##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549




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FORM 10-Q

|           |  |                                                                                           
|---------- |  | ------------------------------------------------------------------------------------------
|          
|          
|          
|          
|(Mark One) |  |                                                                                           
|          
|          
|          
|          
|[X]        |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934. 
|           |  | For the quarterly period ended December 31, 1999.                                         
|          
|          
|          
|          
|[  ]       |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934.
|           |  | For the transition period from    to    .                                                 

Commission file number 1-15139



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LANIER WORLDWIDE, INC.

(Exact Name of Registrant as Specified in Its
Charter)




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|                                                                |  |                                      
|--------------------------------------------------------------- |  | -------------------------------------
|                                                               
|                                                               
|                                                               
|                                                               
|Delaware                                                        |  | 59-2606737                           
|(State or Other Jurisdiction of
	Incorporation or Organization) |  | (I.R.S. Employer
	Identification No.)

|                                         |  |           
|---------------------------------------- |  | ----------
|                                        
|                                        
|                                        
|                                        
|2300 Parklake Drive,
	Atlanta, Georgia   |  | 30345     
|(Address of Principal Executive Offices) |  | (Zip Code)

Registrants Telephone Number, including Area Code
770-496-9500

Former Name, Former Address and Former Fiscal
Year, if Changed Since Last Report.

Indicate by check   X  whether the
registrant: (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the
 past 90 days.

Yes [X]       No
[   ]

Number of shares of common stock outstanding as of the close of
business on February 2, 2000: 83,024,596



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TABLE OF CONTENTS



|           |                                                                                              |                                                                          |  |  |  |  |  | 
|---------- | -------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------ |  |  |  |  |  | 
|PART I    
|           | Item 1. Financial Statements.                                                               
|           |                                                                                              | CONSOLIDATED BALANCE SHEETS                                             
|           |                                                                                              | CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)                           
|           |                                                                                              | CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)                       
|           |                                                                                              | NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) December 31, 1999
|           | Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations
|           | Item 3. Quantitative and Qualitative Disclosures About Market Risk                          
|PART II   
|           | Item 5. Other Information.                                                                  
|           |                                                                                              | UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME                   
|           | ITEM 6. Exhibits and Reports on Form 8-K                                                    
|SIGNATURES



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TABLE OF CONTENTS

|           |  |                                                                                                  |  |      |  | 
|---------- |  | ------------------------------------------------------------------------------------------------ |  | ---- |  | 
|           |  |                                                                                                  |  | Page
|           |  |                                                                                                  |  |     
|Part I     |  |                                                                                                  |  |      |  | 
|          
|          
|          
|          
|           |  | Item 1.  Financial Statements (Unaudited)                                                        |  |      |  | 
|          
|          
|          
|          
|           |  | Consolidated Balance Sheets                                                                      |  |      |  | 
|          
|          
|          
|          
|           |  | Consolidated Statements of Income                                                                |  |      |  | 
|          
|          
|          
|          
|           |  | Consolidated Statements of Cash Flows                                                            |  |      |  | 
|          
|          
|          
|          
|           |  | Notes to Consolidated Financial Statements                                                       |  |      |  | 
|          
|          
|          
|          
|           |  | Item 2.  Managements Discussion and Analysis
	 of Financial Condition and Results of Operations |  |      |  | 
|          
|          
|          
|          
|           |  | Item 3.  Quantitative and Qualitative Disclosures
	About Market Risk                             |  |      |  | 
|          
|          
|          
|          
|Part II    |  |                                                                                                  |  |      |  | 
|          
|          
|          
|          
|           |  | Item 5.  Other Information                                                                       |  |      |  | 
|          
|          
|          
|          
|           |  | Unaudited Pro Forma Consolidated Statements of Income                                            |  |      |  | 
|          
|          
|          
|          
|           |  | Item 6.  Exhibits and Reports on Form 8-K                                                        |  |      |  | 
|          
|          
|          
|          
|Signatures |  |                                                                                                  |  |     



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##### Table of Contents






PART I




Item  1.  Financial Statements.

LANIER WORLDWIDE, INC. AND SUBSIDIARIES




CONSOLIDATED BALANCE SHEETS


|                                     |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |         |           | 
|------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | - | --------- | --------- |  | - | ------- | --------- | 
|                                     |                                                                                                                                                                                                                        | December 31,                               |   | July 2,  
|                                     |                                                                                                                                                                                                                        | 1999                                       |   | 1999     
|                                     |                                                                                                                                                                                                                        |                                            |   |          
|                                     |                                                                                                                                                                                                                        | (Unaudited)                                |   | (Audited)
|                                     |                                                                                                                                                                                                                        |                                           
|                                     |                                                                                                                                                                                                                        | (In thousands)                            
|                                    
|                                    
|                                    
|                                    
|ASSETS                              
|Current Assets                       |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Cash and cash equivalents                                                                                                                                                                                              |                                            | $ | 30,570    |           |  | $ | 18,209  |          
|                                    
|                                    
|                                    
|                                    
|                                     | Trade receivables                                                                                                                                                                                                      |                                            |   | 301,271   |           |  |   | 348,604 |          
|                                    
|                                    
|                                    
|                                    
|                                     | Receivables from former parent company                                                                                                                                                                                 |                                            |   |           |           |  |   | 194,521 |          
|                                    
|                                    
|                                    
|                                    
|                                     | Inventories                                                                                                                                                                                                            |                                            |   | 178,337   |           |  |   | 166,404 |          
|                                    
|                                    
|                                    
|                                    
|                                     | Prepaid expenses                                                                                                                                                                                                       |                                            |   | 18,360    |           |  |   | 17,107  |          
|                                    
|                                    
|                                    
|                                    
|                                     | Deferred income taxes                                                                                                                                                                                                  |                                            |   | 55,468    |           |  |   | 39,276  |          
|                                     |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |        
|                                     |                                                                                                                                                                                                                        | Total current assets                       |   |           | 584,006   |  |   |         | 784,121   | 
|Other Assets                         |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Rental equipment, less allowance for depreciation ($225,741 at
	December 31, 1999 and $205,232 at July 2, 1999)                                                                                                        |                                            |   | 132,547   |           |  |   | 140,718 |          
|                                    
|                                    
|                                    
|                                    
|                                     | Property, plant and equipment, less allowance for depreciation
	($81,679 at December 31, 1999 and $76,053 at July 2,
	1999)                                                                                            |                                            |   | 41,913    |           |  |   | 42,755  |          
|                                    
|                                    
|                                    
|                                    
|                                     | Notes receivables net                                                                                                                                                                                                 |                                            |   | 238,192   |           |  |   | 203,657 |          
|                                    
|                                    
|                                    
|                                    
|                                     | Intangibles, less accumulated amortization ($41,968 at
	December 31, 1999 and $38,610 at July 2, 1999)                                                                                                                 |                                            |   | 122,245   |           |  |   | 125,504 |          
|                                    
|                                    
|                                    
|                                    
|                                     | Other                                                                                                                                                                                                                  |                                            |   | 41,170    |           |  |   | 40,953  |          
|                                     |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |        
|                                     |                                                                                                                                                                                                                        | Total other assets                         |   |           | 576,067   |  |   |         | 553,587   | 
|                                     |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |        
|                                     |                                                                                                                                                                                                                        | Total assets                               |   | $         | 1,160,073 |  |   | $       | 1,337,708 | 
|                                     |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |        
|                                    
|                                    
|                                    
|                                    
|LIABILITIES AND STOCKHOLDERS EQUITY
|Current Liabilities                  |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Notes payable                                                                                                                                                                                                          |                                            | $ | 79,299    |           |  | $ | 138,011 |          
|                                    
|                                    
|                                    
|                                    
|                                     | Trade payables                                                                                                                                                                                                         |                                            |   | 58,488    |           |  |   | 86,815  |          
|                                    
|                                    
|                                    
|                                    
|                                     | Retirement plan obligations                                                                                                                                                                                            |                                            |   | 43,895    |           |  |   | 38,964  |          
|                                    
|                                    
|                                    
|                                    
|                                     | Accrued compensation                                                                                                                                                                                                   |                                            |   | 32,137    |           |  |   | 39,066  |          
|                                    
|                                    
|                                    
|                                    
|                                     | Accrued interest and sundry taxes                                                                                                                                                                                      |                                            |   | 22,776    |           |  |   | 21,772  |          
|                                    
|                                    
|                                    
|                                    
|                                     | Other accrued items                                                                                                                                                                                                    |                                            |   | 32,256    |           |  |   | 33,610  |          
|                                    
|                                    
|                                    
|                                    
|                                     | Unearned service income                                                                                                                                                                                                |                                            |   | 41,184    |           |  |   | 57,898  |          
|                                    
|                                    
|                                    
|                                    
|                                     | Income taxes                                                                                                                                                                                                           |                                            |   | 24,604    |           |  |   | 15,460  |          
|                                    
|                                    
|                                    
|                                    
|                                     | Long-term debt current portion                                                                                                                                                                                         |                                            |   | 86,768    |           |  |   | 2,582   |          
|                                     |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |        
|                                     |                                                                                                                                                                                                                        | Total current liabilities                  |   |           | 421,407   |  |   |         | 434,178   | 
|Other Liabilities                    |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Deferred income taxes                                                                                                                                                                                                  |                                            |   | 17,531    |           |  |   | 16,170  |          
|                                    
|                                    
|                                    
|                                    
|                                     | Long-term debt                                                                                                                                                                                                         |                                            |   | 562,969   |           |  |   | 4,622   |          
|                                    
|                                    
|                                    
|                                    
|Stockholders Equity:                |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Preferred Stock, $.01 par value: authorized 25,000,000 shares;
	none issued                                                                                                                                            |                                            |   |           |           |  |   |         |          
|                                    
|                                    
|                                    
|                                    
|                                     | Common Stock, $.01 par value, 500,000,000 shares authorized;
	issued 87,851,196 shares at December 31, 1999; and $1.00 par
	value, 1,000,000 shares authorized; issued and outstanding 41,893
	 shares at July 2, 1999 |                                            |   | 879       |           |  |   | 42      |          
|                                    
|                                    
|                                    
|                                    
|                                     | Additional paid-in capital                                                                                                                                                                                             |                                            |   | 204,368   |           |  |   | 329,679 |          
|                                    
|                                    
|                                    
|                                    
|                                     | Retained earnings                                                                                                                                                                                                      |                                            |   | 5,702     |           |  |   | 586,556 |          
|                                    
|                                    
|                                    
|                                    
|                                     | Accumulated other comprehensive loss                                                                                                                                                                                   |                                            |   | (35,374   | )         |  |   | (33,539 | )        
|                                    
|                                    
|                                    
|                                    
|                                     | Treasury stock, at cost, 4,826,600 shares                                                                                                                                                                              |                                            |   | (17,409   | )         |  |   |         |          
|                                     |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |        
|                                     |                                                                                                                                                                                                                        | Total stockholders equity                 |   |           | 158,166   |  |   |         | 882,738   | 
|                                     |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |        
|                                     |                                                                                                                                                                                                                        | Total liabilities and stockholders equity |   | $         | 1,160,073 |  |   | $       | 1,337,708 | 
|                                     |                                                                                                                                                                                                                        |                                            |   |           |           |  |   |        

1



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##### Table of Contents



LANIER WORLDWIDE, INC. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


|                                                                |                                     |                                      |         |                  |  |              |         |            |   |   |         |         |  |   |         |         |  
|--------------------------------------------------------------- | ----------------------------------- | ------------------------------------ | ------- | ---------------- |  | ------------ | ------- | ---------- | - | - | ------- | ------- |  | - | ------- | ------- | -
|                                                                |                                     |                                      |         |                 
|                                                                |                                     | Quarter Ended                        |         | Six Months Ended
|                                                                |                                     |                                      |         |                 
|                                                                |                                     | December 31,                         |         | January 1,       |  | December 31, |         | January 1,
|                                                                |                                     | 1999                                 |         | 1999             |  | 1999         |         | 1999      
|                                                                |                                     |                                      |         |                  |  |              |         |           
|                                                                |                                     |                                     
|                                                                |                                     | (In thousands except per share data)
|Revenue                                                         |                                     |                                      |         |                  |  |              |         |            |   |   |         |         |  |   |         |        
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Product sales and rentals           |                                      | $       | 199,519          |  |              | $       | 205,262    |   |   | $       | 368,023 |  |   | $       | 383,286 |  
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Service income                      |                                      |         | 142,345          |  |              |         | 158,310    |   |   |         | 281,469 |  |   |         | 308,325 |  
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Finance income                      |                                      |         | 10,824           |  |              |         | 9,473      |   |   |         | 21,141  |  |   |         | 18,658  |  
|                                                                |                                     |                                      |         |                  |  |              |         |            |   |   |         |         |  |   |         |        
|                                                                |                                     |                                      | 352,688 |                  |  |              | 373,045 |            |   |   | 670,633 |         |  |   | 710,269 |        
|Costs and Expenses                                              |                                     |                                      |         |                  |  |              |         |            |   |   |         |         |  |   |         |        
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Cost of product sales and rentals   |                                      |         | 141,002          |  |              |         | 129,992    |   |   |         | 259,697 |  |   |         | 245,806 |  
|                                                                | Cost of service                     |                                      |         | 76,010           |  |              |         | 87,809     |   |   |         | 152,900 |  |   |         | 173,073 |  
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Selling and administrative expenses |                                      |         | 101,996          |  |              |         | 107,771    |   |   |         | 200,554 |  |   |         | 218,674 |  
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Interest expense                    |                                      |         | 13,479           |  |              |         | 6,425      |   |   |         | 19,068  |  |   |         | 10,545  |  
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Other  net                         |                                      |         | 1,268            |  |              |         | (30        | ) |   |         | 3,734   |  |   |         | (15     | )
|                                                                |                                     |                                      |         |                  |  |              |         |            |   |   |         |         |  |   |         |        
|                                                                |                                     |                                      | 333,755 |                  |  |              | 331,967 |            |   |   | 635,953 |         |  |   | 648,083 |        
|                                                                |                                     |                                      |         |                  |  |              |         |            |   |   |         |         |  |   |         |        
|                                                                | Income before income taxes          |                                      |         | 18,933           |  |              |         | 41,078     |   |   |         | 34,680  |  |   |         | 62,186  |  
|                                                               
|                                                               
|                                                               
|                                                               
|                                                                | Income taxes                        |                                      |         | 7,149            |  |              |         | 13,997     |   |   |         | 13,179  |  |   |         | 21,604  |  
|                                                                |                                     |                                      |         |                  |  |              |         |            |   |   |         |         |  |   |         |        
|Net Income                                                      |                                     | $                                    | 11,784  |                  |  | $            | 27,081  |            |   | $ | 21,501  |         |  | $ | 40,582  |        
|                                                                |                                     |                                      |         |                  |  |              |         |            |   |   |         |         |  |   |         |        
|Weighted average number of shares outstanding                   |                                     |                                      | 86,756  |                  |  |              |         |            |   |   | 87,304  |         |  |   |         |        
|                                                               
|                                                               
|                                                               
|                                                               
|Basic earnings per share                                        |                                     | $                                    | 0.14    |                  |  |              |         |            |   | $ | 0.25    |         |  |   |         |        
|                                                                |                                     |                                      |         |                  |  |              |         |            |   |   |         |         |  |   |         |        
|Weighted average number of shares outstanding assuming dilution |                                     |                                      | 87,040  |                  |  |              |         |            |   |   | 87,588  |         |  |   |         |        
|                                                               
|                                                               
|                                                               
|                                                               
|Diluted earnings per share                                      |                                     | $                                    | 0.14    |                  |  |              |         |            |   | $ | 0.25    |         |  |   |         |        
|                                                                |                                     |                                      |         |                  |  |              |         |            |   |   |         |         |  |   |         |        

2



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##### Table of Contents



LANIER WORLDWIDE, INC. AND SUBSIDIARIES




CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


|                                                      |                                    |                                        |                                                     |                 |         |         |         |         |          |          |  
|----------------------------------------------------- | ---------------------------------- | -------------------------------------- | --------------------------------------------------- | --------------- | ------- | ------- | ------- | ------- | -------- | -------- | -
|                                                      |                                    |                                       
|                                                      |                                    | For The Six Months Ended              
|                                                      |                                    |                                       
|                                                      |                                    | December 31, 1999                      |                                                     | January 1, 1999
|                                                      |                                    |                                        |                                                     |                
|                                                      |                                    |                                       
|                                                      |                                    | (In thousands)                        
|                                                     
|                                                     
|                                                     
|                                                     
|Operating Activities:                                 |                                    |                                        |                                                     |                 |         |         |         |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Net income                         |                                        | $                                                   | 21,501          |         |         | $       | 40,582  |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Adjustments to net income:         |                                        |                                                     |                 |         |         |         |         |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                    | Depreciation                           |                                                     |                 | 52,265  |         |         |         | 54,359   |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                    | Amortization                           |                                                     |                 | 3,358   |         |         |         | 4,242    |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Changes in assets and liabilities: |                                        |                                                     |                 |         |         |         |         |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                    | Trade receivables                      |                                                     |                 | 16,835  |         |         |         | 22,940   |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                    | Receivables from parent                |                                                     |                 | 41,326  |         |         |         | (33,381  | )       
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                    | Inventories                            |                                                     |                 | (11,932 | )       |         |         | 28,437   |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                    | Prepaid expenses                       |                                                     |                 | (1,253  | )       |         |         | (2,554   | )       
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                    | Trade payables and accrued liabilities |                                                     |                 | (30,675 | )       |         |         | 65,076   |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                    | Unearned service income                |                                                     |                 | (16,714 | )       |         |         | (770     | )       
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                    | Income taxes                           |                                                     |                 | 9,144   |         |         |         | 4,197    |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                    | Other                                  |                                                     |                 | (10,615 | )       |         |         | (4,239   | )       
|                                                      |                                    |                                        |                                                     |                 |         |         |         |        
|                                                      |                                    |                                        | Net cash provided by operating activities           |                 |         | 73,240  |         |         |          | 178,889  |  
|                                                     
|                                                     
|                                                     
|                                                     
|Investing Activities:                                 |                                    |                                        |                                                     |                 |         |         |         |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Capital expenditures:              |                                        |                                                     |                 |         |         |         |         |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                    | Cash paid for acquired businesses      |                                                     |                 | (200    | )       |         |         | (168,288 | )       
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                    | Property, plant and equipment          |                                                     |                 | (10,102 | )       |         |         | (9,584   | )       
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      |                                    | Rental equipment                       |                                                     |                 | (36,782 | )       |         |         | (51,821  | )       
|                                                      |                                    |                                        |                                                     |                 |         |         |         |        
|                                                      |                                    |                                        | Net cash used in investing activities               |                 |         | (47,084 | )       |         |          | (229,693 | )
|                                                     
|                                                     
|                                                     
|                                                     
|Financing Activities:                                 |                                    |                                        |                                                     |                 |         |         |         |        
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Proceeds from borrowings           |                                        |                                                     | 645,502         |         |         |         | 107,716 |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Payments to parent                 |                                        |                                                     | (573,634        | )       |         |         |         |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Repurchase of stock                |                                        |                                                     | (17,409         | )       |         |         |         |         
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Repayments of borrowings           |                                        |                                                     | (68,268         | )       |         |         | (76,161 | )       
|                                                      |                                    |                                        |                                                     |                 |         |         |         |        
|                                                      |                                    |                                        | Net cash (used in) provided by financing activities |                 |         | (13,809 | )       |         |          | 31,555   |  
|                                                     
|                                                     
|                                                     
|                                                     
|Effect of exchange rates on cash and cash equivalents |                                    |                                        | 14                                                  |                 |         |         | (1,195  | )      
|                                                      |                                    |                                        |                                                     |                 |         |         |         |        
|Increase (Decrease) in Cash and Cash Equivalents      |                                    |                                        | 12,361                                              |                 |         |         | (20,444 | )      
|                                                     
|                                                     
|                                                     
|                                                     
|Cash and cash equivalents at beginning of year        |                                    |                                        | 18,209                                              |                 |         |         | 87,096  |        
|                                                      |                                    |                                        |                                                     |                 |         |         |         |        
|Cash and Cash Equivalents at End of Period            |                                    | $                                      | 30,570                                              |                 |         | $       | 66,652  |        
|                                                      |                                    |                                        |                                                     |                 |         |         |         |        

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LANIER WORLDWIDE, INC. AND SUBSIDIARIES






NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

December 31, 1999


Note  A.  Basis of Presentation

On October 22, 1999, the Board of Directors of Harris
Corporation (Harris), the then sole stockholder of
Lanier Worldwide, Inc. (Lanier), declared a pro rata
distribution, effective 11:59 p.m., Atlanta time, on
November 5, 1999 of one share of Lanier common stock
(together with associated preferred stock purchase rights) for
each share of Harris common stock held by stockholders of record
of Harris at the close of business on November 1, 1999, to
effectuate the spin-off (the Spin-off) of Lanier as a
 separate public company. The Lanier shares distributed
constituted approximately 90% of the outstanding shares of Lanier
 common stock after the Spin-off. Harris retained approximately
10% of the outstanding shares of Lanier after the Spin-off.

The unaudited consolidated financial statements include the
accounts of Lanier, including certain subsidiaries partially or
wholly owned by Harris, that were transferred to Lanier prior to
the Spin-off.

The consolidated balance sheet as of December 31, 1999, the
consolidated statements of income for the quarter and six months
ended December 31, 1999 and the consolidated statement of cash
flows for the six months ending December 31, 1999 have not
been audited but have been prepared in conformity with the
accounting principles applied in the audited consolidated
financial statements for the fiscal year ending July 2, 1999
 contained in Laniers Registration Statement on
Form 10, as amended (Registration Statement). In
 the opinion of management, the financial statements include all
material adjustments necessary for a fair presentation. This
Form 10-Q should be read in conjunction with the audited
consolidated financial statements and notes included in the
Registration Statement.

Note  B.  Acquisition

In the first quarter of fiscal year 1999, Lanier acquired the
Copying Systems Division of the Agfa-Gevaert Group, which is a
member of the Bayer Group, Leverkusen, Germany (the Agfa
Acquisition). The transaction was accounted for as a
purchase. The purchase price, which is subject to adjustment, was
 $168.3 million in cash. The purchase price exceeded the fair
value of net assets acquired by approximately $46 million, which
is being amortized on a straight-line basis over 20 years.
The results of the Agfa Acquisition are included in the
accompanying unaudited consolidated financial statements from the
 date of acquisition.

Note  C.  Long-Term Debt

Retention of Indebtedness of Lanier Subsidiaries

In connection with the Spin-off, all intercompany accounts
payable to Harris were eliminated and forgiven on
November 5, 1999. Further, Lanier retained existing
indebtedness totaling $146.5 million. During the second quarter
of fiscal 2000, Lanier replaced approximately $51 million of the
retained indebtedness with borrowings under the Credit Facility
described below. Under the credit agreement governing the Credit
Facility, Lanier has the right to maintain a total of $150
million of debt outside of the Credit Facility.

Bank Credit Agreement

On October 20, 1999, Lanier entered into a $900 million
credit facility with three lead agent banks (the Credit
Facility). The $900 million Credit Facility consists of a
$450 million five-year revolver, a $250 million two-year term
loan and a $200 million 364-day revolver.

On November 4, 1999, the credit agreement was amended to add
 a syndicate of eighteen other banks. On that day, Lanier drew
$590 million of debt, consisting of $250 million from the
two-year loan and $340 million from the five-year revolver.
Proceeds were used to make a $545 million cash payment to Harris,
 to pay Harris

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LANIER WORLDWIDE, INC. AND SUBSIDIARIES




NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)-(Continued)


$22.8 million for the transfer of ownership in two subsidiaries
which had $22.8 million of net cash, and for working capital
needs.

In addition to the Credit Facility, Lanier has an existing
European receivable securitization facility totaling $100
million, under which $22.2 million was outstanding as of
December 31, 1999.

Note  D.  Accumulated Other Comprehensive
Loss

Accumulated other comprehensive loss relates solely to foreign
currency translation adjustments related to Laniers foreign
 subsidiaries.

Note  E.  Share Repurchase

On November 30, 1999, Laniers Board of Directors
authorized the repurchase of up to eight million shares of Lanier
 common stock (the Share Repurchase Program). Shares
purchased will be retained as treasury stock and are available
for use under Laniers stock option plan and for other
corporate purposes. Subject to restrictive covenants in
Laniers credit facilities, the repurchases will be made
from time to time at managements discretion in the open
market or in privately negotiated transactions.

Pursuant to the Share Repurchase Program, in December 1999 Lanier
 purchased 4.8 million shares of Lanier common stock in open
market transactions at a total cost of $17.4 million, or
approximately $3.61 per share.

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|         |                                                                                       
|-------- | --------------------------------------------------------------------------------------
|Item  2. | Managements Discussion and Analysis of Financial
	Condition and Results of Operations

Overview

On October 22, 1999, the Board of Directors of Harris, the then
sole stockholder of Lanier, declared a pro rata distribution,
effective 11:59 p.m., Atlanta time, on November 5, 1999, of one
share of Lanier common stock (together with associated preferred
stock purchase rights) for each share of Harris common stock held
 by stockholders of record of Harris at the close of business on
November 1, 1999 to effectuate the spin-off . The Lanier shares
distributed constituted approxima tely 90% of the outstanding
shares of Lanier common stock after the Spin-off. In addition,
Harris retained approximately 10% of the outstanding shares of
Lanier after the Spin-off. The consolidated balance sheet as of
December 31, 1999, the consolidated statements of income for the
second quarter and six-month period ending December 31, 1999, and
 the consolidated statement of cash flows for the six-month
period ending December 31, 1999 have not been audited but have
been prepared in con formity with the accounting principles
applied in the audited consolidated financial statements for the
fiscal year ending July 2, 1999 contained in Laniers
Registration Statement. In the opinion of management, this
information includes all material adjustments necessary for a
fair presentation. This Form 10-Q should be read in conjunction
with the audited consolidated financial statements and notes
included in the Registration Statement.

Forward-Looking Statements

This document contains forward-looking statements that reflect
Laniers current assumptions and estimates of future
performance and economic conditions. Such statements are made in
reliance upon the safe harbor provisions of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. Lanier may make
these statements directly in this document or incorporate such
statements into this document by reference to other documents.
Lanier may also include statements pertaining to periods
following December 31, 1999. Many of these statements may be
identified by words such as believes,
expects, plans, anticipates,
projects, estimates, should
result or are expected to, or similar
expressions. Any forward-looking statements are subject to risks
and uncertainties that may cause actual results and future trends
 to differ materially from those projected, stated or implied by
the forward-looking statements.

Laniers results and the accuracy of the forward-looking
statements could be affected by, among other things: general
economic conditions in the markets in which Lanier operates;
economic developments that have a particularly adverse effect on
one or more of the markets Lanier serves; the ability to execute
managements internal operating plans; stability of key
markets for office products and document management solutions;
fluctuation in foreign currency exchange rates and the
effectiveness of currency hedging program; and worldwide demand
and product and service pricing for office products and document
management solutions. Additional information concerning these
risks and uncertainties is contained in the Registration
Statement, as filed with the Securities and Exchange Commission.
Caution should be taken not to place undue reliance on any
forward-looking statements, since such statements speak only as
of the date of the making of such statements. Lanier disclaims
any intention or obligation to update or revise any
forward-looking statements whether as a result of new
information, future events, or otherwise.

Results of Operations

Lanier is reporting lower revenue and earnings for both the
second quarter and first six months of fiscal 2000 versus
comparable periods in the prior fiscal year. Management believes
the decline was principally attributable to (i) divestitures
 during the fourth quarter of fiscal 1999 of Laniers direct
 sales operation in France and its U.S.-based medical
transcription business, which contributed a combined $12.8
million and $24.4 million of revenue in the second quarter and
six-month period ended January 1, 1999, respectively,
(ii) strengthening of the U.S. dollar against European
currencies which decreased revenues by $12.4 million and $17.1
million in the second quarter and six-month period ended
December 31, 1999, respectively, calculated on a
constant-rate basis, and (iii) competitive pricing pressures
 largely attributable to the industry-wide transition from analog
 to digital products.

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Gross margin declined to 38.5% for both the second quarter and
first six months of fiscal 2000 from 41.6% and 41.0% for
comparable periods in the prior fiscal year. Management believes
the decline was principally attributable to competitive pressures
 and, to a lesser extent, the strengthening of the Japanese yen
versus the U.S. dollar. Further, management believes margin
erosion will likely continue, at least for the duration of the
industry transition to digital products, but cannot predict
accurately the rate of margin erosion or when, if at all, margins
 will improve.

Revenue

Revenue for the second quarter of fiscal 2000 decreased $20.3
million, or 5.4%, to $352.7 million from $373.0 million for the
second quarter of fiscal 1999. For the first six months of fiscal
 2000, revenue decreased $39.7 million, or 5.6%, to $670.6
million from $710.3 million for the comparable period in fiscal
1999. During calendar year 1999, the U.S. dollar strengthened
14.9% against the Euro, impacting Laniers reported revenue
for the second quarter and first six months of fiscal 2000 by
$12.8 million and $18.4 million, respectively. Net of currency
translation effects of a strong U.S. dollar and divestitures in
fiscal 1999 of Laniers direct sales operations in France
and its U.S.-based medical transcription business, second quarter
 revenue increased $4.9 million or 1.3% over the prior
years quarter.

Product Sales and Rentals. Product sales and rentals
revenue for the second quarter of fiscal 2000 decreased $5.8
million, or 2.8%, to $199.5 million from $205.3 million for the
second quarter of fiscal 1999. For the first six months of fiscal
 2000, product sales and rental revenue decreased $15.3 million,
or 4.0%, to $368.0 million from $383.3 million for the comparable
 period in fiscal 1999. Calculated on a constant rate basis, the
strengthening of the U.S. dollar versus foreign currencies,
primarily European, reduced revenue by $7.4 million and $9.1
million for the second quarter and first six months of fiscal
2000, respectively. Laniers divestiture in the fourth
quarter of fiscal 1999 of its direct sales operations in France
lowered revenue by $3.4 million and $5.7 million for the second
quarter and first six months of fiscal 2000, respectively. Net of
 the foregoing currency translation effect and divestitures,
product sales and rentals revenue increased $5.0 million, or
2.4%, for the second quarter of fiscal 2000 and decreased
$500,000 or 0.1% for the first six months of fiscal 2000 versus
comparable periods in the prior year.

Service Income. Service income for the second quarter of
fiscal 2000 decreased $16.0 million, or 10.1%, to $142.3 million,
 from $158.3 million for the second quarter of fiscal 1999. For
the first six months of fiscal 2000, service income decreased
$26.8 million, or 8.7%, to $281.5 million from $308.3 million for
 the comparable period in fiscal 1999. Laniers divestiture
in the fourth quarter of fiscal 1999 of its direct sales
operations in France and its medical transcription business
lowered service income by $2.1 million and $6.3 million,
respectively, for the second quarter of fiscal 2000 and $4.6
million and $12.3 million, respectively, for the first six months
 of fiscal 2000. Calculated on a constant rate basis, the
strengthening of the U.S. dollar against foreign currencies,
primarily European, reduced revenue by $5.1 million and $7.2
million for the second quarter and first six months of fiscal
2000, respectively. In fiscal 2000, Lanier continued its
transition away from servicing and supporting optical storage and
 microfilm product lines, reducing service income by $600,000 and
 $1.2 million for the second quarter and first six months of
fiscal 2000, respectively, versus comparable periods in the prior
 fiscal year. Net of the foregoing divestitures, currency
translation effect and transition out of optical storage and
microfilm service and support, service income decreased $1.9
million, or 1.2%, for the second quarter of fiscal 2000 and $1.5
million, or 0.5%, for the first six months of fiscal 2000, versus
 the comparable periods in fiscal 1999. Management believes the
remainder of the decline was attributable to a combination of the
 growing market preference for cost-per-copy programs as opposed
to prepaid service agreements and pricing pressures associated
with the industry transition to digital products.

Finance Income. For the second quarter of fiscal 2000,
finance income increased $1.3 million, or 13.7%, to $10.8 million
 from $9.5 million for the second quarter of fiscal 1999. For the
 first six months of fiscal 2000, finance income increased $2.4
million, or 12.8%, to $21.1 million from $18.7 million for the
comparable period in fiscal 1999. Management attributed this
years increases to a higher volume of leased equipment.

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Gross Margin.Presented below is detailed information on
gross margin:

|                                     |  |         |      |         |  |             |      |        |  |        |      |             |  |  |      |   |  |  |      |   |  |  |      |  
|------------------------------------ |  | ------- | ---- | ------- |  | ----------- | ---- | ------ |  | ------ | ---- | ----------- |  |  | ---- | - |  |  | ---- | - |  |  | ---- | -
|                                     |  |         |      |         |  |             |      | First  |  | First  |      |            
|                                     |  | Second  |      | Second  |  | Change      |      | Six    |  | Six    |      | Change     
|                                     |  | Quarter |      | Quarter |  | (Percentage |      | Months |  | Months |      | (Percentage
|                                     |  | F2000   |      | F1999   |  | Points)     |      | F2000  |  | F1999  |      | Points)    
|                                     |  |         |      |         |  |             |      |        |  |        |      |            
|Total Gross Margin                   |  |         | 38.5 | %       |  |             | 41.6 | %      |  |        | (3.1 | )           |  |  | 38.5 | % |  |  | 41.0 | % |  |  | (2.5 | )
|                                    
|                                    
|                                    
|                                    
|Product Sales & Rentals Gross Margin |  |         | 29.3 | %       |  |             | 36.7 | %      |  |        | (7.4 | )           |  |  | 29.4 | % |  |  | 35.9 | % |  |  | (6.5 | )
|                                    
|                                    
|                                    
|                                    
|Service Gross Margin                 |  |         | 46.6 | %       |  |             | 44.5 | %      |  |        | 2.1  |             |  |  | 45.7 | % |  |  | 43.8 | % |  |  | 1.9  |  

Total gross margin for the second quarter of fiscal 2000
decreased by $19.5 million, or 12.6%, to $135.7 million from
$155.2 million for the second quarter of fiscal 1999. For the
second quarter, $2.9 million of this decline was attributable to
Laniers divestiture of its direct sales operations in
France and its medical transcription business, $4.3 million arose
 from the currency translation effect from the strengthening of
the U.S. dollar relative to foreign currencies, primarily
European, calculated on a constant rate basis, and $2.4 million
was the result of the strengthening of the Japanese yen relative
to the U.S. dollar. Management believes the remainder of the
decline was principally attributable to ongoing price competition
 for unit placements.

Total gross margin for the first six months of fiscal 2000
decreased by $33.4 million, or 11.5%, to $258.0 million from
$291.4 million for the comparable period in the prior fiscal
year. For the six-month period, $5.1 million of the decrease was
attributable to the divestitures discussed above, $6.1 million
was due to currency translation effects and $4.8 million
reflected the impact of the strengthening of the Japanese yen
versus the U.S. dollar Management believes the remainder of the
decline was principally attributable to ongoing price competition

Management believes the decreases in gross margin on product
sales and rentals for the second quarter and first six months of
fiscal 2000 were principally attributable to ongoing price
competition on both analog and digital product lines and the
strengthening of the Japanese yen against the U.S. dollar
Management believes the increases in gross margin on service for
the second quarter and first six months of fiscal 2000 were
attributable to margin improvements in Laniers facilities
management business primarily from internal emphasis on reducing
compensation expense related to litigation services offerings
initiated in fiscal 1999 and continuing this fiscal year, and to
restructuring of the worldwide service organization completed in
the second half of fiscal year 1999.

Selling and Administrative Expenses. Selling and
administrative expenses for the second quarter of fiscal 2000
decreased $5.8 million, or 5.4%, to $102.0 million from $107.8
million for the second quarter of fiscal 1999. For the first six
months of fiscal 2000, selling and administrative expenses
decreased $18.1 million, or 8.3%, to $200.6 million from $218.7
million for the comparable period in the prior year. Management
attributed the reduction principally to a restructuring program
instituted and completed in fiscal 1999. To a lesser extent,
management believes the decrease was attributable to ongoing
emphasis on reducing overhead expenses

Administrative expenses for the second quarter and for the first
six months of fiscal 1999 included a management fee allocation of
 $7.1 million and $13.0 million, respectively, for Laniers
pro rata share of Harris overhead expenses. For the second
quarter and first six months of fiscal 2000, this allocation was
reduced to $600,000 and $2.3 million, respectively, to reflect
the level of expenses management expects to incur as an
independent public company in fiscal 2000.

Other Income and Expense. Interest expense for the second quarter
 of fiscal 2000 increased $7.1 million, or 110.9%, to $13.5
million from $6.4 million for the second quarter of fiscal 1999.
The second quarter included one month of expense as a subsidiary
of Harris and two months as a stand-alone company. As a result,
interest expense for the quarter would have been approximately $2
 million more had Lanier been a stand-alone company for the
entire quarter. Other expense for the second quarter and first
six months of fiscal 2000 totaled $1.3 million and $3.7 million
respectively, compared to negligible income for comparable
periods

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Provision for Income Taxes. Laniers effective tax
rate for the second quarter and first six months of fiscal 2000
were 37.8% and 38.0%, respectively, versus 34.1% and 34.7% for
comparable periods in the prior fiscal year, respectively. This
years increase in the effective tax rate was primarily
attributable to foreign losses for which Lanier was unable to
recognize a tax benefit.

Net Income.Net income for the second quarter of fiscal
2000 decreased $15.3 million, or 56.5%, to $11.8 million from
$27.1 million for the second quarter of fiscal 1999. For the
first six months of fiscal 2000, net income decreased $19.1
million, or 47.0% to $21.5 million from $40.6 million for the
comparable period in the prior year. The decline is principally
attributable to declines in revenue and gross margin, as
described above, and the additional interest and other expenses
incurred as a result of the Spin-off.

Earnings per Share.For the second quarter of fiscal 2000,
 basic and diluted earnings per share amounted to 14 cents. This
amount was calculated based on 86,756,266 shares, the weighted
average number of shares outstanding during the quarter, after
giving effect to Laniers December 1999 purchase of
4,826,600 shares pursuant to the Share Repurchase Program. The
weighted average number of diluted shares included a dilutive
effect of 284,011 shares related to stock option and performance
share programs.

Liquidity and Capital Resources

Laniers operations are funded by cash provided from
operating activities and by financing provided under its $900
million Credit Facility and various other credit facilities. At
December 31, 1999, the Credit Facility and various other
credit facilities had $644.8 million and $84.2 million
outstanding, respectively.

Analysis of Cash Flows

Net cash provided by operating activities for the first
six months of fiscal 2000 decreased $105.7 million to $73.2
million from $178.9 million for the first six months of
fiscal 1999. The decrease was primarily attributable to a
one-time increase in accounts payable in fiscal 1999 resulting
from a change in the mix of vendors as well as a change in
negotiated payment terms with certain vendors, which contributed
$65.1 million in the prior-year period Further, inventory levels
for the first six months of fiscal 1999 declined by $28.4
million.

For the first six months of fiscal 2000 the following net
changes in assets and liabilities impacted operating cash flow:
(i) a decrease in trade receivables of $16.8 million
primarily due to lower sales; (ii) $41.3 million used to
settle intercompany accounts forgiven by Lanier in connection
with the Spin-off; (iii) a decrease in payables of $31
million attributable to settling in the current year unusually
high prior-year-end balances from trade vendors as a result of
backlog of digital products during the fourth quarter of fiscal
1999; (iv) a decline of $16.7 million in unearned service
income in connection with the market shift from prepaid service
agreements to cost-per-copy programs; and (v) a net source
of cash of $9.1 million from net changes in income taxes
primarily as a result of the Spin-off.

Capital expenditures for the first six months of fiscal 2000
 were $10.1 million for property, plant and equipment and $36.8
million for rental equipment, compared to $9.6 million and $51.8
million, respectively, for the comparable periods in the prior
fiscal year. During the prior years first quarter, $168.3
million was used for the Agfa Acquisition.

Cash used in financing activities in the first six months of
 fiscal 2000 was $13.8 million, compared to cash provided by
financing activities of $31.6 million for the first
six months of 1999. The prior-year period reflects net
borrowings used for the Agfa Acquisition. Proceeds from
borrowings under credit facilities for the first six months
of fiscal 2000 totaled $645.5 million. This amount includes net
borrowings of $590 million under the Credit Facility to fund
$573.6 million of cash payments to Harris in connection with the
Spin-off and $17.4 million for share repurchases pursuant to the
Share Repurchase Program. The remainder of the borrowings were
used to fund working capital requirements. Repayments under
credit facilities in the first six months of fiscal 2000
were $68.3 million.

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Lanier plans to implement a debt refinancing program in the first
 calendar quarter to reduce its cost of borrowing and diversify
sources of funding. Management believes this program will include
 securitizations of domestic trade and lease receivables, the
proceeds of which will be used to pay down the $250 million term
loan. Following this initial step, if market conditions allow,
and to demonstrate a more sensible debt structure, Lanier plans
to do a private placement of debt securities of varied maturities
 with fixed rate features.

Lanier has no material commitments other than supply agreements
with vendors. Lanier will continue to make additional investments
 in facilities, equipment and computer equipment to support
revenue requirements. Cash flow from operations, together with
anticipated borrowing arrangements, is expected adequately to
finance operating cash requirements and capital expenditures
during this fiscal year. Lanier expects to fund future
acquisitions, if any, and long-term growth primarily with cash
flows from operations, borrowings under the Credit Facility and
possible future issuance of equity or debt securities.

Credit Facility

Lanier has a $900 million Credit Facility with ABN AMRO Bank
N.V., as administrative agent, SunTrust Bank, Atlanta, as
syndication agent, and Wachovia Bank N.A., as document agent.

The Credit Facility consists of three tranches: a $200 million
364-day revolving debt facility, a $250 million 2-year term loan
and a five-year revolving debt facility. Covenants, restrictions
and rates are essentially the same for all three tranches of the
Credit Facility.

At December 31, 1999, Lanier had total borrowings under the
Credit Facility of $644.8 million. The maximum amount of $250
million was advanced under the term loan, $394.8 million was
advanced under the five-year revolver and there were no
borrowings under the 364-day revolver.

The Credit Facility contains financial covenants. In particular,
the Credit Facility contains (i) a covenant regarding
maintenance of a leverage ratio, which is defined as total debt
divided by EBITDA (earnings before interest, taxes, depreciation
and amortization), (ii) an interest coverage covenant, which
 is defined as EBITDAR (earnings before interest, taxes,
depreciation, amortization and rental expense) divided by
interest and rental expense and (iii) a minimum net worth
covenant. The Credit Facility restricts Laniers ability to
pay dividends or make other distributions and to redeem, purchase
 or otherwise acquire shares of its capital stock, and prohibits
any such dividend, distribution, redemption, purchase or other
acquisition during the existence of a default or event of default
 thereunder. The Credit Facility contains covenants limiting
total acquisitions in any fiscal year to $150 million. This limit
 increases to $250 million upon repayment of the two-year term
loan portion of the Credit Facility and $350 million upon
achieving a senior unsecured debt rating of BBB or
better by Standard & Poors Ratings Group or
Baa or better by Moodys Investors Service, Inc.

Additionally, the Credit Facility contains covenants which, among
 other things, require production of financial statements, notice
 of material litigation and material governmental and
environmental proceedings, compliance with laws and contractual
obligations, payment of taxes, maintenance of insurance and Year
2000 compliance and limit the incurrence of additional
indebtedness, mergers, consolidations and sales of assets,
dividends, prepayment of other debt, investments and
acquisitions, capital expenditures, sales and leaseback
transactions and transactions with affiliates. Further, the
Credit Facility restricts the cumulative dollar amount of share
repurchases and dividends to 25% of the prior fiscal years
net income. The Credit Facility also contains customary events of
 default, including payment defaults, inaccuracies of
representations and warranties, violation of covenants and cross
defaults to other indebtedness.

Indebtedness under the Credit Facility is guaranteed by
Laniers domestic and foreign subsidiaries, and will be
secured by a pledge of the capital stock of certain subsidiaries.
 Lanier may also incur additional indebtedness under the Credit
Facility from time to time for general corporate purposes,
including working capital, capital expenditures and future
acquisitions.

Year 2000

Lanier previously recognized the material nature of the business
issues surrounding computer processing of dates into and beyond
the Year 2000 and began taking corrective action. Laniers
efforts were focused on

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Year 2000 readiness costs were $11.5 million, approximately
$500,000 of which were incurred in the current fiscal year. These
 costs were funded by cash from operations and generally were not
 incremental to existing IT budgets Internal resources were
re-deployed and timetables for implementation of replacement
systems were accelerated. Lanier does not currently expect to
apply any further funds to address Year 2000 issues.

As of the date of this filing, Lanier has not experienced any
material disruptions of its internal computer systems or software
 applications, and has not experienced any problems with the
computer systems or software applications of its third party
vendors, suppliers or service providers. Management will continue
 to monitor these third parties to determine the impact, if any,
on Laniers business and the actions to take, if any, in the
 event of non-compliance by any of these third parties. Based
upon an assessment of compliance by third parties, there appears
to be no material business risk posed by any such non-compliance.
 Moreover, Lanier generally believes that the vendors that supply
 products to Lanier for resale are responsible for the
products Year 2000 functionality.

Although the Year 2000 rollover did not present any material
business disruption, there are some remaining Year 2000-related
risks, including risks due to the fact that the Year 2000 is a
leap year. These risks include potential product supply issues
and other non-operational issues. Management believes that
appropriate action has been taken to address these remaining Year
 2000 issues and contingency plans are in place to minimize any
financial impact to Lanier Management, however, cannot be certain
 that Year 2000 issues will not have a material adverse impact on
 Lanier, since the evaluation process is not yet complete and it
is early in the Year 2000.

Euro Conversion

On January 1, 1999, certain member nations of the EMU
adopted a common currency, the Euro. For a three-year transition
period, both the Euro and individual participants
currencies will remain in circulation. After January 1,
2002, the Euro will be the sole legal tender for EMU countries.
The adoption of the Euro affects many financial systems and
business applications as the commerce of these nations will be
transacted in both the Euro and the existing national currency.
Approximately 19% of Laniers revenue for the first
six months of fiscal 2000 were derived from EMU countries.
For fiscal 1999, Lanier derived 20.7% of its revenue from EMU
countries.

Lanier is currently addressing Euro-related issues and its impact
 on information systems, currency exchange rate risk, taxation,
contracts, competition, and pricing. To date Lanier has not
experienced an adverse impact or material expense related to the
adoption of the Euro. All costs associated with the adoption of
the Euro have been expensed as incurred. Lanier has completed the
 Euro-related information systems conversion for all information
systems except for the European financial systems. Lanier has
implemented the Euro-compliant version of the European financial
systems; however, several manual billing processes remain which
are on track to be fully automated by the second quarter of
fiscal year 2001.

Seasonality

Laniers business is somewhat seasonal as a result of its
sales incentive programs with the strongest revenue and profit
occurring in the second and fourth quarters. The results of
operations for any interim quarter are not necessarily indicative
 of results for a full year.

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Item  3.  Quantitative and Qualitative
Disclosures About Market Risk

Market Risk

Impact of Foreign Exchange. Laniers international
sales are generally denominated in the currency of the foreign
entities, which exposes Lanier to fluctuations in foreign
currency exchange rates and to other material risks associated
with international operations. Historically, earnings have not
been adversely impacted by currency fluctuations. Currency risk
associated with foreign investments has been mitigated by
liabilities denominated in local functional currencies. In
addition, Lanier utilizes exchange rate agreements, which provide
 limited protection against currency exchange risks. Factors that
 could impact the effectiveness of the hedging program include
volatility of currency markets and the cost and availability of
hedging instruments. A ten-percent adverse change in currency
exchange rates for foreign currency derivatives held at
December 31, 1999 would have an impact of approximately $5.3
 million on the fair value of such instruments. This
quantification of exposure to the market risk associated with
foreign exchange financial instruments does not take into account
 the offsetting impact of changes in the fair value of foreign
denominated assets, liabilities, and firm commitments.

Historically, gains and losses resulting from currency rate
fluctuations have not had a material effect on results of
operations. However, Laniers risk exposure may increase as
international sales increase in volume and geographic
distribution. The impact of translating the assets and
liabilities of international operations into U.S. dollars is
included as a component of stockholder equity.

Interest Rate Risk. Lanier uses interest rate swap
agreements to hedge its exposure to the change in interest rates
on floating rate debt. Under these swaps, Lanier pays fixed
interest rate percentage and receives floating interest rate
percentage. A ten basis point adverse change in interest rates
would have an impact of approximately $200,000 on the fair value
of interest rate swaps which Lanier was a party to as of
December 31, 1999.

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PART  II




Item  5.  Other Information.

LANIER WORLDWIDE, INC.






UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF INCOME


Introduction to Unaudited Pro Forma Consolidated Statements of
 Income

Lanier was acquired by Harris in 1983. The Spin-off was completed
 on November 5, 1999. Accordingly, Lanier has an operating
history as an independent company for approximately two months.
The historical unaudited consolidated statements of income
contained in this Form 10-Q reflect periods during which we
did not operate as an independent company, and certain
assumptions were made in preparing the statements of income.
Therefore, the historical unaudited consolidated statements of
income may not necessarily reflect the consolidated results of
operations that would have existed had Lanier been an independent
 company.

The following unaudited pro forma consolidated statements of
income make adjustments to the historical unaudited consolidated
statements of income for the quarter and six months ended
December 31, 1999, as if the Spin-off had occurred on
July 2, 1999.

The unaudited pro forma consolidated statements of income should
be read in conjunction with the historical unaudited Consolidated
 Financial Statements of Lanier and the Notes thereto contained
elsewhere in this Form 10-Q and the audited Consolidated
Financial Statements contained in Laniers Registration
Statement. The pro forma consolidated statements of income are
presented for informational purposes only and may not necessarily
 reflect the results of operations or what the results of
operations would have been had Lanier operated as an independent
company for the periods indicated.

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LANIER WORLDWIDE, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

For the Quarter Ended December 31, 1999


|                           |                                     |                                         |         |             |  |           |        |        |      |   |         |         | 
|-------------------------- | ----------------------------------- | --------------------------------------- | ------- | ----------- |  | --------- | ------ | ------ | ---- | - | ------- | ------- | 
|                           |                                     | Historical                              |         | Adjustments |  | Pro Forma
|                           |                                     |                                         |         |             |  |          
|                           |                                     |                                        
|                           |                                     | (In thousands except per share amounts)
|Revenue                    |                                     |                                         |         |             |  |           |        |        |      |   |         |        
|                          
|                          
|                          
|                          
|                           | Product sales and rentals           |                                         | $       | 199,519     |  |           |        |        |      |   | $       | 199,519 | 
|                          
|                          
|                          
|                          
|                           | Service income                      |                                         |         | 142,345     |  |           |        |        |      |   |         | 142,345 | 
|                          
|                          
|                          
|                          
|                           | Finance income                      |                                         |         | 10,824      |  |           |        |        |      |   |         | 10,824  | 
|                           |                                     |                                         |         |             |  |           |        |        |      |   |         |        
|                           |                                     | $                                       | 352,688 |             |  |           |        |        |      | $ | 352,688 |        
|Cost and Expenses          |                                     |                                         |         |             |  |           |        |        |      |   |         |        
|                          
|                          
|                          
|                          
|                           | Cost of product sales and rentals   |                                         |         | 141,002     |  |           |        |        |      |   |         | 141,002 | 
|                          
|                          
|                          
|                          
|                           | Cost of service                     |                                         |         | 76,010      |  |           |        |        |      |   |         | 76,010  | 
|                          
|                          
|                          
|                          
|                           | Selling and administrative expenses |                                         |         | 101,996     |  |           |        |        |      |   |         | 101,996 | 
|                          
|                          
|                          
|                          
|                           | Interest                            |                                         |         | 13,480      |  |           |        | 3,472  | (A)  |   |         | 16,952  | 
|                          
|                          
|                          
|                          
|                           | Other  Net                         |                                         |         | 1,267       |  |           |        |        |      |   |         | 1,267   | 
|                           |                                     |                                         |         |             |  |           |        |        |      |   |         |        
|                           |                                     | $                                       | 333,755 |             |  | $         | 3,472  |        |      | $ | 337,227 |        
|                           |                                     |                                         |         |             |  |           |        |        |      |   |         |        
|Income before income tax   |                                     |                                         | 18,933  |             |  |           | (3,472 | )      |      |   | 15,461  |        
|                          
|                          
|                          
|                          
|                           | Income taxes                        |                                         |         | 7,149       |  |           |        | (1,319 | )(B) |   |         | 5,830   | 
|                           |                                     |                                         |         |             |  |           |        |        |      |   |         |        
|Net Income                 |                                     | $                                       | 11,784  |             |  | $         | (2,152 | )      |      | $ | 9,631   |        
|                           |                                     |                                         |         |             |  |           |        |        |      |   |         |        
|Basic earnings per share   |                                     | $                                       | 0.14    |             |  | $         | (0.03  | )      |      | $ | 0.11    | (C)    
|                           |                                     |                                         |         |             |  |           |        |        |      |   |         |        
|Diluted earnings per share |                                     | $                                       | 0.14    |             |  | $         | (0.03  | )      |      | $ | 0.11    | (D)    
|                           |                                     |                                         |         |             |  |           |        |        |      |   |         |        

Notes to Unaudited Pro Forma Consolidated Statement of Income

The following adjustments were made to Laniers historical
consolidated income statement for the quarter ended
December 31, 1999:



|    |  |                                                                                                                                                                                                                                                                                                             
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) |  | Adjustment to interest expense to reflect additional long-term
	debt of Lanier using an annual estimated interest rate of 8.3%
	assuming $700 million of indebtedness net of cash for the period
	October 2, 1999 to November 5, 1999, the Spin-off date.                                                   
|   
|(B) |  | Adjustment for income tax provision related to pretax
	adjustments.                                                                                                                                                                                                                                         
|   
|(C) |  | Basic earnings per share is computed based on 86,756,266 shares,
	which represents the weighted average number of Lanier shares
	outstanding for the quarter ended December 31, 1999 giving
	effect to Laniers repurchase of 4.8 million shares in
	December 1999 pursuant to its Share Repurchase Program.
|   
|(D) |  | Diluted earnings per share is computed based on 87,040,277
	shares, which represents the weighted average number of diluted
	shares for the quarter ended December 31, 1999.                                                                                                                                

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LANIER WORLDWIDE, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF INCOME

For the Six Months Ended December 31, 1999


|                           |                                     |                                         |         |             |  |           |         |        |      |   |         |         | 
|-------------------------- | ----------------------------------- | --------------------------------------- | ------- | ----------- |  | --------- | ------- | ------ | ---- | - | ------- | ------- | 
|                           |                                     | Historical                              |         | Adjustments |  | Pro Forma
|                           |                                     |                                         |         |             |  |          
|                           |                                     |                                        
|                           |                                     | (In thousands except per share amounts)
|Revenue                    |                                     |                                         |         |             |  |           |         |        |      |   |         |        
|                          
|                          
|                          
|                          
|                           | Product sales and rentals           |                                         | $       | 368,023     |  |           |         |        |      |   | $       | 368,023 | 
|                          
|                          
|                          
|                          
|                           | Service income                      |                                         |         | 281,469     |  |           |         |        |      |   |         | 281,469 | 
|                          
|                          
|                          
|                          
|                           | Finance income                      |                                         |         | 21,141      |  |           |         |        |      |   |         | 21,141  | 
|                           |                                     |                                         |         |             |  |           |         |        |      |   |         |        
|                           |                                     | $                                       | 670,633 |             |  |           |         |        |      | $ | 670,633 |        
|Cost and Expenses          |                                     |                                         |         |             |  |           |         |        |      |   |         |        
|                          
|                          
|                          
|                          
|                           | Cost of product sales and rentals   |                                         |         | 259,697     |  |           |         |        |      |   |         | 259,697 | 
|                          
|                          
|                          
|                          
|                           | Cost of service                     |                                         |         | 152,900     |  |           |         |        |      |   |         | 152,900 | 
|                          
|                          
|                          
|                          
|                           | Selling and administrative expenses |                                         |         | 200,554     |  |           |         |        |      |   |         | 200,554 | 
|                          
|                          
|                          
|                          
|                           | Interest                            |                                         |         | 19,068      |  |           |         | 12,408 | (A)  |   |         | 31,476  | 
|                          
|                          
|                          
|                          
|                           | Other  Net                         |                                         |         | 3,734       |  |           |         |        |      |   |         | 3,734   | 
|                           |                                     |                                         |         |             |  |           |         |        |      |   |         |        
|                           |                                     | $                                       | 635,953 |             |  | $         | 12,408  |        |      | $ | 648,361 |        
|                           |                                     |                                         |         |             |  |           |         |        |      |   |         |        
|Income before income tax   |                                     |                                         | 34,680  |             |  |           | (12,408 | )      |      |   | 22,272  |        
|                          
|                          
|                          
|                          
|                           | Income taxes                        |                                         |         | 13,179      |  |           |         | (4,715 | )(B) |   |         | 8,464   | 
|                           |                                     |                                         |         |             |  |           |         |        |      |   |         |        
|Net Income                 |                                     | $                                       | 21,501  |             |  | $         | (7,693  | )      |      | $ | 13,808  |        
|                           |                                     |                                         |         |             |  |           |         |        |      |   |         |        
|Basic earnings per share   |                                     | $                                       | 0.25    |             |  | $         | (0.09   | )      |      | $ | 0.16    | (C)    
|                           |                                     |                                         |         |             |  |           |         |        |      |   |         |        
|Diluted earnings per share |                                     | $                                       | 0.25    |             |  | $         | (0.09   | )      |      | $ | 0.16    | (D)    
|                           |                                     |                                         |         |             |  |           |         |        |      |   |         |        

Notes to Unaudited Pro Forma Consolidated Statement of Income

The following adjustments were made to Laniers historical
consolidated income statement for the six months ended
December 31, 1999:



|    |  |                                                                                                                                                                                                                                                                                                                
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(A) |  | Adjustment to interest expense to reflect additional long-term
	debt of Lanier using an annual estimated interest rate of 8.3%
	assuming $700 million of indebtedness net of cash for the period
	July 3, 1999 to November 5, 1999, the Spin-off date.                                                         
|   
|(B) |  | Adjustment for income tax provision related to pretax
	adjustments.                                                                                                                                                                                                                                            
|   
|(C) |  | Basic earnings per share is computed based on 87,303,731 shares,
	which represents the weighted average number of Lanier shares
	outstanding for the six months ended December 31, 1999
	giving effect to Laniers repurchase of 4.8 million shares
	in December 1999 pursuant to its Share Repurchase Program.
|   
|(D) |  | Diluted earnings per share is computed based on 87,587,742
	shares, which represents the weighted average number of diluted
	shares for the six months ended December 31, 1999.                                                                                                                                

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ITEM  6.  Exhibits and Reports on
Form 8-K

(a)  Exhibits

|        |      |  |  |                         |  |                                                                                                                                                                                                                                                       
|------- | ---- |  |  | ----------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |  |  |                        
|Number  |      |  |  | Description of Exhibits
|        |      |  |  |                        
|        | 3.1  |  |  |                        |  | Amended and Restated Certificate of Incorporation of the
	Registrant (incorporated herein by reference to Exhibit 3.1
	to the Form 8-K filed by the Registrant on November 12,
	 1999).                                                               
|        | 3.2  |  |  |                        |  | Amended and Restated Bylaws of the Registrant (incorporated
	herein by reference to Exhibit 3.2 to the Form 8-K
	filed by the Registrant on November 12, 1999).                                                                                       
|        | 4.1  |  |  |                        |  | Stockholder Protection Rights Agreement, dated November 5,
	1999, between the Registrant and ChaseMellon Shareholder
	Services, LLC (incorporated herein by reference to Exhibit 
	4.1 to the Form 8-K filed by the Registrant on November 12,
	1999).
|        | 10.1 |  |  |                        |  | Lanier Worldwide, Inc. Performance Share Award Agreement Terms
	and Conditions, and Schedule thereto.                                                                                                                                                 
|        | 10.2 |  |  |                        |  | Lanier Worldwide, Inc. Save to Accumulate Retirement $(STAR$)
	Plan, as amended and restated December 1, 1999.                                                                                                                                        
|        | 10.3 |  |  |                        |  | Form of Executive Severance Agreement (incorporated by reference
	to Exhibit 10.14 to the Registrants Registration
	Statement on Form 10 (File No. 1-15139)), and Schedule
	thereto.                                                                 
|        | 10.4 |  |  |                        |  | Form of Indemnification Agreement (incorporated by reference to
	Exhibit 10.10 to the Registrants Registration
	Statement on Form 10 (File No. 1-15139)), and Schedule
	thereto.                                                                     
|        | 27.1 |  |  |                        |  | Financial Data Schedules (For SEC use only).                                                                                                                                                                                                          

(b)  Reports on Form 8-K

The Registrant filed a Form 8-K on November 12, 1999
reporting the distribution of the stock dividend by Harris
Corporation on November 8, 1999 of approximately 90% of the
Registrants issued and outstanding Common Stock to the
shareholders of Harris Corporation.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.



| |                       
| | ----------------------
| | LANIER WORLDWIDE, INC.

|                        |  |                                                                                                                             
|----------------------- |  | ----------------------------------------------------------------------------------------------------------------------------
|Dated: February 8, 2000 |  | By:  /s/ James A. MacLennan                                                                                                 
|                        |  |                                                                                                                             
|                        |  | James A. MacLennan                                                                                                          
|                        |  | Executive Vice President and Chief Financial Officer (Authorized
	Officer and Principal Financial Officer of the Registrant)

17