BASIS OF PRESENTATION The condensed consolidated financial statements present the results of operations, financial position, and cash flows of Marriott International, Inc. and subsidiaries (referred to in this report as we, us, Marriott, or the Company). In order to make this report easier to read, we also refer throughout to (i) our Condensed Consolidated Financial Statements as our Financial Statements, (ii) our Condensed Consolidated Statements of Income as our Income Statements, (iii) our Condensed Consolidated Balance Sheets as our Balance Sheets, (iv) our Condensed Consolidated Statements of Cash Flows as our Statements of Cash Flows, (v) our properties, brands, or markets in the United States (U.S.) and Canada as North America or North American, and (vi) our properties, brands, or markets in our Caribbean and Latin America region, Europe, Middle East and Africa segment, and Asia Pacific segment, as International. In addition, references throughout to numbered Notes refer to these Notes to Condensed Consolidated Financial Statements, unless otherwise stated. These Financial Statements have not been audited. We have condensed or omitted certain information and disclosures normally included in financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP). The financial statements in this report should be read in conjunction with the consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 (2019 Form 10-K). Certain terms not otherwise defined in this Form 10-Q have the meanings specified in our 2019 Form 10-K. Preparation of financial statements that conform with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, the reported amounts of revenues and expenses during the reporting periods, and the disclosures of contingent liabilities. The uncertainty created by the coronavirus and efforts to contain it (COVID-19) has made such estimates more difficult and subjective. Accordingly, ultimate results could differ from those estimates. The accompanying Financial Statements reflect all normal and recurring adjustments necessary to present fairly our financial position as of September 30, 2020 and December 31, 2019, the results of our operations for the three and nine months ended September 30, 2020 and September 30, 2019, and cash flows for the nine months ended September 30, 2020 and September 30, 2019. Interim results may not be indicative of fiscal year performance because of seasonal and short-term variations, as well as the impact of COVID-19. We have eliminated all material intercompany transactions and balances between entities consolidated in these Financial Statements. New Accounting Standards Adopted Accounting Standards Update (ASU) No. 2016-13 - Financial Instruments-Credit Losses (Topic 326). ASU 2016-13 requires the use of an impairment methodology that reflects an estimate of expected credit losses, measured over the contractual life of an instrument, based on information about past events, current conditions, and forecasts of future economic conditions. We adopted ASU 2016-13 in the 2020 first quarter using the modified retrospective transition method. Upon adoption, we increased our allowance for credit losses in the Accounts and notes receivable, net caption of our Balance Sheets by $19 million, from $82 million at December 31, 2019 to $101 million at January 1, 2020. We also recorded a $4 million decrease in the Deferred tax liabilities caption of our Balance Sheets and a $15 million cumulative-effect adjustment to retained earnings on our Balance Sheets. Additionally, we recorded a provision for credit losses of $122 million in the 2020 first three quarters, primarily due to the negative economic impact caused by COVID-19 and our estimate of future economic conditions. The allowance for credit losses was $199 million at September 30, 2020.