Throughout the Management's Discussion and Analysis (MD&A), references to "Xerox
Holdings" refer to Xerox Holdings Corporation and its consolidated subsidiaries
while references to "Xerox" refer to Xerox Corporation and its consolidated
subsidiaries. References herein to "we," "us," "our," the "Company" refer
collectively to both Xerox Holdings and Xerox unless the context suggests
otherwise. References to "Xerox Holdings Corporation" refer to the stand-alone
parent company and do not include its subsidiaries. References to "Xerox
Corporation" refer to the stand-alone company and do not include its
subsidiaries.
Currently, Xerox Holdings' primary direct operating subsidiary is Xerox and
Xerox reflects nearly all of Xerox Holdings' operations. Accordingly, the
following MD&A primarily focuses on the operations of Xerox and is intended to
help the reader understand Xerox's business and its results of operations and
financial condition. The MD&A is provided as a supplement to, and should be read
in conjunction with, the Condensed Consolidated Financial Statements and the
accompanying notes. Throughout this MD&A, references are made to various notes
in the Condensed Consolidated Financial Statements which appear in Item 1 of
this Quarterly Report on Form 10-Q, and the information contained in such notes
is incorporated by reference into the MD&A in the places where such references
are made.
In connection with Xerox Holdings Corporation's announcement of the formation of
the CareAR software business in the third quarter 2021, the ownership of CareAR
Holdings LLC was transferred from Xerox Holdings Corporation to Xerox
Corporation.
Refer to Note 1 - Basis of Presentation in the Condensed Consolidated Financial
Statements for additional information regarding the change in ownership of
CareAR Holdings LLC.
Currency Impact
To understand the trends in the business, we believe that it is helpful to
analyze the impact of changes in the translation of foreign currencies into U.S.
Dollars on revenue and expenses. We refer to this analysis as "constant
currency", "currency impact" or "the impact from currency." This impact is
calculated by translating current period activity in local currency using the
comparable prior year period's currency translation rate. This impact is
calculated for all countries where the functional currency is the local country
currency. We do not hedge the translation effect of revenues or expenses
denominated in currencies where the local currency is the functional currency.
Management believes the constant currency measure provides investors an
additional perspective on revenue trends. Currency impact can be determined as
the difference between actual growth rates and constant currency growth rates.

                                                         Xerox 2021 Form 10-Q 41
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Impact of COVID-19 on Our Business Operations
In response to the COVID-19 pandemic, we continue to prioritize the health and
safety of our employees, customers and partners and support their needs so they
can perform their work flawlessly, whether in the workplace or a remote
location.
During the third quarter 2021, our business continued to be impacted by the
COVID-19 pandemic. The prolonged and extensive impact of the Delta variant drove
many of our customers to delay their plans to return employees to workplaces. As
a result, while we continued to see a correlation between the roll-out of
vaccinations, the return of employees to the workplace, and the gradual recovery
of our post sale revenues, the marginal improvement in our page-volume-driven
post sale revenues was less than previously anticipated. In addition, global
supply chain issues, created in part by the COVID-19 pandemic, have resulted in
an unprecedented level of disruption that has led to shortages and
transportation delays of our products and third-party IT hardware. This has
resulted in lower than anticipated equipment and IT sales, higher transportation
and logistics costs and growth of our order backlog1 at the end of the quarter,
as our customers continued to invest in our print technology and services. We
expect the ongoing effects of the COVID-19 pandemic, including the potential
emergence of new variants, as well as global supply chain disruptions, to delay
economic recovery and continue to affect our revenues and margins into 2022.
We have a strong balance sheet and sufficient liquidity, including approximately
$2.3 billion of cash and cash equivalents and access to our undrawn $1.8 billion
revolver. With our Project Own It transformation and cost savings, we have built
a leaner and more flexible cost structure. In addition, in response to the
COVID-19 pandemic, various governments continued to employ temporary measures to
provide aid and economic stimulus directly to companies through cash grants and
credits or indirectly through payments to temporarily furloughed employees. We
recognized savings from the use of such measures in the U.S., Canada and Europe.
We continue to monitor government programs and actions being implemented, or
expected to be implemented, to counter the economic impacts of the COVID-19
pandemic.
The savings from temporary government assistance were recorded as follows in the
Condensed Consolidated Statements of Income:

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