The vacation ownership management businesses face competition from other management companies, developers and clubs. The principal competitive factors in VRI and TPI attracting HOAs and vacation property owners are the ability to provide comprehensive management services at competitive prices and increasingly the ability to assist in the sale of defaulted inventory. In addition, there are low barriers to entry for new competitors.

Exchange and Rental

Our main vacation exchange business, Interval International, principally competes for developer and consumer market share with RCI. TPI and several third parties that operate in this industry with a significantly more limited scope of available accommodations. This business also faces increasing competition from points-basedpoints‑based vacation clubs and large resort developers, which operate their own internal exchange systems to facilitate exchanges for owners of vacation interestsVOIs at their resorts as they increase in size and scope. Increased consolidation in the industry enhances this competition. In addition, vacation clubs and resort developers may have direct exchange relationships with other developers.

We believe that developers and homeowners' associationsHOAs generally choose to affiliate with an exchange network based on:

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the quality of resorts participating in the network;





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the level of service provided to members;





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the range and level of support services;





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the flexibility of the exchange program;





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the demographics of the membership base;





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the costs for annual membership and exchanges; and





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the continuity of management and its strategic relationships within the industry.

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

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

apply for failure to notify customers when the security of a company'scompany’s electronic/computer systems designed to protect such standards are breached, even by third parties. Other states, such as California, have enacted legislation that requires enhanced disclosure on Internet web sites regarding consumer privacy and information sharing among affiliated entities or have such legislation pending. In addition, the European Union Directive on Data Protection requires that, unless the use of data is "necessary" for certain specified purposes, including, for example, the performance of a contract with the individual concerned, consent must be obtained to use the data (other than in accordance with our stipulated privacy policies) or to transfer it outside of the European Union. Certain Latin American countries have also recently enacted similar data privacy laws. We believe that we are in material compliance with the laws and regulations applicable to privacy and data collection as such are relevant to our business.

       ��Marketing Operations.  The products and services offered by our various businesses are marketed through a number of distribution channels, each of which is regulated at the federal and state level. Such regulations may limit our ability to solicit new customers or to market additional products or services to existing customers. For example, to comply with state and federal regulations on telemarketing, our affected businesses have adopted processes to routinely identify and remove phone numbers listed on the various "do“do not call"call” registries from our calling lists and have instituted procedures for preventing unsolicited or otherwise unauthorized telemarketing calls. In addition, where appropriate, our business has registered as a telemarketer and has adopted calling practices compliant with requirements of the applicable jurisdiction, such as restrictions on the methods and timing of telemarketing calls and limitations on the percentage of abandoned calls generated through the use of automated telephone-dialingtelephone‑dialing equipment or software. Our business has taken steps to identify cellular telephone numbers to prevent them from being called through the use of automated dialers without consent.

Similarly, state and federal regulations may place limitations on our ability to engage our consumers in electronic mail marketing campaigns. Most notably, the CAN-SPAMCAN‑SPAM Act imposes various requirements on the transmission of e-maile‑mail messages whose primary purpose is to advertise or promote a commercial product or service. Some foreign jurisdictions in which we operate have similar regulations. Our affected businesses have adopted e-maile‑mail messaging practices responsive to the requirements of such regulations.

        Internet.Travel regulations.  A number of laws and regulations have been adopted to regulate the Internet, particularly in the areas of privacy and data collection. In addition, it is possible that existing laws may be interpreted to apply to the Internet in ways that the existing laws are not currently applied, particularly with respect to the imposition of state and local taxes on transactions through the Internet. Regulatory and legal requirements are particularly subject to change with respect to the Internet. We cannot predict with certainty whether such new requirements will affect our practices or impact our ability to market our products and services online.

        Travel Agency Services.    TheCertain travel agency products and services that we provide are subject to various federal, state and local regulations. We must comply with laws and regulations that relate to our marketing and sales of such products and services, including laws and regulations that prohibit unfair and deceptive advertising or practices, prize, gift and sweepstakes laws, and laws that require us to register as a "seller“seller of travel"travel” to comply with disclosure requirements. In addition, we are directly or indirectly affected by the regulation of our travel suppliers, many of which are heavily regulated by the United States and other jurisdictions.

relating to zoning, land use restrictions, environmental regulation, accessibility, title transfers, title insurance and taxation. In the United States, these include the Fair Housing Act and the Americans with Disabilities Act. In addition, we are subject to laws in some jurisdictions that impose liability on property developers for construction defects discovered or repairs made by future owners of property developed by the developer.

Lending Regulation

.    Our lending activities are subject to a number of laws and regulations. In the U.S., these include the Dodd-FrankDodd‑Frank Act, the Federal Trade Commission Act, the Fair Housing Act, the Truth-in-LendingTruth‑in‑Lending Act and Regulation Z promulgated thereunder, the Real Estate Settlement Procedures Act and Regulation X promulgated thereunder, the Home Mortgage Disclosure Act and Regulation C promulgated thereunder, the Equal Credit Opportunity Act and Regulation B promulgated thereunder, the Interstate Land Sales Full Disclosure Act, the Telephone Consumer Protection Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Gramm-Leach-BlileyGramm‑Leach‑Bliley Act, the Deceptive Mail Prevention and Enforcement Act, Section 501 of the Depository Institutions Deregulation and Monetary Control Act of 1980 and the Civil Rights Acts of 1964, 1968 and 1991. Most recently, the Consumer Finance Protection Bureau ("CFPB"(“CFPB”) has indicated an interest in the sales and consumer financing practices associated with the vacation ownership industry through initiating a review of certain developers'developers’ practices; this review may result in additional regulation of our industry. Our lending activities are also subject to the laws and regulations of other jurisdictions, including, among others, laws and regulations related to consumer loans, retail installment contracts, mortgage lending, fair debt collection practices, consumer collection practices, mortgage disclosure, lender licenses and money laundering.

Regulations Applicable to Resort Operations

A number of our businesses that manage operations of resorts are subject to, among others, laws and regulations that relate to health, safety and sanitation, the sale of alcoholic beverages, facility operation, access by disabled persons and fire safety. Applicable tourism regulations in Spain and the Canary Islands require that resorts managed by VRI Europe and its subsidiaries in those regions be registered in the Registry of Tourism. We believe that we are in material compliance with these laws and regulations as such are relevant to our business. These requirements are summarized below.

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Health, Safety and Sanitation.  Lodging and restaurant businesses often require licensing by applicable authorities, and sometimes these licenses are obtainable only after the business passes health inspections to assure compliance with health and sanitation codes. Health inspections are performed on a recurring basis. Health-relatedHealth‑related laws affect the food and beverage establishments. They also govern swimming pool use and operation and require the posting of notices, availability of certain rescue and other equipment and limitations on the number of persons allowed to use the pool at any time. These regulations typically impose civil fines or penalties for violations, which may lead to operating restrictions if uncorrected or in extreme cases of violations.

Sale of Alcoholic Beverages.  Alcoholic beverage service is subject to licensing and extensive regulations that govern virtually all aspects of service. Compliance with these regulations at managed locations may impose obligations on the owners of managed resorts, the property manager or both. Resort operations may be adversely affected by delays in transfers or issuances of alcoholic beverage licenses necessary for food and beverage services.

Facility Operation.  The operation of lodging facilities is subject to various innkeepers'innkeepers’ laws and laws regarding accessibility and use of public accommodations by disabled persons. Federal and state laws applicable to places of public accommodation prohibit discrimination in lodging services on the basis of the race, sex, color, religion, ancestry or disability of the guest and impose ongoing obligations with respect to accessibility. Hawaiian state law prohibits smoking in guest rooms and all enclosed areas.

Other.  Our businesses are subject to state and local regulation, including fire safety and applicable real estate brokerage and community association management licensing statutes.

Environmental Matters

The resorts that we manage and the assets at vacation ownership resorts and hotels that we own are all subject to certain requirements and potential liabilities under environmental laws. The costs of complying with these requirements are generally covered by the HOAs that operate the affected resort property and are our responsibility for assets owned by us. Generally, our properties currently maintain insurance which may respond to first-party remediation and emergency response costs, and third-party defense and indemnity costs associated with such potential environmental liabilities. To the extent that we own VOIs in a particular resort, we would be responsible for our pro rata share of losses sustained by such resort as a result of a violation of any such laws and regulations. Furthermore, there is no guarantee that we will maintain such insurance in the future.

Under such laws in the U.S. and certain other jurisdictions, the owners of the resorts could be held liable for the costs of removing or cleaning up hazardous or toxic substances at, on, under, or in our currently or formerly owned or operated properties. Such laws may impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. The presence of hazardous or toxic substances may adversely affect the owner’s ability to sell or rent such real property or to borrow using such real property as collateral. Persons who arrange for the disposal or treatment of hazardous or toxic wastes may be liable for the costs of removal or remediation of such wastes at the treatment, storage or disposal facility, regardless of whether such facility is owned or operated by such person. We may use certain substances and generate certain wastes that may be deemed hazardous or toxic under applicable environmental laws, and we may in the future incur costs related to cleaning up contamination resulting from historical uses of certain of our current or former properties or our treatment, storage or disposal of wastes at facilities owned by others.

The U.S. Congress and some U.S. states are considering or have undertaken actions to regulate and reduce greenhouse gas emissions and/or other natural resources. New or revised laws and regulations or new interpretations of existing laws and regulations, such as those related to climate change, supply chain and water risk, could affect the operation of our properties and/or result in significant additional expense and operating restrictions. The cost impact of such legislation, regulation, or new interpretations would depend upon the specific requirements enacted and cannot be determined at this time.

Environmental laws are not the only source of environmental liability. Under common law, owners and operators of real property may face liability for personal injury or property damage because of various environmental conditions such as alleged exposure to hazardous or toxic substances, poor indoor air quality, radon or poor drinking water quality. Although we may incur remediation liability and various environmental-related costs during the ordinary course of operations, management does not anticipate that such costs will have a material adverse effect on our operations or financial condition.

Internet Address and SEC Filings

Our Internet address iswww.iilg.com. On our Web site, we provide a link to our electronic SEC filings, including our annual report on Form 10-K,10‑K, our quarterly reports on Form 10-Q,10‑Q, our current reports on Form 8-K8‑K and any amendments to these reports. All such filings are available free of charge and are available as soon as reasonably practicable after filing.

Item 1A.  Risk Factors.

Adverse Events and Trends—Adverse events and trends in the vacation ownership, vacation rental and travel industries could adversely affect our business, financial condition and results of operations.

The success of ILG and our businesses depends, in substantial part, upon the health of the worldwide vacation ownership, vacation rental and travel industries. Travel expenditures are sensitive to business and personal discretionary spending levels and tend to decline during general economic downturns. Economic conditions may cause decreased interest in purchases of vacation ownership interests,VOIs, may increase default rates among current owners, and may increase refund requests from

our members. Members and other consumers may be unable or unwilling to travel to certain destinations where vacation ownership resorts and vacation rental properties are located based on one or more of the following factors:

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inclement weather,





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natural or manmade disasters, such as earthquakes, hurricanes, fires, floods, volcanic eruptions, drought, tsunamis, radiation releases and oil spills,





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epidemics, pandemics or other health concerns,





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terrorism, regional violence, geopolitical conflicts, enhanced travel security measures and/or geopolitical conflicts,travel restrictions,





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price increases for travel related services,

The occurrence of any of these factors could result in a decrease and/or delay in demand for travel to our managed hotels and resorts and for exchanges and Getaways to, and purchases of, vacation ownership interestsVOIs in affected regions. This decrease and/or delay in demand, depending on its scope and duration, could adversely affect our business and financial performance. Similarly, these factors could result in a decrease in the number of resort accommodations or vacation rentals available for use in our external exchange programs or as vacation rentals. The matters described above could result in a decrease in the number of Interval Network members and could have a material adverse effect on the vacation ownership and vacation rental industries, which in turn could have a material adverse effect on our business, financial condition and results of operations.

Availability of Financing and Developer Insolvency—Lack of available financing for vacation property developers and the resultant potential for insolvency and bankruptcy of developers could adversely affect our business, financial condition and results of operations.

Vacation ownership property developers, including HVO and Vistana, rely on the credit markets for receivables financing used to fund their sales and marketing efforts and for financing new development. If receivables financing, vacation ownership asset backed securitizations, or financing for development of resorts is unavailable or is only available on unacceptable terms, developers may scale back or even cease operations, including sales and marketing efforts and development of resorts. In addition to adversely affecting HVO and Vistana, a slowdown in sales of vacation ownership interestsVOIs decreases the sources of new members for our exchange networks, and developers may seek to extend or adjust payment terms with us.

Inability to obtain financing on acceptable terms, or at all, previously caused and may in the future cause insolvency of resort developers affiliated withwhose resorts are in our exchange networks, which in turn could reduce or stop the flow of new members from their resorts and also could adversely affect the operations and desirability of exchange with those resorts if the developer'sdeveloper’s insolvency impacts the management of the resorts. In some cases a developer in bankruptcy could terminate its existing relationship with us. Insolvency of one or more developers that in the aggregate have significant obligations owed to us could cause impairments to certain receivables and assets which could have a material adverse effect on our results of operations.

Insolvency of a number of vacation ownership properties managed by us, particularly several of our largest managed properties, could materially adversely affect the Vacation Ownership segment'ssegment’s business, financial condition and results of operations.

Availability of Financing—Lack of available financing for consumers could adversely affect our business, financial condition and results of operations.

 A lack of available credit for consumers could result in a decrease in potential purchasers of vacation interests, which would negatively impact our vacation ownership sales and membership in our exchange networks. This may also cause a decrease in potential purchasers of interests at vacation properties we manage, which could lead to loss of management agreements. A lack of available consumer credit could have a material adverse effect on our business, financial condition and results of operations.

Consolidation of Developers—Consolidation of developers could adversely affect our business, financial condition and results of operations

        The industry has been in a period of consolidation, which is expected to continue. When developers that have affiliation agreements with the Interval Network are acquired, they may choose not to renew at the end of the current term or may only continue on terms less favorable to ILG than the existing agreements. If we are unable to obtain or retain business relationships with the resultant resort developers on as favorable terms, our results of operations may be materially adversely affected.

Competition—The industries in which our businesses operate are highly competitive and these businesses are subject to risks relating to competition that may adversely affect our performance.

Our businesses will be adversely impacted if they cannot compete effectively in their respective industries, each of which is highly competitive. Some of our competitors have significantly greater financial, marketing and other resources than we have. In particular, in the case of the Interval Network, its primary competitor, RCI, is larger. Through the resources of its corporate affiliates, particularly, Wyndham Vacation Ownership, Inc., itself engaged in vacation ownership sales, RCI may have greater access to a significant segment of new vacation ownership purchasers and a broader platform for participating in industry consolidation. Our Exchange and Rental business also competes for rentals with other leisure lodging operators, including both independent and branded properties as well as with alternative lodging marketplaces such as Airbnb and HomeAway, which operate websites that market available furnished, privately-owned residential properties in locations throughout the world, including homes and condominiums, that can be rented on a nightly, weekly or monthly basis. Competitive pressures may cause us to reduce our fee structure or potentially modify our business models, which could adversely affect our business, financial condition and results of operations.

        We believe that developers will continue to create, operate and expand internal exchange and vacation club systems, which decreases their reliance on external vacation ownership exchange programs, including those offered by us, and adversely impacts the supply of resort accommodations available through our exchange networks. The effects on our business are more pronounced as the proportion of vacation club corporate members in the Interval Network increases. The vacation ownership industry has and is expected to continue to experience consolidation through the acquisition of vacation ownership developers by other developers, which may result in the diversion of exchange membership and other business.

Our Vacation Ownership business competes with other vacation ownership developers for sales of vacation ownership interestsVOIs based principally on location, quality of accommodations, price, financing terms, quality of service, terms of property use, opportunity for vacation ownership owners to exchange into time at other vacation ownership properties or other program benefits as well as brand name recognition and reputation. A number of our competitors are significantly larger with greater access to capital resources and broader sales, marketing and distribution capabilities than we have. We also compete with other timeshare management companies on the basis of quality and types of services offered, price and relationship. Our ability to attract and retain purchasers of vacation ownership interestsVOIs and management services depends on our success in distinguishing the quality and value of our vacation ownership offerings from those offered by others. If we are unable to do so, our ability to compete effectively for sales of timeshare interests and management contracts could be adversely affected.

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Third Party Relationships—We dependthe Interval Network, its primary competitor, RCI, is larger. Through the resources of its corporate affiliates, particularly, Wyndham Vacation Ownership, Inc., itself engaged in vacation ownership sales, RCI may have greater access to a significant segment of new vacation ownership purchasers and a broader platform for participating in industry consolidation. Our business also competes for leisure travelers with other leisure lodging operators, including both independent and branded properties as well as with alternative lodging marketplaces such as Airbnb and HomeAway, which operate websites that market available furnished, privately‑owned residential properties in locations throughout the world, including homes and condominiums, that can be rented on relationships with developers, members and other vacation property owners and any adverse changes in these relationshipsa nightly, weekly or monthly basis. Competitive pressures may cause us to reduce our fee structure or potentially modify our business models, which could adversely affect our business, financial condition and results of operations.

        Our Interval Network business is dependent uponWe believe that developers will continue to create, operate and expand internal exchange and vacation club systems, which decreases their reliance on external vacation ownership developers for new members and upon members and participants to renew their existing memberships and otherwise engage in transactions. Developers and members also supply resort accommodations for use in exchanges and Getaways. Our vacation rental business is dependent upon vacation property and hotel owners for vacation properties to rent to vacationers. The Interval Network has established relationships with numerous developers pursuant to exclusive multi-year affiliation agreements and we believe that relationships with these entities are generally strong, but these historical relationships may not continue in the future. During each year, the affiliation agreements for several of the Interval Network's new member-producing developers are scheduled to renew. The non-renewal of an affiliation agreement will adversely affect our ability to secure new members for our programs from the non-renewing resort or developer, and will result in the loss of existing Interval Network members (and their vacation interests) at the end of their current membership to the extent that we do not secure membership renewals directly from such members. For corporate member relationships, this has a greater effect.

        In addition, we may be unable to negotiate new affiliation agreements with resort developers or secure renewals with existing members in our exchange programs, including those offered by us, and our failure to do so would result in decreases in the number of new and/or existing members,adversely impacts the supply of resort accommodations available through our external exchange networks and related revenue.networks. The loss or renegotiation on less favorable terms of several of our largest affiliation agreements could materially impact our business, financial condition and results of operations.

        If we are unable to obtain sufficient renewals of affiliations with resorts and memberships with consumers or to enter into new affiliation agreements, this could have a material adverse effecteffects on our business financial condition and resultsare more pronounced as the proportion of operations. Our ability to maintain existing or negotiate new affiliation agreements on terms as favorable as currently in place may be adversely impacted by the continued creation and operation of internal reservation and exchange networks by developers and vacation clubs, as well as by consolidationclub corporate members in the Interval Network increases. The vacation ownership industry. Thisindustry has and is expected to continue to experience consolidation through the acquisition of vacation ownership developers by other developers, which may result in the diversion of exchange membership and other business.

Consolidation of Developers—Consolidation of developers could materially adversely affect our business, financial condition and results of operations.operations

        Similarly, the failureThe industry has been in a period of our businessesconsolidation, which is expected to maintain existing or negotiate new rental services arrangements and related managementcontinue. When developers that have affiliation agreements with hotel and vacation property owners, as a resultthe Interval Network are acquired, they may choose not to renew at the end of the sale of propertycurrent term or may only continue on terms less favorable to third parties, contract dispute or otherwise, orILG than the failure of vacationers to book vacation rentals through these businesses would result in a decrease in related revenue, which would have an adverse effect on our business, financial condition and results of operations.

        We may beexisting agreements. If we are unable to obtain and maintain management agreementsor retain business relationships with the homeowners' associations or other parties that control management of vacation ownership resorts. The loss of several ofresultant resort developers on as favorable terms, our largest vacation ownership management agreements could materially impact the business, financial condition and results of operations ofmay be materially adversely affected. Consolidation can also lead to larger competitors with greater resources that compete with our Vacation Ownership businesses.vacation ownership sales and marketing business for customers, projects and talent.

Inventory—Insufficient availability of inventory may adversely affect our profits.

        OurIf we fail to develop vacation ownership properties, expand existing properties or enter into agreements with third‑party developers, we may experience a decline in VOI inventory available to be sold by us, which could result in a decrease in our revenues. In addition, a decline in VOI inventory could result in both a decrease of financing revenues that are generated from purchasers of VOIs and fee revenues that are generated by providing club, management, sales and marketing services.

Additionally, our exchange networks'networks’ transaction levels are influenced by the supply of inventory in the system and the demand for such available inventory. The availability of exchange inventory in the Interval Network is

dependent on it being deposited into the system, directly by a member in support of a current or future exchange request or by a developer on behalf of its owners to support their anticipated exchanges.

A number of factors may impact the supply and demand of inventory. For example, economic conditions may negatively impact our members'members’ desire to travel, often resulting in an increase in the number of deposits made as a means of preserving the inventory'sinventory’s value for exchange at a later date

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when the member is ready to travel, while reducing the demand for inventory which is then available for exchange. Also, destination-specificdestination‑specific factors such as regional health and safety concerns, the occurrence or threat of natural disasters and weather may decrease our members'members’ desire to travel or exchange to a given destination, resulting in an increased supply of, but a decreased demand for, inventory from this destination. Additionally,Also, inventory may not be as available to the Interval system because owners are choosing to travel to their home resort/vacation club system or otherwise not depositing with the Interval Network. In these instances, the demand for exchange and Getaway inventory may be greater than the inventory available. The supply of available inventory may also be affected by the occurrence of natural disasters, such as floods, earthquakes or hurricanes. Where the supply and demand of inventory do not keep pace, transactions may decrease or we may elect to purchase additional inventory to fulfill the demand, which could negatively affect our profits and margin.

        If we fail to develop vacation ownership properties, expand existing properties or are unsuccessful in entering into new agreements with third-party developers, we may experience a decline in vacation ownership interest inventory available to be sold by us, which could result in a decrease in our revenues. In addition, a decline in vacation ownership interest inventory could result in both a decrease of financing revenues that are generated from purchasers of vacation ownership interests and fee revenues that are generated by providing club, management, sales and marketing services.

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

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

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

Post-Transaction Relationship—Following the anticipated closing of the Vistana acquisition, the Vistana business will have an ongoing relationship with Starwood and, as a result, the future state or actions of Starwood or any successor of Starwood could impact ILG's reputation, business, financial condition or results of operations.

        Certain additional agreements related to the pending Vistana transaction provide for ongoing services by Starwood as well as the license of the licensed marks under the license agreement. Changes in the strategic direction of Starwood, or any successor of Starwood, could, over time, impact the positioning and offerings of Starwood's brands and programs, including those being made available to the Vistana business. As part of its ongoing evaluation of business and strategic planning alternatives, the Starwood Board of Directors and Starwood's senior management regularly review Starwood's businesses, its strategic direction, performance and prospects in the context of developments in the industries in which it operates and the competitive landscape in the markets in which it operates. In particular, in April 2015, Starwood announced that it was exploring strategic alternatives with respect to

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its business and in November 2015 entered into a definitive merger agreement to be acquired by Marriott International, Inc. in the Marriott transaction. Any uncertainty regarding the closing of the Marriott transaction or the future state or actions of Starwood or any successor of Starwood could affect the reputation of the licensed marks and the offerings of Starwood's brands and programs, thus impacting the business, financial conditions or results of operations of ILG.

Licensing—The exclusive licenselicenses for the HyattWestin® brand and following anticipated completion of the Vistana acquisition, the Westin® and Sheraton® Sheraton® and/or Hyatt®brands, in connection with our vacation ownership business could be terminated.

If we default as specified in the Master License Agreement, dated October 1, 2014, with Hyatt Franchising, L.L.C., we could lose our exclusive right to use the Hyatt® brand in the timeshare business. The loss of this right along with the right to use Hyatt's marketing channels, including its existing hotel loyalty program, could result in the reduction of revenue and profits derived from our vacation ownership business. In addition, the Hyatt Gold Passport Participation Agreement would also terminate upon termination of the Master License Agreement, and we would not be able to offer Hyatt Gold Passport Points to owners and potential owners, which could impair our ability to sell our products and reduce the flexibility and options available in connection with our products.

        If following completion of the pending Vistana acquisition, Vistana defaults as specified in its license agreement to be entered into with Starwood, Vistana could lose its exclusive right to use the Westin®Westin® and Sheraton®Sheraton® brands in connection with the Vistana business and its exclusive right to use specified St. Regis®Regis® and The Luxury Collection®Collection® marks in connection with existing fractional properties that are part of the Vistana business. The loss of this right, along with the right to use Starwood'sStarwood’s marketing channels and other centralized services, including the Starwood Preferred Guest loyalty program, could result in the reduction of revenue and profits derived from the Vistana business. In addition, the Starwood Preferred Guest Affiliation Agreement would terminate upon termination of the license agreement and Vistana would not be able to offer SPG Starpoints to vacation property owners and potential owners, which would impair the marketability of these properties and Vistana'sVistana’s ability to sell its products and reduce the flexibility and options available in connection with its products.

If we default as specified in the Master License Agreement, dated October 1, 2014, with Hyatt Franchising, L.L.C., we could lose our exclusive right to use the Hyatt® brand in the vacation ownership business. The loss of this right along with the right to use Hyatt’s marketing channels, including its existing hotel loyalty program, could result in the reduction of revenue and profits derived from our vacation ownership business. In addition, the Hyatt Gold Passport Participation Agreement would also terminate upon termination of the Master License Agreement, and we would not be able to offer Hyatt Gold Passport Points or World of Hyatt points to owners and potential owners, which could impair our ability to sell our products and reduce the flexibility and options available in connection with our products.

The termination of the either license agreement, SPG Affiliation Agreement or the Hyatt Gold Passport Participation Agreement, and following completion of the pending Vistana acquisition, the license agreement with Starwood or the SPG Affiliation Agreement, wouldcould materially harm our business and results of operations and impair our ability to market and sell our products and maintain our competitive position, and could have a material adverse effect on our financial position, results of operations or cash flows. For example, we would not be able to rely on the strength of the Hyatt®Hyatt®, Westin®Westin® and Sheraton®Sheraton® brands to attract qualified prospects in the marketplace, which could cause our revenue and profits to decline and our marketing and sales expenses to increase.

HyattWestin® Brand—The Hyatt Vacation Ownership business depends on the quality and reputation of the Hyatt, Sheraton® brand, and any deterioration in the quality or reputation of the Hyatt, St. Regis® brand could adversely affect our market share, reputation, business, financial condition and results of operations.

        We offer vacation ownership products under the Hyatt® brand name, and we intend to continue to develop and offer products and services under the Hyatt® brand in the future. If the quality of the Hyatt® brand deteriorates, or the reputation of the Hyatt® brand declines, our market share, reputation, business, financial condition and results of operations could be materially adversely affected.

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Westin®, Sheraton®, St. Regis® and The Luxury Collection®Collection® Brands and SPG Program—The Vistana business depends on the quality and reputation of the Westin®Westin®, Sheraton®Sheraton®, St. Regis®Regis® and The Luxury Collection®Collection® Brands and affiliation with the SPG Program, and any deterioration in the quality or reputation of the Westin®Westin®, Sheraton®Sheraton® St. Regis®Regis® and The Luxury Collection®Collection® Brands or the SPG Program could following the acquisition adversely affect ILG'sILG’s market share, reputation, business, financial condition or results of operations.

The Vistana business offers vacation ownership products under the Westin®Westin®, Sheraton®Sheraton®, St. Regis®Regis® and The Luxury Collection®Collection® brand names and affiliation with the Starwood Preferred Guest Program, which we refer to as the SPG Program, and intends to continue to offer products and services under the Westin®Westin®, Sheraton®Sheraton®, St. Regis®Regis® and The Luxury Collection®Collection® brands in the future. If the quality of the Westin®Westin®, Sheraton®Sheraton®, St. Regis®Regis® or The Luxury Collection® Collection®

brands or the SPG Program deteriorate, or the reputation of the Westin®Westin®, Sheraton®Sheraton®, St. Regis®Regis® or The Luxury Collection®Collection® brands or the SPG Program decline, Vistana'sVistana’s market share, reputation, business, financial condition or results of operations could be materially adversely affected. Additionally, following Marriott International’s acquisition of Starwood in late 2016, the positioning and offerings of these licensed brands and/or the related programs previously provided by Starwood to Vistana could change in a manner that adversely affects our business. Any uncertainty regarding the future state could affect the licensed marks and the offerings of Starwood’s brands and programs, thus negatively impacting the business, financial conditions or results of operations of ILG.

Hyatt® Brand—The Hyatt Vacation Ownership business depends on the quality and reputation of the Hyatt® brand and affiliation with the Hyatt Gold Passport/World of Hyatt program, and any deterioration in the quality or reputation of the Hyatt® brand or the Hyatt Gold Passport/World of Hyatt program could adversely affect our market share, reputation, business, financial condition and results of operations.

We offer vacation ownership products under the Hyatt® brand name and affiliation with Hyatt Gold Passport/World of Hyatt program, and we intend to continue to develop and offer products and services under the Hyatt® brand in the future. If the quality of the Hyatt® brand or Hyatt Gold Passport/World of Hyatt program deteriorates, or the reputation of the Hyatt® brand or Hyatt Gold Passport/World of Hyatt program declines, our market share, reputation, business, financial condition and results of operations could be materially adversely affected.

Approvals for Expansion—Our ability to expand our vacation ownership business and remain competitive could be harmed if Starwood or Hyatt Franchising does not consent to our use of their trademarks at new resorts we acquire, develop or propose to franchise in the future.

Under the terms of our master license agreement,agreements, we must obtain Hyatt Franchising'sStarwood’s approval to use Westin® and Sheraton® brands and Hyatt’s approval, to use the Hyatt®Hyatt® brand, in each case in connection with sharedvacation ownership projects we acquire, develop or propose to franchise in the future. Starwood or Hyatt may reject a proposed project if, among other things, the project does not meet applicable brand standards or is reasonably likely to breach applicable contractual or legal restrictions. If Starwood or Hyatt does not permit us to use the brand in connection with our development or acquisition plans, our ability to expand our HVO business and remain competitive may be materially adversely affected. The requirement to obtain consent to our expansion plans, or the need to identify and secure alternative expansion opportunities if we do not obtain approval, may delay implementation of our expansion plans and cause us to incur additional expense. These same risks apply to the approval by Starwood of the use of the Westin® and Sheraton® brands following completion of the pending Vistana acquisition.

Maintenance of Brand Standards—The maintenance and refurbishment of Vistana-managed and Hyatt Residence Club properties in accordance with applicable brand standards depends on maintenance fees paid by the owners of vacation ownership interests.VOIs.

Owners of vacation ownership interestsVOIs at Vistana and Hyatt Residence Club resorts must pay maintenance fees levied by property owners' associationHOAs boards. These maintenance fees are used to maintain and refurbish the vacation ownership properties and to keep the properties in compliance with Hyatt®applicable brand standards. If property owners' associationHOA boards do not levy sufficient maintenance fees or special assessments, or if owners of vacation ownership interestsVOIs do not pay these fees, not only would our management fee revenue be adversely affected, but the vacation ownership properties could fail to comply with applicable brand standards. However, if the maintenance fees at resorts where we are in active sales increase significantly, it could make sales of VOIs less attractive. If any vacation ownership property fails to comply with the brand standards, Starwood or Hyatt could terminate our rights under the Master License Agreementapplicable license agreement to use its trademarks at such noncompliant property, which could result in the loss of management fees, decrease customer satisfaction and impair our ability to market and sell our products at the non-compliantnon‑compliant locations. These same risks apply to the use of the Westin® and Sheraton® brands and the existing St. Regis® or The Luxury Collection® branded vacation ownership resorts following completion of the pending Vistana acquisition.

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Development Risks-Timing,Risks‑Timing, budgeting and other risks could result in delays or cancellations of our efforts to develop the vacation ownership projects that we undertake, or make these activities more expensive, which could reduce our profits or impair our ability to compete effectively.

We plan to selectively undertake in some cases with joint venture partners, construction of vacation ownership developments which may span multiple phases and often take years to complete. These efforts are subject to a number of risks, including:

•

Additionally, developing new properties often involves lengthy development periods during which significant amounts of capital must be funded before sales proceeds are available to defray costs. If the cost of funding new development exceeds budgeted amounts, and/or the time period for development is longer than initially anticipated, our profits could be reduced. Further, due to the lengthy development cycle, adverse economic conditions may alter or impede our development plans, thereby resulting in incremental costs to us or potential impairment charges.

Deflagging of Co-located Facility--If a branded hotel property with which one of our branded vacation ownership resorts is co-located ceases to be affiliated with its current brand or a related brand, our business could be harmed.

If a branded hotel property with which one of our branded vacation ownership resorts is co-located ceases to be affiliated with its current brand, we could lose the benefits derived from co-location of our resorts, such as the sharing of amenities, infrastructure and staff, integration of services, and other cost efficiencies. Our owners could lose access to the more varied and elaborate amenities that are generally available at the larger campus of an integrated vacation ownership and hotel resort. We expect our overhead and operating costs for such resort may also increase. We would also lose our on-site access to hotel customers, including brand loyalty program members, at such resorts, which is a cost-effective marketing channel for our vacation ownership products, and our sales may decline.

Third Party Relationships—We depend on relationships with developers, members and other vacation property owners and any adverse changes in these relationships could adversely affect our business, financial condition and results of operations.

Our Interval Network business is dependent upon vacation ownership developers for new members and upon members and participants to renew their existing memberships and otherwise engage in transactions. Developers and members also supply resort accommodations for use in exchanges and Getaways. Our vacation rental business is dependent upon vacation property and hotel owners for vacation properties to rent to vacationers. The Interval Network has established relationships with numerous developers pursuant to exclusive multi‑year affiliation agreements and we believe that relationships with these entities are generally strong, but these historical relationships may not continue in the future. During each year, the affiliation agreements for several of the Interval Network’s new member‑producing developers are scheduled to renew. The non‑renewal of an affiliation agreement will adversely affect our ability to secure new members for our programs from the non‑renewing resort or developer, and will result in the loss of existing Interval Network members (and their vacation interests) at the end of their current membership to the extent that we do not secure membership renewals directly from such members. For corporate member relationships, this has a greater effect.

In addition, we may be unable to negotiate new affiliation agreements with resort developers or secure renewals with existing members in our exchange programs, and our failure to do so would result in decreases in the number of new and/or existing members, the supply of resort accommodations available through our exchange networks and related revenue. The loss or renegotiation on less favorable terms of several of our largest affiliation agreements could materially impact our, financial condition and results of operations.

If we are unable to obtain sufficient renewals of affiliations with resorts and memberships with consumers or to enter into new affiliation agreements, this could have a material adverse effect on our business, financial condition and results of operations. Our ability to maintain existing or negotiate new affiliation agreements on terms as favorable as currently in place may be adversely impacted by the continued creation and operation of internal reservation and

exchange networks by developers and vacation clubs, as well as by consolidation in the vacation ownership industry. This could materially adversely affect our business, financial condition and results of operations.

Similarly, the failure of our businesses to maintain existing or negotiate new rental services arrangements and related management agreements with hotel and vacation property owners, as a result of the sale of property to third parties, contract dispute or otherwise, or the failure of vacationers to book vacation rentals through these businesses would result in a decrease in related revenue, which would have an adverse effect on our business, financial condition and results of operations.

We may be unable to obtain and maintain management agreements with the HOAs or other parties that control management of vacation ownership resorts. The loss of several of our largest vacation ownership management agreements could materially impact the business, financial condition and results of operations of our business.

Vacation Rental Revenue—Our success is dependent, in part, on revenue from vacation rentals and, if consumer demand for vacation rentals falls materially below historic levels, our business, financial condition and results of operations could be adversely affected.

General economic conditions can negatively affect demand for our rentals of vacation accommodations to our members, owners and other vacationers, leading us to decrease pricing and resulting in reduced revenue from vacation rentals. We actively seek to provide vacation rental services to resorts participating in our exchange networks and rent units for developers and associations that are managed by Aqua-Aston, Vistana, TPI and VRI or part of the Hyatt Residence Club. Any material or prolonged decrease in demand and/or pricing for vacation rentals would further impact our revenue and, if materially below historical levels, could have a material adverse effect on our business, financial condition and results of operations. Failure of our rental businesses to secure a sufficient number of vacationers for accommodations we offer could also result in increased obligations under guaranteed dollar amount or specified percentage provisions of certain hotel and resort management agreements and, ultimately, could affect our ability to obtain and maintain rental management agreements with vacation property owners. We also actively seek to provide vacation rental services to resorts participating in our exchange networks and rent units for developers and associations that are part of the Hyatt Residence Club or managed by TPI and VRI. Any material or prolonged decrease in demand and/or pricing for vacation rentals would further impact our revenue and, if materially below historical levels, could have a material adverse effect on our business, financial condition and results of operations.

Marketing of Vacation Ownership Interests—VOIs—The future growth of our vacation ownership business depends on our ability to market vacation ownership interestsVOIs successfully and efficiently.

We compete for customers with hotel and resort properties and with other vacation ownership resorts and other vacation options such as cruises. The identification of prospective purchasers, and the marketing of our products to them, are essential to our success. We incur significant expenses associated with marketing programs in advance of closing sales. If our marketing efforts are not successful and we are unable to convert prospects to a sufficient number of sales, we may be unable to recover the expense of our marketing programs and grow our business.

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Secondary Market—The sale of vacation ownership interestsVOIs in the secondary market by existing owners could cause our sales revenues and profits to decline.

There is not currently an active, organized or liquid resale market for vacation ownership interests,VOIs, and resale of vacation ownership interestsVOIs generally are made at sales prices substantially below their original customer purchase prices. Existing owners have offered, and are expected to continue to offer, their vacation ownership interestsVOIs for sale on the secondary market. As a result, these sales create additional pricing pressure on our sale of vacation ownership interests,VOIs, which could cause our sales revenues and profits to decline. In addition, if the secondary market for vacation ownership interestsVOIs becomes more organized or financing for such resales becomes more available, our ability to sell vacation ownership interestsVOIs could be adversely impacted and/or the resulting availability of vacation ownership interestsVOIs (particularly where the vacation ownership interestsVOIs are available for sale at lower prices than the prices at which we would sell them) could cause the volume of vacation ownership inventory that we are able to repurchase to decline, which could adversely affect our sales revenues. Further, unlawful or deceptive third-party vacation ownership interestthird‑party VOI resale schemes involving vacation ownership interestsVOIs in our resorts could damage our reputation and brand value or impact our ability to collect management fees, which may adversely impact its sales revenues and results of operations.

Receivable Portfolio Metrics - If the default rates or other credit metrics underlying our vacation ownership notes receivable deteriorate, our portfolio performance and vacation ownership notes receivable securitization program

could be adversely affected.

Substantial Debt-WeOur vacation ownership notes receivable portfolio performance and securitization program could be adversely affected if a particular vacation ownership notes receivable pool fails to meet certain ratios, which could occur if the default rates or other credit metrics of the underlying vacation ownership notes receivable deteriorate. In addition, if we offer loans to our customers with terms longer than those generally offered in the industry, our ability to securitize those loans may be adversely impacted. Our ability to sell securities backed by our vacation ownership notes receivable depends on the continued ability and willingness of capital market participants to invest in such securities. Asset-backed securities issued in our securitization programs could be downgraded by credit agencies in the future. If a downgrade occurs, our ability to complete other securitization transactions on acceptable terms or at all could be jeopardized, and we could be forced to rely on other potentially more expensive and less attractive funding sources, to the extent available. Similarly, if other operators of vacation ownership products were to experience significant financial difficulties, or if the vacation ownership industry as a whole were to contract, we could experience difficulty in securing funding on acceptable terms. The occurrence of any of the foregoing would decrease our profitability and might require us to adjust our business operations, including by reducing or suspending our provision of financing to purchasers of VOIs. Sales of VOIs may materially decline if we reduce or suspend the provision of financing to purchasers, which would adversely and materially affect our cash flows, revenues and profits.

Debt‑We have substantial debt and interest payment obligations that may restrict our future operations and impair our ability to meet our obligations.

We and our consolidated subsidiaries have substantial indebtedness and, as a result, significant debt service obligations. As of December 31, 2015,2016, we had $425$590 million of total indebtedness outstanding (excluding securitizations) and $516.4$349 million (net of any outstanding letters of credit) available for future borrowings as secured indebtedness under the credit facility. Our level of debt and these significant demands on our cash resources could have material consequences to our business, including, but not limited to:

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





•

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





•

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





•

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





•

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





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





•

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

Although the terms of the credit facility and the indenture governing the senior notes contain, restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of important exceptions, and indebtedness incurred in compliance with these exceptions could be substantial. To the extent we incur additional indebtedness, the risks discussed above will increase.

Ability to refinance debt-Wedebt‑We may not be able to refinance our debt on acceptable terms.

If we are unable to meet our debt obligations or to fund our other liquidity needs, we may need to restructure or refinance our indebtedness, including the notes.indebtedness. Our ability to refinance our indebtedness or obtain additional financing, including securitizations, will depend on, among other things:

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our financial condition at the time;

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





•

other factors, including financial market or industry conditions.

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

Additional Debt Capacity-DespiteVolatility in Credit Markets—Volatility in the credit markets may adversely impact our substantial indebtedness,ability to finance the loans that our vacation ownership business generates.

Our vacation ownership business provides financing to purchasers of our VOIs, and we securitize these loans and use other third party lender receivables financing. Volatility in the credit markets may still beimpact the timing and volume of the timeshare loans that we are able to securitize or obligated to incur more debt,finance which could intensifyadversely affect our sales and liquidity.

Adverse Events and Trends in Key Vacation Destinations—Events and trends in key vacation destinations could adversely affect our business, financial condition and results of operations.

Our businesses have certain concentrations in key vacation destinations, for instance:

Approximately $529 million, $232 million, and $211 million, of 2016, 2015, and 2014 revenue, respectively, which excludes the risks described above.

        Although the terms of the credit facilitypass‑through revenue, was generated from travel to properties in these key vacation destinations as well as hotel, resort and the indenture governing the senior notes contain, restrictionsHOA management services and sales and financing activities related to these locations. As a result, our ongoing ability to successfully process exchange vacations for members, as well as our ability to find purchasers and vacationers for accommodations marketed or managed by us, is largely dependent on the incurrencecontinued desirability of additional indebtedness, these restrictions are subjectareas as key vacation destinations. Any significant shift in travel demand for one or more of these key destinations or any adverse impact on transportation to them, such as decreased airlift, natural disasters, regional violence, terrorism, pandemics or increased travel costs, could have a material adverse effect on our business, financial condition and results of operations.

In addition, the same events that affect demand to one or more of these key destinations could significantly reduce the number of accommodations available for exchanges, Getaways or rental to vacationers, as well as the need for vacation rental and property management services generally. Accordingly, any such event could have a material adverse

effect on our business, financial condition and results of operations, the impact of which could be prolonged. Similarly, the effects of climate change may cause these locations to become less appealing to vacation owners as a result of temperature changes, more severe weather or changes to coastal areas which could adversely affect our business.

International Operations—We operate in a number of important exceptions,international markets, which exposes us to additional risks that could adversely affect our business, financial condition and indebtedness incurredresults of operations.

Revenue from international operations for the years ended December 31, 2016, 2015 and 2014 was $203 million, $120 million and $131 million, respectively. We continue to seek to invest in various international markets.

In order to achieve widespread acceptance in international markets, we must continue to successfully tailor our services to the unique customs and cultures of relevant countries and markets. Learning the customs and cultures of various countries and markets can be difficult and costly, and the failure to do so could slow international growth. Operating in international markets also exposes us to additional risks, including, among others, compliance with applicable U.S. and foreign laws including economic sanctions, embargoes and anti‑corruption laws, changes in regulatory requirements including taxation, limits on our ability to sell products and services and enforce intellectual property rights and difficulties in managing operations due to distance, language and cultural differences, including issues associated with staffing and managing foreign operations. Our failure to comply with these exceptionslaws and regulations could result in substantial civil and criminal penalties being imposed.

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, Argentina, and Egypt, which limit our ability to immediately access cash through repatriations. Furthermore, other countries in which we maintain operations may impose limitations on the repatriation of cash from such countries now or in the future. Any limitation on us to transfer significant cash across borders from our international operations pertaining to intercompany debt or intercompany trade payables, if any, could have a material adverse effect on our business, financial condition and results of operations.

Exchange Rate Changes—Material changes in foreign currency exchange rates could materially adversely affect our results of operations.

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. In particular, significant fluctuations in the value of the U.S. dollar relative to the Euro, the British Pound and the Mexican Peso, among other foreign currencies, could have an adverse effect on our results of operations due to lower demand in affected jurisdictions and the effects of translation of local currency balances and results into U.S. dollars. We do not currently engage in hedging transactions designed to reduce our exposure to foreign currency risk.

Acquisitions and Strategic Arrangements—We may experience financial and operational risks in connection with acquisitions and strategic arrangements.

In May 2016, we acquired the Vistana vacation ownership business from Starwood in a merger transaction following our October 2014 purchase of the HVO business and our 2013 acquisition of the Aqua business and the purchase by our new VRI Europe Limited joint venture of the European shared ownership resort management business of CLC World Resorts and Hotels, or CLC. We intend to continue selectively pursuing other acquisitions. However, we may be substantial. Asunable to identify attractive acquisition candidates or complete transactions on favorable terms. In addition, in the case of December 31, 2015,acquired businesses, we had approximately $516.4 million (netwill need to:

•successfully integrate the operations, as well as the accounting, financial controls, management information, technology, human resources and other administrative systems, of acquired businesses with existing operations and systems;

•maintain third party relationships previously established by acquired companies;

•attract and retain senior management and other key personnel at acquired businesses; and

•successfully manage new business lines, as well as acquisition‑related workload.

We may not be successful in addressing these challenges or any others encountered in connection with historical and future acquisitions. In addition, the anticipated benefits of one or more acquisitions may not be realized and future acquisitions could result in potentially dilutive issuances of equity securities and/or the assumption of contingent liabilities. The occurrence of any outstanding letters of credit) available for additional revolving credit borrowings under the credit facility. To the extentthese events could adversely affect our business, financial condition and results of operations.

We also intend to selectively enter into joint ventures and other strategic arrangements to provide new products and services complementary to those currently offered by our businesses. However, we incur additional indebtedness, the risks discussed above will increase.may be unable to successfully enter into these arrangements on favorable terms or launch related products and services or such products and services may not gain market acceptance or be profitable. The failure to develop and execute any such initiatives on a cost‑effective basis could have an adverse effect on our business, financial condition and results of operations.

Key Personnel—Loss of one or more of our key personnel could adversely affect our relationships with third parties, business, financial condition and results of operations.

Our operations require managerial, operational, sales and marketing expertise as well as the maintenance of relationships with resort developers, homeowners' associations,HOAs, vacation property owners and other third parties. In particular, we are dependent upon the management skills and continued services of several members of our senior management team. The failure of such key personnel to continue to be active in management of our businesses could have a material adverse effect on relationships with third parties, business, financial condition, results of operations and ability to grow the business. We do not maintain key employee insurance for any of our officers and employees.

Adverse Events and Trends in Key Vacation Destinations—Events and trends in key vacation destinations could adversely affect our business, financial condition and results of operations.

        A substantial percentage of the vacation ownership resorts currently participating in Interval's exchange networks are located in Florida, Hawaii, Las Vegas, Mexico and Southern California, a large number of vacation properties for which we provide rental services are located in Hawaii, and a significant portion of our European management revenue derives from Costa del Sol, Spain and Tenerife, Canary Islands. Approximately $231.6 million, $211.1 million, and $146.6 million, of 2015 2014, and 2013 revenue, respectively, which excludes the pass-through revenue, was generated from travel to properties in these key vacation destinations as well as hotel, resort and homeowners' association management services performed in these locations. As a result, our ongoing ability to successfully process exchange vacations for members, as well as our ability to find vacationers for accommodations marketed or managed by us, is largely dependent on the continued desirability of these areas as key vacation destinations. Any significant shift in travel demand for one or more of these

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key destinations or any adverse impact on transportation to them, such as decreased airlift, natural disasters, regional violence, terrorism, pandemics or increased travel costs, could have a material adverse effect on our business, financial condition and results of operations.

        In addition, the same events that affect demand to one or more of these key destinations could significantly reduce the number of accommodations available for exchanges, Getaways or rental to vacationers, as well as the need for vacation rental and property management services generally. Accordingly, any such event could have a material adverse effect on our business, financial condition and results of operations, the impact of which could be prolonged. Similarly, the effects of climate change may cause these locations to become less appealing to vacation owners as a result of temperature changes, more severe weather or changes to coastal areas which could adversely affect our business.

        A substantial percentage of the HVO business' vacation ownership interests available for sale are located in Florida and Hawaii. These same events could affect sales of vacation ownership interests and other revenues related to those properties.

International Operations—We operate in a number of international markets, which exposes us to additional risks that could adversely affect our business, financial condition and results of operations.

        Revenue from international operations for the years ended December 31, 2015, 2014 and 2013 was $120.3 million, $131.4 million and $96.3 million, respectively. We continue to seek to invest in various international markets.

        In order to achieve widespread acceptance in international markets, we must continue to successfully tailor our services to the unique customs and cultures of relevant countries and markets. Learning the customs and cultures of various countries and markets can be difficult and costly, and the failure to do so could slow international growth. Operating in international markets also exposes us to additional risks, including, among others, compliance with applicable U.S. and foreign laws including economic sanctions, embargoes and anti-corruption laws, changes in regulatory requirements including taxation, limits on our ability to sell products and services and enforce intellectual property rights and difficulties in managing operations due to distance, language and cultural differences, including issues associated with staffing and managing foreign operations. Our failure to comply with these laws and regulations could result in substantial civil and criminal penalties being imposed.

        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, Argentina, and Egypt, which limit our ability to immediately access cash through repatriations. As of December 31, 2015, we had $5.2 million of unrealized loss in other comprehensive income within stockholders' equity pertaining to our Venezuela entity, until such time we sell or liquidate our investment. Furthermore, other countries in which we maintain operations may impose limitations on the repatriation of cash from such countries now or in the future. Any limitation on us to transfer significant cash across borders from our international operations pertaining to intercompany debt or intercompany trade payables, if any, could have a material adverse effect on our business, financial condition and results of operations.

Exchange Rate Changes—Material changes in foreign currency exchange rates could materially adversely affect our results of operations.

        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. In particular, significant fluctuations in the value of the U.S. dollar relative to the Euro and the British

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Pound, among other foreign currencies, could have an adverse effect on our results of operations due to lower demand in affected jurisdictions and the effects of translation of local currency balances and results into U.S. dollars. We do not currently engage in hedging transactions designed to reduce our exposure to foreign currency risk.

Acquisitions and Strategic Arrangements—We may experience financial and operational risks in connection with acquisitions and strategic arrangements.

        In October 2015, we announced that we had entered into agreements to acquire the Vistana vacation ownership business from Starwood Hotels & Resorts Worldwide, Inc. in a merger transaction that is expected to close in the second quarter of 2016. The pending Vistana acquisition follows our October 2014 purchase of the HVO business and our 2013 acquisition of the Aqua business and the purchase by our new VRI Europe Limited joint venture of the European shared ownership resort management business of CLC World Resorts and Hotels, or CLC. We intend to continue selectively pursuing other acquisitions. However, we may be unable to identify attractive acquisition candidates or complete transactions on favorable terms. In addition, in the case of acquired businesses, we will need to:

•

successfully integrate the operations, as well as the accounting, financial controls, management information, technology, human resources and other administrative systems, of acquired businesses with existing operations and systems;



•

maintain third party relationships previously established by acquired companies;



•

attract and retain senior management and other key personnel at acquired businesses; and



•

successfully manage new business lines, as well as acquisition-related workload.

        We may not be successful in addressing these challenges or any others encountered in connection with historical and future acquisitions. In addition, the anticipated benefits of one or more acquisitions may not be realized and future acquisitions could result in potentially dilutive issuances of equity securities and/or the assumption of contingent liabilities. The occurrence of any of these events could adversely affect our business, financial condition and results of operations.

        We also intend to selectively enter into joint ventures and other strategic arrangements to provide new products and services complementary to those currently offered by our businesses. However, we may be unable to successfully enter into these arrangements on favorable terms or launch related products and services or such products and services may not gain market acceptance or be profitable. The failure to develop and execute any such initiatives on a cost-effective basis could have an adverse effect on our business, financial condition and results of operations.

Impairment of Assets—Goodwill and other intangible and long-livedlong‑lived assets associated with businesses we acquire and/or VOI inventory may become impaired which could adversely affect our business, financial condition and results of operations.

The performance of the businesses that we have acquired or will acquire may not meet the financial projections anticipated at acquisition or may be impacted by one or more unfavorable events or circumstances. This could negatively affect the value of goodwill and other intangible assets, as well as long-livedlong‑lived assets, and may require us to test the applicable reporting unit and/or asset for impairment. If following the test, we determine that we should record an impairment charge, our business, financial condition and results of operations may be adversely affected.

Table Additionally, we carry our VOI inventory at the lower of Contentscost or estimated fair value, less costs to sell. If the estimates or assumptions used in our evaluation of impairment or fair value change, we may be required to record impairment losses on certain of those assets, which could adversely affect our results of operations.

Estimates and Assumptions—We are required to make a number of significant judgments in applying our accounting policies, and our use of different estimates and assumptions in the application of these policies could result in material changes to our financial condition and results of operations. In addition, changes in accounting standards or their interpretation could significantly impact our results of operations.

Our accounting policies are critical to the manner in which we present our results of operations and financial condition. Many of these policies, including those with respect to our recently acquired vacation ownership business, are highly complex and involve many subjective assumptions, estimates and judgments. We are required to review these estimates regularly and revise them when necessary. Our actual results of operations vary from period to period based on revisions to these estimates. In addition, the regulatory bodies that establish accounting and reporting standards, including the SEC and the Financial Accounting Standards Board (FASB) periodically revise or issue new financial accounting and reporting standards that govern the preparation of our consolidated financial statements. Changes to these standards or their interpretation could significantly impact our results in future periods. For example, the FASB recently released a final, converged, principles-basedprinciples‑based standard on revenue recognition that will modify revenue recognition in periods after

December 15, 2017. We are currently in the process of completing our evaluation of this standard, including identifying the potential differences in the timing and/or method of revenue recognition for our contracts. Adoption of this standard may have a material impact on our consolidated financial position, results of operations and cash flows.

Third Party Relationships—We depend on third parties to processassist in certain fulfillment and distribution services.

In connection with providing benefits and services in our Exchange and Rental businesses, we rely on third party service providers for processing certain fulfillment services.and reservation services, including online travel agencies for rental distribution. If these third parties are unable to continue to provide the services to us at reasonable rates or at all, our ability to deliver expected benefits and services to our customers and our results of operations may be adversely affected. This may cause dissatisfaction and may damage our reputation.

Advances and Extensions of Credit—Our results may be adversely affected if third parties who receive loans, advances or other credit from us are unable to repay.

        In connection with obtaining or extending business relationships with our clients, on occasion we provide loans, advances and other credit. To the extent that these clients are unable to repay these amounts and they are not fully secured by collateral, our results of operations could be materially adversely affected.

In connection with our vacation ownership business, we provide loans to purchasers to finance their purchase of vacation ownership interests. If purchasers default on the loans that we provide to finance their purchases of vacation ownership interests, the revenues and profits that we derive from the vacation ownership business could be reduced. Providing secured financing to some purchasers of vacation ownership interests subjects us to the risk of purchaser default. As of December 31, 2015, we had approximately $32.2 million of net timeshare financing receivables outstanding. We could incur material losses if there is a significant increase in the delinquency rate applicable to our portfolio of consumer loans. An increased level of delinquencies could result from changes in economic or market conditions, increases in interest rates, adverse employment conditions and other factors beyond our control. Increased delinquencies could also result from our inability to evaluate accurately the credit worthiness of the customers to whom we extend financing. If default rates for our borrowers were to increase, we may be required to increase our provision for loan losses. In addition, increased delinquency rates may cause buyers of, or lenders whose loans are secured by, our consumer loans to reduce the amount of availability under our financing or loan sale facilities, or to increase the interest costs associated with such facilities. In such an event, our cost of financing would increase, and we may not be able to secure financing on terms acceptable to us, if at all.

VOIs. If a purchaser defaults under the financing that we provide, we could be forced to write off the loan and reclaim ownership of the timeshare interest through foreclosure or deed in lieu of foreclosure. If the timeshare interest has declined in value, we may incur impairment losses that reduce our profits.

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In addition, we may be unable to resell the property in a timely manner or at the same price, or at all. Also, if a purchaser of a timeshare interest defaults on the related loan during the early part of the amortization period, we may not have recovered the marketing, selling and general and administrative costs associated with the sale of that timeshare interest. If we are unable to recover any of the principal amount of the loan from a defaulting purchaser, or if the allowances for losses from such defaults are inadequate, the revenues and profits that we derive from the vacation ownership business could be reduced.

Volatility in Credit Markets—VolatilityWe could incur material losses if there is a significant increase in the delinquency rate applicable to our portfolio of consumer loans. An increased level of delinquencies could result from changes in economic or market conditions, increases in interest rates, adverse employment conditions and other factors beyond our control. Increased delinquencies could also result from our inability to evaluate accurately the credit marketsworthiness of the customers to whom we extend financing. If default rates for our borrowers were to increase, we may adverselybe required to increase our provision for loan losses. In addition, the indentures governing the securitization of some of our vacation ownership notes receivable contain certain portfolio performance requirements related to default and delinquency rates, which, if not met, would result in disruption or loss of cash flow until portfolio performance sufficiently improves to satisfy the requirements. Purchaser defaults could impact our ability to financesecure financing on terms that are acceptable to us, or at all.

In connection with obtaining or extending business relationships with our clients, on occasion we provide loans, advances and other credit. To the loansextent that these clients are unable to repay these amounts and they are not fully secured by collateral, our vacation ownership business generates.

        Our vacation ownership business provides financing to purchasersresults of our vacation ownership interests, and we may seek to obtain third party lender receivables financing. Volatility in the credit markets may impact the timing and volume of the timeshare loans that we are able to finance whichoperations could adversely affect our sales. Vistana expects to fund construction costs with the proceeds of vacation ownership notes receivable securitizations, which may be adversely affected by this voloatility.affected.

Sufficiency of Maintenance Fee Collection and Budgeting—Our continued management of homeowners' associationsHOAs depends on their ability to collect sufficient maintenances fees.

Our management fees from homeowners' associationsHOAs are derived from maintenance fees levied on the owners by the associations. These maintenance fees also fund the operation, maintenance and improvements for the property. Many of the properties that we manage do not receive subsidies or resale services for foreclosed inventory from the developer. Once an association begins to experience a high default rate, if it is unable to foreclose and resell units to paying owners, the situation worsens as the maintenance fees on remaining owners continually increase to cover expenses. If the homeowners' associationsHOAs that we manage are unable to levy and collect sufficient maintenance fees to cover the costs to operate and maintain the resort properties, such properties may be forced to close or file bankruptcy and may terminate our management agreements.

Most of our VRI Europe properties in Spain operate on a fixed fee basis and VRI Europe has a responsibility to maintain the properties. To the extent the costs of maintenance and operation exceed historic and planned amounts, we may be required to fund the deficit.

Control

Relationships with Managed Resorts—OurDisagreements with HOAs, vacation property owners and other third parties may result in litigation and/or loss of management agreementscontracts.

The nature of our responsibilities managing resorts may from time to time give rise to disagreements with homeowners' associationsvacation property owners and HOAs. Owners of our VOIs may also disagree with changes we make to our products or programs we seek to resolve any disagreements and develop and maintain positive relations with owners and HOAs, but we may not always be renewed if an entity that offers management services acquires sufficient interests in the resort.

        The homeowners' associations that engage us to manage their resorts are operated through an elected board. Entities that offer management services have acquired, or may acquire, a number of vacation ownership interests that may be voted to influence the composition of the homeowners' association board. To the extent that an entity offering management services is able to influencedo so. Failure to resolve such disagreements may result in litigation and/or the membershiploss of management agreements. If any such litigation results in a significant adverse judgment, settlement or decision-makingcourt order, we could suffer significant losses, our profits could be reduced, our reputation could be harmed and our future ability to operate our business could be constrained. A significant loss of the homeowners' association board based on their ownership of interests at the resort, our management agreements may not be renewed andcontracts could adversely affect our business and results of operations may be adversely affected.operations.

New Products and Services—We may not be able to achieve our strategic objectives through new products and initiatives.

In order to support our strategic objectives, we have introduced new products and services and expect to continue to do so in the future. Launching new products and services involves a number of risks including the ability to achieve the anticipated level of market acceptance and to manage the costs and timeliness of rolling-outrolling‑out the product or service. If we are unable to gain market acceptance,

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experience substantial delays or are required to expend significantly more than expected, our business and results of operations may be materially adversely affected.

Property Renovations—A significant decrease in the supply of available vacation accommodations due to ongoing property renovations could adversely affect Additionally, our business, financial condition and results of operations.

        The vacation properties for whichoperations from new products and services that we provide rental and/or management services are expectedmay wish to undergo significant renovations periodically. These renovations may result in a decrease in the supply of vacation accommodations available to vacationers during the applicable renovation periods. Furthermore, ongoing renovations at a particular property may negatively impact the desirability of the property as a vacation destination. A significant decrease in the supply of available vacation accommodations during renovation periods, coupled with the inability to attract vacationers to properties undergoing renovations,introduce could have an adverse effect ondifferent revenue recognition than our business, financial condition and results of operations.strategic objectives.

Compliance and Changing Laws, Rules and Regulations—The failure of our businesses to comply with extensive regulatory requirements, or to obtain and maintain required licenses and rights, could adversely affect our business, financial condition and results of operations.

Our businesses are subject to various laws, rules and regulations on a global basis, including those specific to the vacation ownership industry, as well as those applicable to businesses generally, such as licensing requirements, laws governing our marketing and sales activities, including anti-fraud,anti‑fraud, sweepstakes, telemarketing, home solicitation sales, tour operator, seller of travel, consumer privacy, consumer protection, securities and sales, use, value-addedvalue‑added and other tax laws, rules and regulations. Additionally, our businesses are subject to laws and regulations associated with hotel and resort management, including relating to the preparation and sale of food and beverages, liquor service and health, safety and accessibility of managed premises. While we believe that the operations and practices have been structured in a manner to ensure material compliancematerially comply with applicable laws, rules and regulations, the relevant regulatory authorities may take a contrary position. The failure of our businesses to comply with applicable laws, rules and regulations, or to obtain required licenses or rights, could have a material adverse effect on our business, financial condition and results of operations. In addition, unfavorable changes in the laws, rules and regulations applicable to our businesses, including those related to the imposition of taxes, could decrease demand for the services offered by our businesses, increase costs and/or subject us to additional liabilities, which could have an adverse effect on our business, financial condition, or results of operations.

Compliance with Vacation Ownership Regulations—The failure of our businesses to comply with regulatory requirements applicable to real estate development and sales and marketing activities with respect to vacation ownership interestsVOIs could adversely affect our business, financial condition and results of operations.

The vacation ownership industry is subject to extensive regulations in various jurisdictions in the United States and elsewhere, which generally require vacation ownership resort developers to follow certain procedures in connection with the development, sale and marketing of vacation interests, including the filing of offering statements with relevant governmental authorities for approval and the delivery to prospective purchasers of certain information relating to the terms of the purchase and use, including rescission rights. The preparation of vacation ownership interestVOI registrations requires time and cost, and in many jurisdictions the exact date of registration approval cannot be accurately predicted. Our vacation ownership business'sbusiness’s real estate development activities are also subject to laws and regulations applicable to real estate development, subdivision and construction activities, zoning, land use restrictions, environmental regulation, title

transfers, title insurance and taxation. Laws in some jurisdictions also impose liability on property developers for construction defects discovered or repairs made by future owners of property developed by the developer. In addition, we provide

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financing to some purchasers of vacation ownership interestsVOIs and we also service the resulting loans. This practice subjects us to various regulations, including those which require disclosure to borrowers regarding the terms of their loans as well as settlement, servicing and collection of loans. As a result, any negative change in the regulatory environment within the vacation ownership industry or failure to comply with applicable laws and regulations could have a material adverse effect on our business, financial condition and results of operations.

Permissions—Following the closing of the Vistana transaction, additional permissions may be required in order to market to potential customers.

        Following completion of the pending Vistana acquisition and because Vistana's relationship with Starwood will be changing as a result of the pending transactions, for purposes of "do not call" and similar legislation in some jurisdictions, it may be more difficult for Vistana to utilize customer information it obtains from Starwood in the future, and as a result, maintain compliance with applicable legislation. This could diminish the effectiveness of existing marketing practices and adversely affect the business.

Partnerships and Joint Ventures—Investing through partnerships or joint ventures decreases our ability to manage risk.

In addition to acquiring or developing resorts or acquiring companies that complement our business directly, we have from time to time invested, and expect to continue to invest, as a co-venturer.co‑venturer. Joint venturers often have shared control over the operation of the joint venture assets. Therefore, joint venture investments may involve risks such as the possibility that the co-venturerco‑venturer in an investment might become bankrupt or not have the financial resources to meet its obligations, or have economic or business interests or goals that are inconsistent with our business interests or goals, or be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives. Consequently, actions by a co-venturerco‑venturer might subject resorts or other businesses owned by the joint venture to additional risk. Further, we may be unable to take action without the approval of our joint venture partners. Alternatively, our joint venture partners could take actions binding on the joint venture without our consent. Additionally, should a joint venture partner become bankrupt, we could become liable for our partner'spartner’s share of joint venture liabilities.

Maintenance of Systems and Infrastructure—Our success depends, in part, on the integrity of our systems and infrastructure. System interruption and the lack of integration and redundancy in these systems and infrastructure may have an adverse impact on our business, financial condition and results of operations.

Our success depends, in part, on our ability to maintain the integrity of our systems and infrastructure, including websites, information and related systems, call centers and distribution and fulfillment facilities. System interruption and any lack of integration and redundancy in our information systems and infrastructure may adversely affect our ability to operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficientcost‑efficient operations. We may experience occasional system interruptions that make some or all systems or data unavailable or prevent our businesses from efficiently providing services or fulfilling orders. We also rely on third-partythird‑party computer systems, broadband and other communications systems and service providers in connection with the provision of services generally, as well as to facilitate, process and fulfill transactions. Any interruptions, outages or delays in the systems and infrastructures of our businesses and/or third parties, or deterioration in the performance of these systems and infrastructure, could impair the ability of our businesses to provide services, fulfill orders and/or process transactions.

Fire, flood, power loss, telecommunications failure, hurricanes, tornadoes, earthquakes, acts of war or terrorism, acts of God and similar events or disruptions may damage or interrupt computer, broadband or other communications systems and infrastructure at any time. Any of these events could

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cause system interruption, delays and loss of critical data, and could prevent our businesses from providing services, fulfilling orders and/or processing transactions. While our businesses have backup systems for certain aspects of their operations, these systems are not fully redundant and disaster recovery planning is not sufficient for all eventualities. In addition, we may not have adequate insurance coverage to compensate for losses from a major interruption. If any of these adverse events were to occur, it could adversely affect our business, financial conditions and results of operations.

Technology Projects—Business interruptions, cost overruns or project delays in connection with our undertaking of significant technology projects may materially adversely affect our business.

Our businesses have ongoing development projects related to our proprietary and third party technology, some of which are significant. We have committed sizable resources to these projects, which are expected to be phased in over several years. These projects are extremely complex, in part, because of the wide range of processes and the legacy systems involved. We use both internal and external resources, and if these resources become unavailable, our business

and operations may be adversely affected. As we proceed with our existing projects, we are using controlled project plans and change control processes that we believe will provide for the adequate allocation of resources. However, a divergence from these may result in cost overruns or project delays. If the systems do not operate as expected, this could impact our ability to perform necessary business operations, which could materially adversely affect our business.

Privacy—The processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements, or requirements imposed by credit card companies.

In the processing of consumer transactions, our businesses receive, transmit and store a large volume of personally identifiable information and other user data. The sharing, use, disclosure and protection of this information are governed by the privacy and data security policies maintained by us and our businesses, as well as by contractual obligations with respect to data privacy. Moreover, there are federal, state and international laws regarding privacy and the storing, sharing, use, disclosure and protection of personally identifiable information and user data. Specifically, personally identifiable information is increasingly subject to legislation and regulations in numerous jurisdictions around the world, the intent of which is to protect the privacy of personal information that is collected, processed and transmitted in or from the governing jurisdiction. We could be adversely affected if legislation or regulations are expanded to require changes in business practices or privacy policies, or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, financial condition and results of operations.

A company processing, storing, or transmitting payment card data must be compliant with Payment Card Industry-DataIndustry‑Data Security Standards, or PCI-DSS,PCI‑DSS, or risk losing its ability to process credit card payments and being fined. As of December 31, 2015,2016, we believe our Interval, HVO, VRI, TPI and VRI Europe businesses are compliant with these standards and our Aqua-Aston business is working to become fully compliant.standards. Failure to obtain or maintain PCI-DSSPCI‑DSS compliance could result in our inability to accept credit card payments or subject us to penalties and thus could have a material negative effect on our operations. Changes in these security standards may cause us to incur significant unanticipated expenses to meet new requirements.

Online Security Risks—We are subject to online security risks, including security breaches and identity theft and the related requirements imposed by credit card companies.

Our failure, and/or the failure by the various third party vendors and service providers with which we do business, to comply with applicable privacy policies or federal, state or similar international laws and regulations or any compromise of security that results in the unauthorized release of personally identifiable information or other user data could damage the reputation of our businesses, discourage

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potential users from trying our products and services, breach certain agreements under which we have obligations with respect to network security, and/or result in fines and/or proceedings by governmental agencies, service providers and/or consumers, one or all of which could adversely affect our business, financial condition and results of operations. Any penetration of network security or other misappropriation or misuse of personal consumer information could cause interruptions in the operations of our businesses and subject us to increased costs, litigation and other liabilities. Security breaches could also significantly damage our reputation with consumers and third parties with whom we do business. It is possible that advances in computer capabilities, new discoveries, undetected fraud, inadvertent violations of company policies or procedures or other developments could result in a compromise of information or a breach of the technology and security processes that are used to protect consumer transaction data. As a result, current security measures may not prevent any or all security breaches. We may be required to expend significant capital and other resources to protect against and remedy any potential or existing security breaches and their consequences.

Intellectual Property—We may fail to adequately protect our intellectual property rights or may be accused of infringing intellectual property rights of third parties.

We may fail to adequately protect our intellectual property rights or may be accused of infringing intellectual property rights of third parties. Our failure to protect our intellectual property rights in a meaningful manner or challenges to related contractual rights could result in erosion of brand names and limit our ability to control marketing, which could adversely affect our business, financial condition and results of operations.

From time to time, we are subject to legal proceedings and claims in the ordinary course of business, including claims of alleged infringement of the trademarks, copyrights, patents and other intellectual property rights of third parties. In addition, litigation may be necessary in the future to enforce our intellectual property rights, protect trade secrets or to determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, will likely be protracted and expensive and could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business, financial condition and results of operations.

Permissions—Following the closing of the Vistana transaction, additional permissions may be required in order to market to potential customers.

Because Vistana’s relationship with Starwood has changed as a result of the acquisition by ILG, for purposes of “do not call” and similar legislation in some jurisdictions, it may be more difficult for Vistana to utilize customer information it obtains from Starwood in the future, and as a result, maintain compliance with applicable legislation. This could diminish the effectiveness of existing marketing practices and adversely affect the business.

Environmental Matters—We are subject to certain requirements under applicable environmental laws and regulations and may be subject to potential liabilities.

The resorts that we manage and the assets at vacation ownership resorts that are owned by us are all subject to certain requirements and potential liabilities under national, state, and local laws and regulations that govern the discharge of materials into the environment or otherwise relate to protection of the environment or health and safety. The costs of complying with these requirements are generally covered by the homeowners' associationsHOAs that operate the affected resort property and are our responsibility for assets we own. To the extent that we hold interests in a particular resort, we would be responsible for their pro rata share of losses sustained by such resort as a result of a violation of any such environmental laws and regulations.

Insurance—Damage to, or other potential losses involving, properties that we own or manage may not be covered by insurance.

Market forces beyond our control may limit the scope of the insurance coverage we can obtain or our ability to obtain coverage at reasonable rates. Certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, or terrorist acts, may be uninsurable or the price of coverage for such losses may be too expensive to justify obtaining insurance. As a result, the cost of our insurance may increase and our coverage levels may decrease. In addition, in the event of a substantial loss, the insurance coverage we carry may not be sufficient to pay the full market value or replacement

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cost of our lost investment or that of owners of vacation ownership interestsVOIs or in some cases may not provide a recovery for any part of a loss. As a result, we could lose some or all of the capital we have invested in a property, as well as the anticipated future revenue from the property. In addition, we could lose the management contract for the property and, to the extent such property operates under a licensed brand, the property may lose operating rights under the associated brand.

Compliance with Sanction laws—ILG could be adversely affected by changes to or violations of sanctions laws.

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

Takeover Defenses—Our rights plan, charter provisions and terms of our debt agreements may affect the likelihood of a takeover or change of control of ILG.

We have in place a stockholders'stockholders’ rights plan and certain charter provisions that may have the effect of deterring hostile takeovers or delaying or preventing changes in control or management of our company that are not approved by our board. In particular, our charter provides that stockholders may not act by written consent and that the board has the power to issue shares of preferred stock with such designation, powers, preferences, and rights as the board shall determine. The transactions that may be deterred, delayed or prevented might have allowed our stockholders to receive a premium for their shares over then-currentthen‑current market prices. In addition, under our senior credit facility, a change of control (as defined in the credit agreement) constitutes an event of default, entitling our lenders to terminate the facility and require us to repay outstanding borrowings. Under the indenture governing our senior notes, we are required to make an offer to repurchase the senior notes at a price of 101% of the principal amount plus accrued interest following a change of control (as defined in the indenture). As a result, the provisions of these debt agreements also may affect the likelihood of a takeover or other change of control. Under the master license agreement,agreements, we need Hyatt'sStarwood’s or Hyatt’s written consent prior to a change of control (as defined in the agreement) of our subsidiary, S.O.I. Acquisition Corp.Vistana and inHVO, respectively, and both for certain cases,change of control transactions of ILG.

Dividends—We may not continue paying dividends at the same rate or at all.

While we beganhave been paying quarterly dividends, in 2012, we may be unable to continue to pay dividends at the current rate or at all based on covenants in our credit agreement or if we do not have sufficient surplus under Delaware law. Our board of directors may determine not to declare dividends if the board deems this action to be in our company'scompany’s best interests. Discontinuing payment of dividends could change the manner, timing and/or ability to realize gains on investment in our common stock.

Item 1B.    Unresolved Staff Comments.

None.

Item 2.    Properties.

As of the date hereof,January 1, 2017, ILG conducts operations through 3637 offices in 1615 countries, of which 1517 offices are within the United States and 2120 offices are outside of the United States. ILG'sILG’s global

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headquarters is located in Miami, Florida and occupies approximately 100,000 square feet of office space under a long-termlong‑term lease expiring in December 2020. We own or lease regional offices and sales centers.

        OurILG’s portfolio consisted of the vacation exchange businesses withinownership resorts and hotels described in Part I, Item 1 “Business” under the Exchangeheading “Our Resorts”. We own all unsold inventory at these properties and Rental segment operate a call center in Miami with approximately 60,000 square feet under a long-term lease expiring in September 2026. Our European headquarters is located in London, Englandwe own certain food, beverage, fitness, spa and occupies approximately 12,000 square feet of office space under a long-term lease which expires in September 2021, while our Asian headquarters is located in Singaporerecreational amenities, front desks, undeveloped land and occupies approximately 5,500 square feet of office space expiring in August 2018. The vacation rental business within our Exchangesimilar assets at resorts we developed and Rental segment is headquartered in Honolulu, Hawaii with approximately 22,000 square feet of total office space under leases expiring in October 2019 and February 2026.

        The Vacation Ownership businesses have main offices in St. Petersburg, Florida under a lease of 13,000 square feet through November 2020 and Orange County, California under a lease of 34,000 square feet expiring May 2024.select managed properties. 

Item 3.    Legal Proceedings.

Rules of the Securities and Exchange Commission require the description of material pending legal proceedings, other than ordinary, routine litigation incidental to ILG'sILG’s business, and advise that proceedings ordinarily need not be described if they primarily involve damages for claims in amounts (exclusive of interest and costs) not exceeding 10% of the current assets of the registrant and its subsidiaries on a consolidated basis. In the judgment of management, none of the pending litigation matters which ILG and its subsidiaries are defending, involves or is likely to involve amounts of that magnitude.

On December 5, 2016, individuals and entities who own or owned 107 fractional interests of a total of 372 interests created in the Fifth and Fifty-Fifth Residence Club located within The St. Regis, New York filed suit against us, certain of our subsidiaries, Marriott International Inc. and certain of its subsidiaries including Starwood Hotels and Resorts Worldwide LLC. The case is filed as a mass action in federal court in the Southern District of New York, not as a class action. The plaintiffs principally challenge the sale of less than all interests offered in the fractional offering plan,

the  amendment of the plan to include additional units, the failure to amend the plan to provide for certain alleged changes, and the rental of unsold fractional interests by the plan’s sponsor, claiming that alleged acts by us and the other defendants breached or undermined the relevant agreements and harmed the value of plaintiffs’ fractional interests. The relief sought includes, among other things, compensatory damages, rescission, disgorgement, attorneys’ fees, and pre- and post-judgment interest. In response to our request to file a motion to dismiss, the plaintiffs have agreed to amend their complaint on or before March 6, 2017. We will determine at that time whether to request permission to file a motion to dismiss the amended complaint. We dispute the material allegations in the complaint and intend to defend against the action vigorously. Given the early stages of the action and the inherent uncertainties of litigation, we cannot estimate a range of the potential liability, if any, at this time.

On February 28, 2017, the owners association for the Fifth and Fifty-Fifth Residence Club located within The St. Regis, New York filed a separate suit against us and certain of our subsidiaries in federal court in the Southern District of New York. The complaint, which has not been served on any party, asserts claims against the sponsor of the residence club, St. Regis Residence Club, New York, Inc., the club manager, St. Regis New York Management, Inc., and certain affiliated entities for alleged breach of fiduciary duties principally related to sale and rental practices and alleged breach of the original purchase agreements with certain owners. The relief sought consists of unspecified actual damages, punitive damages, and disgorgement of payments under the management and purchase agreements, as well as related agreements. We dispute the material allegations in the complaint and intend to defend against the action vigorously. Given the early stages of the action and the inherent uncertainties of litigation, we cannot estimate a range of the potential liability, if any, at this time.

Item 4.    Mine Safety Disclosures.

Not applicable

Executive Officers of the Registrant

See Part III, Item 10 of this report for information about our executive officers.

PART II

PART II

Item 5.    Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market for Registrant's Common Equity and Related Stockholder Matters

Our common stock has beenis listed on The NASDAQ Stock Market Global Select Market under the ticker symbol "IILG"“ILG” since August 2008. Prior to that time thereOctober 2016. Previously our ticker symbol was no public market for our common stock.“IILG”. The table below sets forth the high and low sales prices per share for ILG common stock as reported on NASDAQ, for the calendar periods indicated.