600,000	$ 3,100,000
Unrecognized compensation expense
Unrecognized compensation cost, net of estimated forfeitures			$ 21,900,000
Weighted average period for recognition of unrecognized compensation expense (in years)			2 years 2 months 12 days

XML

CONSOLIDATED STATEMENTS OF INCOME (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
CONSOLIDATED STATEMENTS OF INCOME
Revenue	$ 134,881	$ 126,739
Cost of sales (exclusive of depreciation and amortization shown separately below)	46,376	42,791
Gross profit	88,505	83,948
Selling and marketing expense	13,735	13,773
General and administrative expense	26,305	25,426
Amortization expense of intangibles	2,012	7,043
Depreciation expense	3,664	3,306
Operating income	42,789	34,400
Other income (expense):
Interest income	151	426
Interest expense	(1,653)	(8,564)
Other expense, net	(520)	(2,473)
Total other expense, net	(2,022)	(10,611)
Earnings before income taxes and noncontrolling interest	40,767	23,789
Income tax provision	(15,757)	(8,560)
Net income	25,010	15,229
Net income attributable to noncontrolling interest	(6)	(4)
Net income attributable to common stockholders	$ 25,004	$ 15,225
Earnings per share attributable to common stockholders:
Basic (in dollars per share)	$ 0.44	$ 0.27
Diluted (in dollars per share)	$ 0.44	$ 0.27
Weighted average number of shares of common stock outstanding:
Basic (in shares)	56,928	56,089
Diluted (in shares)	57,435	56,676
Dividends declared per common share (in dollars per share)		$ 0.10

XML

SEGMENT INFORMATION (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 item	Mar. 31, 2012	Dec. 31, 2012
SEGMENT INFORMATION
Number of operating segments which are also reportable segments	2
SEGMENT INFORMATION
Revenue	$ 134,881	$ 126,739
Cost of sales	46,376	42,791
Gross profit	88,505	83,948
Selling and marketing expense	13,735	13,773
General and administrative expense	26,305	25,426
Amortization expense of intangibles	2,012	7,043
Depreciation expense	3,664	3,306
Direct segment operating expenses	45,716	49,548
Operating income	42,789	34,400
Total assets
Total assets	930,758		906,920
Revenue:
United States	116,143	107,961
All other countries	18,738	18,778
Revenue	134,881	126,739
Long-lived assets (excluding goodwill and other intangible assets):
United States	50,406		51,059
All other countries	2,095		2,289
Total long-lived assets	52,501		53,348
Membership and Exchange
SEGMENT INFORMATION
Revenue	102,095	100,907
Cost of sales	25,457	25,126
Gross profit	76,638	75,781
Selling and marketing expense	12,825	12,852
General and administrative expense	20,485	22,226
Amortization expense of intangibles	337	5,420
Depreciation expense	3,319	3,063
Operating income	39,672	32,220
Total assets
Total assets	811,196		789,451
Revenue:
Revenue	102,095	100,907
Management and Rental
SEGMENT INFORMATION
Management fee revenue	17,445	12,433
Pass-through revenue	15,341	13,399
Revenue	32,786	25,832
Cost of sales	20,919	17,665
Gross profit	11,867	8,167
Selling and marketing expense	910	921
General and administrative expense	5,820	3,200
Amortization expense of intangibles	1,675	1,623
Depreciation expense	345	243
Operating income	3,117	2,180
Total assets
Total assets	119,562		117,469
Revenue:
Revenue	$ 32,786	$ 25,832

XML

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock	Treasury Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Balance at Dec. 31, 2012	$ 272,066	$ 586	$ (20,913)	$ 182,131	$ 121,160	$ (10,898)
Balance (in shares) at Dec. 31, 2012	56,900,000	58,553,265	1,697,360
Increase (Decrease) in Stockholders' Equity
Net income attributable to common stockholders	25,004				25,004
Other comprehensive loss	(1,773)					(1,773)
Non-cash compensation expense	2,557			2,557
Issuance of common stock upon exercise of stock options	350			350
Issuance of common stock upon exercise of stock options (in shares)		24,882
Issuance of common stock upon vesting of restricted stock units, net of withholding taxes	(4,457)	4		(4,461)
Issuance of common stock upon vesting of restricted stock units, net of withholding taxes (in shares)		426,743
Change in excess tax benefits from stock-based awards	2,470			2,470
Deferred stock compensation expense	(84)			(84)
Balance at Mar. 31, 2013	$ 296,133	$ 590	$ (20,913)	$ 182,963	$ 146,164	$ (12,671)
Balance (in shares) at Mar. 31, 2013	57,300,000	59,004,890	1,697,360

XML

LONG-TERM DEBT (Details 2) (USD $)	1 Months Ended	3 Months Ended
	Jun. 30, 2012	Mar. 31, 2013	Dec. 31, 2012	Jun. 21, 2012
Senior Secured Credit Facility and Covenants
Total unamortized debt issuance costs		$ 3,300,000	$ 3,500,000
Accumulated amortization on debt issuance costs		600,000	400,000
Revolving credit facility
Senior Secured Credit Facility and Covenants
Principal amount		500,000,000		500,000,000
Maximum borrowing capacity subject to certain conditions				700,000,000
Amount outstanding		240,000,000	260,000,000
Commitment fee (as a percent)		0.275%
Percentage of voting equity securities of the Borrower and its U.S. subsidiaries by which credit facility is secured		100.00%
Percentage of equity in the first-tier foreign subsidiaries of the Borrower by which credit facility is secured		65.00%
Lender and third - party debt issuance costs incurred	$ 3,900,000
Revolving credit facility | Actual
Senior Secured Credit Facility and Covenants
Consolidated leverage ratio of debt over EBITDA		1.35
Consolidated interest coverage ratio		9.95
Revolving credit facility | Minimum
Senior Secured Credit Facility and Covenants
Commitment fee (as a percent)		0.25%
Revolving credit facility | Minimum | Financial covenant
Senior Secured Credit Facility and Covenants
Consolidated interest coverage ratio		3.0
Revolving credit facility | Maximum
Senior Secured Credit Facility and Covenants
Commitment fee (as a percent)		0.375%
Revolving credit facility | Maximum | Through December 31, 2013 | Financial covenant
Senior Secured Credit Facility and Covenants
Consolidated leverage ratio of debt over EBITDA		3.50
Revolving credit facility | Maximum | After December 31, 2013 | Financial covenant
Senior Secured Credit Facility and Covenants
Consolidated leverage ratio of debt over EBITDA		3.25
Revolving credit facility | Base rate
Senior Secured Credit Facility and Covenants
Reference rate		Base Rate
Applicable margin (as a percent)		0.75%
Revolving credit facility | Base rate | Minimum
Senior Secured Credit Facility and Covenants
Applicable margin (as a percent)		0.25%
Revolving credit facility | Base rate | Maximum
Senior Secured Credit Facility and Covenants
Applicable margin (as a percent)		1.25%
Revolving credit facility | LIBOR
Senior Secured Credit Facility and Covenants
Reference rate		LIBOR
Applicable margin (as a percent)		1.75%
Revolving credit facility | LIBOR | Minimum
Senior Secured Credit Facility and Covenants
Applicable margin (as a percent)		1.25%
Revolving credit facility | LIBOR | Maximum
Senior Secured Credit Facility and Covenants
Applicable margin (as a percent)		2.25%

XML

GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2013

GOODWILL AND OTHER INTANGIBLE ASSETS

Schedule of balance of goodwill and other intangible assets, net

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

	March 31, 2013		December 31, 2012
Goodwill	$	505,774	$	505,774
Intangible assets with indefinite lives		40,916		40,916
Intangible assets with definite lives, net		55,750		57,762
Total goodwill and other intangible assets, net	$	602,440	$	604,452

Schedule of intangible assets with definite lives

        Intangible assets with indefinite lives relate principally to trade names and trademarks. At March 31, 2013, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	129,500	$	(129,500	)	$	—
Purchase agreements		75,879		(74,610	)		1,269
Resort management contracts		72,666		(22,735	)		49,931
Technology		25,076		(25,055	)		21
Other		17,826		(13,297	)		4,529
Total	$	320,947	$	(265,197	)	$	55,750

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

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

Schedule of amortization of intangible assets with definite lives

Based on March 31, 2013 balances, such amortization for the next five years and thereafter are estimated to be as follows (in thousands):

Twelve month period ending March 31,
2014	$	7,634
2015		7,504
2016		7,048
2017		6,272
2018		5,819
2019 and thereafter		21,473
	$	55,750

XML

FAIR VALUE MEASUREMENTS (Details) (USD $)			1 Months Ended	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Nov. 30, 2010 TPI	Mar. 31, 2013 Level 3 Contingent consideration TPI	Mar. 31, 2013 Level 3 Contingent consideration TPI Maximum
Contingent consideration related to business acquisition
Contingent consideration payment, low end of range			$ 0
Contingent consideration payment, high end of range			5,000,000
Period for payment of contingent consideration (in years)			3 years
Discount rate (as a percent)				18.50%
Fair value of contingent consideration				1,700,000
Net change in fair value of the contingent consideration				500,000
Increase in fair value of contingent consideration due to revisions to estimated earnings				400,000
Increase in fair value of contingent consideration due to accretion of interest				100,000
Accrued expenses and other current liabilities	44,204,000	44,575,000		1,700,000
Percentage change to inputs that would not result in a change to the estimated contingent consideration				10.00%
Unfavorable change in estimated consideration				$ 400,000	$ 100,000

XML

LONG-TERM DEBT (Tables)

3 Months Ended

Mar. 31, 2013

LONG-TERM DEBT

Schedule of Long-term debt

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

	March 31, 2013		December 31, 2012
Revolving credit facility (interest rate of 1.96% at March 31, 2013 and 1.97% at December 31, 2012)	$	240,000	$	260,000
Total long-term debt	$	240,000	$	260,000

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net income	$ 25,010	$ 15,229
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization expense of intangibles	2,012	7,043
Amortization of debt issuance costs	196	424
Depreciation expense	3,664	3,306
Accretion of original issue discount		677
Non-cash compensation expense	2,557	3,077
Non-cash interest expense	68	109
Non-cash interest income		(190)
Deferred income taxes	(985)	(526)
Excess tax benefits from stock-based awards	(2,474)	(2,127)
Loss (gain) on disposal of property and equipment	156	(230)
Change in fair value of contingent consideration	425
Changes in operating assets and liabilities:
Accounts receivable	(20,879)	(16,253)
Prepaid expenses and other current assets	1,213	(670)
Prepaid income taxes and income taxes payable	16,510	7,922
Accounts payable and other current liabilities	93	(479)
Deferred revenue	18,469	18,372
Other, net	1,414	1,946
Net cash provided by operating activities	47,449	37,630
Cash flows from investing activities:
Acquisition, net of cash acquired		(39,963)
Capital expenditures	(3,075)	(3,107)
Investment in financing receivables		(9,480)
Payments received on financing receivables	9,876	1,318
Proceeds from disposal of property and equipment	5	230
Net cash provided by (used in) investing activities	6,806	(51,002)
Cash flows from financing activities:
Principal payments on term loan		(5,000)
Payments on revolving credit facility	(20,000)
Withholding taxes on vesting of restricted stock units	(2,680)	(3,395)
Proceeds from the exercise of stock options	350	201
Excess tax benefits from stock-based awards	2,474	2,127
Net cash used in financing activities	(19,856)	(6,067)
Effect of exchange rate changes on cash and cash equivalents	(3,034)	3,807
Net increase (decrease) in cash and cash equivalents	31,365	(15,632)
Cash and cash equivalents at beginning of period	101,162	195,517
Cash and cash equivalents at end of period	132,527	179,885
Cash paid during the period for:
Interest, net of amounts capitalized	1,283	14,646
Income taxes, net of refunds	231	1,165
Other non-cash item:
Dividends declared and unpaid		$ 5,849

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income attributable to common stockholders	$ 25,004	$ 15,225
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(1,773)	2,967
Total other comprehensive income (loss), net of tax	(1,773)	2,967
Comprehensive income	$ 23,231	$ 18,192

XML

INCOME TAXES

3 Months Ended

Mar. 31, 2013

INCOME TAXES

INCOME TAXES

NOTE 10—INCOME TAXES

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

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

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

        For the three months ended March 31, 2013, ILG recorded an income tax provision for continuing operations of $15.8 million, which represents an effective tax rate of 38.6%. This tax rate is higher than the federal statutory rate of 35% due principally to state and local income taxes partially offset by foreign income taxed at lower rates. During the three months ended March 31, 2013, the effective tax rate increased due to the shift in the projections of the proportion of income earned and taxed between the various jurisdictions, partially offset by a decrease in unrecognized tax benefits associated with the expiration of the statute of limitations related to foreign taxes.

        For the three months ended March 31, 2012, ILG recorded an income tax provision for continuing operations of $8.6 million which represents an effective tax rate of 36%. This tax rate is higher than the federal statutory rate of 35% due principally to state and local income taxes partially offset by foreign income taxed at lower rates. During the three months ended March 31, 2012, the effective tax rate decreased due to other income tax items, the most significant of which related to the tax impact of ILG's ability and intention to redeem the senior notes and the decrease in unrecognized tax benefits associated with the expiration of the statute of limitations related to foreign taxes.

        As of March 31, 2013 and December 31, 2012, ILG had unrecognized tax benefits of $1.6 million and $0.7 million, respectively, which if recognized, would favorably affect the effective tax rate. During the three months ended March 31, 2013, the unrecognized tax benefits increased by a net amount of approximately $0.9 million as a result of an increase of approximately $1.1 million related to state income tax items offset by approximately $0.2 million related to the decrease in unrecognized tax benefits as a result of the expiration of the statute of limitations related to foreign taxes. The increase of $1.1 million for state income tax items did not have an overall impact on the effective tax rate as it is entirely offset by a related state refund claim filed during the quarter.

        ILG recognizes interest and, if applicable, penalties related to unrecognized tax benefits in income tax expense. There were no material accruals for interest for the three months ended March 31, 2013. During the three months ended March 31, 2013, interest and penalties decreased by approximately $0.2 million as a result of the expiration of the statute of limitations related to foreign taxes. As of March 31, 2013, ILG had accrued $0.4 million for interest and penalties.

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

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

        The IRS has substantially completed its review of IAC's consolidated tax returns for the years ended December 31, 2001 through 2009, which includes our operations from September 24, 2002, our date of acquisition by IAC, until the spin-off in August 2008. The settlement has not yet been submitted to the Joint Committee of Taxation for approval. The statute of limitations for the years 2001 through 2009 has been extended to June 30, 2014. Various IAC consolidated tax returns that include our operations, filed with state and local jurisdictions, are currently under examination, the most significant of which are California, New York and New York City for various tax years beginning with 2006. No other open tax years are currently under examination by the IRS or any state and local jurisdictions.

        During 2012, the U.K. Finance Act of 2012 was enacted which further reduced the U.K. corporate income tax rate to 24%, effective April 1, 2012 and 23%, effective April 1, 2013. The impact of the U.K. rate reduction to 24% and 23%, which reduced our U.K. net deferred tax asset and increased income tax expense, was reflected in the reporting period when the law was enacted. The change in the corporate tax rate initially negatively impacted income tax expense as the future benefit expected to be realized from our U.K. net deferred tax assets decreases; however, going forward, the lower corporate tax rate will decrease income tax expense and favorably impact our effective tax rate.

XML

Document and Entity Information	3 Months Ended
	Mar. 31, 2013	May 01, 2013
Document and Entity Information
Entity Registrant Name	Interval Leisure Group, Inc.
Entity Central Index Key	0001434620
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		57,308,112
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1

XML

SEGMENT INFORMATION

3 Months Ended

Mar. 31, 2013

SEGMENT INFORMATION

SEGMENT INFORMATION

NOTE 11—SEGMENT INFORMATION

        Pursuant to FASB guidance as codified in ASC 280, an operating segment is a component of a public entity (1) that engages in business activities that may earn revenues and incur expenses; (2) for which operating results are regularly reviewed by the entity's chief operating decision maker to make decisions about resources to be allocated to the segments and assess its performance; and (3) for which discrete financial information is available. We also considered how the businesses are organized as to segment management, and the focus of the businesses with regards to the types of products or services offered. ILG consists of two operating segments which are also reportable segments. Membership and Exchange offers leisure and travel-related products and services to owners of vacation interests and others mostly through various membership programs, as well as related services to resort developer clients. Management and Rental provides hotel, condominium resort, timeshare resort and homeowners association management, and vacation rental services to both vacation property owners and vacationers.

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

	Three Months Ended March 31,
	2013		2012
Membership and Exchange
Revenue	$	102,095	$	100,907
Cost of sales		25,457		25,126
Gross profit		76,638		75,781
Selling and marketing expense		12,825		12,852
General and administrative expense		20,485		22,226
Amortization expense of intangibles		337		5,420
Depreciation expense		3,319		3,063
Segment operating income	$	39,672	$	32,220

	Three Months Ended March 31,
	2013		2012
Management and Rental
Management fee revenue	$	17,445	$	12,433
Pass-through revenue		15,341		13,399
Total revenue		32,786		25,832
Cost of sales		20,919		17,665
Gross profit		11,867		8,167
Selling and marketing expense		910		921
General and administrative expense		5,820		3,200
Amortization expense of intangibles		1,675		1,623
Depreciation expense		345		243
Segment operating income	$	3,117	$	2,180

	Three Months Ended March 31,
	2013		2012
Consolidated
Revenue	$	134,881	$	126,739
Cost of sales		46,376		42,791
Gross profit		88,505		83,948
Direct segment operating expenses		45,716		49,548
Operating income	$	42,789	$	34,400

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

	March 31, 2013		December 31, 2012
Total Assets:
Membership and Exchange	$	811,196	$	789,451
Management and Rental		119,562		117,469
Total	$	930,758	$	906,920

        We maintain operations in the United States, the United Kingdom and other international locations. Geographic information on revenue, based on sourcing, and long-lived assets, based on physical location, is presented below (in thousands):

	Three Months Ended March 31,
	2013		2012
Revenue:
United States	$	116,143	$	107,961
All other countries		18,738		18,778
Total	$	134,881	$	126,739

	March 31, 2013		December 31, 2012
Long-lived assets (excluding goodwill and other intangible assets):
United States	$	50,406	$	51,059
All other countries		2,095		2,289
Total	$	52,501	$	53,348

XML

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
ASSETS
Cash and cash equivalents	$ 132,527	$ 101,162
Restricted cash and cash equivalents	8,213	7,348
Accounts receivable, net of allowance of $391 and $409, respectively	52,503	31,964
Deferred income taxes	16,660	16,107
Deferred membership costs	10,453	12,349
Prepaid income taxes		12,973
Prepaid expenses and other current assets	26,285	27,592
Total current assets	246,641	209,495
Property and equipment, net	52,501	53,348
Goodwill	505,774	505,774
Intangible assets, net	96,666	98,678
Deferred membership costs	12,483	11,058
Deferred income taxes	4,277	4,571
Other non-current assets	12,416	23,996
TOTAL ASSETS	930,758	906,920
LIABILITIES:
Accounts payable, trade	13,380	11,086
Deferred revenue	113,950	93,367
Income taxes payable	1,266
Interest payable	499	386
Accrued compensation and benefits	16,760	16,526
Member deposits	9,919	9,463
Accrued expenses and other current liabilities	44,204	44,575
Total current liabilities	199,978	175,403
Long-term debt	240,000	260,000
Other long-term liabilities	1,126	1,493
Deferred revenue	107,251	111,273
Deferred income taxes	85,838	86,259
Total liabilities	634,193	634,428
Redeemable noncontrolling interest	432	426
Commitments and contingencies
STOCKHOLDERS' EQUITY:
Preferred stock-authorized 25,000,000 shares, of which 100,000 shares are designated Series A Junior Participating Preferred Stock; $0.01 par value; none issued and outstanding
Common stock-authorized 300,000,000 shares; $.01 par value; issued 59,004,890 and 58,553,265 shares, respectively	590	586
Treasury stock-1,697,360 shares at cost	(20,913)	(20,913)
Additional paid-in capital	182,963	182,131
Retained earnings	146,164	121,160
Accumulated other comprehensive loss	(12,671)	(10,898)
Total stockholders' equity	296,133	272,066
TOTAL LIABILITIES AND EQUITY	$ 930,758	$ 906,920

XML

LONG-TERM DEBT

3 Months Ended

Mar. 31, 2013

LONG-TERM DEBT

LONG-TERM DEBT

NOTE 5—LONG-TERM DEBT

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

	March 31, 2013		December 31, 2012
Revolving credit facility (interest rate of 1.96% at March 31, 2013 and 1.97% at December 31, 2012)	$	240,000	$	260,000
Total long-term debt	$	240,000	$	260,000

Credit Facility

        On June 21, 2012, we entered into an amended and restated credit agreement (the "Amended Credit Agreement") which, among other things (1) provides for a $500 million revolving credit facility, (2) extends the maturity of the credit facility to June 21, 2017, (3) provides for an interest rate on borrowings, commitment fees and letter of credit fees based on our consolidated leverage ratio, and (4) may be increased to up to $700 million, subject to certain conditions. As of March 31, 2013, there was $240.0 million outstanding on the revolving credit facility. Any principal amounts outstanding under the revolving credit facility are due at maturity. The interest rate on the Amended Credit Agreement is based on (at our election) either LIBOR plus a predetermined margin that ranges from 1.25% to 2.25%, or the Base Rate as defined in the Amended Credit Agreement plus a predetermined margin that ranges from 0.25% to 1.25%, in each case based on our consolidated leverage ratio. As of March 31, 2013, the applicable margin was 1.75% per annum for LIBOR revolving loans and 0.75% per annum for Base Rate loans. The revolving credit facility has a commitment fee on undrawn amounts that ranges from 0.25% to 0.375% per annum based on our consolidated leverage ratio, and as of March 31, 2013, the commitment fee was 0.275%.

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

Restrictions and Covenants

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

        The Amended Credit Agreement requires us to meet certain financial covenants regarding the maintenance of a maximum consolidated leverage ratio of consolidated debt, less credit given for a portion of foreign cash, over consolidated Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"), as defined in the Amended Credit Agreement, of 3.50 through December 31, 2013 and 3.25 thereafter. Additionally, we are required to maintain a minimum consolidated interest coverage ratio of consolidated EBITDA over consolidated interest expense, as defined in the Amended Credit Agreement, of 3.0. As of March 31, 2013, ILG was in compliance in all material respects with the requirements of all applicable financial and operating covenants, and our consolidated leverage ratio and consolidated interest coverage ratio under the Amended Credit Agreement were 1.35 and 9.95, respectively.

Debt Issuance Costs

        In connection with entering into the Amended Credit Agreement, we incurred $3.9 million of lender and third-party debt issuance costs. As of March 31, 2013 and December 31, 2012, total unamortized debt issuance costs on outstanding debt were $3.3 million, net of $0.6 million of accumulated amortization, and $3.5 million, net of $0.4 million of accumulated amortization, respectively, which were included in "Other non-current assets" in our consolidated balance sheets. Debt issuance costs are amortized to "Interest expense" on a straight-line basis for our Amended Credit Agreement.

XML

PROPERTY AND EQUIPMENT

3 Months Ended

Mar. 31, 2013

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

NOTE 4—PROPERTY AND EQUIPMENT

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

	March 31, 2013			December 31, 2012
Computer equipment	$	18,877		$	18,269
Capitalized software		79,969			78,036
Land, buildings and leasehold improvements		23,809			23,781
Furniture and other equipment		12,539			12,419
Projects in progress		6,168			6,372
		141,362			138,877
Less: accumulated depreciation and amortization		(88,861	)		(85,529	)
Total property and equipment, net	$	52,501		$	53,348

XML

PROPERTY AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2013

PROPERTY AND EQUIPMENT

Schedule of Property and equipment, net

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

	March 31, 2013			December 31, 2012
Computer equipment	$	18,877		$	18,269
Capitalized software		79,969			78,036
Land, buildings and leasehold improvements		23,809			23,781
Furniture and other equipment		12,539			12,419
Projects in progress		6,168			6,372
		141,362			138,877
Less: accumulated depreciation and amortization		(88,861	)		(85,529	)
Total property and equipment, net	$	52,501		$	53,348

XML

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2013

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

NOTE 12—COMMITMENTS AND CONTINGENCIES

        In the ordinary course of business, ILG is a party to various legal proceedings. ILG establishes reserves for specific legal matters when it determines that the likelihood of an unfavorable outcome is probable and the loss is reasonably estimable. ILG does not establish reserves for identified legal matters when ILG believes that the likelihood of an unfavorable outcome is not probable. Although management currently believes that an unfavorable resolution of claims against ILG, including claims where an unfavorable outcome is reasonably possible, will not have a material impact on the liquidity, results of operations, or financial condition of ILG, these matters are subject to inherent uncertainties and management's view of these matters may change in the future. ILG also evaluates other contingent matters, including tax contingencies, to assess the probability and estimated extent of potential loss. See Note 10 for a discussion of income tax contingencies.

        Other items, such as certain purchase commitments and guarantees are not recognized as liabilities in our consolidated financial statements but are required to be disclosed in the footnotes to the financial statements. These funding commitments could potentially require our performance in the event of demands by third parties or contingent events. At March 31, 2013, guarantees, surety bonds and letters of credit totaled $34.2 million, with the highest annual amount of $14.9 million occurring in year one. The total includes maximum exposure under guarantees of $31.0 million, which primarily relates to the Management and Rental segment's hotel and resort management agreements of Aston, including those with guaranteed dollar amounts, and accommodation leases supporting the management activities of Aston, entered into on behalf of the property owners for which either party may terminate such leases upon 60 days prior written notice to the other party. In addition, certain of the Management and Rental segment's hotel and resort management agreements of Aston provide that owners receive specified percentages of the revenue generated under its management. In these cases, the operating expenses for the rental operations are paid from the revenue generated by the rentals, the owners are then paid their contractual percentages, and the Management and Rental segment either retains the balance (if any) as its management fee or makes up the deficit. Although such deficits are reasonably possible in a few of these agreements, as of March 31, 2013, future amounts are not expected to be significant, individually or in the aggregate.

        The purchase obligations primarily relate to future guaranteed purchases of rental inventory, operational support services and membership fulfillment benefits. Aston also enters into agreements, as principal, for services purchased on behalf of property owners for which it is subsequently reimbursed. As such, Aston is the primary obligor and may be liable for unreimbursed costs. As of March 31, 2013, amounts pending reimbursements are not significant.

European Union Value Added Tax Matter

        In 2009, the European Court of Justice issued a judgment related to Value Added Tax ("VAT") in Europe against an unrelated party. The judgment affects companies who transact within the European Union ("EU"), specifically providers of vacation interest exchange services, and altered the manner in which the Membership and Exchange segment accounts for VAT on its revenues as well as to which EU country VAT is owed. As of March 31, 2013 and December 31, 2012, ILG had an accrual of $3.7 million and $4.5 million, respectively, representing the net exposure of any VAT reclaim refund receivable and accrued VAT liabilities related to this matter. The net change in the accrual primarily relates to a $0.6 million decrease due to the change in estimate primarily to update the periods for which the accrued VAT liabilities are due, $0.1 million in payments, as well as the effect of foreign currency remeasurements. The change in estimate resulted in a favorable adjustment to our consolidated statement of income for the three months ended March 31, 2013. Because of the uncertainty surrounding the ultimate outcome and settlement of these VAT liabilities, it is reasonably possible that future costs to settle these VAT liabilities may range from $3.7 million up to approximately $5.1 million based on quarter-end exchange rates. ILG believes that the $3.7 million accrual at March 31, 2013 is our best estimate of probable future obligations for the settlement of these VAT liabilities. The difference between the probable and reasonably possible amounts is primarily attributable to the assessment of certain potential penalties.

XML

BENEFIT PLANS

3 Months Ended

Mar. 31, 2013

BENEFIT PLANS

BENEFIT PLANS

NOTE 8—BENEFIT PLANS

        Under a retirement savings plan sponsored by ILG, qualified under Section 401(k) of the Internal Revenue Code, participating employees may contribute up to 50.0% of their pre-tax earnings, but not more than statutory limits. ILG provides a discretionary match under the ILG plan of fifty cents for each dollar a participant contributed into the plan with a maximum contribution of 3% of a participant's eligible earnings, subject to Internal Revenue Service ("IRS") restrictions. Matching contributions for the ILG plan were approximately $0.4 million and $0.3 million for the three months ended March 31, 2013 and 2012, respectively. Matching contributions were invested in the same manner as each participant's voluntary contributions in the investment options provided under the plan.

        Effective August 20, 2008, a deferred compensation plan (the "Director Plan") was established to provide non-employee directors of ILG an option to defer director fees on a tax-deferred basis. Participants in the Director Plan are allowed to defer a portion or all of their compensation and are 100% vested in their respective deferrals and earnings. With respect to director fees earned for services performed after the date of such election, participants may choose from receiving cash or stock at the end of the deferral period. ILG has reserved 100,000 shares of common stock for issuance pursuant to this plan, of which 37,565 share units were outstanding at March 31, 2013. ILG does not provide matching or discretionary contributions to participants in the Director Plan. Any deferred compensation elected to be received in stock is included in diluted earnings per share.

XML

FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2013

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

NOTE 6—FAIR VALUE MEASUREMENTS

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

Level 1—	Observable inputs that reflect quoted prices in active markets
Level 2—	Inputs other than quoted prices in active markets that are either directly or indirectly observable
Level 3—	Unobservable inputs in which little or no market data exists, therefore requiring the company to develop its own assumptions

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

        As of March 31, 2013, the fair value of the remaining contingent consideration was $1.7 million, an increase of $0.5 million from December 31, 2012, of which $0.4 million is due to revisions to the estimated earnings used in our calculation of the fair value of the contingent consideration and $0.1 million is due to the accretion of interest. The revision to estimated earnings and the accretion of interest have been reflected in "General and administrative expense" and "Interest expense", respectively, in our consolidated statements of income. The total contingent consideration of $1.7 million is included in "Accrued expenses and other current liabilities" in our consolidated balance sheet as of March 31, 2013.

        As a measure of sensitivity, a change of 10% to all of the aforementioned Level 3 inputs would have resulted in a change to the estimated contingent consideration liability pertaining to this acquisition of between $0.4 million (favorable) or less than $0.1 million (unfavorable) as of March 31, 2013. There have been no transfers of inputs used in measuring fair value between the three tiers within the fair value hierarchy since December 31, 2011.

Fair Value of Financial Instruments

        The estimated fair value of financial instruments below has been determined using available market information and appropriate valuation methodologies, as applicable. There have been no changes in the methods and significant assumptions used to estimate the fair value of financial instruments during the three months ended March 31, 2013. Our financial instruments include guarantees, letters of credit and surety bonds.

	March 31, 2013						December 31, 2012
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
	(In thousands)
Cash and cash equivalents	$	132,527		$	132,527		$	101,162		$	101,162
Restricted cash and cash equivalents		8,213			8,213			7,348			7,348
Financing receivable		—			—			9,876			9,876
Total debt		(240,000	)		(240,000	)		(260,000	)		(260,000	)
Guarantees, surety bonds and letters of credit		N/A			(34,173	)		N/A			(36,747	)

        The carrying amounts of cash and cash equivalents and restricted cash and cash equivalents reflected in the accompanying consolidated balance sheets approximate fair value as they are redeemable at par upon notice or maintained with various high-quality financial institutions and have original maturities of three months or less. Under the fair value hierarchy established in ASC 820, cash and cash equivalents and restricted cash and cash equivalents are stated at fair value based on quoted prices in active markets for identical assets (Level 1). As of December 31, 2012, the financing receivable was presented in our consolidated balance sheets within "Other non-current assets" and pertained to a secured real estate related loan issued to a third party in 2012 with an original maturity in 2015. During the first quarter 2013, the loan was repaid in full at 100% of the original principal amount plus accrued interest. The carrying value at December 31, 2012 of this financing receivable approximated fair value through inputs inherent to the originating value of the loan, such as interest rates and ongoing credit risk accounted for through non-recurring adjustments for estimated credit losses as necessary (Level 2). The stated interest rate on this loan was comparable to market rate. Interest was recognized within our "Interest income" line item in our consolidated statements of income for the three months ended March 31, 2013 and 2012.

        The carrying value of the outstanding balance under our $500 million revolving credit facility approximates fair value as of March 31, 2013 through inputs inherent to the debt such as variable interest rates and credit risk (Level 2).

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

XML

STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2013

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY

NOTE 7—STOCKHOLDERS' EQUITY

        ILG has 300 million authorized shares of common stock, par value of $.01 per share. At March 31, 2013, there were 59.0 million shares of ILG common stock issued, of which 57.3 million are outstanding with 1.7 million shares held as treasury stock. At December 31, 2012, there were 58.6 million shares of ILG common stock issued, of which 56.9 million were outstanding with 1.7 million shares held as treasury stock.

        ILG has 25 million authorized shares of preferred stock, par value $.01 per share, none of which are issued or outstanding as of March 31, 2013 and December 31, 2012. The Board of Directors has the authority to issue the preferred stock in one or more series and to establish the rights, preferences, and dividends.

Dividend Declared

        In May 2013, our Board of Directors declared a quarterly dividend payment of $0.11 per share payable June 18, 2013 to shareholders of record on June 4, 2013.

Stockholder Rights Plan

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

Share Repurchase Program

        Effective August 3, 2011, ILG's Board of Directors authorized a share repurchase program for up to $25.0 million, excluding commissions, of our outstanding common stock. Acquired shares of our common stock are held as treasury shares carried at cost on our consolidated financial statements. Common stock repurchases may be conducted in the open market or in privately negotiated transactions. The amount and timing of all repurchase transactions are contingent upon market conditions, applicable legal requirements and other factors. This program may be modified, suspended or terminated by us at any time without notice.

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

Accumulated Other Comprehensive Loss

        Pursuant to final guidance issued by the FASB in February of 2013, entities are required to disclose additional information about reclassification adjustments within accumulated other comprehensive income/loss, referred to as AOCL for ILG, including (1) changes in AOCL balances by component and (2) significant items reclassified out of AOCL in the period. For the three months ended March 31, 2013, there were no significant items reclassified out of AOCL, and the change in AOCL pertains to current period foreign currency translation adjustments as disclosed in our accompanying consolidated statements of comprehensive income.

XML

STOCK-BASED COMPENSATION

3 Months Ended

Mar. 31, 2013

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

NOTE 9—STOCK-BASED COMPENSATION

        On August 20, 2008, ILG established the ILG 2008 Stock and Annual Incentive Plan (the "2008 Incentive Plan") which provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock-based awards. RSUs are awards in the form of phantom shares or units, denominated in a hypothetical equivalent number of shares of ILG common stock and with the value of each award equal to the fair value of ILG common stock at the date of grant. All outstanding award agreements provide for settlement, upon vesting, in stock for U.S. employees. For non-U.S. employees, all grants issued prior to the spin-off provide for settlement upon vesting in cash, while grants since the spin-off provide for settlement upon vesting in stock. Each RSU is subject to service-based vesting, where a specific period of continued employment must pass before an award vests. We grant awards subject to graded vesting (i.e. portions of the award vest at different times during the vesting period) or to cliff vesting (i.e. all awards vest at the end of the vesting period). In addition, certain RSUs are subject to attaining specific performance criteria.

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

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

        In connection with the spin-off, certain prior awards under IAC's plans were adjusted to convert, in whole or in part, to awards under the 2008 Incentive Plan under which RSUs and options relating to 2.9 million shares of common stock were issued. At the time of the spin-off, an additional 5.0 million shares of common stock were reserved for issuance under the 2008 Incentive Plan. As of March 31, 2013, ILG has 1.1 million remaining shares available for future issuance under this plan.

        During the first quarter of 2013 and 2012, the Compensation Committee granted approximately 657,000 and 586,000 RSUs, respectively, vesting over three to four years, to certain officers and employees of ILG and its subsidiaries. Of these RSUs granted in 2013 and 2012, approximately 300,000 and 130,000 cliff vest in three years and approximately 58,000 and 73,000 of these RSUs, respectively, are subject to performance criteria that could result between 0% and 200% of these awards being earned either based on defined EBITDA or relative total shareholder return targets over the respective performance period, as specified in the award document.

        For the 2013 and 2012 RSUs subject to relative total shareholder return performance criteria, the number of RSUs that may ultimately be awarded depends on whether the market condition is achieved. We used a Monte Carlo simulation analysis to estimate a $29.61 for 2013 and $17.34 for 2012 per unit grant date fair value for these performance-based RSUs. This analysis estimates the total shareholder return ranking of ILG as of the grant date relative to two peer groups, approved by the Compensation Committee, over the remaining performance period. The expected volatility of ILG's common stock at the date of grant was estimated based on a historical average volatility rate for the approximate three-year performance period. The dividend yield assumption was based on historical and anticipated dividend payouts. The risk-free interest rate assumption was based on observed interest rates consistent with the approximate three-year performance measurement period.

        Non-cash compensation expense related to RSUs for the three months ended March 31, 2013 and 2012 was $2.6 million and $3.1 million, respectively. At March 31, 2013, there was approximately $21.9 million of unrecognized compensation cost, net of estimated forfeitures, related to RSUs, which is currently expected to be recognized over a weighted average period of approximately 2.2 years.

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

        Non-cash stock-based compensation expense related to equity awards is included in the following line items in the accompanying consolidated statements of income for the three months ended March 31, 2013 and 2012 (in thousands):

	Three Months Ended March 31,
	2013		2012
Cost of sales	$	194	$	165
Selling and marketing expense		322		277
General and administrative expense		2,041		2,635
Non-cash compensation expense	$	2,557	$	3,077

        The following table summarizes RSU activity during the three months ended March 31, 2013:

	Shares			Weighted-Average Grant Date Fair Value
	(In thousands)
Non-vested RSUs at January 1		1,569		$	13.29
Granted		659			20.72
Vested		(643	)		11.41
Non-vested RSUs at March 31		1,585		$	17.14

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

        The value of these shares upon exercise of the put or call is equal to their fair market value, determined by negotiation or arbitration, reduced by the accreted value of the preferred interest that was taken by ILG upon the purchase of Aston. The initial value of the preferred interest was equal to the acquisition price of Aston. The preferred interest accretes at a 10% annual rate. Upon exercise of the put or call, the consideration payable can be denominated in ILG shares, cash or a combination thereof at ILG's option. An additional put right by the holder and call right by ILG would require, upon exercise, the purchase of these non-voting common shares by ILG immediately prior to a registered public offering by Aston, at the public offering price. The unrecognized compensation cost related to this equity award was fully amortized at December 31, 2011.

        As of March 31, 2013, the estimated redemption value of this redeemable interest is lower than the current carrying value on our consolidated balance sheet. Consequently, pursuant to the applicable accounting guidance, no adjustment to the balance of this noncontrolling interest was recorded for the three months ended March 31, 2013.

XML

LONG-TERM DEBT (Details) (Revolving credit facility, USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Revolving credit facility
LONG-TERM DEBT
Stated interest rate (as a percent)	1.96%	1.97%
Total long-term debt	$ 240,000	$ 260,000

XML

SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2013

SIGNIFICANT ACCOUNTING POLICIES

Schedule of computation of weighted average common and common equivalent shares

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

	Three Months Ended March 31,
	2013		2012
Basic weighted average shares of common stock outstanding		56,928		56,089
Net effect of common stock equivalents assumed to be vested related to RSUs		496		572
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees		11		15
Diluted weighted average shares of common stock outstanding		57,435		56,676

XML

STOCK-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2013

STOCK-BASED COMPENSATION

Schedule of allocation of recognized compensation cost

        Non-cash stock-based compensation expense related to equity awards is included in the following line items in the accompanying consolidated statements of income for the three months ended March 31, 2013 and 2012 (in thousands):

	Three Months Ended March 31,
	2013		2012
Cost of sales	$	194	$	165
Selling and marketing expense		322		277
General and administrative expense		2,041		2,635
Non-cash compensation expense	$	2,557	$	3,077

Schedule of RSU award activity

	Shares			Weighted-Average Grant Date Fair Value
	(In thousands)
Non-vested RSUs at January 1		1,569		$	13.29
Granted		659			20.72
Vested		(643	)		11.41
Non-vested RSUs at March 31		1,585		$	17.14

XML

STOCK-BASED COMPENSATION (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Non-cash stock-based compensation expense
Non-cash compensation expense	$ 2,557	$ 3,077
Cost of sales
Non-cash stock-based compensation expense
Non-cash compensation expense	194	165
Selling and marketing expense
Non-cash stock-based compensation expense
Non-cash compensation expense	322	277
General and administrative expenses
Non-cash stock-based compensation expense
Non-cash compensation expense	$ 2,041	$ 2,635

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Accounts receivable, allowance (in dollars)	$ 391	$ 409
Preferred stock, authorized shares	25,000,000	25,000,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, authorized shares	300,000,000	300,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, issued shares	59,004,890	58,553,265
Treasury stock, shares	1,697,360	1,697,360
Series A Junior Participating Preferred Stock
Preferred stock, authorized shares	100,000	100,000

XML

GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2013

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

NOTE 3—GOODWILL AND OTHER INTANGIBLE ASSETS

        Pursuant to FASB guidance as codified within ASC 350, "Intangibles—Goodwill and Other," goodwill acquired in business combinations is assigned to the reporting unit(s) expected to benefit from the combination as of the acquisition date. ILG determined our Membership and Exchange and Management and Rental operating segments are individual reporting units which are also individual reportable segments of ILG pursuant to ASC 280, Segment Reporting ("ASC 280"). ILG tests goodwill and other indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if events or changes in circumstances indicate that the assets might be impaired. Goodwill is tested for impairment based on either a qualitative assessment or a two-step impairment test, as more fully described in Note 2 of our 2012 Annual Report on Form 10-K. When performing the two-step impairment test, if the carrying amount of a reporting unit's goodwill exceeds its implied fair value, an impairment loss equal to the excess is recorded.

        As of October 1, 2012, we reviewed the carrying value of goodwill and other intangible assets of each of our two reporting units. Goodwill assigned to the Membership and Exchange and Management and Rental reporting units as of that date was $483.5 million and $22.3 million, respectively. We performed a qualitative assessment on both our reporting units and concluded that it was more-likely-than-not that the fair value exceeded its carrying value and, therefore, a two-step impairment test was not necessary. As of March 31, 2013, we did not identify any triggering events which required an interim impairment test subsequent to our annual impairment test on October 1, 2012.

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

	March 31, 2013		December 31, 2012
Goodwill	$	505,774	$	505,774
Intangible assets with indefinite lives		40,916		40,916
Intangible assets with definite lives, net		55,750		57,762
Total goodwill and other intangible assets, net	$	602,440	$	604,452

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

Other Intangible Assets

        Intangible assets with indefinite lives relate principally to trade names and trademarks. At March 31, 2013, intangible assets with definite lives relate to the following (in thousands):

	Cost		Accumulated Amortization			Net
Customer relationships	$	129,500	$	(129,500	)	$	—
Purchase agreements		75,879		(74,610	)		1,269
Resort management contracts		72,666		(22,735	)		49,931
Technology		25,076		(25,055	)		21
Other		17,826		(13,297	)		4,529
Total	$	320,947	$	(265,197	)	$	55,750

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

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

        Amortization of intangible assets with definite lives is primarily computed on a straight-line basis. Total amortization expense for intangible assets with definite lives was $2.0 million and $7.0 million for the three months ended March 31, 2013 and 2012, respectively. Based on March 31, 2013 balances, such amortization for the next five years and thereafter are estimated to be as follows (in thousands):

Twelve month period ending March 31,
2014	$	7,634
2015		7,504
2016		7,048
2017		6,272
2018		5,819
2019 and thereafter		21,473
	$	55,750

XML

SEGMENT INFORMATION (Tables)

3 Months Ended

Mar. 31, 2013

SEGMENT INFORMATION

Schedule of information on reportable segments and reconciliation to consolidated operating income

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

	Three Months Ended March 31,
	2013		2012
Membership and Exchange
Revenue	$	102,095	$	100,907
Cost of sales		25,457		25,126
Gross profit		76,638		75,781
Selling and marketing expense		12,825		12,852
General and administrative expense		20,485		22,226
Amortization expense of intangibles		337		5,420
Depreciation expense		3,319		3,063
Segment operating income	$	39,672	$	32,220

	Three Months Ended March 31,
	2013		2012
Management and Rental
Management fee revenue	$	17,445	$	12,433
Pass-through revenue		15,341		13,399
Total revenue		32,786		25,832
Cost of sales		20,919		17,665
Gross profit		11,867		8,167
Selling and marketing expense		910		921
General and administrative expense		5,820		3,200
Amortization expense of intangibles		1,675		1,623
Depreciation expense		345		243
Segment operating income	$	3,117	$	2,180

	Three Months Ended March 31,
	2013		2012
Consolidated
Revenue	$	134,881	$	126,739
Cost of sales		46,376		42,791
Gross profit		88,505		83,948
Direct segment operating expenses		45,716		49,548
Operating income	$	42,789	$	34,400

Schedule of assets by reporting segment

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

	March 31, 2013		December 31, 2012
Total Assets:
Membership and Exchange	$	811,196	$	789,451
Management and Rental		119,562		117,469
Total	$	930,758	$	906,920

Schedule of geographic information on revenue, based on sourcing, and long-lived assets, based on physical location

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

	Three Months Ended March 31,
	2013		2012
Revenue:
United States	$	116,143	$	107,961
All other countries		18,738		18,778
Total	$	134,881	$	126,739

	March 31, 2013		December 31, 2012
Long-lived assets (excluding goodwill and other intangible assets):
United States	$	50,406	$	51,059
All other countries		2,095		2,289
Total	$	52,501	$	53,348

XML

STOCKHOLDERS' EQUITY (Details) (USD $) In Millions, except Share data, unless otherwise specified	1 Months Ended			3 Months Ended		12 Months Ended
	May 31, 2013	Aug. 31, 2011	Jun. 30, 2009	Mar. 31, 2013 item	Mar. 31, 2012	Dec. 31, 2012
STOCKHOLDERS' EQUITY
Authorized shares of common stock				300,000,000		300,000,000
Par value of common stock (in dollars per share)				$ 0.01		$ 0.01
Shares of common stock issued				59,004,890		58,553,265
Shares of common stock outstanding				57,300,000		56,900,000
Shares held as treasury stock				1,697,360		1,697,360
Authorized shares of preferred stock				25,000,000		25,000,000
Par value of preferred stock (in dollars per share)				$ 0.01		$ 0.01
Preferred stock, issued shares				0		0
Preferred stock, outstanding shares				0		0
Minimum number of series to issue preferred stock				1
Dividends declared per common share (in dollars per share)	$ 0.11				$ 0.10
Stockholder Rights Plan
Rights per common stock share declared as dividend			1
Minimum percentage of common stock to be acquired before rights become exercisable			15.00%
Percentage of discount on prevailing market price of common stock			50.00%
Share Repurchase Program
Amount authorized under share repurchase program		$ 25.0
Number of shares of common stock repurchased				0		0
Remaining availability for future repurchases of common stock				$ 4.1

XML

SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2013

SIGNIFICANT ACCOUNTING POLICIES

Accounting Estimates

Accounting Estimates

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

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

Earnings per Share

Earnings per Share

        Basic earnings per share attributable to common stockholders is computed by dividing the net income attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. Treasury stock is excluded from the weighted average number of shares of common stock outstanding. Diluted earnings per share attributable to common stockholders is computed based on the weighted average number of shares of common stock and dilutive securities outstanding during the period. Dilutive securities are common stock equivalents that are freely exercisable into common stock at less than market prices or otherwise dilute earnings if converted. The net effect of common stock equivalents is based on the incremental common stock that would be issued upon the assumed exercise of common stock options and the vesting of restricted stock units ("RSUs") using the treasury stock method. Common stock equivalents are not included in diluted earnings per share when their inclusion is antidilutive. The computations of diluted earnings per share available to common stockholders do not include approximately 0.8 million stock options for the three months ended March 31, 2013 and 1.3 million stock options and RSUs for the three months ended March 31, 2012, as the effect of their inclusion would have been antidilutive to earnings per share.

        In connection with the spin-off, stock options to purchase ILG common stock were granted to non-ILG employees for which there is no future compensation expense to be recognized by ILG. As of March 31, 2013 and 2012, 0.9 million and 1.0 million, respectively, of stock options remained outstanding.

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

	Three Months Ended March 31,
	2013		2012
Basic weighted average shares of common stock outstanding		56,928		56,089
Net effect of common stock equivalents assumed to be vested related to RSUs		496		572
Net effect of common stock equivalents assumed to be exercised related to stock options held by non-employees		11		15
Diluted weighted average shares of common stock outstanding		57,435		56,676

Recent Accounting Pronouncements/Adopted Accounting Pronouncements

Recent Accounting Pronouncements

        With the exception of those discussed below, there are no recent accounting pronouncements or changes in accounting pronouncements since the recent accounting pronouncements described in our 2012 Annual Report on Form 10-K that are of significance, or potential significance, to ILG based on our current operations. The following summary of recent accounting pronouncements is not intended to be an exhaustive description of the respective pronouncement.

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

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