MARRIOTT VACATIONS WORLDWIDE Corp
For the period ended Dec 31, 2025. Filed Mar 2, 2026.
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FY2025 · Filed Mar 2, 2026
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Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Marriott Vacations Worldwide Corporation
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Marriott Vacations Worldwide Corporation (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 27, 2026 expressed an unqualified opinion thereon.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
| Valuation of Goodwill | |
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| Description of the Matter | At December 31, 2025, the balance of Goodwill was $2,958 million. During the year ended December 31, 2025, the Company recorded a goodwill impairment charge of $159 million. As discussed in Notes 2 and 10 to the consolidated financial statements, the Company performs an annual review for potential impairment of the carrying value of goodwill in the fourth quarter, or more frequently if events or circumstances indicate a possible impairment. The Company’s goodwill is tested for impairment at the reporting unit level. |
| Auditing the Company’s goodwill impairment assessment was complex and highly judgmental due to the significant estimation uncertainty in determining the fair value of the reporting units. In particular, the fair value estimates for the reporting units were sensitive to significant assumptions including projections of revenues, EBITDA margin, and discount rate. These significant assumptions are forward-looking and could be affected by company-specific, market or economic conditions. | |
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to determine the fair value of the reporting units, including management’s review of the valuation model and the significant assumptions used in the valuation.To test the estimated fair value of the reporting units, we performed audit procedures that included, among others, evaluating the valuation methodologies and testing the significant assumptions discussed above and the underlying data used by the Company in its analysis. We compared the significant assumptions used by the Company to current industry and economic trends, the Company’s historical results and other guideline companies within the same industry. We also performed sensitivity analyses on the significant assumptions described above to evaluate the changes in the fair value of the reporting units that would result from changes in these assumptions. We involved our valuation specialists to assist in our evaluation of the Company’s valuation methodologies and significant assumptions discussed above. |
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| Cost of Vacation Ownership Products | |
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| Description of the Matter | The Company’s cost of vacation ownership products was $184 million for the year ended December 31, 2025. As discussed in Note 2 to the consolidated financial statements, the Company accounts for the cost of vacation ownership products utilizing the relative sales value method in accordance with the authoritative guidance for accounting for real estate time-sharing transactions. Changes in estimates used in applying the relative sales value method are recognized in the period that the changes occur. |
| Auditing the Company’s application of the relative sales value method was challenging due to the nature and extent of audit effort required as the calculations are complex and contain a significant volume of data. Additionally, the determination of the cost of vacation ownership products was sensitive to the selection and application of assumptions, specifically future pricing assumptions, used in estimating future revenues from sale of vacation ownership products which are affected by expectations about future market and economic conditions. | |
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process to determine the cost of vacation ownership products. For example, we tested controls over management’s review of the calculations, including the inputs and certain estimates, such as estimated future revenues from sale of vacation ownership products. To test the cost of vacation ownership products, we performed audit procedures that included, among others, assessing the methodologies used, evaluating the estimates discussed above and testing the completeness and accuracy of the data used by the Company in the calculations. For example, we agreed inputs to the calculations to historical data and source documentation and evaluated the estimates used in the calculations, such as estimated future revenues from sale of vacation ownership products, utilizing historical operating results. |
| Originated Vacation Ownership Notes Receivable Reserve | |
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| Description of the Matter | As of December 31, 2025, the Company’s originated vacation ownership notes receivable reserve was $527 million. As discussed in Notes 2 and 5 to the consolidated financial statements, for originated notes, the Company records the difference between the vacation ownership note receivable and variable consideration included in the transaction price for the sale of the related vacation ownership products as a reserve on the Company’s originated vacation ownership notes receivable. The estimate of the variable consideration for originated vacation ownership notes receivable is based on default rates that are an output of the Company’s static pool analyses and the estimates regarding future defaults. Auditing the Company’s originated vacation ownership notes receivable reserve was challenging due to the nature and extent of audit effort required to test the static pool analyses, which are complex and contain a significant volume of data. Furthermore, the originated vacation ownership notes receivable reserve was sensitive to management’s assumptions regarding future default rates. |
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s originated vacation ownership notes receivable reserve process. For example, we tested controls over management’s review of the static pool analyses, including the significant inputs to the analyses, and review of the assumptions regarding future default rates.To test the originated vacation ownership notes receivable reserve, we performed audit procedures that included, among others, assessing the methodology used, evaluating the assumptions regarding future default rates as discussed above, and testing the completeness and accuracy of the static pool analyses, including the significant inputs to the analyses. For example, we agreed inputs to the static pool analyses to historical data and source documentation. In addition, we recalculated the resulting originated vacation ownership notes receivable reserve recognized by the Company. We also compared the assumptions regarding future defaults to the Company’s historical and current default rates and performed a retrospective review of the defaults projected from the analyses. |
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/s/Ernst & Young LLP
We have served as the Company’s auditor since 2011.
Orlando, Florida
February 27, 2026
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