===========================================================================

                           UNITED STATES
                SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549

                             FORM 10-Q


       [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
              OF THE SECURITIES EXCHANGE ACT OF 1934

         For the quarterly period ended September 30, 2000

                                OR

       [ ] 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 0-9722


                       INTERGRAPH CORPORATION
      ------------------------------------------------------
      (Exact name of registrant as specified in its charter)

           Delaware                              63-0573222
-------------------------------      ------------------------------------
(State or other jurisdiction of      (I.R.S. Employer Identification No.)
incorporation or organization)

         Intergraph Corporation
          Huntsville, Alabama                      35894-0001
----------------------------------------           ----------
(Address of principal executive offices)           (Zip Code)

                             (256) 730-2000
                           ------------------
                           (Telephone Number)


Indicate  by check mark 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  ___


    Common stock, par value  $.10 per share: 49,450,448 shares
               outstanding as of September 30, 2000

===========================================================================




                      INTERGRAPH CORPORATION
                            FORM 10-Q*
                        September 30, 2000

                               INDEX


                                                                    Page No.
                                                                    --------
PART I.  FINANCIAL INFORMATION

  Item 1. Financial Statements


          Consolidated Balance Sheets at September 30, 2000 and
             December 31, 1999                                          2

          Consolidated Statements of Operations for the quarters
             and nine months ended September 30, 2000 and 1999          3

          Consolidated Statements of Cash Flows for the nine
             months ended September 30, 2000 and 1999                   4

          Notes to Consolidated Financial Statements                  5 - 16

  Item 2. Management's Discussion and Analysis of Financial
             Condition and Results of Operations                     17 - 30

  Item 3. Quantitative and Qualitative Disclosures About Market Risk   31



PART II. OTHER INFORMATION

  Item 1. Legal Proceedings                                            31

  Item 6. Exhibits and Reports on Form 8-K                             31


SIGNATURES                                                             32




*Information contained in this Form 10-Q includes statements  that
are  forward  looking as defined in Section 21E of the  Securities
Exchange  Act of 1934.  Actual results may differ materially  from
those  projected  in the forward looking statements.   Information
concerning  factors  that  could cause actual  results  to  differ
materially  from  those  in  the  forward  looking  statements  is
described  in  the  Company's  filings  with  the  Securities  and
Exchange  Commission, including its most recent Annual  Report  on
Form 10-K, its Form 10-Q filings for the quarters ended March  31,
2000 and June 30, 2000, and this Form 10-Q.




PART I.   FINANCIAL INFORMATION

              INTERGRAPH CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS
                            (Unaudited)

----------------------------------------------------------------------------
                                                September 30,   December 31,
                                                     2000           1999
----------------------------------------------------------------------------
(In thousands except share and per share amounts)

Assets
  Cash and cash equivalents                        $106,421         $ 88,513
  Accounts receivable, net                          195,444          258,768
  Inventories                                        22,911           35,918
  Other current assets                               30,986           28,744
----------------------------------------------------------------------------
      Total current assets                          355,762          411,943

  Investments in affiliates                          17,381            9,940
  Other assets                                       63,213           68,154
  Property, plant, and equipment, net                59,010           94,907
----------------------------------------------------------------------------
      Total Assets                                 $495,366         $584,944
============================================================================

Liabilities and Shareholders' Equity
  Trade accounts payable                           $ 31,872         $ 50,963
  Accrued compensation                               35,087           35,848
  Other accrued expenses                             60,923           71,052
  Billings in excess of sales                        50,176           66,051
  Income taxes payable                                9,628            8,175
  Short-term debt and current maturities of
    long-term debt                                    7,898           11,547
----------------------------------------------------------------------------
      Total current liabilities                     195,584          243,636

  Deferred income taxes                               2,360            2,620
  Long-term debt                                     25,437           51,379
  Other noncurrent liabilities                       10,971           10,609
----------------------------------------------------------------------------
      Total liabilities                             234,352          308,244
----------------------------------------------------------------------------

  Shareholders' equity:
   Common stock, par value $.10 per share -
     100,000,000 shares authorized;
     57,361,362 shares issued                         5,736            5,736
   Additional paid-in capital                       214,797          216,943
   Retained earnings                                170,315          178,231
   Accumulated other comprehensive loss            ( 14,539)        (  5,506)
----------------------------------------------------------------------------
                                                    376,309          395,404
   Less - cost of 7,910,914 treasury shares at
     September 30, 2000 and 8,145,149 treasury
     shares at December 31, 1999                   (115,295)        (118,704)
----------------------------------------------------------------------------
      Total shareholders' equity                    261,014          276,700
----------------------------------------------------------------------------
      Total Liabilities and Shareholders' Equity   $495,366         $584,944
============================================================================

The accompanying notes are an integral part of these consolidated
financial statements.


              INTERGRAPH CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS
                            (Unaudited)

----------------------------------------------------------------------------
                                        Quarter Ended     Nine Months Ended
                                        September 30,        September 30,
                                       2000      1999       2000       1999
----------------------------------------------------------------------------
(In thousands except per share amounts)

Revenues
 Systems                             $91,988  $150,622   $349,568   $472,522
 Maintenance                          39,650    45,806    123,463    141,082
 Services                             27,299    24,120     73,292     78,630
----------------------------------------------------------------------------
   Total revenues                    158,937   220,548    546,323    692,234
----------------------------------------------------------------------------

Cost of revenues
 Systems                              61,417   115,295    223,964    341,590
 Maintenance                          20,623    27,122     65,713     75,559
 Services                             22,448    20,546     60,962     63,154
-----------------------------------------------------------------------------
   Total cost of revenues            104,488   162,963    350,639    480,303
-----------------------------------------------------------------------------

   Gross profit                       54,449    57,585    195,684    211,931

Product development                   12,887    15,857     42,850     47,200
Sales and marketing                   28,767    40,821     93,570    130,221
General and administrative            22,320    28,743     71,159     83,120
Nonrecurring operating charges         3,362    13,124      3,362     15,596
----------------------------------------------------------------------------

   Loss from operations              (12,887)  (40,960)   (15,257)   (64,206)

Gains on sales of assets              12,018       ---     19,111     12,471
Arbitration settlement                   ---       ---        ---    ( 8,562)
Interest expense                     (   953)  ( 1,501)   ( 3,241)   ( 4,340)
Other income (expense) - net         ( 2,457)      427    ( 3,629)   ( 2,520)
----------------------------------------------------------------------------
   Loss from continuing
   operations before income taxes    ( 4,279)  (42,034)   ( 3,016)   (67,157)

Income tax expense                     1,000     1,500      4,900      1,500
----------------------------------------------------------------------------
   Loss from continuing operations   ( 5,279)  (43,534)   ( 7,916)   (68,657)

Loss from discontinued operation,
   net of income taxes                   ---   ( 1,967)       ---    ( 6,494)
-----------------------------------------------------------------------------

   Net loss                         $( 5,279) $(45,501)  $( 7,916)  $(75,151)
=============================================================================

   Loss per share - basic and diluted:

      Continuing operations         $(   .11) $(   .89)  $(   .16)  $(  1.41)
      Discontinued operation             ---   (   .04)      ---     (   .13)
----------------------------------------------------------------------------
          Net loss                  $(   .11) $(   .93)  $(   .16)  $(  1.54)
============================================================================

Weighted average shares outstanding -
         basic and diluted            49,435    48,971     49,331     48,834
============================================================================

The accompanying notes are an integral part of these consolidated
financial statements.




              INTERGRAPH CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (Unaudited)

----------------------------------------------------------------------------
Nine Months Ended September 30,                          2000         1999
----------------------------------------------------------------------------
(In thousands)

Cash Provided By (Used For):
Operating Activities:
  Net loss                                            $( 7,916)     $(75,151)
  Adjustments to reconcile net loss to net cash
  provided by (used for) operating activities:
   Gains on sales of assets                            (19,111)      (12,471)
   Depreciation                                         11,727        15,838
   Amortization                                         15,125        20,336
   Exchange loss                                         2,695           406
   Noncash portion of arbitration settlement               ---         3,530
   Noncash portion of nonrecurring operating charges     2,921        12,694
   Net changes in current assets and liabilities        32,184        10,261
----------------------------------------------------------------------------
   Net cash provided by (used for) operating
    activities                                          37,625       (24,557)
----------------------------------------------------------------------------

Investing Activities:
  Net proceeds from sales of assets                     22,348        28,868
  Purchases of property, plant, and equipment          ( 5,492)      ( 7,915)
  Capitalized software development costs               ( 9,775)      (14,669)
  Capitalized internal use software costs              (   904)      ( 3,648)
  Business acquisition, net of cash acquired           ( 1,093)      ( 1,917)
  Other                                                    227       ( 2,614)
----------------------------------------------------------------------------
   Net cash provided by (used for) investing
    activities                                           5,311       ( 1,895)
----------------------------------------------------------------------------

Financing Activities:
  Gross borrowings                                         ---            45
  Debt repayment                                       (20,969)      (16,956)
  Proceeds of employee stock purchases and exercise
   of stock options                                      1,263         2,037
----------------------------------------------------------------------------
   Net cash used for financing activities              (19,706)      (14,874)
----------------------------------------------------------------------------
Effect of exchange rate changes on cash                ( 5,322)      ( 1,074)
----------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents    17,908       (42,400)
Cash and cash equivalents at beginning of period        88,513        95,473
----------------------------------------------------------------------------
Cash and cash equivalents at end of period            $106,421      $ 53,073
============================================================================

The accompanying notes are an integral part of these consolidated
financial statements.


               INTERGRAPH CORPORATION AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1:  In  the  opinion of management, the accompanying  unaudited
         consolidated  financial statements contain all  adjustments
         (consisting  of  normal recurring items)  necessary  for  a
         fair  presentation  of  results  for  the  interim  periods
         presented.

         Certain  reclassifications have been made to the previously
         reported  consolidated statements of  operations  and  cash
         flows  for the quarter and nine months ended September  30,
         1999  to  provide  comparability with  the  current  period
         presentation.

NOTE 2:  Discontinued Operation.  On October 31, 1999,  the  Company
         sold  its  VeriBest, Inc. operating segment.   Accordingly,
         the  Company's  consolidated statements of  operations  for
         the  quarter  and nine months ended September 30, 1999 have
         been   restated  to  reflect  VeriBest's  business   as   a
         discontinued  operation.   The discontinued  operation  has
         not   been   presented  separately  in   the   consolidated
         statement   of  cash  flows  for  the  nine  months   ended
         September  30, 1999.  Other than its operating  losses  for
         the  periods presented, the discontinued operation did  not
         have  a  significant  impact on the Company's  consolidated
         cash flow or financial position.

         For   the   quarter  ended  September  30,  1999,  VeriBest
         incurred  a net loss of $1,967,000, including a  loss  from
         operations  of  $2,074,000, on revenues  from  unaffiliated
         customers  of  $7,911,000.   For  the  nine  months   ended
         September  30,  1999,  VeriBest  incurred  a  net  loss  of
         $6,494,000,   including   a   loss   from   operations   of
         $6,204,000,  on  revenues  from unaffiliated  customers  of
         $21,946,000.   VeriBest's  third  quarter  1999  loss  from
         operations  included  nonrecurring  operating  charges   of
         $871,000.  See Note 4.

NOTE 3:  Litigation.   As further described in the Company's  Annual
         Report  on Form 10-K for its year ended December  31,  1999
         and  its Form 10-Q filings for the quarters ended March 31,
         2000  and June 30, 2000, the Company has extensive  ongoing
         litigation   with  Intel  Corporation.   See   Management's
         Discussion and Analysis of Financial Condition and  Results
         of  Operations  in  this  Form 10-Q  for  a  discussion  of
         developments during third quarter 2000.

NOTE 4:  Nonrecurring Operating Charges.  During 1998 and 1999,  the
         Company  implemented various restructuring  actions  in  an
         effort  to  restore  the Company to profitability.   For  a
         complete  discussion, see the Company's  Annual  Report  on
         Form   10-K   for  the  year  ended  December   31,   1999.
         Restructuring  activity during the  first  nine  months  of
         1999 and 2000 is discussed below.

         In  second quarter 1999, in response to continued operating
         losses   in   its   Intergraph  Computer  Systems   ("ICS")
         operating  segment, the Company implemented a  resizing  of
         its  European  computer hardware sales organization.   This
         resizing  involved  closing  most  of  the  Company's   ICS
         subsidiaries  in  Europe  and  consolidating  the  European
         hardware  sales  effort within the Intergraph  subsidiaries
         in   that  region.   The  associated  cost  of  $2,500,000,
         primarily  for  employee  severance  pay,  is  included  in
         "Nonrecurring   operating  charges"  in  the   consolidated
         statement   of   operations  for  the  nine  months   ended
         September  30,  1999.  Approximately 46 European  positions
         were eliminated, all in the sales and marketing area.   The
         Company  estimates  that  this  resizing  has  resulted  in
         annual savings of approximately $3,000,000.

         In  third quarter 1999, the Company took further actions to
         reduce  expenses  in  its unprofitable business  units  and
         restructure the Company to support the vertical markets  in
         which  it  operates.   These actions  included  eliminating
         approximately   400   positions  worldwide,   consolidating
         offices,   completing   the   worldwide   vertical   market
         alignment  of the sales force, and narrowing the  focus  of
         the  Company's  ICS business unit to high-end workstations,
         specialty  servers, digital video products and 3D  graphics
         cards.   As a result of these actions, the Company recorded
         a   nonrecurring  charge  to  operations  of   $20,124,000,
         $7,000,000 of which is recorded as a component of "Cost  of
         revenues  -  Systems"  in  the consolidated  statements  of
         operations for the quarter and nine months ended  September
         30,  1999.  This $7,000,000 charge represents the costs  of
         inventory  write-offs incurred as a result  of  ICS's  exit
         from the PC and generic server business.

         Severance  costs  associated with the  third  quarter  1999
         restructuring totaled approximately $8,700,000,  $7,846,000
         of  which  is included in "Nonrecurring operating  charges"
         in  the  consolidated  statements  of  operations  for  the
         quarter  and  nine months ended September  30,  1999.   The
         remaining  severance costs related to headcount  reductions
         in   the   Company's   VeriBest  operating   segment,   and
         accordingly,  they are reflected in "Loss from discontinued
         operation,   net   of  income  taxes"  in   the   Company's
         consolidated statements of operations for the  quarter  and
         nine  months  ended September 30, 1999.  Approximately  400
         positions  company-wide  were  eliminated  through   direct
         reductions   in  workforce.   All  employee   groups   were
         affected, but the majority of eliminated positions  derived
         from  the  sales and marketing, general and administrative,
         and  customer  support  areas.  The Company  estimates  the
         annual  savings  resulting from  this  reduction  in  force
         approximated $22,000,000.

         The  remainder  of  the  third  quarter  1999  nonrecurring
         operating  charges consisted of write-offs  of  capitalized
         business system software no longer required as a result  of
         the  verticalization of the Company's  business  units  and
         resulting  decentralization of portions  of  the  corporate
         financial and administrative functions.

         Cash  outlays  for severance related to the 1998  and  1999
         restructuring    actions   approximated   $4,000,000    and
         $4,400,000  in  the  first nine months of  2000  and  1999,
         respectively.    Additionally,  in  third   quarter   2000,
         European severance liabilities of $400,000 related  to  the
         1999   actions  were  reversed  as  some  of  the  affected
         employees  left  the  Company  voluntarily.   This  expense
         reversal  is reflected in "Nonrecurring operating  charges"
         in  the  consolidated  statements  of  operations  for  the
         quarter  and  nine  months ended September  30,  2000.   At
         September  30, 2000, the total remaining accrued  liability
         for  severance relating to the 1999 reductions in force was
         approximately    $500,000   compared    to    approximately
         $5,000,000  at  December 31, 1999.  These  liabilities  are
         reflected  in  "Other accrued expenses"  in  the  Company's
         consolidated  balance  sheets.   The  related   costs   are
         expected  to be paid over the remainder of 2000 and  relate
         primarily  to severance liabilities in European  countries,
         where   typically   several   months   are   required   for
         settlement.

         In  first quarter 2000, the Company announced its intention
         to  exit  the development and design of hardware  products.
         The  Company completed this exit in third quarter 2000 with
         the  sales  of its Intense3D graphics accelerator  division
         and  its high end workstation and server business (see Note
         5).   Upon  completion of these transactions,  the  Company
         closed   the   remainder   of  its   hardware   development
         operations   and   incurred  a   nonrecurring   charge   to
         operations of approximately $8,500,000 in relation to  this
         closure,  including amounts reflected in "Cost of  revenues
         -   Systems"  and  "Cost  of  revenues  -  Maintenance"  of
         $4,531,000   and  $210,000,  respectively.    The   amounts
         reflected  in  cost  of  revenues represent  the  costs  of
         inventory  write-offs incurred as a result of the shutdown.
         With  the exception of these costs, all expenses associated
         with  the shutdown are reflected in "Nonrecurring operating
         charges"  in  the  Company's  consolidated  statements   of
         operations   for  the  quarter  and  nine   months   ending
         September  30, 2000.  Severance costs associated  with  the
         shutdown  totaled approximately $1,659,000.   Approximately
         50  positions were eliminated worldwide, primarily  in  the
         sales  and marketing area, with the majority of the related
         expense  incurred  in  Europe.  The  remaining  exit  costs
         consist  primarily of fixed asset write-offs of  $1,541,000
         and  accruals  for  lease cancellations and  idle  building
         space.   Related  cash outlays during  third  quarter  2000
         totaled  approximately  $842,000, primarily  for  severance
         payments.   At  September 30, 2000, the  remaining  accrued
         liability  related  to this charge was  $1,380,000  and  is
         reflected  in  "Other accrued expenses"  in  the  Company's
         September  30,  2000  consolidated  balance  sheet.   These
         costs are expected to be paid over the remainder of 2000.

         The  closure of the hardware development organization  will
         allow   the  Company's  operating  segments  to  focus   on
         providing  software, systems integration, and  services  to
         the  industries  in which Intergraph is  a  market  leader.
         The  Company  will continue to sell hardware products  from
         other  vendors  and  perform hardware maintenance  services
         for  its  installed  customer base. The  Company  estimates
         that  its  exit from the development and sale  of  its  own
         hardware  products  will  reduce  its  annual  revenues  to
         approximately $600,000,000.  The Company expects  to  incur
         additional  charges in fourth quarter 2000 as it  completes
         its  worldwide verticalization process and restructures its
         international  operations  to align  their  cost  structure
         with   the   projected  level  of  revenue.   The   Company
         estimates   that  the  charges  incurred  will  approximate
         $15,000,000.

         Severance  payments to date have been funded from  existing
         cash  balances and from proceeds from the sale  of  assets.
         For  further discussion regarding the Company's  liquidity,
         see  Management's  Discussion  and  Analysis  of  Financial
         Condition and Results of Operations in this Form 10-Q.

NOTE 5:  Gains  on  sales of assets.  "Gains on sales of assets"  in
         the  consolidated statements of operations and  cash  flows
         consists  of  the  net gains and losses recognized  by  the
         Company  on  sales  of  various  noncore  subsidiaries  and
         divisions   and   of   gains  recorded   on   real   estate
         transactions.  Significant components of the 1999 and  2000
         year to date gains are discussed below.

         In  April 1999, the Company sold InterCAP Graphics Systems,
         Inc.,  a  wholly-owned subsidiary, to Micrografx, a  global
         provider  of enterprise graphics software, for $12,150,000,
         consisting  of  $3,853,000  in cash  received  at  closing,
         deferred  payments received in September and  October  1999
         totaling   $2,500,000,   and   a   $5,797,000   convertible
         subordinated debenture due March 2002 (included  in  "Other
         assets"  in  the September 30, 2000 and December  31,  1999
         consolidated balance sheets).  The resulting gain  on  this
         transaction of $11,505,000 is included in "Gains  on  sales
         of  assets" in the consolidated statement of operations for
         the  nine  months  ended September  30,  1999.   InterCAP's
         revenues   and   losses  for  1998  were   $4,660,000   and
         $1,144,000,  respectively, ($3,600,000 and  $1,853,000  for
         1997).   Assets  of  the subsidiary at  December  31,  1998
         totaled  $1,550,000.   The  subsidiary  did  not   have   a
         material effect on the Company's results of operations  for
         the period in 1999 prior to its sale.

         On  July 21, 2000 (but with effect from July 1, 2000),  the
         Company  completed  the  sale  of  the  Intense3D  graphics
         accelerator   division  of  ICS  to   3Dlabs,   Inc.   Ltd.
         ("3Dlabs"),  a leading supplier of integrated hardware  and
         software  graphics accelerator solutions  for  workstations
         and  design professionals. As initial consideration for the
         acquired    assets,   3Dlabs   issued   to   the    Company
         approximately 3,600,000 of its common shares, subject to  a
         registration rights agreement and a three year  irrevocable
         proxy granted to 3Dlabs, with an aggregate market value  of
         approximately  $13,200,000 on the date of closing.   As  of
         September  30, 2000, the market value of these  shares  had
         declined  by approximately $4,000,000.  Fifteen percent  of
         the  shares  have  been placed in escrow for  one  year  to
         cover  any potential claims against the Company by  3Dlabs.
         The agreement also contains an earn-out provision based  on
         various  performance measures for Intense3D operations  for
         the  remainder of 2000.  These performance measures include
         the  financial contribution of the division, the  retention
         of  key  employees by the division, the delivery  schedules
         of  new products, and the performance of products developed
         by  the  division.   The  earn-out  provision  provides  an
         opportunity  for additional proceeds of up to  $25,000,000,
         payable  in stock and/or cash at the option of 3Dlabs.  The
         Company  recorded  a pretax gain from the initial  proceeds
         of  the  sale of approximately $7,000,000 in third  quarter
         2000.   This gain is included in "Gains on sales of assets"
         in  the Company's consolidated statements of operations for
         the  quarter and nine months ended September 30, 2000.  The
         market   value  of  the  Company's  investment  in  3Dlabs,
         excluding  the  shares  held in  escrow,  of  approximately
         $7,800,000  is  included in "Investments in affiliates"  in
         the  Company's  September  30,  2000  consolidated  balance
         sheet,  and  the revaluation adjustment for the decline  in
         the  market  value of the stock since the date  of  closing
         has  been  recorded  as a component of  "Accumulated  other
         comprehensive loss" (see Note 14).  Full year  1999  third-
         party  revenue  for  the  Intense3D  division  approximated
         $38,000,000,  with  operating  results  at  an  approximate
         breakeven  level.  For the six months ended June 30,  2000,
         the  division  earned an operating income of  approximately
         $8,500,000  on third party revenues of $34,000,000.   There
         is  no  Intense3D activity reflected in the Company's third
         quarter 2000 results of operations.

         Significant  contingencies associated  with  the  Intense3D
         sale include potential penalties for the failure of ICS  or
         its  successor  to meet its forecasted level  of  purchases
         from  3Dlabs and potential liability for inventory included
         in  the  sale, including inventory on order from  SCI  (the
         Company's  contract  manufacturer),  that  proves   to   be
         obsolete  or  in excess, if any.  In addition, the  Company
         serves  as  the  intermediary between 3Dlabs  and  SCI  for
         manufacturing performed by SCI for 3Dlabs, and as such,  is
         exposed should 3Dlabs be unable to meet its obligations  to
         SCI,  though  such  exposure  is  mitigated  by  a  certain
         payment  guarantee  in  favor  of  the  Company.   See  the
         Company's  Annual Report on Form 10-K for  the  year  ended
         December  31,  1999  for  a  discussion  of  the  Company's
         business relationship with SCI.

         On  September  6,  2000, the Company sold  several  of  the
         buildings  on  its  Huntsville, Alabama campus  to  a  real
         estate   investment  company  for  net  cash  proceeds   of
         approximately  $7,200,000.   The  Company's  gain  on  this
         transaction  of $1,335,000 is included in "Gains  on  sales
         of  assets"  in  the consolidated statements of  operations
         for  the quarter and nine months ended September 30,  2000.
         The  resulting  consolidation of the Company's  Huntsville-
         based  personnel  and operations into  fewer  buildings  is
         expected  to reduce the Company's future overhead expenses.
         Cash  proceeds from the sale were used to repay  a  portion
         of  the  Company's term loan with its primary lender.   For
         further  discussion regarding the Company's borrowings  and
         liquidity,  see  Management's Discussion  and  Analysis  of
         Financial Condition and Results of Operations in this  Form
         10-Q.

         On  September  8, 2000, the Company completed  a  strategic
         alliance  agreement with Silicon Graphics, Inc. ("SGI"),  a
         worldwide   provider  of  high-performance  computing   and
         advanced graphics solutions, in which SGI acquired  certain
         of  the Company's hardware business assets, including ICS's
         Zx10  family  of  workstations  and  servers.   Under   the
         alliance,  the Company has become a reseller  for  SGI  and
         offers its application solutions on the SGI platform.   The
         Company  received  $299,000 as initial  cash  consideration
         for  the  acquired assets.  The agreement also contains  an
         earn-out provision based on the revenues generated  by  the
         product  lines  sold  for a period of one  year  after  the
         closing  date.   The  Company  recorded  a  loss  from  the
         initial  proceeds  of  this  transaction  of  approximately
         $280,000.   This  loss is included in "Gains  on  sales  of
         assets"   in  the  Company's  consolidated  statements   of
         operations for the quarter and nine months ended  September
         30,  2000.   As  with  3Dlabs, the Company  serves  as  the
         intermediary   between  SGI  and  SCI   for   manufacturing
         performed by SCI for SGI.

         Other  significant  components of the Company's  "Gains  on
         sales  of  assets" for the nine months ended September  30,
         2000 include an aggregate gain of $5,230,000 recognized  on
         the   sales  of  land  and  an  office  building   in   the
         Netherlands, a $2,002,000 gain recognized on the sale of  a
         noncore  software division, a $1,544,000 gain on  the  sale
         of  an investment in an affiliate, and a $1,463,000 gain on
         the  termination  of a long-term capital  lease  (see  Note
         10).   The  proceeds from the sales of the noncore software
         division  and  the investment in the affiliate,  $3,547,000
         in  the  aggregate, were not received until fourth  quarter
         2000  and  are reflected in "Other current assets"  in  the
         Company's September 30, 2000 consolidated balance sheet.

NOTE 6:  Arbitration Settlement.  The Company maintains an equity
         ownership   position   in  Bentley  Systems,   Incorporated
         ("BSI"),  the  developer  and  owner  of  MicroStation,   a
         software   product  utilized  in  many  of  the   Company's
         software  applications and for which the Company serves  as
         a  nonexclusive distributor.  In March 1996, BSI  commenced
         arbitration   against  the  Company   with   the   American
         Arbitration Association, Atlanta, Georgia, relating to  the
         respective  rights of the companies under their April  1987
         Software  License  Agreement and other  matters,  including
         the  Company's  alleged  failure to  properly  pay  to  BSI
         certain  royalties  on its sales of BSI software  products,
         and  seeking significant damages.  On March 26,  1999,  the
         Company and BSI executed a Settlement Agreement and  Mutual
         General   Release   ("the  Agreement")   to   settle   this
         arbitration and mutually release all claims related to  the
         arbitration  or  otherwise, except for  certain  litigation
         between  the companies that was the subject of  a  separate
         settlement agreement and payment for products and  services
         obtained  or  provided  in the normal  course  of  business
         since  January 1, 1999.  Both the Company and BSI expressly
         denied  any fault, liability, or wrongdoing concerning  the
         claims that were the subject matter of the arbitration  and
         settled  solely  to avoid continuing litigation  with  each
         other.

         Under  the terms of the Agreement, the Company on April  1,
         1999 made payment to BSI of $12,000,000 and transferred  to
         BSI  ownership  of  three million of the  shares  of  BSI's
         Class   A   common  stock  owned  by  the   Company.    The
         transferred shares were valued at approximately  $3,500,000
         on  the  Company's  books. As a result of  the  settlement,
         Intergraph's  equity  ownership in  BSI  was  reduced  from
         approximately 50% to approximately 33%.  Additionally,  the
         Company  had a $1,200,000 net receivable from BSI  relating
         to  business conducted prior to January 1, 1999  which  was
         written off in connection with the settlement.

         In  first  quarter 1999, the Company accrued a nonoperating
         charge  to  earnings  of $8,562,000  ($.18  per  share)  in
         connection  with the settlement, representing  the  portion
         of  settlement costs not previously accrued.   This  charge
         is    included   in   "Arbitration   settlement"   in   the
         consolidated  statement of operations for the  nine  months
         ended September 30, 1999.

         The  $12,000,000 payment to BSI was funded  primarily  from
         existing  cash balances.  For further discussion  regarding
         the  Company's  liquidity, see Management's Discussion  and
         Analysis  of Financial Condition and Results of  Operations
         in this Form 10-Q.

NOTE 7:  Basic  loss  per  share  is  computed  using  the  weighted
         average number of common shares outstanding.  Diluted  loss
         per share is computed using the weighted average number  of
         common  and equivalent common shares outstanding.  Employee
         stock   options  are  the  Company's  only   common   stock
         equivalent  and  are  included in the calculation  only  if
         dilutive.

NOTE 8:  Inventories  are  stated at the lower of  average  cost  or
         market and are summarized as follows:

         -----------------------------------------------------------
                                    September 30,       December 31,
                                        2000                1999
         -----------------------------------------------------------
         (In thousands)

         Raw materials                $ 5,812             $12,888
         Work-in-process                4,716               5,739
         Finished goods                 1,854               5,895
         Service spares                10,529              11,396
         -----------------------------------------------------------
         Totals                       $22,911             $35,918
         ===========================================================

         The  Company's  raw materials and finished  goods  inventory
         balances  have  declined steadily  as  the  result  of  the
         Company's  decision  to  exit the development  of  hardware
         products.   In  third  quarter  2000,  as  this  exit   was
         completed, the Company recorded an inventory write-down  of
         approximately  $4,741,000,  primarily  related   to   these
         balances.  See Note 4 for further discussion.

         The  Company's December 31, 1999 raw materials and work-in-
         process  balances  have been restated  to  reflect  certain
         parts  as raw materials rather than work-in-process as  the
         Company  is  no  longer manufacturing or  assembling  these
         products  at  its facilities.  Amounts currently  reflected
         as  work-in-process relate primarily to contracts accounted
         for under the percentage-of-completion method.

NOTE 9:  Property,  plant,  and equipment - net includes  allowances
         for  depreciation  of  $178,601,000  and  $214,219,000   at
         September 30, 2000 and December 31, 1999, respectively.

NOTE 10: Supplementary cash flow information is  summarized  as
         follows:

         Changes  in  current  assets and liabilities,  net  of  the
         effects   of   business  acquisitions,  divestitures,   and
         nonrecurring operating charges, in reconciling net loss  to
         net cash provided by (used for) operations are as follows:

         -----------------------------------------------------------
                              Cash Provided By (Used For) Operations
         Nine Months Ended
          September 30,                       2000            1999
         -----------------------------------------------------------
         (In thousands)

         (Increase) decrease in:
           Accounts receivable, net           $52,997       $21,753
           Inventories                         12,121         1,734
           Other current assets                 3,139        (1,430)
         Increase (decrease) in:
           Trade accounts payable             (17,839)       (  298)
           Accrued  compensation and other
            accrued  expenses                 ( 7,271)       (6,788)
           Income taxes payable                 1,628        (2,081)
           Billings in excess of sales        (12,591)       (2,629)
         -----------------------------------------------------------
         Net changes in current assets and
           liabilities                        $32,184       $10,261
         ===========================================================

         Investing  and  financing transactions in  the  first  nine
         months  of  2000  that did not require  cash  included  the
         termination  of a long-term lease on one of  the  Company's
         facilities.   The  Company accounted for this  lease  as  a
         financing,   and  upon  termination,  long-term   debt   of
         $8,300,000   and   property,  plant,   and   equipment   of
         $6,500,000  were  removed from the Company's  books.  Other
         significant  noncash  investing and financing  transactions
         in  the  first nine months of 2000 included the sale  of  a
         division  of  the  Company  for  initial  consideration  of
         $11,248,000  paid  in  common  stock  of  the  acquirer,  a
         $3,431,000  unfavorable mark-to-market  adjustment  on  the
         stock  received  in  this  transaction,  and  the  sale  of
         various  assets  of  the  Company  for  future  receivables
         totaling  $3,547,000  (see  Note  5).  Significant  noncash
         investing  and  financing transactions in  the  first  nine
         months  of  1999 included the acquisition of a business  in
         part   for   future   obligations  totaling   approximately
         $3,300,000 (see Note 11), the sale of a subsidiary in  part
         for  deferred payments and debt of $7,047,000 (see Note 5),
         the  purchase of inventory for future obligations  totaling
         $2,700,000  (see  Note  12),  and  the  financing  of   new
         financial and administrative systems with a long-term  note
         payable of approximately $2,000,000.

NOTE 11: In  January 1999, the Company acquired PID, an Israeli
         software  development company, for $5,655,000.  At closing,
         the  Company  paid $2,180,000 in cash, with  the  remainder
         due   in   varying  installments  through  February   2002.
         Installment payments totaling $1,093,000 were made  in  the
         first  nine  months of 2000 and are included  in  "Business
         acquisition,  net  of  cash  acquired"  in  the   Company's
         consolidated  statement of cash flows for the  nine  months
         ended  September  30, 2000.  The accounts  and  results  of
         operations  of  PID have been combined with  those  of  the
         Company  since the date of acquisition using  the  purchase
         method  of  accounting.  This acquisition  has  not  had  a
         material effect on the Company's results of operations.

NOTE 12: In November 1998, the Company sold substantially all of
         its  U.S.  manufacturing  assets to  SCI  Technology,  Inc.
         ("SCI")  a  wholly-owned subsidiary of SCI  Systems,  Inc.,
         and  SCI  assumed  responsibility for the manufacturing  of
         substantially all of the Company's hardware products.   The
         total  purchase price was $62,404,000, $42,485,000 of which
         was   received  during  fourth  quarter  1998.   The  final
         purchase  price installment of $19,919,000 was received  on
         January  12,  1999  and is included in "Net  proceeds  from
         sales  of  assets" in the Company's consolidated  statement
         of  cash  flows  for  the nine months ended  September  30,
         1999.   As  part  of  this transaction,  SCI  retained  the
         option  to  sell to the Company any inventory  included  in
         the  initial  sale  which  had not  been  utilized  in  the
         manufacture  and sale of finished goods within  six  months
         of  the date of the sale (the "unused inventory").  On June
         30,  1999,  SCI  exercised this  option  and  sold  to  the
         Company  unused  inventory having a value of  approximately
         $10,200,000  in exchange for a cash payment  of  $2,000,000
         on  July  2, 1999 and a short-term installment note payable
         in  the  principal  amount of $8,200,000.   This  note  was
         payable  in  three monthly installments concluding  October
         1,  1999  and  bore interest at a rate of 9%.  The  Company
         funded  its  payments to SCI primarily with  existing  cash
         balances.  For  further discussion regarding the  Company's
         liquidity,  see  Management's Discussion  and  Analysis  of
         Financial Condition and Results of Operations in this  Form
         10-Q.   For  a  complete discussion of the SCI transaction,
         see  the Company's Annual Report on Form 10-K for the  year
         ended December 31, 1999.

NOTE 13: Segment  Information.   The year  2000  has  been  and
         continues to be a transitional year for the Company  during
         which  it has focused its efforts on organizing the Company
         into  six  vertical business segments.   In  third  quarter
         2000,  the Company substantially completed the U.S. portion
         of   this  process.   The  international  portion  of  this
         process  is  expected to be completed by the end  of  first
         quarter  2001.   The  segment presentation  below  provides
         operating  segment information based on the  Company's  new
         business  structure  for  the  year  2000 and, as required,
         comparative  information based on  the  Company's  previous
         segment  structure.  The Company is unable to  restate  its
         prior  year data in a format that would provide an accurate
         comparison to the new business structure.  However, two  of
         the  Company's segments, Intergraph Public Safety, Inc. and
         Z/I  Imaging Corporation, did not change as a result of the
         new   structure,  and  their  prior  year  information   is
         comparable to the new presentation.

         The  Company's  reportable segments are strategic  business
         units  which  are organized by the types of  products  sold
         and   the   specific  markets  served.

         The   Company   evaluates  performance  of  the   operating
         segments based on revenue and income from operations.   The
         accounting  policies  of the reportable  segments  are  the
         same  as  those  used  in preparation of  the  consolidated
         financial statements of Intergraph Corporation (see Note  1
         of  Notes to Consolidated Financial Statements included  in
         the  Company's  Annual Report on Form  10-K  for  the  year
         ended  December  31,  1999).  Sales between  the  operating
         segments  are  accounted  for  under  a  transfer   pricing
         policy.   Transfer prices approximate prices that would  be
         charged  for  the  same  or similar property  to  similarly
         situated  unrelated  buyers.   In  the  U.S.,  intersegment
         sales  of  products  and services to be used  for  internal
         purposes   are   charged   at  cost.    For   international
         subsidiaries,  transfer  price is charged  on  intersegment
         sales  of  products  and services to  be  used  for  either
         internal purposes or sale to customers.

         New   Segments.   The  Company's  new  operating   segments
         consist   of   Process  and  Building  Solutions   ("PBS"),
         Intergraph   Public  Safety,  Inc.  ("IPS"),  Mapping   and
         Geographic    Information   Systems   ("GIS")    Solutions,
         Intergraph   Government  Solutions  ("IGS"),  Z/I   Imaging
         Corporation   ("Z/I  Imaging"),  and  Intergraph   Computer
         Systems  ("ICS").   Also  included  as  a  segment   on   a
         temporary   basis   is   the   International   Distribution
         operation  which  will  be  verticalized  into  the   other
         operating segments by the end of first quarter 2001.

         PBS  supplies software and services to the process,  power,
         offshore,  and  marine industries.  Amounts  presented  for
         PBS  below  represent the Company's complete  domestic  and
         international operations for this business.  These  amounts
         were   previously  included  in  the  Intergraph   Software
         operating segment.

         IPS  develops,  markets,  and implements  systems  for  the
         public  safety and utilities and communications industries.
         Unchanged from the previous presentation, IPS includes  the
         domestic  and  international public safety  operations  and
         the domestic utilities and communications operations.

         Mapping  and GIS Solutions develops, markets, and  supports
         geospatial   solutions  for  business  GIS,  land   records
         management,  rail transportation, environmental management,
         utilities and communications companies, and commercial  map
         production.   Amounts presented below for Mapping  and  GIS
         Solutions  include  the domestic operations  for  both  the
         federal  and commercial mapping organizations.  The results
         for  these  organizations were previously included  in  the
         Intergraph  Government  Solutions and  Intergraph  Software
         operating segments, respectively.

         IGS  provides  specially developed software  and  hardware,
         commercial   off-the-shelf   products,   and   professional
         services   to   federal,  state,  and   local   governments
         worldwide.   The new IGS business segment is not comparable
         to  the  previous Intergraph Government Solutions  segment.
         Amounts  presented  for  the  new  IGS  below  include  the
         previously  reported federal operations of  IGS,  excluding
         the  mapping organization which is now included in  Mapping
         and  GIS Solutions, as well as the domestic operations  for
         the  transportation industry, previously  included in   the
         Intergraph   Software  operating  segment.    Additionally,
         hardware  maintenance  and   network  services,  previously
         included in the  ICS  business  unit, are now  consolidated
         into IGS.

         Z/I  Imaging, a 60%-owned subsidiary of the Company  formed
         October   1,   1999,  supplies  end-to-end   photogrammetry
         solutions for front-end data collection to mapping  related
         and   engineering  markets.   Z/I  Imaging   includes   the
         domestic and international operations reported previously.

         ICS  includes the domestic and international operations  of
         the  Company's  hardware division prior to the end of third
         quarter shutdown of hardware development  activities.   The
         new presentation is not   comparable   to   the    previous
         presentation as it excludes the Company's ongoing  hardware
         maintenance  and  network services  operations  which  have
         been  moved  to IGS.  Third quarter 2000 will be  the  last
         quarter   reflecting  operations  for ICS as an   operating
         segment.   Going  forward, the only hardware  sold  by  the
         Company  will  be purchased by the operating segments  from
         third party vendors for resale.

         The   International     Distribution    operation  includes
         international   operations  for   information   technology,
         Mapping  and  GIS  Solutions, utilities and communications,
         transportation,    and   international  corporate expenses.
         These    operations   were    previously   reflected     in
         the   Intergraph  Software  operating  segment.   The  IGS,
         Mapping and GIS Solutions, and IPS operating segments  sell
         to  the  International Distribution operation  (essentially
         subsidiaries  of the  Company located  outside  the  United
         States) at  transfer price.   These transfer price revenues
         are included in  the intersegment  revenues reported  below
         for  each  of  these operating segments.

         The  following  table  sets forth  revenues  and  operating
         income  (loss)  for  the Company's new reportable  segments
         for the quarter and nine months ended September 30, 2000.

         ---------------------------------------------------------------
                                     Quarter Ended     Nine Months Ended
                                     September 30,       September 30,
                                         2000                 2000
         ---------------------------------------------------------------
         (In thousands)

         Revenues

         PBS:
           Unaffiliated customers       $ 28,905           $ 86,769
           Intersegment revenues           1,946              6,637
         ---------------------------------------------------------------
                                          30,851             93,406
         ---------------------------------------------------------------

         IPS:
           Unaffiliated customers         20,331             59,314
           Intersegment revenues           2,030              6,657
         ---------------------------------------------------------------
                                          22,361             65,971
         ---------------------------------------------------------------

         Mapping and GIS Solutions:
           Unaffiliated customers         11,522             37,807
           Intersegment revenues           6,715             25,725
         ---------------------------------------------------------------
                                          18,237             63,532
         ---------------------------------------------------------------

         IGS:
           Unaffiliated customers         25,948            111,032
           Intersegment revenues           3,327             12,504
         ---------------------------------------------------------------
                                          29,275            123,536
         ---------------------------------------------------------------

         Z/I Imaging:
           Unaffiliated customers          6,745             20,292
           Intersegment revenues           2,906             12,800
         ---------------------------------------------------------------
                                           9,651             33,092
         ---------------------------------------------------------------

         ICS:
           Unaffiliated customers         14,521             87,512
           Intersegment revenues           8,166             24,854
         ---------------------------------------------------------------
                                          22,687            112,366
         ---------------------------------------------------------------

         International Distribution:
           Unaffiliated customers         50,965            143,104
           Intersegment revenues           1,499              4,785
         ---------------------------------------------------------------
                                          52,464            147,889
         ---------------------------------------------------------------
         Corporate                           ---                493
         ---------------------------------------------------------------
                                         185,526            640,285
         ---------------------------------------------------------------
         Eliminations                    (26,589)           (93,962)
         ---------------------------------------------------------------
         Total revenues                 $158,937           $546,323
         ===============================================================

         ---------------------------------------------------------------
         Operating income (loss) before nonrecurring charges:

         PBS                            $  3,033           $  6,573
         IPS                               1,134              3,695
         Mapping and GIS Solutions         1,753              4,987
         IGS                               2,463             10,507
         Z/I Imaging                       1,118              6,335
         ICS                             (11,379)           (15,521)
         International Distribution      ( 1,484)           ( 5,763)
         Corporate                       ( 6,163)           (22,708)
         ---------------------------------------------------------------
         Total                          $( 9,525)          $(11,895)
         ===============================================================

         Previous  Segments.   Prior  to  third  quarter  2000,  the
         Company's  operating segments consisted of  ICS,  IPS,  the
         Software  and  Intergraph Government  Solutions  businesses
         (collectively,   the  Software  and  Government   Solutions
         businesses  formed what was termed "Intergraph"),  and  Z/I
         Imaging.  Effective October 31, 1999, the Company sold  its
         VeriBest  operating segment and, accordingly, its operating
         results   are   reflected   in  "Loss   from   discontinued
         operation,   net   of  income  taxes"  in   the   Company's
         consolidated statements of operations for the  quarter  and
         nine  months  ended September 30, 1999.   Certain  VeriBest
         financial  information  for these periods  is  included  in
         Note 2.

         ICS  supplied  high  performance Windows NT-based  graphics
         workstations,   3D  graphics  subsystems,  and   solutions,
         including   hardware  maintenance  and  network   services.
         Intergraph  supplied  software  and  solutions,   including
         hardware  purchased from ICS, consulting, and  services  to
         the  process and building and infrastructure industries and
         provided   services   and   specialized   engineering   and
         information   technology  to  support  federal   government
         programs.   The IPS and Z/I Imaging segments are consistent
         with  the  new  presentation.  Prior  to  October  1999,  a
         portion  of  the Z/I Imaging business was included  in  the
         Intergraph   Software  operating  segment.    The   Company
         believes  the associated revenues and operating income  for
         the  third  quarter  and first nine  months  of  1999  were
         insignificant to the Software segment as a whole.

         The  following  table  sets forth  revenues  and  operating
         income   (loss)   for  the  Company's  previous   operating
         segments  for the quarters and nine months ended  September
         30, 2000 and 1999.   Differences  between  the  information
         provided in  this  table  and  that  provided  for the  new
         segments  for  the  same  periods  are  the  result  of the
         reorganization  described  under "New Segments" above,  and
         the Company considers  the  new  segment  information to be
         determinative.

         ----------------------------------------------------------------
                                       Quarter Ended    Nine Months Ended
                                       September 30,      September 30,
                                      2000      1999     2000      1999
         ----------------------------------------------------------------
         (In thousands)

         Revenues

         ICS:
           Unaffiliated customers  $ 18,757  $ 53,644  $102,297  $168,665
           Intersegment revenues     12,412    32,140    40,238    96,549
         ----------------------------------------------------------------
                                     31,169    85,784   142,535   265,214
         ----------------------------------------------------------------

         IPS:
           Unaffiliated customers    20,331    19,245    59,314    61,777
           Intersegment revenues      2,030     4,871     6,657     8,375
         ----------------------------------------------------------------
                                     22,361    24,116    65,971    70,152
         ----------------------------------------------------------------

         Intergraph Software:
           Unaffiliated customers    79,757   108,786   257,117   344,086
           Intersegment revenues      1,224     2,487     5,355    11,796
         ----------------------------------------------------------------
                                     80,981   111,273   262,472   355,882
         ----------------------------------------------------------------

         Intergraph Government Solutions:
           Unaffiliated customers    33,347    38,873   107,303   117,706
           Intersegment revenues      1,037     1,240     3,686     4,946
         ----------------------------------------------------------------
                                     34,384    40,113   110,989   122,652
         ----------------------------------------------------------------

         Z/I Imaging:
           Unaffiliated customers     6,745       ---    20,292       ---
           Intersegment revenues      2,906       ---    12,800       ---
         ----------------------------------------------------------------
                                      9,651       ---    33,092       ---
         ----------------------------------------------------------------
                                    178,546   261,286   615,059   813,900
         ----------------------------------------------------------------
         Eliminations               (19,609)  (40,738)  (68,736) (121,666)
         ----------------------------------------------------------------
         Total revenues            $158,937  $220,548  $546,323  $692,234
         ================================================================


         ----------------------------------------------------------------
                                   Quarter Ended,      Nine Months Ended
                                    September 30,         September 30,
                                   2000      1999       2000       1999
         ----------------------------------------------------------------
         (In thousands)

         Operating income (loss) before nonrecurring charges:

         ICS                    $(13,382)  $(20,237)  $(16,948)  $(39,743)
         IPS                       1,134      2,400      3,695      7,586
         Intergraph Software       4,305    ( 2,765)     6,274      4,765
         Intergraph Government
          Solutions                2,113      3,496      6,984      9,131
         Z/I Imaging               1,118        ---      6,335        ---
         Corporate               ( 4,813)   (10,730)   (18,235)   (30,349)
         ----------------------------------------------------------------
         Total                  $( 9,525)  $(27,836)  $(11,895)  $(48,610)
         ================================================================

         Amounts included in the "Corporate"  category  in  both the
         new segment   and  previous  segment  presentations   above
         consist of general  corporate expenses,  primarily  general
         and  administrative expenses remaining after charges to the
         operating segments based on segment usage of administrative
         services.  Some of these expenses were previously allocated
         to the Intergraph Software operating segment but have  been
         moved to  the  Corporate category  in  the new presentation
         since  they are not  specifically  allocable to any of  the
         new  operating   segments.   In   both  presentations,  the
         Corporate  category includes legal fees.  In the first nine
         months of 2000 and 1999, the Company's  legal fees  totaled
         $4,990,000  and $14,456,000, respectively.

         Significant  profit  and  loss items  for  the  first  nine
         months of 2000 that were not allocated to the segments  and
         not  included in the presentations above include  gains  on
         sales  of  assets of $19,111,000 and nonrecurring operating
         charges  of  $3,362,000.  Such items  for  the  first  nine
         months   of   1999   include  an  $8,562,000   charge   for
         arbitration  settlement,  gains  on  sales  of  assets   of
         $12,471,000,   and   nonrecurring  operating   charges   of
         $15,596,000.

         The  Company  does  not  evaluate performance  or  allocate
         resources  based  on  assets and,  as  such,  it  does  not
         prepare  balance  sheets for its operating segments,  other
         than those of its wholly-owned subsidiaries.

NOTE 14: Comprehensive loss.  The Company's comprehensive losses
         for  the  third  quarter  and first  nine  months  of  2000
         totaled    $11,898,000   and   $16,949,000,   respectively,
         compared   to  comprehensive  losses  of  $45,888,000   and
         $82,837,000,  respectively, for the comparable  prior  year
         periods.   These comprehensive losses differ from net  loss
         due  mainly  to  foreign currency translation  adjustments.
         Comprehensive losses for the third quarter and  first  nine
         months   of  2000  also  include  a  $3,431,000  unrealized
         holding loss on the Company's shareholdings in 3Dlabs  (see
         Note 5).

NOTE 15: In June 1998, the Financial Accounting Standards Board
         ("FASB")   issued   Statement   of   Financial   Accounting
         Standards  No.  133, Accounting for Derivative  Instruments
         and  Hedging  Activities ("SFAS 133"), requiring  companies
         to  recognize  derivatives as either assets or  liabilities
         on  the  balance  sheet and to measure the  instruments  at
         fair   value.    In  July  1999,  the  FASB   delayed   the
         implementation  of this new accounting standard  to  fiscal
         years  beginning  after June 15, 2000 (calendar  year  2001
         for  the  Company).  The Company is evaluating the  effects
         of  adopting SFAS 133 but does not anticipate a significant
         impact  on  its consolidated operating results or financial
         position.   As  of September 30, 2000, the Company  had  no
         freestanding derivatives.



NOTE 16: In   December  1999,  the  Securities  and   Exchange
         Commission  ("SEC")  issued Staff Accounting  Bulletin  No.
         101,  Revenue  Recognition  in Financial  Statements  ("SAB
         101"),   which   provides  guidance  on  the   recognition,
         presentation,  and  disclosure  of  revenue  in   financial
         statements.  SAB 101 outlines basic criteria that  must  be
         met  prior  to recognition of revenue, including persuasive
         evidence  of the existence of an arrangement, the  delivery
         of  products  and  performance of  services,  a  fixed  and
         determinable  sales  price,  and  reasonable  assurance  of
         collection.    In   June   2000,  the   SEC   delayed   the
         implementation  date of SAB 101 until  no  later  than  the
         fourth  fiscal  quarter  of fiscal  years  beginning  after
         December  15,  1999 (fourth quarter 2000 for the  Company).
         The   Company  is  currently  evaluating  the  effects   of
         adopting  SAB  101 and will record any material  impact  on
         prior  periods  as the cumulative effect  of  a  change  in
         accounting  principle  in  its fourth  quarter  results  of
         operations,  with  a restatement of prior interim  quarters
         of 2000, if necessary.

NOTE 17: On  April  27, 2000, the Company and BSI announced  an
         agreement   under  which  BSI  will  acquire   Intergraph's
         MicroStation-based     civil     engineering,     networked
         plotservers, and raster conversion software product  lines,
         under  which the Company will sell and support MicroStation
         and  certain other BSI products.  The agreement, valued  at
         approximately $42,000,000, is subject to the  execution  of
         definitive  documents and is expected to  close  in  fourth
         quarter  2000.   Full year 1999 revenues  for  the  product
         lines  to  be  sold  to BSI approximated $35,000,000.   The
         agreement will allow the Company to increase its  focus  on
         its  core  vertical businesses and is expected  to  improve
         the business relationship between the Company and BSI.

NOTE 18: Subsequent Event.  On October 30, 2000, the Company's Board
         of Directors approved a stock repurchase plan  which   will
         allow the Company under certain circumstances to repurchase
         up to $30,000,000  of its  outstanding common stock.    The
         Plan is not expected to  commence until  the completion  of
         certain transactions,  including  sale  of  the   Company's
         Microstation-based software products   to  BSI,   sale   of
         remaining idle building space on the Company's  Huntsville,
         Alabama campus,  and completion of the restructuring of the
         Company's   international  organization  into  the vertical
         business  units.   However, the Board in its discretion may
         approve    purchases  prior   to   completion   of    these
         transactions.   The  Plan   may be suspended  at  any  time
         after its commencement and will terminate on  December  31,
         2002.   The  Company  has  no obligation to  purchase   any
         specific number of shares  under the Plan.



              INTERGRAPH CORPORATION AND SUBSIDIARIES
              MANAGEMENT'S DISCUSSION AND ANALYSIS OF
           FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SUMMARY
-------

Earnings.  In third quarter 2000, the Company incurred a net  loss
of  $.11 per share on revenues of $158.9 million, including  gains
on  sales  of assets of $.24 per share and nonrecurring  operating
charges  of  $.17  per share for exit of the hardware  development
business.  In third quarter 1999, the Company incurred a loss from
continuing  operations  of $.89 per share on  revenues  of  $220.5
million,  including  nonrecurring operating charges  of  $.41  per
share  for the cost of actions taken during the quarter to  reduce
expenses   in  the  Company's  unprofitable  business  units   and
restructure the Company to support the vertical markets  in  which
it  operates.   For  the first nine months of  2000,  the  Company
incurred  a  net  loss  of $.16 per share on  revenues  of  $546.3
million, including gains on sales of assets of $.39 per share  and
the  $.17 nonrecurring charge for exit of the hardware development
business.  For the first nine months of 1999, the Company incurred
a  net  loss  from  continuing operations of $1.41  per  share  on
revenues of $692.2 million, including gains on sales of assets  of
$.26 per share, an $.18 per share charge for the settlement of its
arbitration   proceedings   with  Bentley   Systems,   Inc.   (see
"Arbitration  Settlement" following), and  nonrecurring  operating
charges  of  $.46  per  share, primarily for employee  termination
costs  and  asset  write-offs  recorded  in  connection  with  the
Company's changing business strategy.  See "Nonrecurring Operating
Charges"  following for a complete description of the nonrecurring
charges  incurred  in  the first nine months  of  1999  and  2000.
Exclusive  of nonrecurring charges and one time gains,  the  third
quarter  and year to date 2000 operating losses improved  to  $.10
per  share and $.15 per share, respectively, compared to $.43  per
share  and $.85 per share, respectively, for the comparable  prior
year  periods.   These loss improvements are  the  result  of  the
continuing  decline  in the Company's operating  expenses.   Third
quarter and year to date 2000 operating expenses have declined  by
25%  and 20%, respectively, from the comparable prior year levels.
The  Company  has also realized considerable improvements  in  its
gross  margin  levels  as  the result of the  increasing  software
content  in  its  product  mix.  However, the  resulting  positive
impact  has  been more than offset by the significant declines  in
revenues  resulting  from  the  Company's  exit  of  the  hardware
development business.  The improvements in the Company's operating
expense  and  gross margin levels have not yet been sufficient  to
return the Company to sustained profitability as operating results
have been negatively impacted by operating losses incurred by  the
Intergraph Computer Systems ("ICS") operating segment, legal  fees
associated  with the Intel trial, and a temporary  duplication  of
administrative expenses in connection with verticalization of  the
Company's operating segments.

Discontinued Operation.  In fourth quarter 1999, the Company  sold
its   VeriBest  operating  segment.  Accordingly,  the   Company's
consolidated  statements of operations for the  quarter  and  nine
months ended September 30, 1999 reflect VeriBest's business  as  a
discontinued   operation.   Except  where  noted  otherwise,   the
following  discussion  of  the  Company's  results  of  operations
addresses only results of continuing operations.  The discontinued
operation  has  not been presented separately in the  consolidated
statement  of  cash flows for the nine months ended September  30,
1999,  and  it  is  not  segregated from the related  discussions.
Other  than  its  operating losses for the periods presented,  the
discontinued  operation did not have a significant impact  on  the
Company's consolidated cash flow or financial position.  See  Note
2  of Notes to Consolidated Financial Statements contained in this
Form  10-Q  for summarized financial information for the  VeriBest
operating segment.

Though,  as  discussed  below,  the Company  exited  the  hardware
development business in third quarter 2000, these operations  have
not  been  presented as discontinued operations in  the  Company's
consolidated statements of operations primarily due to a  lack  of
discrete financial information for them on a comparative basis  as
the  hardware development assets were never segregated from  those
of   the   consolidated  business.   Additionally,  the  Company's
operating  segments continue to sell hardware  products  of  other
vendors  and  perform  limited  specialized  hardware  development
activity, primarily in the Intergraph Government Solutions and Z/I
Imaging  operating  segments.  Information  regarding  results  of
operations  for  the hardware development business  for  the  nine
months  ended September 30, 2000 is presented in Note 13 of  Notes
to Consolidated Financial Statements contained in this Form 10-Q.

Remainder of the Year.  The Company expects that the industries in
which  it  competes  will continue to be characterized  by  higher
performance   and  lower  priced  products,  intense  competition,
rapidly   changing  technologies,  shorter  product  cycles,   and
development and support of software standards that result in  less
specific  hardware  and software dependencies by  customers.   The
Company    lost   significant   market   share   in   a    generic
undifferentiated hardware market due to the actions of Intel (see the
Company's  Annual Report on Form 10-K for the year ended  December
31,  1999 for a complete discussion of the Company's dispute  with
Intel  and its effects on the operations of the Company), and  in
third  quarter  2000,  it  completed  its  exit  of  the  hardware
development  business.  During the quarter, the Company  sold  its
graphics  accelerator  division to 3Dlabs, Inc.  Ltd.  ("3Dlabs"),
sold  its  high-end  workstation and server  business  to  Silicon
Graphics, Inc. ("SGI"), and shutdown the remainder of its hardware
development operation.  The Company will continue to sell hardware
products   from  other  vendors  through  its  vertical  operating
segments  and  perform  hardware  maintenance  services  for   its
installed  customer  base, but going forward does  not  expect  to
incur any significant losses related to hardware.

Improvement  in the Company's operating results will  continue  to
depend   on   its   ability  to  accurately  anticipate   customer
requirements   and  technological  trends  and  to   rapidly   and
continuously   develop   and  deliver  new   products   that   are
competitively  priced,  offer  enhanced  performance,   and   meet
customers'  requirements for standardization and interoperability,
and  will  further depend on its ability to successfully implement
its strategic direction, which includes the creation and operation
of  independent  vertical business units.  To date, the  Company's
verticalization efforts have been concentrated  in  the  U.S.   In
fourth  quarter 2000, the Company plans to align its international
operations with the new vertical businesses and bring the cost  of
the  international operations in line with the  current  level  of
revenue being generated.  The Company expects to incur a charge to
operations  of approximately $15 million in connection with  these
international  restructuring efforts.  As part  of  this  process,
several  international subsidiaries, primarily in the Middle  East
and  Asia,  will be converted into distributorships in  which  the
Company  will have little or no direct ownership interest.   While
the  sales  of  these  subsidiaries are not  expected  to  provide
significant  cash  flow  to the Company, they  should  reduce  the
Company's  operating costs. In addition, the Company continues  to
pursue  further real estate sales and facilities consolidation  on
its Huntsville,  Alabama  campus and at  international  subsidiary
locations.   If  completed  as planned, these  sales  may  provide
substantial cash to the Company as well as reductions in operating
costs.   The  majority  of the real estate  and  subsidiary  sales
transactions  are  expected to close in fourth  quarter  2000  and
first quarter 2001.

The Company estimates that its exit from the development and sale of its own
hardware products will reduce its annual revenues to approximately
$600  million.  To achieve and maintain profitability, the Company
must successfully complete its efforts to align operating expenses
with  this  projected level of revenue.  In addition, the  Company
continues   to   face   significant  operational   and   financial
uncertainty of unknown duration due to its dispute with Intel.

Nonrecurring Operating Charges. During 1998 and 1999, the  Company
implemented various restructuring actions in an effort to  restore
the  Company to profitability.  For a complete discussion, see the
Company's  Annual Report on Form 10-K for the year ended  December
31,  1999. Restructuring activity during the first nine months  of
1999 and 2000 is discussed below.

In  second quarter 1999, in response to continued operating losses
in  its Intergraph Computer Systems ("ICS") operating segment, the
Company  implemented a resizing of its European computer  hardware
sales  organization.  This resizing involved closing most  of  the
Company's  ICS  subsidiaries  in  Europe  and  consolidating   the
European  hardware sales effort within the Intergraph subsidiaries
in  that  region.  The associated cost of $2.5 million,  primarily
for employee severance pay, is included in "Nonrecurring operating
charges" in the consolidated statement of operations for the  nine
months  ended  September  30,  1999.   Approximately  46  European
positions  were  eliminated, all in the sales and marketing  area.
The  Company estimates that this resizing has resulted  in  annual
savings of approximately $3 million.

In  third quarter 1999, the Company took further actions to reduce
expenses  in  its unprofitable business units and restructure  the
Company  to  support  the vertical markets in which  it  operates.
These  actions  included eliminating approximately  400  positions
worldwide,   consolidating  offices,  completing   the   worldwide
vertical  market alignment of the sales force, and  narrowing  the
focus of the Company's ICS business unit to high-end workstations,
specialty  servers, digital video products and 3D graphics  cards.
As  a result of these actions, the Company recorded a nonrecurring
charge  to  operations of $20.1 million, $7 million  of  which  is
recorded  as  a component of "Cost of revenues - Systems"  in  the
consolidated  statements of operations for the  quarter  and  nine
months   ended  September  30,  1999.   This  $7  million   charge
represents the costs of inventory write-offs incurred as a  result
of ICS's exit from the PC and generic server business.

Severance   costs   associated  with  the   third   quarter   1999
restructuring totaled approximately $8.7 million, $7.8 million  of
which  is  included  in "Nonrecurring operating  charges"  in  the
consolidated  statements of operations for the  quarter  and  nine
months  ended  September 30, 1999.  The remaining severance  costs
related   to  headcount  reductions  in  the  Company's   VeriBest
operating  segment, and accordingly, they are reflected  in  "Loss
from discontinued operation, net of income taxes" in the Company's
consolidated  statements of operations for the  quarter  and  nine
months  ended  September  30, 1999.  Approximately  400  positions
company-wide   were  eliminated  through  direct   reductions   in
workforce.  All employee groups were affected, but the majority of
eliminated positions derived from the sales and marketing, general
and  administrative,  and  customer support  areas.   The  Company
estimates  the  annual savings resulting from  this  reduction  in
force approximated $22 million.

The  remainder  of  the third quarter 1999 nonrecurring  operating
charges  consisted  of write-offs of capitalized  business  system
software no longer required as a result of the verticalization  of
the  Company's  business units and resulting  decentralization  of
portions of the corporate financial and administrative functions.

Cash   outlays  for  severance  related  to  the  1998  and   1999
restructuring actions approximated $4 million and $4.4 million  in
the   first   nine   months  of  2000  and   1999,   respectively.
Additionally,   in   third   quarter  2000,   European   severance
liabilities  of  $.4  million related to  the  1999  actions  were
reversed  as  some  of  the affected employees  left  the  Company
voluntarily.   This expense reversal is reflected in "Nonrecurring
operating  charges" in the consolidated statements  of  operations
for  the  quarter and nine months ended September  30,  2000.   At
September  30,  2000,  the total remaining accrued  liability  for
severance   relating  to  the  1999  reductions   in   force   was
approximately $.5 million compared to approximately $5 million  at
December  31,  1999.   These liabilities are reflected  in  "Other
accrued  expenses" in the Company's consolidated  balance  sheets.
The  related  costs are expected to be paid over the remainder  of
2000  and  relate primarily to severance liabilities  in  European
countries,  where  typically  several  months  are  required   for
settlement.

In first quarter 2000, the Company announced its intention to exit
the  development  and  design of hardware products.   The  Company
completed  this exit in third quarter 2000 with the sales  of  its
Intense3D   graphics  accelerator  division  and  its   high   end
workstation  and server business (see "Gains on sales  of  assets"
following).   Upon completion of these transactions,  the  Company
closed  the  remainder of its hardware development operations  and
incurred a nonrecurring charge to operations of approximately $8.5
million  in relation to this closure, including amounts  reflected
in  "Cost  of  revenues  -  Systems"  and  "Cost  of  revenues   -
Maintenance"  of $4.5 million and $.2 million, respectively.   The
amounts  reflected  in  cost of revenues represent  the  costs  of
inventory  write-offs incurred as a result of the shutdown.   With
the  exception  of these costs, all expenses associated  with  the
shutdown are reflected in "Nonrecurring operating charges" in  the
Company's  consolidated statements of operations for  the  quarter
and  nine  months  ending  September 30,  2000.   Severance  costs
associated  with the shutdown totaled approximately $1.7  million.
Approximately 50 positions were eliminated worldwide, primarily in
the  sales  and marketing area, with the majority of  the  related
expense  incurred  in Europe.  The remaining  exit  costs  consist
primarily  of fixed asset write-offs of $1.5 million and  accruals
for  lease  cancellations and idle building space.   Related  cash
outlays  during  third  quarter  2000  totaled  approximately  $.8
million, primarily for severance payments.  At September 30, 2000,
the  remaining accrued liability related to this charge  was  $1.4
million  and  is  reflected  in "Other accrued  expenses"  in  the
Company's  September 30, 2000 consolidated balance  sheet.   These
costs are expected to be paid over the remainder of 2000.

The  closure of the hardware development organization  will  allow
the  Company's operating segments to focus on providing  software,
systems  integration,  and services to  the  industries  in  which
Intergraph is a market leader.  The Company will continue to  sell
hardware   products  from  other  vendors  and  perform   hardware
maintenance services for its installed customer base.  The Company
estimates that its exit from the development and sale of  its  own
hardware products will reduce its annual revenues to approximately
$600  million. The Company expects to incur additional charges  in
fourth  quarter 2000 as it completes its worldwide verticalization
process  and  restructures its international operations  to  align
their  cost  structure with the projected level of  revenue.   The
Company  estimates that the charges incurred will approximate  $15
million.

Severance  payments  to date have been funded from  existing  cash
balances  and from proceeds from the sale of assets.  For  further
discussion  regarding the Company's liquidity, see "Liquidity  and
Capital Resources" following.

Gains  on  sales  of assets.  "Gains on sales of  assets"  in  the
consolidated statements of operations and cash flows  consists  of
the  net  gains and losses recognized by the Company on  sales  of
various  noncore subsidiaries and divisions and of gains  recorded
on  real estate transactions.  Significant components of the  1999
and 2000 year to date gains are discussed below.

In April 1999, the Company sold InterCAP Graphics Systems, Inc., a
wholly-owned  subsidiary,  to Micrografx,  a  global  provider  of
enterprise  graphics  software, for $12.2 million,  consisting  of
$3.9  million  in  cash  received at  closing,  deferred  payments
received in September and October 1999 totaling $2.5 million,  and
a  $5.8 million convertible subordinated debenture due March  2002
(included in "Other assets" in the September 30, 2000 and December
31, 1999 consolidated balance sheets).  The resulting gain on this
transaction  of $11.5 million is included in "Gains  on  sales  of
assets"  in the consolidated statement of operations for the  nine
months  ended September 30, 1999.  InterCAP's revenues and  losses
for  1998 were $4.7 million and $1.1 million, respectively,  ($3.6
million  and $1.9 million for 1997).  Assets of the subsidiary  at
December  31, 1998 totaled $1.6 million.  The subsidiary  did  not
have a material effect on the Company's results of operations  for
the period in 1999 prior to its sale.

On  July 21, 2000 (but with effect from July 1, 2000), the Company
completed the sale of the Intense3D graphics accelerator  division
of  ICS  to  3Dlabs, Inc. Ltd. ("3Dlabs"), a leading  supplier  of
integrated  hardware  and software graphics accelerator  solutions
for   workstations   and   design   professionals.    As   initial
consideration  for  the  acquired assets,  3Dlabs  issued  to  the
Company approximately 3.6 million of its common shares, subject to
a registration rights agreement and a three year irrevocable proxy
granted to 3Dlabs, with an aggregate market value of approximately
$13.2  million on the date of closing.  As of September 30,  2000,
the market value of these shares had declined by approximately  $4
million.  Fifteen percent of the shares have been placed in escrow
for one year to cover any potential claims against the Company  by
3Dlabs. The agreement also contains an earn-out provision based on
various  performance  measures for Intense3D  operations  for  the
remainder  of  2000.   These  performance  measures  include   the
financial  contribution  of the division,  the  retention  of  key
employees by the division, the delivery schedules of new products,
and  the  performance of products developed by the division.   The
earn-out provision provides an opportunity for additional proceeds
of  up  to $25 million, payable in stock and/or cash at the option
of  3Dlabs.   The Company recorded a pretax gain from the  initial
proceeds of the sale of approximately $7 million in third  quarter
2000.  This gain is included in "Gains on sales of assets" in  the
Company's  consolidated statements of operations for  the  quarter
and  nine months ended September 30, 2000. The market value of the
Company's  investment  in 3Dlabs, excluding  the  shares  held  in
escrow,  of approximately $7.8 million is included in "Investments
in  affiliates"  in the Company's September 30, 2000  consolidated
balance  sheet, and the revaluation adjustment for the decline  in
the  market value of the stock since the date of closing has  been
recorded as a component of "Accumulated other comprehensive loss".
Full  year  1999  third-party revenue for the  Intense3D  division
approximated $38 million, with operating results at an approximate
breakeven  level.   For the six months ended June  30,  2000,  the
division earned an operating income of approximately $8.5  million
on  third  party revenues of $34 million.  There is  no  Intense3D
activity reflected in the Company's third quarter 2000 results  of
operations.

Significant  contingencies  associated  with  the  Intense3D  sale
include  potential  penalties  for  the  failure  of  ICS  or  its
successor  to meet its forecasted level of purchases  from  3Dlabs
and  potential  liability  for inventory  included  in  the  sale,
including  inventory  on  order from SCI (the  Company's  contract
manufacturer),  that proves to be obsolete or in excess,  if  any.
In addition, the Company serves as the intermediary between 3Dlabs
and  SCI  for  manufacturing performed by SCI for 3Dlabs,  and  as
such,  is  exposed should 3Dlabs be unable to meet its obligations
to  SCI,  though  such exposure is mitigated by a certain  payment
guarantee  in  favor  of the Company.  See  the  Company's  Annual
Report  on  Form 10-K for the year ended December 31, 1999  for  a
discussion of the Company's business relationship with SCI.

On September 6, 2000, the Company sold several of the buildings on
its Huntsville, Alabama campus to a real estate investment company
for   net  cash  proceeds  of  approximately  $7.2  million.   The
Company's gain on this transaction of $1.3 million is included  in
"Gains  on  sales  of  assets" in the consolidated  statements  of
operations  for  the quarter and nine months ended  September  30,
2000.   The  resulting consolidation of the Company's  Huntsville-
based personnel and operations into fewer buildings is expected to
reduce the Company's future overhead expenses.  Cash proceeds from
the  sale were used to repay a portion of the Company's term  loan
with  its  primary lender.  For further discussion  regarding  the
Company's  borrowings  and liquidity, see "Liquidity  and  Capital
Resources" following.

On  September 8, 2000, the Company completed a strategic  alliance
agreement   with  Silicon  Graphics,  Inc.  ("SGI"),  a  worldwide
provider  of  high-performance  computing  and  advanced  graphics
solutions, in which SGI acquired certain of the Company's hardware
business  assets, including ICS's Zx10 family of workstations  and
servers.   Under the alliance, the Company has become  a  reseller
for  SGI and offers its application solutions on the SGI platform.
The Company received $.3 million as initial cash consideration for
the  acquired  assets.   The agreement also contains  an  earn-out
provision  based  on the revenues generated by the  product  lines
sold for a period of one year after the closing date.  The Company
recorded  a loss from the initial proceeds of this transaction  of
approximately  $.3 million.  This loss is included  in  "Gains  on
sales  of  assets"  in  the Company's consolidated  statements  of
operations  for  the quarter and nine months ended  September  30,
2000.   As  with  3Dlabs, the Company serves as  the  intermediary
between SGI and SCI for manufacturing performed by SCI for SGI.

Other  significant components of the Company's "Gains on sales  of
assets"  for the nine months ended September 30, 2000  include  an
aggregate gain of $5.2 million recognized on the sales of land and
an   office  building  in  the  Netherlands,  a  $2  million  gain
recognized  on  the sale of a noncore software  division,  a  $1.5
million gain on the sale of an investment in an affiliate,  and  a
$1.5 million gain on the termination of a long-term capital lease.
The  proceeds from the sales of the noncore software division  and
the  investment  in the affiliate, $3.5 million in the  aggregate,
were  not received until fourth quarter 2000 and are reflected  in
"Other  current  assets"  in  the  Company's  September  30,  2000
consolidated balance sheet.

Litigation.   As further described in the Company's Annual  Report
on Form 10-K for the year ended December 31, 1999 and its Form 10-
Q filings for the quarters ended March 31, 2000 and June 30, 2000,
the  Company is subject to certain risks and uncertainties and has
extensive  ongoing litigation with Intel Corporation.  Significant
litigation  developments during third quarter 2000  are  discussed
below.

Intel  Litigation.   On March 17, 2000, Intel filed  a  series  of
motions in the Alabama Court to dismiss certain Alabama state  law
claims of the Company.  The Company filed its responses to Intel's
motions on July 17, 2000, together with its own motions to dismiss
certain   Intel   counter-claims.   Intel's  responses   were   by
permission  of the Court filed on November 3, 2000.   No  decision
has been entered.

The  trial date for this case, previously scheduled for June 2000,
has  been  continued.  A formal schedule has not yet been entered,
but  the  Company believes it likely that trial may be rescheduled
for the second half of 2001.

The  Company  has  other  ongoing litigation,  none  of  which  is
considered to represent a material contingency for the Company  at
this  time.  However, any unanticipated unfavorable ruling in  any
of these proceedings could have an adverse impact on the Company's
results of operations and cash flow.

Arbitration Settlement.  The Company maintains an equity ownership
position  in Bentley Systems, Incorporated ("BSI"), the  developer
and owner of MicroStation, a software product utilized in many  of
the  Company's  software applications and for  which  the  Company
serves  as  a  nonexclusive  distributor.   In  March  1996,   BSI
commenced  arbitration  against  the  Company  with  the  American
Arbitration  Association,  Atlanta,  Georgia,  relating   to   the
respective rights of the companies under their April 1987 Software
License  Agreement  and  other matters,  including  the  Company's
alleged  failure to properly pay to BSI certain royalties  on  its
sales  of  BSI software products, and seeking significant damages.
On  March  26,  1999,  the Company and BSI executed  a  Settlement
Agreement  and Mutual General Release ("the Agreement") to  settle
this  arbitration and mutually release all claims related  to  the
arbitration  or  otherwise, except for certain litigation  between
the  companies  that  was  the subject of  a  separate  settlement
agreement  and  payment  for products  and  services  obtained  or
provided  in the normal course of business since January 1,  1999.
Both the Company and BSI expressly denied any fault, liability, or
wrongdoing concerning the claims that were the subject  matter  of
the  arbitration and settled solely to avoid continuing litigation
with each other.

Under the terms of the Agreement, the Company on April 1, 1999
made  payment  to  BSI  of  $12 million  and  transferred  to  BSI
ownership of three million of the shares of BSI's Class  A  common
stock owned by the Company.  The transferred shares were valued at
approximately $3.5 million on the Company's books.  As a result of
the  settlement, Intergraph's equity ownership in BSI was  reduced
from  approximately 50% to approximately 33%.   Additionally,  the
Company  had  a $1.2 million net receivable from BSI  relating  to
business conducted prior to January 1, 1999 which was written  off
in connection with the settlement.

In  first quarter 1999, the Company accrued a nonoperating  charge
to  earnings  of approximately $8.6 million ($.18  per  share)  in
connection  with  the  settlement,  representing  the  portion  of
settlement costs not previously accrued.  This charge is  included
in  "Arbitration  settlement"  in the  consolidated  statement  of
operations for the nine months ended September 30, 1999.

The  $12 million payment to BSI was funded primarily from existing
cash  balances.   For further discussion regarding  the  Company's
liquidity, see "Liquidity and Capital Resources" following.

Year  2000 Issue.  The Company successfully completed all  aspects
of  its  Year  2000  readiness program with respect  to  both  its
internal systems and its products.  As of the date of this filing,
the  Company  has encountered no significant Year  2000  problems.
However,  any undetected errors or defects in the current  product
offerings  of  the  Company  or  its  suppliers  could  result  in
increased costs for the Company and potential litigation over Year
2000 compliance issues.

The  Company employed no additional resources to complete its Year
2000  readiness program, and as a result, the related costs, which
were funded from operations and expensed as incurred, did not have
a  material  impact  on  its results of  operations  or  financial
condition.   Year  2000  related  changes  in  customer   spending
patterns have not had, and are not anticipated to have, a material
impact on the Company's orders or revenues.

ORDERS/REVENUES
---------------

Orders.  Systems  and services orders for the  third  quarter  and
first  nine  months  of  2000 totaled $151.9  million  and  $467.9
million,  respectively, reflecting declines of  approximately  15%
and  14%  from the comparable prior year periods. Orders  for  the
third  quarter and first nine months of 1999 included $4.7 million
and  $13.1  million,  respectively, in  orders  of  the  Company's
discontinued   VeriBest  operation.   Excluding  the   impact   of
VeriBest,  U.S.  orders declined by 5% and 8%,  respectively,  and
international  orders declined by 25% and 16%, respectively,  from
the third quarter and year to date 1999 levels. Third quarter 2000
orders  also  declined by 12% from the second quarter 2000  level.
The  orders  decline  for the quarter and  year  to  date  can  be
attributed  primarily to the weakening demand  for  the  Company's
hardware  products as the result of the Company's exit  from  this
market,  though in first quarter 2000, some weakness was noted  in
the  Company's software segments as well.  These negative  factors
were  partially offset by a significant improvement in  orders  of
the  Company's  Intergraph Public Safety  ("IPS")  business  unit.
IPS's  orders  increased  by 30% and 50%, respectively,  from  the
third  quarter  and  year to date 1999 levels  as  the  result  of
several  large orders received in third quarter 2000.  The Company
believes the first quarter weakness in software orders was due  in
part   to   transitioning  to  vertical  units  in  the   software
businesses,  but may also have been related to the announced  exit
from  the  hardware  development business.  International  orders,
particularly in Europe, have also been adversely affected  by  the
strengthening of the U.S. dollar.  The Company estimates that this
strengthening of the dollar resulted in an approximate 2%  decline
in  its reported systems and services orders from the year to date
1999 level.

Revenues.   Total revenues for the third quarter  and  first  nine
months   of   2000   were  $158.9  million  and  $546.3   million,
respectively, down 28% and 21%, respectively, from the  comparable
prior  year  periods  due  to  the expected  decline  in  hardware
revenues  and  the first quarter order softness  in  the  vertical
software   businesses.   Sales  outside   the   U.S.   represented
approximately  52%  of total revenues for the  nine  months  ended
September  30,  2000,  consistent with the comparable  prior  year
period  and the full year 1999, despite the strengthening  of  the
U.S. dollar.

In  third  quarter 2000, the Company substantially  completed  the
segregation of its operations into six vertical business  segments
which  provide software, systems integration, and services to  the
industries in which Intergraph is a market leader.  Third  quarter
and  year to date revenues for each of these industry segments are
presented in Note 13 of Notes to Consolidated Financial Statements
contained in this Form 10-Q.

Systems.   Systems revenue for the third quarter  and  first  nine
months  of  2000 was $92 million and $349.6 million, respectively,
down  39% and 26% from the comparable prior year periods.  Factors
cited  previously as contributing to the decline  in  orders  have
also   adversely   affected  systems  revenues,  and   competitive
conditions  manifested  in  declining  sales  prices  continue  to
adversely  affect  the  Company's  systems  revenues  and  margin.
Systems  revenues  in Europe, the U.S., the Americas  (Canada  and
Latin  America),  and  Asia declined by  36%,  27%,  19%  and  4%,
respectively,  from  year  to  date 1999  levels,  while  MidWorld
systems  revenues increased by 12%.  Excluding  the  impact  of  a
stronger  dollar,  the  European revenue  decline  was  29%.   The
improvement in MidWorld revenues is attributed primarily to  sales
made  by Z/I Imaging, a 60%-owned subsidiary of the Company formed
in fourth quarter 1999.

Hardware  revenues  for  the  quarter  totaled  approximately  $30
million,  down 61% from the comparable prior year period  and  41%
from  the second quarter of 2000.  Hardware revenues for the first
nine  months of 2000 declined by approximately 43% from the  prior
year  to  date level.  The company anticipates continuing declines
in  its  hardware revenues as a result of its exit of the hardware
development business in third quarter 2000.

Maintenance.  Revenue from maintenance of Company systems  totaled
$39.7  million  for the third quarter and $123.5 million  for  the
first  nine  months of 2000, down 13% and 12%, respectively,  from
the  comparable  prior year periods.  The trend  in  the  industry
toward  lower  priced  products and longer  warranty  periods  has
resulted in reduced levels of maintenance revenue, and the Company
believes   this  trend,  along  with  its  exit  of  the  hardware
development  business, will act to reduce its level of maintenance
revenue.

Services.  Services revenue, consisting primarily of revenues from
Company  provided training and consulting, totaled  $27.3  million
for  the third quarter and $73.3 million for the first nine months
of 2000, up 13% and down 7% from the respective prior year levels.
Services  are  becoming increasingly significant to the  Company's
business, representing approximately 17% of total revenue for  the
third  quarter and 13% of total revenue for the first nine  months
of  2000.   The  Company  is  endeavoring  to  grow  its  services
business;   however,   revenues  from  these  services   typically
fluctuate significantly from quarter to quarter and produce  lower
gross margins than systems or maintenance revenues.

GROSS MARGIN
------------

The Company's total gross margin for third quarter 2000 was 34.3%,
up  8.2  points  from the third quarter 1999 level.   Total  gross
margin  for the first nine months of 2000 was 35.8%, up 5.2 points
from the comparable prior year period and 4.1 points from the full
year 1999 level.

Systems  margin for the third quarter was 33.2%, down 4.8  points
from  the second quarter 2000 level and up 9.7 points from  third
quarter  1999.  Systems margin for the first nine months of  2000
was  35.9%, up 8.2 points from the comparable prior year  period
and  5.9  points from the full year 1999. The third quarter  2000
margin was negatively impacted by a $4.5 million inventory write-
down  incurred  in connection with the shutdown of the  Company's
hardware development business, and the third quarter 1999  margin
was  negatively  impacted  by  a $7 million  inventory  write-off
incurred in connection with the Company's decision to exit the PC
and  generic  server  businesses.  (See  "Nonrecurring  Operating
Charges"  preceding.) Excluding these charges, the third  quarter
2000  systems  margin was basically flat with the second  quarter
2000  level  and  up 10.1 points from the comparable  prior  year
period.   The  increase in systems margin  from  the  prior  year
levels is due primarily to the increasing software content in the
product  mix  as  the  Company's hardware  revenues  continue  to
decline.   Additionally,  Z/I Imaging,  a  subsidiary  formed  in
fourth  quarter 1999, has had a positive impact on the  Company's
systems  margin  due  to  the high margins  earned  on  sales  of
reconnaissance cameras.

In  general,  the Company's systems margin may be  improved  by  a
higher  software content in the product mix, a weaker U.S.  dollar
in  international  markets,  and a  higher  mix  of  international
systems  sales  to total systems sales.  Systems  margins  may  be
lowered  by  price competition, a higher hardware content  in  the
product mix, a stronger U.S. dollar in international markets,  the
effects   of  technological  changes  on  the  value  of  existing
inventories,  and a higher mix of federal government sales,  which
generally  produce  lower  margins than commercial  sales.   While
unable to predict the effects that many of these factors may  have
on  its  systems margin, the Company expects continued improvement
as  a  result  of  the Company's exit of the hardware  development
business, derived primarily from an increased software content  in
the  product  mix  and  a  reduction  in  inventory  carrying  and
obsolescence  costs.   However, the Company  continues  to  expect
pressure  on  its  systems  margin as  the  result  of  increasing
industry price competition.

Maintenance margin for the third quarter of 2000 was 48%,  up  2.2
points from the second quarter 2000 level and 7.2 points from  the
third  quarter of 1999.  Year to date maintenance margin is 46.8%,
up  .4  points from the corresponding prior year period and up  .8
points  from  the  full  year 1999 level.   Though  the  Company's
maintenance  revenues  continue to  decline,  the  cost  of  these
revenues has been reduced proportionately, due in part to  reduced
inventory   obsolescence   costs.   The   Company   monitors   its
maintenance cost closely and has taken certain measures, including
reductions  in headcount, to align these costs with the  declining
levels  of revenue.  As part of these efforts, in the latter  part
of  1999,  the Company began outsourcing the hardware  maintenance
function  in  some  of  its larger European  subsidiaries.   Third
quarter 1999 maintenance margins were negatively impacted by  some
of  the  initial costs incurred in this transition to outsourcing,
primarily  in  the  form  of  severance  and  incentives  paid  to
employees    who   transferred   to   the   hardware   maintenance
subcontractor.   The  Company  believes  that  the  trend  in  the
industry toward lower priced products and longer warranty periods,
along  with  its  exit of the hardware development business,  will
continue  to  reduce its maintenance revenue, which will  pressure
maintenance   margin   in  the  absence  of   corresponding   cost
reductions.

Services  margin  for the third quarter of 2000 was  17.8%,  up  4
points  from the second quarter 2000 level and 3 points  from  the
third  quarter  of 1999.  Year to date services margin  is  16.8%,
down 2.9 points from the corresponding prior year period and up .8
points from the full year 1999 level.  The decline from the  first
nine  months  of 1999 is due primarily to the decline in  services
revenue  from the prior year period.  Significant fluctuations  in
services  revenues  and  margins from period  to  period  are  not
unusual  as  the incurrence of costs on certain types  of  service
contracts  may not coincide with the recognition of revenue.   For
contracts  other than those accounted for under the percentage-of-
completion  method, costs are expensed as incurred, with  revenues
recognized either at the end of the performance period or based on
milestones  specified in the contract.  Year to date 2000  margins
have been negatively impacted by a large federal services contract
which  is nearing completion.  Significant costs were incurred  on
this  project in the first half of the year, but the  majority  of
the remaining revenue on the contract will not be recognized until
contract  completion,  which is anticipated  to  occur  in  fourth
quarter 2000.

OPERATING EXPENSES
------------------

The Company's operating expenses continue to decline steadily each
quarter.   Exclusive  of nonrecurring charges, operating  expenses
for  the  third quarter and first nine months of 2000 declined  by
25% and 20%, respectively, from the comparable prior year periods.
In  response to the level of its operating losses, the Company has
taken  various actions, including employee terminations and  sales
of   unprofitable  business  operations,  to  reduce  its  average
employee headcount by approximately 18% from the prior year level.
Sales  and marketing expense for the third quarter and first  nine
months  of  2000 declined by 30% and 28%, respectively,  from  the
corresponding  prior year periods as the result of  reductions  in
headcount  and  reduced public relations expenses.  The  Company's
sales and marketing expenses are inherently activity based and can
be  expected  to  fluctuate  with activity  levels.   General  and
administrative expense for the third quarter and first nine months
of   2000  decreased  by  22%  and  14%,  respectively,  from  the
comparable  prior year periods due to a decline in legal  fees  as
the result of reduced activity related to the Intel litigation and
a  decline  in  European compensation expenses as  the  result  of
reduced  headcount.  The Company expects that its  legal  expenses
will continue to fluctuate with the activity level associated with
the  Intel  trial.   Additionally, the Company is  experiencing  a
temporary  duplication of administrative expenses in the  U.S.  in
connection with its efforts to verticalize its operating  segments
and   decentralize   portions  of  the  corporate   administrative
function.  The Company expects that these expenses will decline by
the  end  of  2000.   Product development expense  for  the  third
quarter  and  first nine months of 2000 declined by  19%  and  9%,
respectively,  from  the  corresponding  prior  year  periods  due
primarily  to the reduction in headcount, partially  offset  by  a
decline    in   software   development   costs   qualifying    for
capitalization,   primarily  related  to  the  Company's   federal
shipbuilding effort.

NONOPERATING INCOME AND EXPENSE
-------------------------------

Interest  expense  was $1 million for the third quarter  and  $3.2
million for the first nine months of 2000 versus $1.5 million  and
$4.3  million,  respectively,  for the  corresponding  prior  year
periods.   The Company's average outstanding debt has declined  in
comparison  to  the  same  prior year  periods  due  primarily  to
repayment  of  borrowings utilizing the  proceeds  from  sales  of
various   noncore  businesses  and  assets.   See  "Liquidity  and
Capital  Resources" following for a discussion  of  the  Company's
current financing arrangements.

"Other  income (expense) - net" in the consolidated statements  of
operations consists primarily of interest income, foreign exchange
gains  and  losses, and other miscellaneous items of  nonoperating
income and expense.

IMPACT OF CURRENCY FLUCTUATIONS AND CURRENCY RISK MANAGEMENT
------------------------------------------------------------

Fluctuations  in  the  value of the U.S. dollar  in  international
markets can have a significant impact on the Company's results  of
operations.  For the first nine months of 2000 and the  full  year
1999,  approximately  52% of the Company's revenues  were  derived
from  customers  outside  the  United  States,  primarily  through
subsidiary  operations.  Most subsidiaries sell to  customers  and
incur  and pay operating expenses in local currency.  These  local
currency revenues and expenses are translated to U.S. dollars  for
reporting  purposes.   A stronger U.S. dollar  will  decrease  the
level  of  reported U.S. dollar orders and revenues, decrease  the
dollar  gross  margin, and decrease the reported dollar  operating
expenses  of the international subsidiaries.  Over the first  nine
months  of 2000, the U.S. dollar strengthened on average from  its
comparable  prior  year  level, which  decreased  reported  dollar
revenues,  orders,  and gross margin, but also decreased  reported
dollar  operating expenses in comparison to the prior year period.
The  Company estimates that this strengthening of the U.S.  dollar
in  its  international  markets, primarily in  Europe,  negatively
impacted  its results of operations for the first nine  months  of
2000  by  approximately  $.07  per  share  in  comparison  to  the
corresponding prior year period.

The  Company  conducts business in all major markets  outside  the
U.S., but the most significant of these operations with respect to
currency  risk are located in Europe and Asia.  See the  Company's
Annual  Report on Form 10-K for the year ended December  31,  1999
for  a  description  of  the Company's  policy  for  managing  the
currency risks associated with its international operations.

At  December  31,  1999,  the Company's only  outstanding  forward
exchange  contracts  related  to  formalized  intercompany   loans
between the Company's European subsidiaries and were immaterial to
the  Company's  financial position.  In first  quarter  2000,  the
Company  ceased  hedging its currency exposures  in  the  European
region.   At  September  30,  2000, the  Company  had  no  forward
exchange contracts outstanding.

Euro  Conversion.  On January 1, 1999, eleven member countries  of
the European Monetary Union ("EMU") fixed the conversion rates  of
their national currencies to a single common currency, the "Euro".
In June 2000, Greece became the twelfth member of the EMU to adopt
the  Euro.  The national currencies of the participating countries
will  continue  to exist through July 1, 2002, and  Euro  currency
will  begin to circulate on January 1, 2002.  All of the Company's
financial systems currently accommodate the Euro, and during  1999
and  the first nine months of 2000, the Company conducted business
in Euros with its customers and vendors who chose to do so without
encountering significant problems.  While the Company continues to
evaluate  the  potential  impacts of the common  currency,  it  at
present  has not identified significant risks related to the  Euro
and  does  not anticipate that full Euro conversion in  2002  will
have  a  material impact on its results of operations or financial
condition.  To date, the conversion to one common currency has not
impacted the Company's pricing in its European markets.

INCOME TAXES
------------

The Company incurred a pretax loss of $3 million in the first nine
months of 2000 versus a pretax loss from continuing operations  of
$67.2  million  in  the first nine months  of  1999.   Income  tax
expense  for  both  periods  resulted  primarily  from  taxes   on
individually profitable majority owned subsidiaries, including the
Company's 60% ownership interest in Z/I Imaging in the first  nine
months  of  2000.   There was no material income  tax  expense  or
benefit related to the Company's discontinued operation.  See  the
Company's  Annual Report on Form 10-K for the year ended  December
31,  1999 for details of the Company's tax position, including net
operating loss and tax credit carryforwards.

RESULTS BY OPERATING SEGMENT
----------------------------

The year 2000 has been and continues to be a transitional year for
the  Company during which it has focused its efforts on organizing
the Company into six vertical business segments.  In third quarter
2000, the Company substantially completed the U.S. portion of this
process.  The international portion of this process is expected to
be  completed  by  the end of first quarter 2001.   The  following
discussion   provides  a  comparative  analysis  of   results   of
operations  based  on  the Company's prior  business  segmentation
structure.  Prior year comparative data is not available  for  the
Company's  new  business structure, except for  Intergraph  Public
Safety, Inc. and Z/I Imaging Corporation, whose businesses did not
change  as  a  result of the verticalization  process.   With  the
exception of the Company's ICS business unit, all of the Company's
newly  defined operating segments were profitable from  operations
for the third quarter and year to date 2000.  See Note 13 of Notes
to  Consolidated Financial Statements contained in this Form  10-Q
for  further  explanation  and details of  the  Company's  segment
reporting, including a presentation of the Company's new  vertical
operating structure for third quarter 2000 and forward.

In   third  quarter  2000,  Intergraph  Computer  Systems  ("ICS")
incurred  an operating loss of $13.4 million on revenues of  $31.2
million, compared to a third quarter 1999 operating loss of  $20.2
million  on  revenues of $85.8 million.  Year  to  date,  ICS  has
incurred an operating loss of $16.9 million on revenues of  $142.5
million,  compared  to  an  operating loss  of  $39.7  million  on
revenues  of $265.2 million for first nine months of 1999.   These
operating  results  exclude  the impact  of  certain  nonrecurring
income   and   operating  expense  items  associated  with   ICS's
operations, including the nonrecurring operating charges  of  $4.2
million and $4.5 million incurred in the first nine months of 2000
and  1999, respectively, primarily for employee termination  costs
as   well  as  fixed  asset  write-offs  and  accruals  for  lease
cancellations  and idle building space recorded in  third  quarter
2000  as  the result of the segment's final exit from the hardware
development  business.  ICS's operating loss improvement  for  the
first  nine  months of 2000 resulted primarily from an approximate
53%  decline  in  operating expenses as the  result  of  headcount
reductions  achieved  in 1999 and 2000.  Although  total  revenues
declined  by 46%, ICS's gross margin was flat with the prior  year
to  date  level  at  9.8%.  ICS's third quarter  2000  margin  was
negatively   impacted  by  a  $4.5  million  inventory  write-down
incurred   in  connection  with  the  shutdown  of  its   hardware
development  business,  and  its third  quarter  1999  margin  was
negatively  impacted by a $7 million inventory write-off  incurred
in  connection  with the its decision to exit the PC  and  generic
server  businesses.  The ICS business was significantly  adversely
impacted  by  factors associated with the Company's  dispute  with
Intel.  (See the Company's Annual Report on Form 10-K for the year
ended December 31, 1999 for a complete discussion of the Company's
dispute  with Intel and its effects on the operations of  ICS  and
the  Company.)  As  a result, in third quarter 2000,  the  Company
exited  the  hardware  development  business.   The  Company  will
continue to sell hardware products from other vendors through  its
vertical  operating  segments  and  perform  hardware  maintenance
services  for  its  installed customer base.  Effective  with  the
shutdown  of  ICS, the Company's hardware maintenance and  network
services  operations were combined with the Intergraph  Government
Solutions operating segment.  Third quarter 2000 will be the  last
quarter reflecting operations for the ICS operating segment.

In  third  quarter 2000, Intergraph Public Safety  ("IPS")  earned
operating  income  of $1.1 million on revenues of  $22.4  million,
compared to operating income in third quarter 1999 of $2.4 million
on  revenues  of  $24.1  million.  Year to date,  IPS  has  earned
operating income of $3.7 million on revenues of $66 million versus
operating  income of $7.6 million on revenues of $70.2 million  in
first  nine months of 1999.  Improvements in the segment's systems
and  maintenance  margins from the prior year to date  level  have
been  offset  by  a  25%  increase  in  operating  expenses.    In
anticipation of increasing orders, the Utilities division  of  IPS
has  increased its headcount by approximately 14% from  the  prior
year to date level, primarily in the product development and sales
and    marketing   areas.    Additionally,   IPS's   general   and
administrative expenses have increased by 23% from the prior  year
period  due to legal expenses incurred in Australia for an inquiry
related  to  a  large  contract award.  It is unknown  at  present
whether  this  inquiry will result in a legal  proceeding  of  any
significance with respect to the IPS operating segment.   The  IPS
business  is  characterized by large orders that are difficult  to
forecast  and  cause  revenues  to  fluctuate  significantly  from
quarter  to quarter.  IPS's orders for the third quarter and  year
to  date  2000  increased by 30% and 50%, respectively,  from  the
comparable prior year levels as the result of several large orders
received in third quarter 2000, due in part to negotiation  delays
on  several projects in second quarter 2000.  These orders  should
accrue to revenue incrementally over the next several quarters  as
the projects are completed.

In  third  quarter  2000, the Software business  earned  operating
income of $4.3 million on revenues of $81 million, compared  to  a
third  quarter 1999 operating loss of $2.8 million on revenues  of
$111.3  million.  Year to date, the Software business  has  earned
operating  income  of $6.3 million on revenues of  $262.5  million
versus  an operating income of $4.8 million on revenues of  $355.9
million  for the same prior year period.  These operating  results
exclude  the  impact of certain nonrecurring income and  operating
expense  items associated with Software operations, including  the
third  quarter 2000 gain of $2 million on the sale  of  a  noncore
software  product  line.   Year  to  date  1999  operating  income
excludes the first quarter 1999 arbitration settlement accrual  of
$8.6 million, the second quarter 1999 gain on the sale of InterCAP
of  $11.5  million, and third quarter 1999 nonrecurring  operating
charges  of  approximately $5.8 million,  primarily  for  employee
severance  costs.   Though  total gross margin  increased  by  3.6
points  from the prior year to date level to 40.7%, a 26%  decline
in  revenues  resulted  in a significant  reduction  in  operating
income.   The impact of the revenue decline was offset  by  a  21%
decline  in  operating expenses from the 1999 year to date  level,
primarily  related  to the segment's sales and marketing  expense.
During  1999, the segment reduced and reorganized its sales  force
to  align  its  expenses more closely with  the  lower  volume  of
revenue being generated.

Intergraph  Government Solutions earned operating income  of  $2.1
million  on  revenues  of  $34.4 million in  third  quarter  2000,
compared to third quarter 1999 operating income of $3.5 million on
revenues of $40.1 million.  Year to date, Government Solutions has
earned operating income of $7 million on revenues of $111 million,
compared to operating income of $9.1 million on revenues of $122.7
million  for the same prior year period.  Though revenues for  the
first  nine  months  of 2000 declined by 10% from  the  comparable
prior  year period, total gross margin improved by 3.7  points  to
26.3%, due primarily to improvements in the segment's systems  and
services margins.  However, this improvement was offset by  a  19%
increase  in operating expenses, primarily the result of increased
general  and administrative expense resulting from verticalization
of  the  operating  segment, including  implementation  of  a  new
accounting system, and from an increase in bad debt expenses  from
the corresponding prior year period.

In third quarter 2000, Z/I Imaging earned operating income of $1.1
million on revenues of $9.7 million.  Year to date, Z/I has earned
operating  income  of $6.3 million on revenues of  $33.1  million.
This was the segment's fourth full quarter of operations since its
inception  on October 1, 1999.  Systems revenues were higher  than
expected   for  the  first  nine  months  of  2000  as  sales   of
reconnaissance  cameras were strong.  Total gross margin  for  the
third  quarter  and first nine months of 2000  was  61%  and  56%,
respectively,  reflecting the high margins earned on  software  as
well  as  on  sales  of reconnaissance cameras.   Z/I's  operating
expenses for third quarter 2000 were approximately 25% above their
normal  level  due to the determination and payment  of  year  end
bonuses.

General corporate expenses for the third quarter and year to  date
2000  declined by 55% and 40%, respectively, from their comparable
prior  year  levels.   These declines are  due  primarily  to  the
declines  in the Company's legal expenses and the ongoing  efforts
of the Company to reduce its corporate overhead.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

At  September 30, 2000, cash totaled $106.4 million, up from $88.5
million at December 31, 1999.  Cash generated by operations in the
first  nine  months of 2000 totaled $37.6 million, compared  to  a
consumption  of  $24.6 million in the first nine months  of  1999.
The  cash generation in the first nine months of 2000 reflects the
Company's improved results of operations and continuing  focus  on
collection of accounts receivable.  Cash consumption in the  first
nine  months of 1999 included the $12 million payment to BSI  (See
"Arbitration  Settlement" preceding).  Severance payments  in  the
first  nine months of 2000 and 1999 totaled $4.8 million and  $4.4
million, respectively.

Net cash generated by investing activities totaled $5.3 million in
the  first  nine  months of 2000, compared to a $1.9  million  net
consumption  of cash in the first nine months of 1999.   Investing
activities in the first nine months of 2000 included $22.3 million
in net proceeds from sales of assets, primarily from sales of land
and  office  buildings  in the Netherlands and  on  the  Company's
Huntsville,  Alabama campus.  Investing activities  in  the  first
nine  months  of 1999 included $28.9 million in net proceeds  from
sales  of assets, including $19.9 million from the fourth  quarter
1998  sale of the Company's manufacturing assets (See Note  12  of
Notes to Consolidated Financial Statements contained in this  Form
10-Q), $4.1 million from the sale of the InterCAP subsidiary, $2.5
million  from  the sale of land, and  $2  million  from  the  sale
of  the  corporate  jet.   Other significant investing activities
in the first nine months of  2000 included expenditures for
capitalizable software development costs of  $9.8 million ($14.7
million in the first nine months of  1999) and  capital
expenditures of $5.5 million ($7.9  million  in  the first nine
months of 1999), primarily for Intergraph products used
in  hardware  and  software development and  sales  and  marketing
activities.   The  Company expects that capital expenditures  will
require  $8  to $10 million for the full year 2000, primarily  for
these same purposes.  The Company's term loan and revolving credit
agreement  contains  certain restrictions  on  the  level  of  the
Company's capital expenditures.

Net  cash  used for financing activities totaled $19.7 million  in
the  first nine months of 2000, compared to $14.9 million  in  the
first  nine months of 1999.  Net debt repayments during the  first
nine  months  of  2000  and 1999 totaled  $21  million  and  $16.9
million,  respectively.  In the first nine  months  of  2000,  the
Company used approximately $7 million to repay its Australian term
loan,  $4  million to pay off the mortgage on a disposed  European
office  building, and $7.1 million to pay down the term loan  with
its  primary  lender.  Activity in the first nine months  of  1999
relates primarily to the Company's term loan and revolving  credit
agreement.

An  additional  reduction  in  the Company's  long-term  debt  was
achieved  through the termination of a long-term lease on  one  of
the  Company's  facilities  in first quarter  2000.   The  Company
accounted  for  this lease as a financing, and  upon  termination,
long-term  debt of $8.3 million and property, plant, and equipment
of $6.5 million were removed from the Company's books.

Currency  fluctuations continue to have a negative impact  on  the
Company's   consolidated  cash  balance  due  primarily   to   the
devaluation  of the Euro.  The Company has increased  exposure  to
this  currency  as a result of the October 1999 formation  of  Z/I
Imaging and its significant presence in Germany.

Under  the  Company's January 1997 six year fixed  term  loan  and
revolving credit agreement, available borrowings are determined by
the  amounts  of  eligible assets of the Company  (the  "borrowing
base"),   as   defined   in  the  agreement,  primarily   accounts
receivable,   with  maximum  availability  of  $80  million.    In
September 2000, the Company repaid $7.1 million of the $25 million
term loan portion of the agreement with proceeds received from the
sale  of  several  office  buildings on  its  Huntsville,  Alabama
campus.   The  remaining  $17.9  million  term  loan  is  due   at
expiration of the agreement.  Borrowings are secured by  a  pledge
of  substantially  all of the Company's assets  in  the  U.S.  and
certain  international receivables.  The rate of interest  on  all
borrowings under the agreement is the greater of 7% or the Norwest
Bank Minnesota National Association base rate of interest (9.5% at
September  30, 2000) plus .625%, and there are provisions  in  the
agreement  that  will lower the interest rate upon achievement  of
sustained  profitability by the Company.  The  agreement  requires
the Company to pay a facility fee at an annual rate of .15% of the
amount available under the credit line, an unused credit line  fee
at  an  annual rate of .25% of the average unused portion  of  the
revolving credit line, and a monthly agency fee.  At September 30,
2000, the Company had outstanding borrowings of $17.9 million (the
term  loan)  which  are  classified  as  long-term  debt  in   the
consolidated balance sheet, and an additional $17.2 million of the
available  credit  line  was allocated to  support  the  Company's
letters of credit and forward exchange contracts.  As of this same
date,  the  borrowing  base, representing  the  maximum  available
credit under the line, was approximately $48.1 million.

The  term  loan  and revolving credit agreement  contains  certain
financial  covenants of the Company, including minimum net  worth,
minimum current ratio, and maximum levels of capital expenditures,
and  restrictive covenants that limit or prevent various  business
transactions  (including  repurchases  of  the  Company's   stock,
dividend  payments,  mergers, acquisitions of  or  investments  in
other  businesses,  and  disposal of assets  including  individual
businesses,  subsidiaries, and divisions)  and  limit  or  prevent
certain  other business changes without approval.   The  Company's
net  worth covenant was reduced to $200 million effective June 30,
2000.  Additionally, the agreement required the Company to retain,
pending  a  return to profitability, the services of an investment
banking  firm to advise the Company regarding potential partnering
arrangements  and  other alternatives for  its  computer  hardware
business.   This  requirement was waived by the lender  in  second
quarter 2000.

At  September 30, 2000, the Company had approximately $31  million
in  debt on which interest is charged under various floating  rate
arrangements,  primarily  its six year  term  loan  and  revolving
credit  agreement and a European mortgage.  The Company is exposed
to  market  risk  of future increases in interest rates  on  these
loans.

The  Company continues to improve its general financial  condition
and  has  generated positive operating cash flow  for  the  fourth
consecutive  quarter,  primarily the result of  improved  accounts
receivable  collections  and  operating  expense  declines.    The
Company expects to sustain this improvement in its operating  cash
flows  throughout  2000  as a result of headcount  reductions  and
other  expense  savings actions taken during 1999 and  2000.   The
Company  is managing its cash very closely and believes  that  the
combination  of improved cash flow from operations,  its  existing
cash  balances,  and  cash available under  its  revolving  credit
agreement  will  be adequate to meet cash requirements  for  2000,
including requirements for severance payments associated with  the
various restructuring actions being taken by the Company.  For the
near  term,  the Company also anticipates that its  cash  position
will continue to benefit from the sales of excess real estate  and
other  noncore  assets of the Company.  However,  for  the  longer
term,  the  Company must continue to align its operating  expenses
with  the  reduced levels of revenue being generated if it  is  to
fund  its  operations and build cash reserves without reliance  on
funds  from  sales of assets and external financing.  The  Company
anticipates  no significant nonoperating events that will  require
the use of cash, other than its stock repurchase program described
under "Subsequent Event" below.

SUBSEQUENT EVENT
----------------

On October  30, 2000, the Company's Board of Directors approved  a
stock  repurchase plan which will allow the Company under  certain
circumstances  to  repurchase up to $30 million of its outstanding
common  stock.   The  Plan is not expected to commence  until  the
completion  of  certain  transactions,  including  sale   of   the
Company's Microstation-based software products to BSI (See Note 17
of  Notes to Consolidated Financial Statements contained  in  this
Form  10-Q.),  sale  of  remaining  idle  building  space  on  the
Company's  Huntsville,  Alabama  campus,  and  completion  of  the
restructuring of the Company's international organization into the
vertical business units.  However, the Board in its discretion may
approve purchases prior to completion of these transactions.   The
Plan  may be suspended at any time after its commencement and will
terminate on December 31, 2002.  The Company has no obligation  to
purchase any specific number of shares under the Plan.



              INTERGRAPH CORPORATION AND SUBSIDIARIES


       Item  3:  Quantitative and Qualitative Disclosures  About Market Risk
                 -----------------------------------------------------------

                 The  Company  has  experienced no material  changes  in
                 market  risk  exposures that affect  the  quantitative  and
                 qualitative disclosures presented in the Company's Form 10-
                 K filing for its year ending December 31, 1999.


       PART II.  OTHER INFORMATION
                 -----------------

       Item 1:   Legal Proceedings
                 -----------------

                 On  March 17, 2000, Intel filed a series of motions in the
                 Alabama Court to dismiss certain Alabama state law  claims
                 of  the  Company.   The  Company filed  its  responses  to
                 Intel's  motions on July 17, 2000, together with  its  own
                 motions  to dismiss certain Intel counter-claims.  Intel's
                 responses  were  by  permission  of  the  Court  filed  on
                 November 3, 2000.  No decision has been entered.

                 The  trial  date for this case, previously  scheduled  for
                 June 2000, has been continued.  A formal schedule has  not
                 yet  been entered, but the Company believes it likely that
                 trial may be re-scheduled for the second half of 2001.

         Item 6: Exhibits and Reports on Form 8-K
                 --------------------------------

           (a)   Exhibit 27, Financial Data Schedule

           (b)   There  were  no  reports on Form 8-K  filed  during  the
                 quarter ended September 30, 2000.



              INTERGRAPH CORPORATION AND SUBSIDIARIES
                            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.



                      INTERGRAPH CORPORATION
                      ----------------------
                          (Registrant)




By: /s/ James F. Taylor Jr.         By:  /s/ John W. Wilhoite
   ------------------------            -----------------------------
    James F. Taylor Jr.                 John W. Wilhoite
    Chief Executive Officer             Executive Vice President and
                                        Chief Financial Officer
                                        (Principal Financial and
                                        Accounting Officer)

Date: November 13, 2000             Date: November 13, 2000