What changed in this filing

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Item 1A. Risk Factors

2025-02-28 compared with 2024-02-27 · 85 added, 81 removed, 352 unchanged (32% of the section changed)

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for example, we saw marked declines in occupancy, rentals, and contract sales because of the temporary closure of nearly all of our sales centers and many of our resorts and the reduction in operations and amenities at all of our resorts.

When Health Crises make headlines from time to time, consumer fear about contracting an illness and recommendations or mandates from governmental authorities to avoid large gatherings of people or self-quarantine, may increase.

These recommendations and mandates have affected, and may affect in the future, resort occupancies.

When Health Crises make headlines, consumer fear about contracting an illness and government recommendations or mandates to avoid large gatherings of people or self-quarantine may increase.

These fears, recommendations and mandates have affected, and may affect in the future, resort occupancies.

A substantial amount of our sales activity occurs at our resorts, and the number of prospective and current owners who visit our resorts impacts sales volume.

Our rental revenue is also substantially impacted by the desire and ability of vacationers to travel.

Fear of exposure to viruses or other illnesses, government restrictions on travel, including quarantine requirements, low vaccination rates in some parts of the world and viruses or other illnesses that may be resistant to available vaccines could cause travelers to cancel or delay plans to travel to our resorts.

Fear of exposure to illnesses, government restrictions on travel, low vaccination rates in some parts of the world and illnesses that may be resistant to available vaccines could cause travelers to cancel or delay plans to visit our resorts.

These changes in vacation and travel patterns could adversely affect our cash flows, revenues, and results of operations.

Moreover, when travel advisories and restrictions are lifted, there could be a resurgence of the virus or illness, and as a result, travel demand could be unpredictable and could remain so for a significant period.

Moreover, when travel advisories and restrictions are lifted, travel demand could be unpredictable and could remain so for a significant period.

Adverse changes in the perceived or actual economic climate, including higher unemployment rates, declines in income levels, inflation, recession and loss of personal wealth resulting from the impact of a future Health Crisis may negatively affect travel demand for a prolonged period.

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In addition, the transactions in which we have securitized vacation ownership notes receivable contain certain portfolio performance requirements related to default and delinquency rates, which, if not met, would result in loss or disruption of cash flow until portfolio performance sufficiently improves to satisfy the requirements.

The duration and extent of the impact of a future Health Crisis on our business and financial results will largely depend on future developments, including the duration and spread of the Health Crisis, the response by all levels of government in their efforts to contain the Health Crisis to mitigate the economic disruptions, the related impact on consumer confidence and spending, and how quickly economies and demand for our products and services recover after the Health Crisis subsides, all of which are highly uncertain, can rapidly change and cannot be predicted.

The duration and extent of the impact of a future Health Crisis on our business and financial results will largely depend on future developments, including the duration and spread of the Health Crisis, governmental efforts to contain the Health Crisis, the related impact on consumer confidence and spending, and how quickly economies and demand for our products and services recover after the Health Crisis subsides, all of which are highly uncertain, can rapidly change and cannot be predicted.

Such impacts could adversely affect our results of operations, cash flows, and capital resources for a significant period.

Further, a future Health Crisis may also adversely affect our cash flows and operating and financial results in a manner that is not presently known to us or that we currently do not consider to present significant risks to our operations.

Risks related to our business and industry.

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A substantial amount of our sales activity occurs at our resorts, and sales volume is affected by the number of visitors at our resorts.

Fear of exposure to contagious illnesses, such as COVID-19 or other Health Crises, or natural or man-made disasters, and the physical effects of climate change, such as more frequent or severe storms, droughts, hurricanes, wildfires, erosion and flooding, have caused and may continue to cause travelers to delay or cancel travel plans, including sales tours at our resorts, with greater frequency.

Other factors such as weakened consumer confidence, limited availability or increased costs of consumer credit and damage to infrastructure caused by natural or man-made disasters or other causes that impede travel have caused, and may in the future cause, travelers to delay or cancel plans to tour or visit our resorts.

Fear of exposure to contagious illnesses, natural or man-made disasters, the physical effects of climate change, such as more frequent or severe storms, droughts, hurricanes, wildfires, erosion and flooding, weakened consumer

confidence, limited availability or increased costs of consumer credit and damage to infrastructure caused by natural or man-made disasters and other causes that impede travel have caused, and may in the future cause, travelers to delay or cancel plans to tour or visit our resorts.

For example, hurricanes and wildfires have caused a number of Interval International exchange network resorts and our managed vacation ownership resorts to close for prolonged periods.

The wildfires in Maui last year also resulted in the temporary closure of our resorts and sales centers in Maui, which had an adverse effect on our business and results of operations for 2023.

The 2023 wildfires in Maui also resulted in the temporary closure of our resorts and sales centers in Maui, which had an adverse effect on our business and results of operations for 2023 and 2024.

At times, beach access at our resorts and our managed resorts has been impeded by weather conditions or due to the effects of erosion.

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Inflation can adversely affect us by increasing the costs of carrying unsold inventory, development and other corporate capital expenditures, materials and labor, service contracts, insurance, technology and related hardware or equipment, and interest rates.

All of these factors can have a negative impact on the affordability of our products and services.

All of these factors can decrease the affordability of our products and services.

In a high inflationary environment, we may be unable to raise the price of our products and services in a proportional manner, which could reduce our operating margins, including in our financing business, and negatively impact our results or operations.

In addition, an increase in the cost of capital, labor and materials could have an adverse impact on our business or financial results.

Inflation could also have an indirect adverse impact on our business by making travel more expensive for consumers and reducing consumer discretionary income.

Inflation could also have an indirect adverse impact on our business by making travel more expensive, increasing maintenance costs and fees for consumers and reducing consumer discretionary income.

Alternatively, deflation could cause an overall decrease in spending and borrowing capacity, which could lead to a deterioration of economic conditions and employment levels.

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While we adjust interest rates on our financing programs from time to time, such changes are typically not made in lockstep with the timing and magnitude of changes in broader market rates.

As a result, our financing profit margin declined in 2023 due to general market interest rate increases, and may decline again in the future.

As a result, our financing profit margin declined in 2023 and 2024 due to general market interest rate increases, and may decline again in the future.

Increasing our financing rates could negatively impact VOI sales and financing propensity.

However, if we are unable to increase our financing rates at the same rate as our costs of funds, our financing profits will be negatively impacted, as happened in 2023.

However, if we are unable to increase our financing rates at the same rate as our costs of funds, our financing profits will be negatively impacted, as happened in 2023 and 2024.

Our business is extensively regulated, and any failure to comply with applicable laws could materially adversely affect our business.

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Our real estate development activities, marketing and sales activities, lending activities and resort management activities are also heavily regulated.

In addition, a myriad of laws, regulations and policies impact multiple areas of our business, such as those regulating the sale and offer of securities, anti-discrimination, anti-fraud, data protection, anti-corruption and bribery or implementing government economic sanctions.

In addition, a myriad of laws, regulations and policies impact multiple areas of our business, such as those regulating the sale and offer of securities, anti-discrimination, anti-fraud, environmental and social matters, data protection, anti-corruption and bribery or implementing government economic sanctions.

Complying with the intricate and multifaceted regulatory structures applicable to our businesses across the globe is complicated, constantly evolving, time-consuming and costly.

We may not be able to successfully comply with all laws, regulations and policies to which we are subject.

We may not be able to successfully comply with all laws, regulations and policies.

Laws, regulations, policies, and case law precedent may change or be subject to different interpretation in the future, including in ways that could decrease demand for our products and services, increase costs, and subject us to additional liabilities.

Failure to comply could have a material adverse effect on our business.

For example, failure to comply with applicable law could result in the loss of licenses or registrations we must have in order to operate our business, render sales contracts for our products void or voidable, subject us to fines or other sanctions, and increase our exposure to litigation.

Adverse action by governmental authorities or others alleging our failure to comply with applicable laws could adversely affect our business, financial condition, and reputation.

For example, we could lose licenses or registrations required to operate our business, sales contracts for our products could be void or voidable, we may incur fines or other sanctions, and our exposure to litigation may increase.

Allegations of our failure to comply with applicable laws could adversely affect our business, financial condition, and reputation.

Changes in privacy laws could adversely affect our ability to market our products effectively.

We rely on a variety of direct marketing techniques, including telemarketing, digital marketing and postal mailings.

We rely on a variety of marketing techniques, including digital marketing (e-mail), telemarketing, postal mailings, websites and social media.

Adoption of new laws, or changes in existing laws, in any of the jurisdictions in which we operate regulating marketing and solicitation or data protection could adversely affect the effectiveness of our marketing strategies.

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customers or otherwise control or process personal data of E.U.

Complying with the GDPR, other international laws and regulations, and state and federal laws and regulations could subject us to increased costs;

Complying with the GDPR or other laws and regulations could subject us to increased costs;

and our failure to comply with these laws and regulations could result in significant fines, litigation, losses, third-party damages and other liabilities, any of which may have a material adverse effect on our brands, marketing, reputation, business, financial condition and results of operations.

The cost of compliance with privacy laws in the jurisdictions in which we operate has increased and may continue to increase as laws change and we expand into new jurisdictions and become subject to the privacy laws of such jurisdictions.

The cost of our compliance with privacy laws has increased and may continue to increase as laws change and we expand into new jurisdictions.

If we are not able to develop adequate alternative marketing strategies, our sales may be adversely affected.

We also obtain access to potential customers from travel service providers and other companies with whom we have relationships.

If our access to these third-party customer lists is prohibited or restricted, our ability to develop new customers and introduce our products to them could be impaired.

We also obtain access to potential customers from travel service providers and other companies.

If our access to these third-party customer lists is prohibited or restricted, our ability to attract new customers could be impaired.

Failure to maintain the integrity of internal or customer data or to protect our information systems from cyber-attacks could disrupt our business, damage our reputation, and subject us to costs, fines or lawsuits.

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It is critical that we maintain the integrity of and protect this data, which we rely on to make business decisions and which our customers and employees expect that we will protect.

We may be required to expend significant capital and other resources to enhance the security of our data.

We may have to expend significant capital and other resources to enhance the security of our data.

Our information systems and records, including those we maintain with our service providers or licensors, may be subject to security breaches, cyber-attack or cyber-intrusion, system failures, viruses, malicious software, operator error or inadvertent releases of data, or other cybersecurity incidents.

Data breaches have increased in recent years as the number, intensity and sophistication of attacks have increased.

The techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time.

Data breaches have increased in recent years as the number, intensity and sophistication of attacks increased.

Techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, may be difficult to detect and could be enhanced by artificial intelligence (“AI”).

Neither we nor our service providers may be able to prevent, detect and contain unauthorized activity and misuse or human errors compromising the efficacy of security measures.

A breach in the security of our information systems or those of our service providers or licensors could lead to an interruption in the operation of our systems, resulting in operational inefficiencies and a negative impact to our results of operations.

A significant cybersecurity incident or theft, loss, disclosure, or fraudulent use of our customer, employee or company data could adversely impact our reputation and result in remedial and other expenses, fines, penalties or litigation, any of which may be exacerbated by a delay or failure to detect a cybersecurity incident or the full extent of such incident.

A breach in the security of our information systems or those of our service providers or licensors could lead to interruptions in the operation of our systems, resulting in operational inefficiencies and a negative impact to our results of operations.

A significant cybersecurity incident or theft,

loss, disclosure, or fraudulent use of our customer, employee or company data could adversely impact our reputation and result in remedial and other expenses, fines, penalties or litigation, any of which may be exacerbated by a delay or failure to detect a cybersecurity incident or the full extent of such incident.

The regulatory environment in the jurisdictions where we operate, and the requirements imposed on us by the payment card industry regarding information, security and privacy, are increasingly demanding.

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Routinely, we partner with and use third-party service providers and products that host, manage, or control sensitive data.

The failure of any such service providers or products to comply with our privacy policies or privacy laws and regulations, or any unauthorized release of personally identifiable information or other user data, could damage our reputation, discourage potential users from trying our products and services, breach certain agreements under which we have obligations with respect to network security, and result in fines and proceedings against us by governmental agencies, service providers and consumers.

To the extent our liability insurance covers claims and losses arising from cybersecurity incidents or attacks, such insurance might not be sufficient in type or amount to cover us against such claims or losses.

Our insurance might not be sufficient in type or amount to cover us against such claims or losses.

Any of the foregoing could materially adversely affect our business, financial condition and results of operations.

Our use of AI technologies may not be successful and may present business, compliance, and reputational risks.

We use, and are expanding our use of, machine learning and AI technologies in our products and processes.

If we fail to keep pace with rapidly evolving AI technological developments, our competitive position and business results may be negatively impacted.

Our use of AI technologies requires resources to develop, test and maintain such products, which is costly.

We may not achieve our objectives from these efforts.

In addition, third parties may be more successful in the use of AI or create technologies that could require us to change how we currently operate certain of our businesses.

The introduction of AI technologies, particularly generative AI, into new or existing offerings may result in new or expanded risks and liabilities, due to enhanced governmental scrutiny, litigation, compliance issues, ethical concerns, confidentiality, data privacy or security risks, as well as other factors that could adversely affect our business, reputation, and financial results.

If the content, analyses, or recommendations that AI applications assist in producing are, or are alleged to be, deficient, inaccurate, unreliable, misleading, biased, discriminatory or otherwise flawed, any of which may not be easily detectable, our business and reputation may be adversely affected.

Use of AI technologies, and the evolving legal, regulatory and compliance framework for AI, could impact our ability to protect our data and intellectual property, as well as vendor and client information, and could expose us to intellectual property or other claims by third parties.

Use of AI technologies may also increase risks related to cyberattacks or other security incidents or result in a failure to protect confidential information.

Because AI technology is highly complex and rapidly developing, it is not possible to predict all of the legal, operational or technological risks that may arise relating to AI.

Our international operations expose us to risks that could negatively impact our financial results or disrupt our business.

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Our information technology systems and our databases are potentially susceptible to man-made and natural disasters, as well as power losses, computer and telecommunications failures, technological breakdowns, cyber-attacks, acts of war or terrorism and other events.

System interruption, delays, obsolescence, loss of critical data and lack of integration and redundancy in our information technology systems and infrastructure may adversely affect our ability to provide services, operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations.

System interruption, delays, obsolescence, loss of critical data and lack of

integration and redundancy in our information technology systems and infrastructure may adversely affect our ability to provide services, operate websites, process and fulfill transactions, respond to customer inquiries and generally maintain cost-efficient operations.

Our backup systems only relate to certain aspects of our operations;

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Projects to upgrade or replace our technologies may be extremely complex and require significant resources and time, and may adversely affect our ability to provide services, operate websites, process and fulfill transactions, and respond to customer inquiries during the upgrade or replacement process.

In addition, we may not have adequate insurance coverage to compensate for losses

from a major interruption.

Our insurance coverage may not compensate us for all our losses from a major interruption.

If our information technology systems fail to adequately support our strategic, operational or compliance needs, our business, financial position, results of operations or cash flows, as well as our disclosure controls and procedures and internal control over financial reporting, may be adversely affected.

Spanish court rulings voiding certain timeshare contracts have increased our exposure to litigation that may materially adversely affect our business and financial condition.

A series of Spanish court rulings starting in 2015 increased our exposure to litigation that may materially adversely affect our business and financial condition.

A series of Spanish court rulings starting in 2015 (“2015 Rulings”) increased our exposure to litigation that may materially adversely affect our business and financial condition.

These rulings voided certain timeshare contracts entered into after January 1999 related to certain resorts in Spain if a resort’s timeshare structure did not meet requirements prescribed by Spanish timeshare laws enacted in 1998, even if the structure was lawful prior to 1998 and adapted pursuant to mechanisms specified in the 1998 laws.

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Defending these lawsuits has required, and may continue to require, the Company to incur legal fees and reserve for judgments.

If additional owners at our resorts in Spain file similar lawsuits, this may:

void certain of those owners’ timeshare contracts;

Under recently enacted legislation, effective April 4, 2025, existing timeshare owners will have five years to bring lawsuits based on the 2015 Rulings to void their timeshare contracts, after which time such claims will no longer be recognized.

Damages recoverable for claims brought during the five-year period will be reduced by the market value of the benefits the owners received or were entitled to receive under their timeshare contracts.

Owners who purchase after April 4, 2025, will not be entitled to make claims under the 2015 Rulings.

If additional owners at our resorts in Spain file similar lawsuits, this may void certain of those owners’ timeshare contracts;

cause us to incur material litigation and other costs, including judgment or settlement payments;

and materially adversely affect the results of operations of our Vacation Ownership segment, as well as our business and financial condition.

The increased ability for owners of Spanish timeshares to void their contracts has negatively impacted other developers with resorts in Spain and led to a decrease in the number of resorts located in Spain in the Interval Network with active sales and the loss of members who own VOIs at those resorts.

The ability for owners of Spanish timeshares to void their contracts has negatively impacted other developers with resorts in Spain and led to a decrease in the number of resorts located in Spain in the Interval Network with active sales and the loss of members who own VOIs at those resorts.

The industries in which our businesses operate are competitive, which may impact our ability to compete successfully.

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Developments in an audit, litigation, or laws, regulations, administrative practices, principles, and interpretations could have a material effect on our operating results or cash flows.

The final outcome of tax audits, investigations, and any related litigation could be materially different from our historical tax provisions and accruals.

An unfavorable outcome from any tax audit could result in higher tax costs, penalties and interest, and could materially and adversely affect our financial condition or results of operations.

Concentration of some of our resorts, sales centers and exchange destinations in particular geographic areas exposes our business to the effects of severe weather and other regional events in these areas.

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Properties in these markets have had to close in the past, including for extended periods, in order to repair or assess damage caused by disasters.

For example, we temporarily closed our resorts and sales centers last year as a result of wildfires in Maui.

For example, we temporarily closed our resorts and sales centers in 2023 as a result of wildfires in Maui.

Depending on the severity of future disasters, the resulting damage could require closure of all or substantially all of our properties in one or more of these markets while we complete renovations.

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In 2023, our cost to insure our properties in these areas increased significantly.

Our insurance costs may rise again in the future and coverage levels may decrease for properties in these areas as a result of the number and magnitude of recent natural disasters in these areas.

Our insurance costs may rise again and coverage levels may decrease for properties in these areas as a result of the number and magnitude of recent natural disasters in these areas.

Our business is also susceptible to the effects of adverse economic developments in these areas, such as regional economic downturns, significant increases in the number of our competitors’ products in these markets and potentially higher labor, real estate, tax or other costs in these geographic markets.

Because of this geographic concentration of properties, we face a greater risk of a negative effect on our results of operations if these areas are affected by severe weather, man-made disasters or adverse economic and competitive conditions.

This geographic concentration of properties increases the risk of a negative effect on our results of operations if these areas are affected by severe weather, man-made disasters or adverse economic and competitive conditions.

If we are not able to successfully identify, finance, integrate and manage costs related to acquisitions, our business operations and financial position could be adversely affected.

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Failure to achieve the anticipated benefits of any acquisition may adversely affect our financial condition, operating results and prospects.

Acquisitions may also significantly increase our debt or result in dilutive issuances of our equity securities, impairments of goodwill or substantial amortization expenses associated with other intangible assets.

Acquisitions may also significantly increase our debt or result in dilutive issuances of our equity securities, impairments of assets or substantial amortization expenses associated with other intangible assets.

Our use of different estimates and assumptions in the application of our accounting policies could result in material changes to our reported financial condition and results of operations, and changes in accounting standards or their interpretation could significantly impact our reported 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 policies relating to the recognition of revenue and determination of cost of sales, are highly complex and involve many assumptions, estimates and judgments.

We are required to review these assumptions, estimates and judgments regularly and revise them when necessary.

Many of these policies, including policies relating to the recognition of revenue, determination of cost of sales and evaluation of our assets for impairment, are highly complex and involve many assumptions, estimates and judgments.

We review these assumptions, estimates and judgments regularly and revise them when necessary.

Our actual results of operations vary from period to period based on revisions to these estimates.

For example, in response to the COVID-19 pandemic, we increased our reserve for vacation ownership notes receivable due to higher default expectations and revised our estimates of the fair value of our reporting units, resulting in the impairment of goodwill.

For example, higher loan delinquencies or defaults could lead to an increase in our estimated reserve for vacation ownership notes receivable.

In addition, changes to our assumptions and estimates used to determine the fair value of our assets or actual operating results that are lower than our current estimates could result in impairment losses and require us to write off all or a portion of our assets.

See the “Critical Accounting Estimates” section of Item 7.

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The market for highly skilled associates and leaders in our industry is extremely competitive.

If we are less successful in our recruiting efforts, or if we are unable to retain management and other key associates, our ability to develop and deliver successful products and services may be adversely affected.

If we are unable to attract and retain management and other key associates, our ability to develop and deliver successful products and services may be adversely affected.

Effective succession planning is also important to our long-term success.

The departure of a key executive or associate or the failure to ensure an effective transfer of knowledge and a smooth transition upon such departure may be disruptive to the business and could hinder our strategic planning and execution.

Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may impose additional costs on us or expose us to new or additional risks.

Increasing scrutiny and evolving expectations from customers, regulators, investors, and other stakeholders with respect to our environmental, social and governance practices may increase our costs or expose us to new or additional risks.

Companies are facing increasing and frequently evolving scrutiny globally from customers, regulators, investors, employees and other stakeholders related to their environmental, social, and governance (“ESG”) practices and disclosure.

Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, board and workforce diversity, labor conditions, human rights, and cybersecurity and data privacy.

Third parties have also developed proprietary ratings or analyses of companies based on certain ESG metrics.

Third parties have developed proprietary ratings or analyses of companies based on certain ESG metrics.

ESG disclosure rules have been adopted by California and the European Union, and are being considered by the SEC.

Increased ESG-related compliance costs could result in increases to our overall operational costs.

Increased ESG-related compliance costs could increase our overall

operational costs.

Failure to adapt to or comply with regulatory requirements or investor or other stakeholder expectations and standards could negatively impact our reputation, ability to do business with certain partners, and stock price, and result in penalties.

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These relationships are governed by various agreements, including long-term license agreements that expire between 2090 and 2095, subject to renewal.

However, if we breach our obligations under a license agreement and remain in breach after the applicable notice and cure period, the applicable licensor may be entitled to terminate the license agreement and our rights to use its brands in connection with our businesses.

In addition, if any of our properties does not meet applicable brand standards, the applicable licensor can terminate our right to use its trademarks at the subject properties.

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We must obtain the applicable licensor’s consent to use its trademarks in connection with properties we acquire or develop in the future.

If our licensors do not consent to such use as required by the applicable license agreement, our ability to expand our business and remain competitive may be materially adversely affected.

If our licensors do not consent to such use, our ability to expand our business and remain competitive may be materially adversely affected.

Deterioration in the quality or reputation of the brands associated with our portfolio could adversely affect our market share, reputation, business, financial condition and results of operations.

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Approximately 25% of our Vacation Ownership segment resorts are co-located with same-branded or affiliated hotel properties.

If a branded hotel property with which one of our resorts is co-located ceases to be operated by or affiliated with the same brand as our resort, which has happened in the past, we could lose benefits such as sharing amenities, infrastructure and staff, integration of services, and other cost efficiencies.

If a branded hotel property with which one of our resorts is co-located ceases to be operated by or affiliated with the same brand as our resort, which has happened in the past, we could lose benefits such as shared 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 resorts would increase.

We could also lose our on-site access to hotel customers, including brand customer loyalty program members, at such resorts, which is a cost-effective marketing channel for our vacation ownership products, and our sales may decline.

We may not have inventory available for sale when needed or we may have excess inventory.

We may enter into capital-efficient transactions to source inventory in which third parties agree to deliver completed units to us at pre-agreed prices in the future.

We may enter into capital-efficient transactions to source inventory in which third parties agree to deliver completed units in the future to us at pre-agreed prices.

These transactions expose us to additional risk as we will not control development activities or timing of development completion.

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Accordingly, we are subject to the risk that those borrowers may default on the financing that we provide.

The risk of borrower defaults may increase due to man-made or natural disasters or a recession or other economic downturn, which cause financial hardship for borrowers.

The risk of borrower defaults may increase due to man-made or natural disasters, recessions or other economic downturns that cause financial hardship for borrowers.

In the past, we have experienced increased defaults as a result of economic downturns.

Certain of our borrowers have been impacted by man-made and natural disasters, including the recent wildfires near Los Angeles.

However, at this time, we cannot quantify the effect the wildfires near Los Angeles may have on borrower defaults.

The risk of borrower defaults may also increase if we do not evaluate accurately the creditworthiness of the customers to whom we extend financing or due to the influence of timeshare relief firms.

Borrower defaults have caused, and may continue to cause, us to foreclose on vacation ownership notes receivable and reclaim ownership of the financed interests, both for loans that we have not securitized and in our role as servicer for the vacation ownership notes receivable we have securitized through the ABS market or the Warehouse Credit Facility.

If default rates for our borrowers increase, we have been required, and may in the future be required, to increase our reserve on vacation ownership notes receivable, which would reduce our earnings.

Borrower defaults have caused,

and may continue to cause, us to foreclose on vacation ownership notes receivable and reclaim ownership of the financed interests, both for loans that we have not securitized and in our role as servicer for the vacation ownership notes receivable we have securitized through the ABS market or the Warehouse Credit Facility.

If default rates for our borrowers increase, we have been required, and may in the future be required, to increase our reserve on vacation ownership notes receivable, which would adversely affect our results of operations and cash flows.

If default rates increase beyond current projections and result in higher than expected foreclosure activity, our results of operations would be adversely affected.

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Also, if a purchaser of a VOI 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 VOI.

Also, if a purchaser of a VOI defaults on the related loan during the early part of the amortization period, we may not have fully recovered the marketing, selling and general and administrative costs associated with the sale of that VOI.

If we are unable to recover any of the principal amount of the loan from a defaulting borrower, 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 materially.

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Owners of our VOIs are required to pay maintenance fees to maintain and refurbish the vacation ownership properties and keep them in compliance with brand standards.

If a resort fails to comply with applicable brand standards, the applicable licensor could terminate our rights to use its trademarks at the resort, which would result in the loss of management fees, decreased customer satisfaction, and impairment of our ability to market and sell our products at the non-compliant locations.

If a resort fails to comply with applicable brand standards, the applicable licensor could terminate our rights to use its trademarks at the resort, which could result in the loss of management fees, decreased customer satisfaction, and impairment of our ability to market and sell our products at the non-compliant locations.

Increases in maintenance fees to keep pace with operating expenses, maintenance and other costs may make our products less desirable, which could negatively impact sales and cause an increase in defaults on our vacation ownership notes receivable portfolio.

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Risks related to our exchange and third-party management business.

Our Exchange & Third-Party Management business depends on relationships with developers, members and others, and any adverse changes in these relationships could adversely affect our business, financial condition, and results of operations.

Our Interval International business depends on vacation ownership developers for new members and on members and participants to renew their existing memberships and otherwise engage in transactions.

Any adverse changes in our relationships with developers, members and others could adversely affect our Exchange & Third-Party Management business, financial condition, and results of operations.

Our Interval International business depends on vacation ownership developers for new members and on members and participants to renew their existing memberships and engage in transactions.

Developers and members also supply resort accommodations for use in exchanges and Getaways.

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The failure to secure the renewal of affiliation agreements with developers with corporate member relationships, where the developer renews Interval International membership fees for all of its active owners, has a greater adverse effect.

The loss or renegotiation on less favorable terms of several of our largest affiliation agreements could materially adversely impact our financial condition and results of operations.

The loss or renegotiation on less favorable terms of several of our largest affiliation agreements could materially adversely impact

our financial condition and results of operations.

Our ability to maintain affiliation agreements with resort developers is also impacted by consolidation in the vacation ownership industry.

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and owner decisions to travel to their home resort/vacation club system or otherwise not deposit exchange inventory.

The factors that affect demand for specific destinations could significantly reduce the number of

accommodations available in such areas for exchanges.

The factors that affect demand for specific destinations could significantly reduce the number of accommodations available in such areas for exchanges.

The level of inventory in our system also depends on the number of developers whose resorts are in our exchange network, and the numbers of members of such resorts.

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The credit agreement that governs our corporate credit facility (“Corporate Credit Facility”) and the indentures that govern our various senior notes impose significant operating and financial restrictions on us, which among other things limit our ability and the ability of certain of our subsidiaries to incur debt, pay dividends and make other restricted payments, make loans and investments, incur liens, sell assets, enter into affiliate transactions, enter into agreements restricting certain subsidiaries’ ability to pay dividends and consolidate, merge or sell all or substantially all of their assets.

All of these covenants and restrictions limit how we conduct our business.

The Corporate Credit Facility also requires us to maintain a specified leverage ratio.

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In addition, our credit ratings will impact the cost and availability of future borrowings and, accordingly, our cost of capital.

Downgrades in our ratings could adversely affect our businesses, cash flows, financial condition, operating results and share and debt prices, as well as our obligations with respect to our capital efficient inventory acquisitions.

Downgrades in our ratings could adversely affect our businesses, cash flows, financial condition, operating results and share and debt prices, as well as our ability to meet our obligations under our capital efficient inventory acquisitions.

Failure to make scheduled cash payments on our existing debt, or to comply with the restrictive covenants and other requirements in our debt agreements, could result in an event of default, which, if not cured or waived, could result in acceleration of our debt repayment obligations.

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The existence of a share repurchase program could cause our stock price to be higher than it would be absent the program and could reduce market liquidity for our stock.

Use of our funds to repurchase shares could diminish our cash reserves, which may

impact our ability to finance growth, pursue strategic opportunities, and discharge liabilities.

Use of our funds to repurchase shares could diminish our cash reserves, which may impact our ability to finance growth, pursue strategic opportunities, and discharge liabilities.

Our share repurchases may not enhance stockholder value because the market price of our common stock may decline below the prices at which we repurchased shares and short-term stock price fluctuations could reduce the program’s effectiveness.

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Provisions of our Charter and Bylaws, as well as provisions in the agreements with our licensors, may delay or prevent a merger or acquisition that a stockholder may consider favorable.

For example, our Charter and Bylaws require advance notice for stockholder proposals and nominations, place limits on convening stockholder meetings and authorize our Board of Directors to issue one or more series of preferred stock.

For example, our Charter and Bylaws require advance notice of stockholder proposals and nominations, place limits on convening stockholder meetings and authorize our Board of Directors to issue one or more series of preferred stock.

Delaware law also restricts some business combinations between any holder of 15% or more of our outstanding common stock and us.

The fact that these provisions and statutory restrictions may discourage acquisition proposals or delay or prevent a change in control could harm our stock price.

Delaware law also restricts some business combinations between any holder of 15% or more of our outstanding common stock and us.

Further, a change in control could result in an acceleration of our obligations under the Corporate Credit Facility or the indentures that govern our senior notes.

The threat of our debt being accelerated in connection with a change in control could make it more difficult for us to attract potential buyers or to consummate a change in control transaction that would otherwise be beneficial to our stockholders.

Risks related to the Vistana Spin-Off.

The ILG Acquisition could result in material liability if it causes the Vistana Spin-Off to be taxable.

In connection with Vistana’s spin-off from Starwood and acquisition by ILG (the “Vistana Spin-Off”), ILG and Vistana entered into a Tax Matters Agreement that restricts them from actions or omissions that would cause the Vistana Spin-Off to become taxable.

Failure to adhere to these restrictions, including in certain circumstances that may be outside of our control, could result in tax being imposed on Starwood or its stockholders for which we may be obligated to indemnify Starwood.

Even if we are not responsible for such tax liabilities under the Tax Matters Agreement, we may be liable under applicable tax law for such liabilities if Starwood fails to pay such taxes.

For two years after the Vistana Spin-Off, the Tax Matters Agreement prohibited Vistana and ILG from taking certain actions involving their stock or Vistana’s assets because the Vistana Spin-Off would be taxable to Starwood (but not to Starwood stockholders) pursuant to Section 355(e) of the Internal Revenue Code if there was a direct or indirect 50% or greater change in Vistana’s ownership as part of a plan or series of related transactions including the Vistana Spin-Off.

The Vistana acquisition was not expected to violate this rule because Starwood stockholders held over 50% by vote and value of ILG stock (and, thus, indirectly, of Vistana) immediately after the Vistana acquisition.

However, the ILG Acquisition diluted the indirect ownership of Vistana by its former stockholders below 50%.

We received an opinion from KPMG LLP that entering into the ILG Acquisition would not affect the tax-free status of the Vistana Spin-Off;

however, this opinion does not bind the Internal Revenue Service ( the “IRS”) or any court.

If the IRS asserts that the ILG Acquisition is part of a plan or series of related transactions including the Vistana Spin-Off and the Vistana acquisition, and this assertion is sustained, the Vistana Spin-Off would be subject to the application of Section 355(e) of the Code, and we would be liable to indemnify Starwood (or Marriott International) for any resulting tax liability pursuant to the Tax Matters Agreement.

Such debt acceleration could make it more difficult for us to attract potential buyers or to consummate a change in control transaction that would otherwise be beneficial to our stockholders.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors