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

                                 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, 2001

                                     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: 49,699,667 shares
                  outstanding as of September 30, 2001


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


                          INTERGRAPH CORPORATION
                                FORM 10-Q*
                            September 30, 2001

                                  INDEX


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

   Item 1. Financial Statements
           --------------------

           Consolidated Balance Sheets at September 30, 2001 and
             December 31, 2000                                             2

           Consolidated Statements of Operations for the quarters
             and the nine months ended September 30, 2001 and 2000         3

           Consolidated Statements of Cash Flows for the nine months
             ended September 30, 2001 and 2000                             4

           Notes to Consolidated Financial Statements                    5 - 13

   Item 2. Management's Discussion and Analysis of Financial Condition
           -----------------------------------------------------------
           and Results of Operations                                    14 - 24
           -------------------------

   Item 3. Quantitative and Qualitative Disclosures About Market Risk      25
           ----------------------------------------------------------



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

   Item 1. Legal Proceedings                                               26
           -----------------

   Item 6. Exhibits and Reports on Form 8-K                                26
           --------------------------------


SIGNATURES                                                                 27




   * 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  for the quarters ended March 31, 2001 and
   June 30, 2001, and this Form 10-Q.


PART I.  FINANCIAL INFORMATION
         ---------------------

                 INTERGRAPH CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                              (Unaudited)


-------------------------------------------------------------------------
                                            September 30,   December 31,
                                                2001           2000
-------------------------------------------------------------------------
(In thousands except share and per share amounts)


Assets
  Cash and cash equivalents                  $  115,439    $  119,848
  Accounts receivable, net                      166,150       178,862
  Inventories                                    28,150        25,290
  Other current assets                           43,444        53,475
-------------------------------------------------------------------------
        Total current assets                    353,183       377,475
  Investments in affiliates                      17,875        14,262
  Capitalized software development costs         23,840        23,871
  Other assets                                   34,445        42,971
  Property, plant, and equipment, net            53,078        56,329
-------------------------------------------------------------------------
        Total Assets                         $  482,421    $  514,908
=========================================================================

Liabilities and Shareholders' Equity
  Trade accounts payable                     $   34,055    $   35,224
  Accrued compensation                           34,424        33,257
  Other accrued expenses                         46,042        61,591
  Billings in excess of sales                    43,727        46,603
  Income taxes payable                           10,631        10,984
  Short-term debt and current maturities
    of  long-term  debt                           3,161         5,765
-------------------------------------------------------------------------
        Total current liabilities               172,040       193,424
-------------------------------------------------------------------------
  Deferred income taxes                           6,665         6,604
  Long-term debt                                 11,964        25,265
  Other noncurrent liabilities                    2,874         4,612
-------------------------------------------------------------------------
        Total noncurrent liabilities             21,503        36,481
-------------------------------------------------------------------------
  Minority interest in consolidated subsidiaries  7,250         7,003
-------------------------------------------------------------------------
  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                   211,703       214,079
   Retained earnings                            196,365       188,326
   Accumulated other comprehensive
     income (loss)                             ( 21,388)     ( 15,931)
-------------------------------------------------------------------------
                                                392,416       392,210
   Less - cost of 7,661,695 treasury shares at
    September 30, 2001 and 7,836,452 treasury
    shares at December 31, 2000                (110,788)     (114,210)
-------------------------------------------------------------------------
        Total shareholders' equity              281,628       278,000
-------------------------------------------------------------------------
        Total Liabilities and Shareholders'
        Equity                               $  482,421    $  514,908
=========================================================================

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,
                                    2001      2000           2001       2000
-------------------------------------------------------------------------------

(In thousands except per share amounts)

Revenues
 Systems                        $  70,547   $  91,988    $ 225,135   $ 349,568
 Maintenance                       28,804      39,650       93,519     123,463
 Services                          27,705      27,299       80,315      73,292
-------------------------------------------------------------------------------
   Total revenues                 127,056     158,937      398,969     546,323
-------------------------------------------------------------------------------

Cost of revenues
 Systems                           35,652      61,417      113,845     223,964
 Maintenance                       15,512      20,623       52,110      65,713
 Services                          19,742      22,448       60,493      60,962
-------------------------------------------------------------------------------
   Total cost of revenues          70,906     104,488      226,448     350,639
-------------------------------------------------------------------------------

   Gross profit                    56,150      54,449      172,521     195,684

Product development                13,230      12,887       40,318      42,850
Sales and marketing                22,244      28,767       70,065      93,570
General and administrative         18,512      22,320       56,080      71,159
Reorganization charges (credit)       ---       3,362      (   384)      3,362
-------------------------------------------------------------------------------

   Income (Loss) from operations    2,164     (12,887)       6,442     (15,257)

Gains on sales of assets              530      12,018        5,361      19,111
Interest expense                  (   246)    (   953)     ( 1,389)    ( 3,241)
Other income (expense) - net          834     ( 2,104)       4,325     ( 2,133)
-------------------------------------------------------------------------------

   Income (Loss) before income taxes
   and minority interest            3,282     ( 3,926)      14,739     ( 1,520)

Income tax expense                ( 2,500)    ( 1,000)     ( 6,500)    ( 4,900)
-------------------------------------------------------------------------------

   Income (Loss) before
   minority interest                  782     ( 4,926)       8,239     ( 6,420)

Minority interest in earnings of
consolidated subsidiaries             460     (   353)     (   200)    ( 1,496)
-------------------------------------------------------------------------------

   Net income (loss)            $   1,242   $ ( 5,279)   $   8,039   $ ( 7,916)
===============================================================================

   Net income (loss)
   per share - basic            $     .03   $ (   .11)   $     .16   $ (   .16)

   Net income (loss)
   per share - diluted          $     .02   $ (   .11)   $     .16   $ (   .16)
===============================================================================

Weighted average shares outstanding -
       Basic                       49,655      49,435       49,516      49,331
       Diluted                     51,854      49,435       51,546      49,331
===============================================================================

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,                        2001             2000
-------------------------------------------------------------------------------
(In thousands)

Cash Provided By (Used For):
Operating Activities:
   Net income (loss)                               $   8,039        $ ( 7,916)
   Adjustments to reconcile net income (loss)
    to net cash provided by (used for) operating
    activities:
     Depreciation                                      9,082           11,727
     Amortization                                     10,782           15,125
     Gains on sales of capital assets               (  5,361)         (19,111)
     Net changes in current assets and liabilities  (  2,770)          37,800
-------------------------------------------------------------------------------
   Net cash provided by operating activities          19,772           37,625
-------------------------------------------------------------------------------

Investing Activities:
   Net proceeds from sales of assets                   4,297           22,348
   Purchases of property, plant, and equipment      (  6,503)         ( 5,492)
   Capitalized software development costs           (  3,510)         ( 9,775)
   Business acquisition, net of cash acquired       (  3,002)         ( 1,093)
   Other                                                 305          (   677)
-------------------------------------------------------------------------------
   Net cash provided by (used for)
   investing activities                             (  8,413)           5,311
-------------------------------------------------------------------------------

Financing Activities:
   Gross borrowings                                       69              ---
   Debt repayment                                   ( 15,619)         (20,969)
   Treasury stock repurchase                        (  1,876)             ---
   Proceeds of employee stock purchases and
    exercise of stock options                          2,922            1,263
-------------------------------------------------------------------------------
   Net cash used for financing activities           ( 14,504)         (19,706)
-------------------------------------------------------------------------------
Effect of exchange rate changes on cash             (  1,264)         ( 5,322)
-------------------------------------------------------------------------------
Net increase (decrease) in cash and
 cash equivalents                                   (  4,409)          17,908
Cash and cash equivalents at beginning of period     119,848           88,513
-------------------------------------------------------------------------------
Cash and cash equivalents at end of period         $ 115,439        $ 106,421
===============================================================================

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 the nine months ended September
          30,  2000 to provide comparability with the current  period
          presentation.

NOTE 2:   Litigation.   As further described in the Company's  Annual
          Report  on Form 10-K for its year ended December  31,  2000
          and  its  Form 10-Q for the quarters ended March  31,  2001
          and  June  30,  2001,  the Company  continues  its  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 the third quarter of 2001.

NOTE 3:   Inventories  are  stated at the lower of  average  cost  or
          market and are summarized as follows:

          -----------------------------------------------------------
                                   September 30,         December 31,
                                      2001                  2000
          -----------------------------------------------------------
          (In thousands)

          Raw materials            $  5,461               $ 6,124
          Work-in-process             7,898                 3,850
          Finished goods              8,569                 6,077
          Service spares              6,222                 9,239
          -----------------------------------------------------------
          Totals                   $ 28,150              $ 25,290
          ===========================================================

          Inventories  on hand at September 30, 2001 and December 31,
          2000  relate  primarily to continuing specialized  hardware
          assembly  activity  in the Company's Intergraph  Government
          Solutions  and  Z/I  Imaging  business  segments  and   the
          Company's  continuing warranty and maintenance  obligations
          on  computer  hardware  previously sold.   The  balance  at
          September  30,  2001 also includes work-in-process  amounts
          related  to  an increase in activity with a major  customer
          in  Russia.   This  increase  primarily  accounts  for  the
          increase  in  the Company's inventories from  the  December
          31,   2000  level.  Amounts  reflected  as  work-in-process
          relate  primarily  to sales contracts accounted  for  under
          the percentage-of-completion method.

NOTE 4:   Property,  plant,  and equipment - net includes  allowances
          for  depreciation  of  $151,079,000  and  $165,437,000   at
          September 30, 2001 and December 31, 2000, respectively.

NOTE 5:   Reorganization  charges (credit).  During the  three  years
          ended  December  31, 2000, the Company implemented  various
          reorganization 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,  2000.  For a discussion of cash  outlays  in
          the  third  quarter and the first nine months of  2001  and
          2000  related to these actions and other factors  affecting
          the  Company's  severance liabilities, see  "Reorganization
          Charges  (Credit)" included in Management's Discussion  and
          Analysis  of Financial Condition and Results of  Operations
          in this Form 10-Q.

NOTE 6:   Gains  on  sales of assets. "Gains on sales of  assets"  in
          the  consolidated statements of operations and  cash  flows
          consist  of  the  net gains and losses  recognized  by  the
          Company  on  sales  of various noncore  divisions,  product
          lines,  and  real  estate.  Significant components  of  the
          2001 and 2000 gains are discussed below.

          The  Company recorded a gain of $530,000 during  the  third
          quarter of 2001, and gains of $12,018,000 during the  third
          quarter  of  2000. During the third quarter  of  2001,  the
          Company recognized a gain of $680,000 from the sale of  its
          Saudi  Arabian  subsidiary  and an  impairment  reserve  of
          $150,000 for its anticipated sale of its Intergraph  Middle
          East,  Ltd. subsidiary, which is expected to close  in  the
          fourth  quarter  of 2001 (See Note 14).  During  the  third
          quarter   of   2000,  the  Company  recognized   gains   of
          $7,085,000  from sales of its hardware business,  gains  of
          $2,005,000 on sales of other noncore business divisions,  a
          gain  of   $1,544,000 on the sale of an  investment  in  an
          affiliate,  and gains of $1,384,000 on the  sales  of  real
          estate and land.

          The  Company recognized gains of $5,361,000 and $19,111,000
          for  the  first nine months of 2001 and 2000, respectively.
          In  addition  to  the  sales of the Mid World  subsidiaries
          noted  above,  during the first nine months  of  2001,  the
          Company  reported additional gains of $4,250,000  from  the
          2000  sale  of  noncore product lines to  Bentley  Systems,
          Inc.  and $581,000 from the 2000 sale of a noncore division
          to  3Dlabs, Inc. Ltd.  Included in the first nine months of
          2000  are  gains of $7,012,000 from sales of  its  hardware
          business,  gains  of $2,005,000 on sales of  other  noncore
          business  divisions, a gain of  $1,544,000 on the  sale  of
          an  investment in an affiliate, and gains of $8,550,000  on
          the sales of real estate and land.

          For  a  complete discussion, see "Gains on Sales of Assets"
          included   in  Management's  Discussion  and  Analysis   of
          Financial Condition and Results of Operations in this  Form
          10-Q.

NOTE 7:   As  part  of  the proceeds of the April 1999  sale  of  its
          InterCAP  subsidiary,  the Company  received  a  $5,797,000
          convertible  subordinated debenture from  Micrografx,  Inc.
          which  would  come  due  on  March  31,  2002.   (See   the
          Company's  Annual Report on Form 10-K for  the  year  ended
          December  31, 2000 for a summary of the conversion features
          of  the  debenture.)  In the fourth quarter  of  2000,  the
          Company  recorded a $5,000,000 write-down of the  value  of
          this   debenture  due  to  the  financial  and  operational
          difficulties  currently  being experienced  by  Micrografx.
          The  Company wrote off the remaining value of the debenture
          in  the  first  quarter of 2001, to reflect the  continuing
          financial  and  operational difficulties being  experienced
          by  Micrografx.   The first quarter of  2001  write-off  of
          $797,000 is included in "Other income (expense) -  net"  in
          the  Company's  first  nine  months  of  2001  consolidated
          statement of operations.  The Company's recorded value  for
          the  debenture at December 31, 2000 is included  in  "Other
          assets" in the Company's consolidated balance sheet  as  of
          that date.

          On  July  16, 2001, Corel Corporation (Corel),  an  Ottawa,
          Canada-based  software company, announced its intention  to
          purchase   Micrografx.   In  order   to   facilitate   this
          purchase,  the  Company agreed to accept  $3,797,000,  plus
          accrued   interest,   for  complete   settlement   of   its
          convertible subordinated debenture.  On October  31,  2001,
          the  Company  received $3,797,000, plus  accrued  interest,
          and  will report this transaction as a component of  "Other
          income  (expense) - net" in the consolidated statements  of
          operations in the fourth quarter of 2001.

NOTE 8:   Basic  income  (loss)  per  share  is  computed  using  the
          weighted  average  number  of  common  shares  outstanding.
          Diluted  income  (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 9:   Comprehensive income (loss) includes net income  (loss)  as
          well  as  all  other  non-owner changes  in  equity.  These
          comprehensive income (loss) amounts differ from net  income
          (loss)   due  primarily  to  foreign  currency  translation
          adjustments   and  unrealized  holding  losses   on   stock
          holdings.   In  the  third quarter of 2001,  the  Company's
          comprehensive  income  totaled  $623,000,  compared  to   a
          comprehensive loss of $11,898,000 in the third  quarter  of
          2000. In the third quarter of 2001, the Company recorded  a
          positive  foreign currency translation adjustment  totaling
          $3,532,000 resulting primarily from weakening of  the  U.S.
          dollar  with respect to the Company's net assets in Europe.
          This   is   compared   to  a  negative   foreign   currency
          translation  adjustment totaling $3,169,000  in  the  third
          quarter  of 2000 resulting primarily from strengthening  of
          the  U.S.  dollar with respect to the Company's net  assets
          in  Europe.  The third quarter of 2001 comprehensive income
          also  included a $4,151,000 unrealized holding loss on  the
          Company's  common  stock holdings  of  3Dlabs,  Inc.  Ltd.,
          compared  to  a $3,431,000 unrealized holding loss  on  the
          same stock holdings in the third quarter of 2000.

          In   the   first   nine  months  of  2001,  the   Company's
          comprehensive  income  totaled $2,582,000,  compared  to  a
          comprehensive loss of $16,949,000 in the first nine  months
          of  2000.  In  the first nine months of 2001,  the  Company
          recorded    a   positive   foreign   currency   translation
          adjustment  totaling  $326,000  resulting  primarily   from
          weakening  of the U.S. dollar with respect to the Company's
          net  assets  in  Europe.  This is compared  to  a  negative
          foreign    currency    translation   adjustment    totaling
          $5,583,000  in  the  first nine months  of  2000  resulting
          primarily  from the strengthening of the U.S.  dollar  with
          respect  to the Company's net assets in Europe.  The  first
          nine  months of 2001 comprehensive income also  included  a
          $5,783,000 unrealized holding loss on the Company's  common
          stock  holdings  of  3Dlabs,  Inc.  Ltd.,  compared  to   a
          $3,431,000  unrealized  holding  loss  on  the  same  stock
          holdings  for the first nine months of 2000.   (See  "Gains
          on  Sales  of  Assets" included in Management's  Discussion
          and   Analysis  of  Financial  Condition  and  Results   of
          Operations in this Form 10-Q.)

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

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


          -----------------------------------------------------------
                               Cash Provided By (Used For) Operations

          Nine Months Ended September 30,    2001            2000
          -----------------------------------------------------------
          (In thousands)

          (Increase) decrease in:
            Accounts receivable, net      $ 11,381         $ 52,997
            Inventories                    ( 3,592)          12,121
            Other current assets             5,718            5,834
          Increase (decrease) in:
            Trade accounts payable         (   735)         (17,839)
            Accrued compensation and
             other accrued  expenses       (14,613)         ( 4,350)
            Income taxes payable             1,334            1,628
            Billings in excess of sales    ( 2,263)         (12,591)
          -----------------------------------------------------------
          Net changes in current assets
          and liabilities                 $( 2,770)        $ 37,800
          ===========================================================

          Significant  noncash  investing and financing  transactions
          in  first  nine  months  of 2001 included  the  receipt  of
          common  stock with a value of approximately $10,000,000  as
          additional  consideration for the  third  quarter  of  2000
          sale   of  the  Company's  Intense3D  graphics  accelerator
          division  offset by a $5,783,000 unfavorable mark-to-market
          adjustment, and a $4,300,000 increase to a note  receivable
          as  additional consideration for the fourth quarter of 2000
          sale of its civil, plotting, and raster product lines.  For
          a  complete discussion of these transactions, see "Gains on
          Sales  of  Assets" included in Management's Discussion  and
          Analysis  of Financial Condition and Results of  Operations
          in  this  Form  10-Q.  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.  There were  no  significant  noncash
          investing  or  financing transactions in the third  quarter
          of 2001.

NOTE 11:  Business   Acquisitions.  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.   The  Company  made  installment
          payments  approximating $1,095,000 in both the  first  nine
          months  of  2001 and the first nine months of 2000.   These
          payments  are reflected in "Business acquisitions"  in  the
          Company's  consolidated  statements  of  cash  flows.   The
          accounts  and  results  of  operations  of  PID  have  been
          combined  with those of the Company's Process and  Building
          Solutions  ("PBS")  business  segment  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.

          In  January 2001, the Company acquired the MARIAN materials
          management  business  unit from debis  Systemhaus  Industry
          GmbH  of  Germany  for  a  purchase  price  consisting   of
          2,000,000  Euros  paid at closing and  additional  payments
          due  March 1, 2002 and 2003 to be calculated as 15% of  the
          annual  revenues  earned by the Company from  the  sale  of
          MARIAN  products  in  2001  and  2002,  respectively.   The
          Company's  payment at closing approximated  $1,820,000  and
          is  included  in "Business acquisitions" in  the  Company's
          consolidated  statement of cash flows for  the  first  nine
          months  ended September 30, 2001.  The accounts and results
          of  operations of MARIAN have been combined with  those  of
          PBS  since  the  January  1, 2001  effective  date  of  the
          acquisition using the purchase method of accounting.   This
          acquisition has not had a material effect on the  Company's
          results of operations.

NOTE 12:  The  year  2000 was  a  transitional year  for the Company,
          during  which  it  focused its efforts  on  organizing  the
          Company  into nine vertical business segments.  The Company
          substantially  completed the U.S. portion of  this  process
          in  the  third  quarter  of  2000,  and  the  international
          portion  of this process was completed in the first quarter
          of  2001.  The segment presentation below provides business
          segment  information  based on the Company's  new  business
          structure  for  the  year  2001.   The  Company's   segment
          information  for the third quarter and for the  first  nine
          months  of  2000 has been restated to conform to  this  new
          business structure.

          The  Company's  2001 business segments consist  of  Process
          and  Building Solutions ("PBS"), Intergraph Public  Safety,
          Inc.  ("IPS"),  Mapping and Geographic Information  Systems
          ("GIS")    Solutions,   Intergraph   Government   Solutions
          ("IGS"), and Z/I Imaging Corporation ("Z/I Imaging").   The
          Company's  Middle  East operations ("Mid World"),  portions
          of  which were sold in April 2001 and in July 2001, and the
          anticipated sale of the remaining portion of the Mid  World
          operations  is expected to close by the end  of  the  year,
          are  also  included as a segment on a temporary basis  (See
          Note 14).

          The  Company's  reportable segments are strategic  business
          units that are organized by the types of products sold  and
          the   specific   markets  served.    Except   where   noted
          otherwise,  the  amounts presented below for  each  segment
          represent    the    Company's   complete    domestic    and
          international operations with respect to its business.

          PBS  supplies software and services to the process,  power,
          offshore, and marine industries.

          IPS  develops,  markets,  and implements  systems  for  the
          public safety and utilities and communications industries.

          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 worldwide operations  for  both  the
          federal and commercial mapping organizations.

          IGS  provides  specially developed software  and  hardware,
          commercial   off-the-shelf   products,   and   professional
          services   to   federal,  state,  and   local   governments
          worldwide,  as  well as to commercial customers.  IGS  also
          includes   the  U.S.  hardware  maintenance   and   network
          services business.

          Z/I   Imaging,  a  60%-owned  subsidiary  of  the  Company,
          supplies  end-to-end photogrammetry solutions for front-end
          data   collection   to  mapping  related  and   engineering
          markets.

          Information  presented  for  Intergraph  Computer   Systems
          ("ICS")  for 2000 includes the operations of the  Company's
          hardware  division  prior  to its  third  quarter  of  2000
          closure.   2000 was the last year for presentation  of  ICS
          as  a  business  segment.  Currently, the majority  of  the
          hardware  sold by the Company is purchased by the  business
          segments  from third party vendors, and such purchases  and
          resales  are included in the results of operations  of  the
          applicable business segments.

          Amounts   included  in  the  "Corporate"  category  consist
          primarily  of  general corporate expenses, including  legal
          fees   and   other  general  and  administrative   expenses
          remaining after charges to the business segments  based  on
          segment usage of administrative services. Also included  in
          the   "Corporate"  category  are  revenues   and   expenses
          associated  with  the  residual  effects  of  closing   the
          hardware  business  in 2000, including  management  of  the
          Company's  spare  parts repair depot and the  international
          hardware maintenance organization that includes all of  the
          Company's  hardware maintenance operations outside  of  the
          U.S. (previously  reported as a  separate  segment).   This
          segment  receives revenues related primarily  to  the  sale
          and  repair  of  spare  parts for the  Company's  installed
          customer   base,  intersegment  revenue  from   the   other
          business  segments for performance of hardware  maintenance
          services on their behalf, and customer revenue for  selling
          hardware   maintenance  and  other  miscellaneous  hardware
          products  and services directly to customers  who  are  not
          associated with any of the other business segments.

          The  Company  evaluates  the performance  of  its  business
          segments based on revenue and income from operations.   The
          accounting   policies  of  the  reportable   segments   are
          consistent  across segments and 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, 2000).  Sales between the business  segments,
          the  most significant of which are associated with hardware
          maintenance services provided by IGS and Corporate  to  the
          other  business units, 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.   Transfer  price  is
          charged   on   all  intersegment  sales  of  products   and
          services.

          The  following  table  sets forth  revenues  and  operating
          income (loss) by business segment for the quarters and  the
          nine months ended September 30, 2001 and 2000.


          ----------------------------------------------------------------------
                                       Quarter Ended        Nine Months Ended
                                        September 30,          September 30,

                                       2001      2000         2001      2000
          ----------------------------------------------------------------------
          (In thousands)

          Revenues


          PBS:
           Unaffiliated customers   $  27,204  $  27,973   $  82,369  $  83,765
           Intersegment revenues        1,400      2,343       4,026      7,078
          ----------------------------------------------------------------------
                                       28,604     30,316      86,395     90,843
          ----------------------------------------------------------------------

          IPS:
           Unaffiliated customers      29,028     29,113      88,735     89,782
           Intersegment revenues          (78)       ---          38        423
          ----------------------------------------------------------------------
                                       28,950     29,113      88,773     90,205
          ----------------------------------------------------------------------

          Mapping and GIS Solutions:
           Unaffiliated customers      28,129     34,044      86,964    113,473
           Intersegment revenues        2,105      7,756       6,742     11,732
          ----------------------------------------------------------------------
                                       30,234     41,800      93,706    125,205
          ----------------------------------------------------------------------

          IGS:
           Unaffiliated customers      32,673     33,680      98,391    112,484
           Intersegment revenues        1,155      3,955       5,374     14,288
          ----------------------------------------------------------------------
                                       33,828     37,635     103,765    126,772
          ----------------------------------------------------------------------

          Z/I Imaging:
           Unaffiliated customers       4,156      6,889      21,476     20,292
           Intersegment revenues        4,009      2,761       9,836     12,800
          ----------------------------------------------------------------------
                                        8,165      9,650      31,312     33,092
          ----------------------------------------------------------------------

          Mid World:
           Unaffiliated customers       4,397      6,142      11,379     16,764
           Intersegment revenue           ---        ---         ---        ---
          ----------------------------------------------------------------------
                                        4,397      6,142      11,379     16,764
          ----------------------------------------------------------------------

          ICS:
           Unaffiliated customers         ---     14,433         ---     85,867
           Intersegment revenues          ---      8,166         ---     24,854
          ----------------------------------------------------------------------
                                          ---     22,599         ---    110,721
          ----------------------------------------------------------------------

          Corporate:
           Unaffiliated customers       1,469      6,663       9,655     23,896
           Intersegment revenues        2,260      3,820       9,649     19,444
          ----------------------------------------------------------------------
                                        3,729     10,483      19,304     43,340
          ----------------------------------------------------------------------
                                      137,907    187,738     434,634    636,942
          ----------------------------------------------------------------------
           Eliminations              ( 10,851)  ( 28,801)   ( 35,665)  ( 90,619)
          ----------------------------------------------------------------------
           Total revenues           $ 127,056  $ 158,937   $ 398,969  $ 546,323
          ======================================================================



          --------------------------------------------------------------------
                                     Quarter Ended          Nine Months Ended
                                      September 30,            September 30,

                                    2001         2000        2001       2000
          --------------------------------------------------------------------
          (In thousands)

          Operating income (loss) :

          PBS                   $  1,559      $  3,065    $  4,163   $  6,663
          IPS                      2,532       (   365)      4,847      1,288
          Mapping and
           GIS Solutions           1,204           894       4,516      4,203
          IGS                      2,444         6,188       8,103     12,161
          Z/I Imaging                643         1,117       4,435      6,335
          Mid World                   23       (   296)    ( 3,395)   ( 1,481)
          ICS                        ---       (13,152)       ---     (15,381)
          Corporate              ( 6,241)      (10,338)    (14,713)   (29,045)
          Eliminations               ---           ---     ( 1,514)       ---
          --------------------------------------------------------------------
          Total                 $  2,164      $(12,887)   $  6,442   $(15,257)
          ====================================================================

          Significant  profit and loss items that were not  allocated
          to  the  segments  and not included in the  analysis  above
          include   gains  on  sales  of  assets  of   $530,000   and
          $12,018,000 for the quarters ended September 30, 2001,  and
          September  30,  2000, respectively, and gains on  sales  of
          assets  of  $5,361,000 and $19,111,000 for the nine  months
          ended September 30, 2001 and 2000, respectively.

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

NOTE 13:  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.   This  statement  became  effective  for  the
          Company  in the first quarter of 2001, but did not  have  a
          significant  impact on its consolidated  operating  results
          or  financial  position.  The Company  ceased  its  hedging
          program  in  the  first  quarter  of  2000  and  does   not
          currently own any freestanding derivatives.

NOTE 14:  Mid  World.  In  the  first  quarter  of 2001, the  Company
          announced  its  intention to sell  its  operations  in  the
          Middle   East   ("Mid   World")  and  convert   them   into
          distributorships.   In April 2001, the Company  closed  the
          sales  of  it  operations in Turkey and  Kuwait.   In  July
          2001,  the  Company  also closed  the  sale  of  its  Saudi
          Arabian  operation  and  recorded  a  $680,000  gain.   The
          company  also  expects to complete the sale  of  Intergraph
          Middle  East, Ltd. (IMEL), based in Abu Dubai, United  Arab
          Emirates,  by  the end of 2001 and has taken an  impairment
          reserve of $150,000 in anticipation of an expected loss  on
          the  IMEL  sale.   Upon completion of the  IMEL  sale,  the
          company will no longer have any subsidiaries in the  region
          and will do business solely through distributors.  None  of
          these  operations  were material to the  Company,  and  the
          company believes the sale of these operations will not have
          a material impact on  the  Company's consolidated operating
          results  or  cash flow.  During the  first quarter of 2001,
          in   connection  with  its  ongoing  efforts  to  sell  the
          remainder  of  its  Mid  World   operations,  the   Company
          performed a detailed  review of  all outstanding contracts,
          commitments, and receivables in  the  region.  A memorandum
          of understanding was reached on  the anticipated completion
          of the largest contract in the region, resulting in charges
          to Mid World  operations totaling  $1,629,000  in the first
          quarter,  including  a $923,000  increase  to cost of sales
          for  projected  cost overruns   and   a   $706,000   charge
          to   general  and administrative expense for the settlement
          of  outstanding receivables for the project. For the  third
          quarter  of 2001, consolidated revenues and  after-tax gain
          for the Mid World region totaled approximately   $4,397,000
          and $157,000, respectively.  For the first nine  months  of
          2001,  consolidated revenue and after-tax loss for the  Mid
          World   region   totaled  approximately   $11,379,000   and
          $3,770,000,  respectively.  Net  assets  for   the   region
          totaled approximately $9,000,000 at September 30, 2001.

NOTE 15:  New  Accounting  Standards.  In  June  2001, the  Financial
          Accounting  Standards Board ("FASB")  issued  Statement  of
          Financial   Accounting   Standards   No.   141,    Business
          Combinations ("SFAS 141"), requiring companies  to  account
          for  all  business combinations using the purchase  method.
          This  statement  became effective for the  Company  in  the
          third   quarter  of  2001  and  relates  to  all   business
          combinations  initiated after June 30, 2001 or acquisitions
          dated  July 1, 2001 or later.  This statement did not  have
          an  impact on the Company's consolidated operating  results
          or  financial position for the third quarter or  the  first
          nine  months  of  2001  as  the Company  is  not  currently
          engaged in any business combinations or acquisitions.

          In  June  2001,  the Financial Accounting  Standards  Board
          ("FASB")   issued   Statement   of   Financial   Accounting
          Standards  No.  142, Goodwill and Other  Intangible  Assets
          ("SFAS  142"),  requiring companies to  test  goodwill  and
          intangible  assets with indefinite useful  lives  at  least
          annually  for  impairment, and to continue amortization  of
          intangible assets with finite useful lives over the  useful
          lives,  but without the restraint of an arbitrary  ceiling.
          The  statement also requires disclosure of carrying  values
          of   goodwill   (by  aggregate  and  reportable   segment),
          carrying  amounts of intangible assets by major  intangible
          asset  class  for those subject to amortization  and  those
          not  subject to amortization, and the estimated  intangible
          asset  amortization expense for the next five years.   This
          statement  will become effective for the Company  in  first
          quarter  2002,  and  will be applied to  all  goodwill  and
          intangible  assets  recognized in the financial  statements
          at  that date, unless any goodwill or intangible assets are
          acquired  after  June  30,  2001,  which  will  be  subject
          immediately  to  the  statement.   Any  impairment   losses
          arising  due  to the initial application of this  statement
          will  be  reported as resulting from a change in accounting
          principle.  The Company currently reviews all goodwill  and
          intangible  assets on a monthly basis and does  not  expect
          the  adoption  of  this  statement to  have  a  significant
          impact  on the Company's consolidated operating results  or
          financial position.

          In  August  2001, the Financial Accounting Standards  Board
          ("FASB")   issued   Statement   of   Financial   Accounting
          Standards  No.  144,  Accounting  for  the  Impairment   or
          Disposal   of   Long-Lived  Assets  ("SFAS   144"),   which
          supersedes Statement of Financial Accounting Standards  No.
          121,  Accounting  for the Impairment of  Long-Lived  Assets
          and  for Long-Lived Assets to Be Disposed Of ("SFAS  121").
          This  statement  provides guidance on  the  accounting  for
          long-lived  assets to be held and used,  and  those  to  be
          disposed  of by sale and other than by sale.  Goodwill  has
          been  removed from the scope of this statement and  is  now
          addressed  in  SFAS  142 discussed above.   This  statement
          will  become effective for the Company in the first quarter
          of  2002,  although early application is  encouraged.   The
          provisions   of   this  statement   are   to   be   applied
          prospectively.   The  Company currently reviews  long-lived
          assets  on a monthly basis and does not expect the adoption
          of  this  statement  to have a significant  impact  on  the
          Company's   consolidated  operating  results  or  financial
          position.


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


SUMMARY
-------

Cautionary Note Regarding Forward-Looking Statements. This report,
including the following discussion, contains statements which  are
forward-looking  as  defined  in Section  21E  of  the  Securities
Exchange  Act   of  1934.  Forward-looking   statements  are   any
statements other than those made solely with respect to historical
fact  and  include, but  are  not limited to, statements regarding
projected revenue and operating income levels for the remainder of
2001, market  conditions  and  their  anticipated  impact  on  the
Company and its vertical  business  units, expectations  regarding
future results with respect  to  various revenue and expense items
as  well  as  significant  items  which  may affect them over  the
remainder  of 2001,  expectations  regarding  future  cash   flows
and  debt  reductions,  plans  to  grow  the  Company's   services
business,  plans  to  convert  the  Company's  operations  in  the
Middle  East  into distributorships  and  the  anticipated  timing
and   financial  statement  impact  of these planned transactions,
plans to sell  and lease excess  facilities, information regarding
the development, timing  of  introduction,  and performance of new
products   and   expectations  regarding   the  Company's  various
ongoing  litigation  proceedings,  including   that   with   Intel
Corporation.   It   is important  to note that actual results  may
differ materially  from those projected in  these  forward-looking
statements.  Factors  that  could  cause  or  contribute  to  such
differences include, but are not limited  to,  continued worldwide
economic  slowdown,  increased  competition,  rapid  technological
change,   unanticipated  changes  in  customer  requirements,  the
ability of the  Company to achieve  cost reductions, uncertainties
with  respect  to  the  Company's  installed  customer  base   for
discontinued   hardware  products,   inability   to  protect   the
Company's  intellectual  property  rights,  inability   to  access
the  technology  necessary  to  compete  in  the  markets  served,
inability  to  complete  certain sales and lease  transactions  as
planned, risks associated with doing business internationally, and
risks  associated  with  various ongoing  litigation  proceedings.
Additional information concerning factors that could cause  actual
results  to  differ  materially from those in the  forward-looking
statements  is  contained  in  the  Company's  filings  with   the
Securities and Exchange Commission, including its Annual Report on
Form 10-K for the year ended December 31, 2000 and this Form 10-Q.
All  forward-looking statements contained herein  are  based  upon
information available to the Company on the date of this Form 10-Q
filing.  The  Company  disclaims any  obligation  to  update  such
statements  as  the result of new information, future  events,  or
otherwise.

Earnings.  In  the third quarter of 2001, the Company  earned  net
income  of  $.03  per share on a basic per share basis  ($.02  per
share  on  a  fully diluted basis) on revenues of $127.1  million,
including  gains on sales of assets of $.01 per share (both  basic
and  fully  diluted  basis).  In the third quarter  of  2000,  the
company  incurred  a net loss of $.11 per share  (both  basic  and
fully  diluted  basis)  on revenues of $158.9  million,  including
gains  on sales of assets of $.24 per share (both basic and  fully
diluted  basis)  and nonrecurring operating charges  of  $.17  per
share  (both  basic and  fully diluted basis) for the exit of  the
hardware  development  business.  Exclusive  of  the  nonrecurring
charges (credit), the third quarter of 2001 income from operations
was  $.04 per share (both basic and fully diluted basis) versus  a
third quarter of 2000 loss from operations of $.10 per share (both
basic and fully diluted basis).  The improvement is primarily  the
result  of higher gross margins and reduced operating expenses  of
16%  primarily  due  to  the  exit  of  the  hardware  development
business.

For  the first nine months of 2001, the Company earned net  income
of $.16 per share (both basic and fully diluted basis) on revenues
of  $399 million, including  gains on  sales of assets of $.11 per
share  on  a  basic  per share basis ($.10 per share  on  a  fully
diluted  basis) and a nonrecurring credit of $.01 per share  (both
basic  and fully diluted basis).  During the first nine months  of
2000,  the  Company incurred a net loss of $.16  per  share  (both
basic  and  fully  diluted basis) on revenues of  $546.3  million,
including  gains on sales of assets of $.39 per share (both  basic
and  fully  diluted  basis) and the $.17  per  share  nonrecurring
charge (both basic and fully diluted basis) primarily for exit  of
the  hardware  development business. The improvement is  primarily
the  result of higher gross margins and reduced operating expenses
of  19.8%,  primarily due to the exit of the hardware  development
business.

Remainder  of the Year.  The Company expects that the  markets  in
which  it  competes will continue to be characterized  by  intense
competition,  rapidly changing technologies, and  shorter  product
cycles.   Further  improvement in the Company's operating  results
will  depend   on  further  market  penetration  achieved  through
the  ability  to  accurately   anticipate   customer  requirements
and technological trends, 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 depend on the Company's ability  to
successfully implement its strategic direction, which includes the
operation  and  growth  of independent vertical business segments.
These  matters  are  subject  to  known   and  unknown  risks  and
uncertainties.  See  "Cautionary  Note  Regarding  Forward-Looking
Statements."

Gains  on Sales of Assets. In the second half of 2000, the Company
sold  its  MicroStation-based  civil  engineering,  plotting,  and
raster software product lines to Bentley Systems, Inc. ("BSI") and
its  Intense3D graphics accelerator division to 3Dlabs, Inc.  Ltd.
("3Dlabs").    (See the Company's Annual Report on Form  10-K  for
the  year  ended December 31, 2000 for complete details  of  these
transactions.)   Both  of  these sales transactions  provided  for
additional consideration based on the performance of the divisions
sold.

In the  first quarter of 2001, the Company reported  an additional
gain from the BSI transaction of approximately $4.3 million as the
initial consideration for the sale, as well as the Company's  note
receivable from BSI was increased based upon a revised calculation
of  transferred maintenance revenues for the products sold to BSI,
as  provided  for in the original sale agreement. This  additional
gain  is  included in "Gains on sales of assets" in the  Company's
first  nine  months of 2001 consolidated statements of  operations
and  cash  flows.   The outstanding amount of the  Company's  note
receivable  from  BSI  totaled  approximately  $12.8  million   at
September  30, 2001 ($11 million at December 31, 2000),  the  $7.6
million noncurrent portion of which is reflected in "Other assets"
in  the Company's consolidated balance sheet as of that date.  The
current  portion  of  the note receivable is reflected  in  "Other
current   assets".    The   agreement  provides   for   additional
consideration  to be calculated based on renewals  of  maintenance
contracts through December 1, 2001 for the products sold  to  BSI,
although  nothing  has  been recorded to  date  for  the  proceeds
contingent  on  maintenance contract renewals.  Revenues  for  the
product lines sold to BSI approximated $28 million and $35 million
in 2000 and 1999, respectively.

In  the  first  quarter of 2001, the Company also reported  a  $.6
million  additional gain from the 3Dlabs transaction.   This  gain
was  the  result of the  final calculation  and  settlement of the
earn-out  provisions  with  3Dlabs.  The  total  earn-out  of  $10
million, $8.6  million  of which was accrued by the Company in the
fourth  quarter  of  2000, was  paid to  the  Company in the first
quarter of 2001 in  the  form of stock  of 3Dlabs, increasing  the
Company's  ownership  interest  in  3Dlabs  to  approximately 37%,
although  this  interest  is  subject  to  a  registration  rights
agreement and  a three  year  irrevocable proxy granted to 3Dlabs.
The  market  value  of these  shares  is  included in "Investments
in affiliates"  in  the Company's  September 30, 2001 consolidated
balance  sheet,  along  with  its  other  holdings  of 3Dlabs, and
revaluation adjustments for the decline in the market value of the
stock since the  date  of settlement are  recorded as  a component
of  "Accumulated  other  comprehensive income (loss)".  The amount
accrued by  the  Company at  December  31, 2000  with  respect  to
the earn-out provisions  is reflected  in  "Other  current assets"
in its  December  31,  2000  consolidated  balance  sheet, and the
additional first  quarter  of  2001  gain  is  included  in "Gains
on  sales  of  assets"  in  the  Company's   nine   months   ended
September  30,  2001  consolidated  statements  of  operations and
cash  flows.    Full  year  1999   third-party  revenue   for  the
Intense3D  division  approximated  $38  million,   with  operating
results at an approximate breakeven level.  For  the  nine  months
ended  September  30, 2000,  the  division  earned   an  operating
income  of approximately  $8.5 million  on  third  party  revenues
of $34 million.

In  the  third quarter of 2001, the Company sold its Saudi Arabian
operation, reporting a $680,000 gain.  This gain is offset  by  an
impairment  reserve  of  $150,000 for the  expected  loss  on  the
completion of the sale of Intergraph Middle East, Ltd. (IMEL),  by
the  end  of 2001.  The total gain is shown in "Gains on sales  of
assets"  in  the Company's first nine months of 2001  consolidated
statements of operations and cash flows.  See Note 14 for  further
discussion on Mid World.

"Gains on sales of assets" for the nine months ended September 30,
2000  include  a  $7  million gain of the  sale  of  the  hardware
business, a $7  million gain for the sale of several  real  estate
holdings  worldwide, a $1.5 million gain on the termination  of  a
long-term  capital  lease, a $2 million gain  on  the  sale  of  a
noncore software division, and a $1.5 million gain on the sale  of
an investment in an affiliate.  See Note 6 for further discussions
on gains on sales of assets.

On October 31, 2001, the Company received $3,797,000, plus accrued
interest  as settlement of its convertible subordinated  debenture
from  Micrografx, and will report this transaction as a  component
of  "Other  income (expense) - net" in the consolidated statements
of  operations  in the fourth quarter of 2001.   See  Note  7  for
further discussion.

Reorganization  Charges (Credit).  During the  three  years  ended
December  31, 2000, the Company implemented various reorganization
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, 2000.  Cash  outlays  for
severance  related to these actions approximated $3.6 million  for
the  first  nine months of 2001 and $4 million for the first  nine
months  of 2000. Additionally, during the first quarter  of  2001,
European severance liabilities totaling approximately $.4  million
were  reversed as the Company's new business segments, in response
to  unanticipated  attrition, hired or are rehiring  some  of  the
employees  whose  positions  had  been  eliminated  by  the   2000
reorganization  plan.   In  addition,  a  few  of  the  terminated
employees  left  the  Company voluntarily,  further  reducing  the
Company's   severance  requirements.   The  $.4  million   expense
reversal is reflected in "Reorganization charges (credit)" in  the
nine  months  ended September 30, 2001 consolidated  statement  of
operations.

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

Litigation.   As further described in the Company's Annual  Report
on  Form  10-K for the year ended December 31, 2000,  the  Company
continues   its   ongoing  litigation  with   Intel   Corporation.
Litigation  developments  during first nine  months  of  2001  are
discussed below.

Intel  Litigation.  On March 1, 2001, the United States  Court  of
Appeals for the Federal Circuit (the "Appeals Court") reversed the
October  12,  1999  decision of the U.S. District  Court  for  the
Northern  District of Alabama, Northeastern Division (the "Alabama
Court"), specifically holding that Intel was never licensed to use
the  Company's Clipper patents.  On March 15, 2001, Intel filed  a
petition for rehearing with the Appeals Court, requesting that  it
reconsider  its March 1, 2001 decision.  The Appeals Court  denied
this  request  on  April 9, 2001, and mandated that  the  case  be
remanded  to  the  Alabama Court effective  April  16,  2001.  The
Company  believes that the patent license decision of the  Appeals
Court  is  well  supported by law and fact, and will  continue  to
aggressively  pursue its patent case for the payment of  royalties
by  Intel  for  their use of the Company's Clipper  technology  in
Intel's Pentium line of products.

On  July  30, 2001, the Company filed a separate lawsuit  in  U.S.
District  Court,  the  Eastern District of Texas,  charging  Intel
Corporation with infringement of two Intergraph patents pertaining
to  parallel  instruction computing (PIC). The  complaint  alleges
that   Intel's   IA-64   EPIC   (Trademark)  (explicitly  parallel
instruction computing)  architecture,  which  is at the  heart  of
Intel's new Itanium (Trademark) chip, infringes upon the Company's
two PIC  patents.  The PIC  patents, which Intergraph filed for in
1993, cover  (1) the techniques used to convey compiler-recognized
parallelism to  the hardware and (2) the novel approach to routing
instructions to any of the  processing units. The Company believes
an evaluation of available public  materials confirms that Intel's
IA-64  Itanium products,  which  became  commercially available in
2001,  infringed upon Intergraph's patented PIC technology.

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.


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

Orders.   The third quarter of 2001 and the first nine  months  of
2001  systems and services orders totaled $78.1 million and $286.7
million,   down   49%  and  39%  from  the  same  prior   periods,
respectively.  U.S. and international orders declined by  52%  and
43%,  respectively, from the third quarter of 2000 level  and  34%
and  44%, respectively, from the first nine months of 2000  level.
U.S.  and  international orders decreased 42%  and  33%  from  the
second  quarter  of 2001 level.  The decline from the  prior  year
period,  both  in  the  U.S.  and  internationally,  is  primarily
attributable  to  the Company's exit from the  hardware  business,
though  weakness was noted in the Company's software  segments  as
well.  The Company believes the weakness in software orders is due
in  part  to  the  worldwide  economic slowdown  and  the  general
reluctance  of  companies  to make large investments  in  software
systems  in the face of weak markets.  The third quarter  of  2001
orders  were  lower than the second quarter of  2001  due  to  the
signing of large contracts by the IPS and IGS segments in the U.S.
and by the IPS segment in Europe in the second quarter of 2001.

Revenues.  Total revenues for the third quarter of 2001 and  first
nine  months  of  2001  were  $127.1  million  and  $399  million,
respectively,  down approximately 20% and 27% from the  comparable
prior  year  periods.  With  respect to  the  prior  year  period,
declines  in the Company's systems and maintenance revenues  as  a
result  of  the Company's exit from the hardware business  in  the
third quarter of 2000 and as a result of the sale of the Company's
civil,  plotting  and  raster software product  lines  to  BSI  in
December  2000  have  been  partially  offset  by  growth  in  the
Company's services business.

Hardware revenues no longer represent a significant portion of the
Company's   business.   For  2001  and  forward,   the   Company's
operations  have  been  segregated into  seven  vertical  business
segments   which   provide  software,  systems  integration,   and
services.   Revenues for each of these segments, as  well  as  the
third  quarter of 2000 and the first nine months of 2000  revenues
for the Company's hardware operations, are presented in Note 12 of
Notes to Consolidated Financial Statements contained in this  Form
10-Q.   A  discussion of significant fluctuations from  the  first
nine  months  of  2000  level follows  in  "Results  by  Operating
Segment".

Sales  outside  the U.S. represented approximately  47%  of  total
revenues  for the nine months ended September 30, 2001, down  from
52% for the comparable prior year period and 52% for the full year
2000.   The decline can be primarily attributed to the Europe  and
Asia Pacific regions where hardware sales previously represented a
significant portion of its business.  European revenues  were  27%
of  total revenues for first nine months of 2001, compared to  28%
for the first nine months and full year of 2000.

Systems.  Systems revenue for the third quarter and the first nine
months   of   2001   were  $70.5  million  and   $225.1   million,
respectively, down 23% and 36% from the corresponding  prior  year
periods.  Factors cited previously as contributing to the  decline
in orders, primarily the Company's exit from hardware development,
have also adversely affected systems revenues.

Maintenance.  Revenues from maintenance of Company systems totaled
$28.8 million for the third quarter of 2001 and $93.5 million  for
the  first  nine  months of 2001, down 27% and 24%,  respectively,
from  the  comparable prior year periods.  The Company's  hardware
maintenance business continues to decline as a result of its  exit
of  the  hardware business, and the Company expects this trend  to
continue  as  its  installed customer base  declines.   The  third
quarter  and  the  first nine months of 2001 maintenance  revenues
were  also  reduced in comparison to the prior year periods  as  a
result  of  the sale of the Company's civil, plotting  and  raster
software  product  lines,  including  the  associated  maintenance
contracts,  to  BSI  in December 2000.  (See "Gains  on  Sales  of
Assets" preceding.)

Services.  Services revenue, consisting primarily of revenues from
consulting  services, totaled $27.7 million for the third  quarter
and  $80.3  million for the first nine months of 2001, up  1%  and
10%, respectively, from the same prior year periods.  Services are
becoming  increasingly  significant  to  the  Company's  business,
representing  approximately 22% and 20% of total revenue  for  the
third  quarter  and  the first nine months of 2001,  respectively,
compared  to  17% and 13%, respectively, for the  same prior  year
periods.  The Company is endeavoring to grow its services business
and   is   redirecting  the  efforts  of  its  declining  hardware
maintenance  business  toward  information  technology   services;
however,   revenues  from  these  services  by  nature   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 the third quarter of 2001 was
44.2%,  up  9.9 points from the third quarter of 2000 level.   For
the  first  nine months of 2001, total gross margin was 43.2%,  up
7.4 points from the first nine months of 2000 level and 6.7 points
from the full year 2000 level.

Systems  margin was 49.5% for the third quarter of 2001, down  4.5
points  from the second quarter level and up 16.3 points from  the
third  quarter of 2000 level.  For the first nine months of  2001,
systems  margin  was  49.4%, up 13.5 points from  the  first  nine
months  2000 level and 11.8 points from the full year 2000  level.
The  decline  in  systems margin for the  third  quarter  of  2001
compared to the second quarter of 2001 is due to a revenue decline
directly related to the current market decline and an increase  in
subcontractor  costs.   The upward trend  in  the  Company's  2001
systems  gross  margin as compared to the prior  year  periods  is
primarily  the  result  of  reduced  hardware  sales  due  to  the
Company's exit from the hardware business in the third quarter  of
2000.

In general, the Company's systems margin may be improved by 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, 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 margins, the Company
expects continuing pressure on its systems margin as the result of
increasing industry price competition.

Maintenance  margin for the third quarter of 2001 was 46.1%,  down
1.9  points  from the third quarter of 2000. For  the  first  nine
months of 2001, maintenance margin was 44.3%, down 2.5 points from
the  same  prior year period and down 1 point from the  full  year
2000 level.  The Company monitors its maintenance cost closely and
has   taken   certain  measures,  including  worldwide   headcount
reductions   and  the  outsourcing  of  its  hardware  maintenance
function in Canada and parts of Europe, to align these costs  with
the  declining levels of revenue.  The Company believes  that  its
exit  from  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 2001 was 28.7%,  up  10.9
points  from the third quarter of 2000 level. For the  first  nine
months  of 2001, service margin was 24.7%, up 7.9 points from  the
same  prior year period and 6.3 points from the full year of  2000
level.    The  increase  from  the third  quarter  of  2000  level
resulted primarily from a decrease in cost of sales due to tighter
management  controls  on percentage-of-completion  projects.   The
increase  from the first nine months of 2000 corresponds  directly
to  the increase in services revenue in the U.S. against 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.


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

Operating expenses for the third quarter and the first nine months
of  2001 were $54.0 million and $166.5 million, respectively, down
16%  and  20% from the comparable prior year periods.  In response
to  the  level of its previous operating losses, the Company  took
various  actions, including employee terminations as well  as  the
closure  and  sale  of certain unprofitable and  noncore  business
operations, which have resulted in an approximate 12% reduction in
average  employee  headcount from the prior year  to  date  level.
Product  development expenses were relatively flat with the  third
quarter  of 2000 level and down 6% from the first nine  months  of
2000  level. Declines  in  product development  expenses  for year
to date 2001 compared to  the same prior year level  are  mainly a
result  from the exit of the hardware development business  and  a
decline in software development costs.  These reductions have been
partially  offset  by  a decline in software development  projects
qualifying for capitalization, primarily related to the  Company's
shipbuilding  efforts.   Sales  and  marketing  expenses  for  the
quarter were down 23% from the third quarter of 2000 level and for
the  nine months were down 25% from the first nine months of  2000
level.  Reductions in headcount in the fourth quarter of 2000  and
throughout  2001  related to the exit of the hardware  development
business  have resulted in significant expense declines worldwide.
The Company's sales and marketing expenses are inherently activity
based  and  can  be  expected to fluctuate with  activity  levels.
General  and administrative expenses were down 17% from the  third
quarter  of 2000 level and down 21% from the first nine months  of
2000  level, primarily due to reductions in legal fees,  corporate
and  international  headcount, and worldwide  bad  debt  expenses.
Though  the  Company's legal expenses were lower compared  to  the
prior  year to date level, legal expenses increased in  the  third
quarter  of 2001. Legal expenses are expected to increase  in  the
fourth  quarter  of  2001 and in first half  of  2002  due  to  an
increase in the activity level associated with the Intel lawsuits.
The  Company also incurred a $1.7 million one-time charge  in  the
third  quarter  of  2001 for the write-off of Corporate  financial
system   software  licenses  that  no  longer  fit  the  Company's
corporate structure.


NONOPERATING INCOME AND EXPENSES
--------------------------------

Interest expense was $.2 million for the third quarter of 2001 and
$1.4  million  for the first nine months of 2001, compared  to  $1
million  for  the third quarter of 2000 and $3.2 million  for  the
first nine months of 2000.  The Company's average outstanding debt
has  declined in comparison to the third quarter of 2000 level 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.  In the third  quarter  of 2001, this amount
included a $.9 million  foreign  exchange loss and interest income
of $1.3 million.  In  the  first nine  months of 2001, this amount
included a $.8 million  write-off of  the value  of  a convertible
debenture held by the Company (see Note 7 of Notes to Consolidated
Financial Statements  contained in this Form 10-Q), a $1.4 million
foreign  exchange loss  and  interest  income of $5.1 million. The
Company's  interest income  has  increased  significantly from the
prior  year level due  to  interest  earned  on  notes received in
connection with sales of noncore business operations in 2000 and a
higher  amount  of invested cash.  See the Company's Annual Report
on  Form 10-K  for the year  ended  December 31, 2000 for complete
details  of  these transactions.  Similar items for the first nine
months of 2000 include a foreign exchange loss of $2.7 million and
interest income of $3.4 million.


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 2001, approximately  47%
of  the Company's revenues were derived from customers outside the
United  States, primarily through subsidiary operations,  compared
to  52%  for  the  full year of 2000.  Most subsidiaries  sell  to
customers   and  incur  and  pay  operating  expenses   in   local
currencies.   These  local  currency  revenues  and  expenses  are
translated  into 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.   A weaker U.S. dollar will increase  the  level  of
reported  U.S.  dollar orders and revenues,  increase  the  dollar
gross  margin, and increase the reported dollar operating expenses
of  the  international subsidiaries.  During the first nine months
of  2001,  the  U.S.  dollar was relatively  flat  on  average  in
comparison to the first nine months of 2000 level, resulting in no
material impact on the results of operations.

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.  Local  currencies
are   the   functional  currencies  for  the  Company's   European
subsidiaries.  The U.S. dollar is the functional currency for  all
other international subsidiaries.  Effective the first quarter  of
2000,  the  Company  ceased  hedging  the  foreign  currency  risk
associated with its international operations.  The Company had  no
forward  contracts outstanding at September 30, 2001  or  December
31, 2000.

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  September  2000, and with effect from January 1, 2001,  Greece
became  the  twelfth member of the EMU to adopt  the  Euro.   Euro
currency  will  begin to circulate on January  1,  2002,  and  the
individual national currencies of the participating countries will
be  withdrawn from circulation by February 28, 2002.  All  of  the
Company's  financial systems currently accommodate the  Euro,  and
since  1999, the Company has conducted business in Euros with  its
customers  and  vendors who choose to do so  without  encountering
significant administrative 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 European markets.


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

The  Company earned pretax income before minority interest of $3.3
million and $14.7 million in the third quarter and the first  nine
months of 2001, respectively, as compared to a pretax loss of $3.9
million  in  the third quarter of 2000 and a pretax loss  of  $1.5
million for the first nine months of 2000.  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.  See the Company's  Annual
Report  on  Form  10-K for the year ended December  31,  2000  for
details of the Company's tax position, including its net operating
loss and tax credit carryforwards.


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

In  the  third quarter of 2001, the Process and Building Solutions
segment  reported operating income of $1.6 million on revenues  of
$28.6  million,  compared to the third quarter of  2000  operating
income of $3.1 million on revenues of $30.3 million. In the  first
nine months of 2001, the PBS segment reported operating income  of
$4.2  million on revenues of $86.4 million, compared to the  first
nine  months of 2000 operating income of $6.7 million on  revenues
of  $90.8  million.   Although  the  first  nine  months  revenues
decreased  by  4.9%,  gross margin percentages  improved  by  7.9%
(59.0% for the first nine months of 2001 compared to 51.1% for the
first  nine months of 2000), due primarily to a reduction of sales
of  lower  margin products.  The decline in the first nine  months
revenues  and  improvement  in gross margin  was  due  to  several
factors,  including a reduction of hardware sales and  maintenance
revenue  due  to the Company's exit from the hardware business  in
the  third  quarter  of  2000  and the  reduction  of  maintenance
revenues  resulting from the sale of certain noncore  products  to
Bentley  Systems, Inc.  The first nine months of 2001  decline  in
operating  income  from the prior year period  was  primarily  the
result of a 40% increase in the segment's research and development
expenses due to a decline in software development costs qualifying
for   capitalization,  primarily  related  to   PBS's   commercial
shipbuilding efforts.

In  the  third  quarter of 2001, Intergraph Public  Safety  earned
operating  income  of $2.5 million on revenues of  $29.0  million,
compared to a third quarter of 2000 operating loss of $.4  million
on  revenues of $29.1 million.  In the first nine months of  2001,
IPS  earned operating income of $4.8 million on revenues of  $88.8
million,  compared  to  the first nine months  of  2000  operating
income  of  $1.3  million  on  revenues  of  $90.2  million.   The
improvement  in the segment's first nine months of 2001  operating
results from the first nine months of 2000 was due primarily to  a
higher  gross margin percentage of 43.3% for the first nine months
of  2001  as compared to 38.8% for the first nine months of  2000.
These higher gross margins are a result of higher software content
sales as compared to the same period in 2000.

In  the  third  quarter of 2001, Mapping and GIS Solutions  earned
operating  income  of $1.2 million on revenues of  $30.2  million,
compared  to  a  third  quarter of 2000 operating  income  of  $.9
million on revenues of $41.8 million.  In the first nine months of
2001,  Mapping and GIS Solutions earned operating income  of  $4.5
million  on revenues of $93.7 million, compared to the first  nine
months  of  2000 operating income of $4.2 million on  revenues  of
$125.2 million. The first nine months of 2001 revenue reduction of
25.2% from the first nine months of 2000 level was a result of the
reduction  of hardware sales and maintenance revenue  due  to  the
Company's exit from the hardware business in the third quarter  of
2000 and the reduction of maintenance revenues resulting from  the
sale  of  certain noncore products to Bentley Systems, Inc.   This
reduction  of  hardware  sales  and  certain  other  lower  margin
products resulted in a higher gross margin percentage of 45.3% for
the  first nine months of 2001 as compared to 35.0% for the  first
nine months of 2000.  Also, the first quarter of 2001 margins were
positively  impacted  by  the receipt  of  delayed  funding  on  a
government  contract for which costs were incurred in  2000.   The
segment's  first  nine  months  of 2001  operating  expenses  were
approximately  4.2% lower than operating expenses from  the  first
nine months of 2000.

In  the  third  quarter  of 2001, Intergraph Government  Solutions
earned  operating  income of $2.4 million  on  revenues  of  $33.8
million, compared to the third quarter of 2000 operating income of
$6.2  million  on revenues of $37.6 million.  In  the  first  nine
months  of  2001, IGS earned operating income of $8.1  million  on
revenues  of $103.8 million, compared to the first nine months  of
2000  operating  income  of $12.2 million on  revenues  of  $126.8
million.    Gross  margins, for IGS in the first  nine  months  of
2001,  declined  as compared with the first nine months  of  2000.
This  decline  was a result of decreased systems  and  maintenance
revenues resulting from the third quarter of 2000 exit of hardware
development  and the sale of certain noncore products  to  Bentley
Systems,  Inc. The decline in gross margins were partially  offset
by  a  23.6%  decline in operating expenses due to  reductions  in
headcount and bad debt expenses.  As a result of the exit from the
hardware  business,  IGS  plans to redirect  the  efforts  of  its
maintenance organization toward information technology  solutions.
While this redirection is expected to reduce maintenance revenues,
the  Company  believes  operating margins will  remain  relatively
stable.

In  the third quarter of 2001, Z/I Imaging earned operating income
of  $.6  million on revenues of $8.2 million, compared to a  third
quarter  of  2000 operating income of $1.1 million on revenues  of
$9.7  million.   In  the first nine months of  2001,  Z/I  Imaging
earned  operating  income of $4.4 million  on  revenues  of  $31.3
million,  compared  to  the first nine months  of  2000  operating
income  of $6.3 million on revenues of $33.1 million.  The decline
in  first nine months of 2001 operating income from the first nine
months  of 2000 period was primarily the result of a 9.4%  decline
in  systems  revenues  combined with an 8% increase  in  operating
expenses.   Total gross margin for the first nine months  of  2001
remained  strong at 56.5% (compared to 56.3% for  the  first  nine
months  of 2000), reflecting the high margins earned on  sales  of
software  as  well  as  on  sales  of  photogrammetric  processing
systems.  The operating expense increase in the first nine  months
of  2001 resulted primarily from increased staffing as a result of
Z/I Imaging's continued infrastructure building.

In  the third quarter of 2001, Mid World broke even on revenues of
$4.4 million, compared to an operating loss of $.3 million in  the
third  quarter of 2000 on revenues of $6.1 million.  In the  first
nine  months of 2001, Mid World incurred an operating loss of $3.4
million  on  revenues of $11.4 million, compared to  an  operating
loss  of $1.5 million in the first nine months of 2000 on revenues
of  $16.8  million.   Revenues in the first nine  months  of  2001
declined  by 32% from the prior year period as Mid World primarily
focused  on  selling the business rather than  on  developing  new
business,  and  as the result of delays on a major  contract.   In
April  2001  and  July 2001, portions of the Mid World  operations
were  sold.   The sale of the remaining portion of the  Mid  World
operation  is expected to close before the end of 2001  (See  Note
14).

In the third quarter of 2000, Intergraph Computer Systems incurred
an  operating loss of $13.2 million on revenues of $22.6  million.
For  the first nine months of 2000, ICS incurred an operating loss
of  $15.4 million on revenues of $110.7 million.  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, 2000  for  a
complete  discussion of the Company's dispute with Intel  and  its
effects on the operations of ICS and the Company.)  In response to
its  continued operating losses, in the third quarter of 2000, ICS
exited  the development and design of hardware products and closed
its operations.

In the third quarter of 2001, Corporate reported an operating loss
of  $6.2 million on revenues of $3.7 million, compared to a  third
quarter  of  2000 operating loss of $10.3 million on  revenues  of
$10.5  million.  In first nine months of 2001, Corporate  reported
an  operating loss of $14.7 million on revenues of $19.3  million,
compared to  a first nine months of 2000 operating loss  of  $29.0
million on revenues of $43.3 million.  The $14 million improvement
in  operating results for the third quarter of 2001 as compared to
the  third  quarter  of 2000 was due to a decline in restructuring
costs primarily associated with the  Company exiting the  hardware
business,  a  decline  in  legal  fees  associated  with the Intel
lawsuits,  and  a reduction   in   headcount  resulting  from  the
transfer  of  administrative  personnel  to  the vertical business
units.

See   Note  12  of  Notes  to  Consolidated  Financial  Statements
contained  in  this  Form  10-Q for  further  explanation  of  the
Company's segment reporting.


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

At  September  30, 2001, cash totaled $115.4 million  compared  to
$119.8  million at December 31, 2000.  Cash provided by operations
in the first nine months of 2001 totaled $19.8 million compared to
cash  provided by operations of $37.6 million in first nine months
of  2000.  For the nine months ended September 30, 2001, cash from
operations  consisted  of net income of  $8  million  and  noncash
transactions of $14.6 million, offset by changes in current assets
and  liabilities  of  $2.8 million.  For  the  nine  months  ended
September 30, 2000, cash from operations consisted primarily of  a
decrease  in  accounts receivable of $53 million due to  increased
collection  efforts, offset by a reduction in accounts payable  of
$18 million.

Net cash used for investing activities totaled $8.4 million in the
first  nine  months  of  2001, compared to $5.3  million  of  cash
generated in the first nine months of 2000.  The first nine months
of  2001  investing activities included $4.4 million  in  proceeds
from  sales of various assets, primarily payment on notes received
in  connection with sales of noncore business operations in  2000,
less  expenditures  related to current  and  prior  year  business
acquisitions of $3.0 million (see Note 11 of Notes to Consolidated
Financial   Statements  contained  in  this  Form   10-Q).   Other
significant investing activities in the first nine months of  2001
included expenditures for capitalizable software development costs
of  $3.5  million ($9.8 million in the first nine months of  2000)
and  capital  expenditures of $6.5 million ($5.5  million  in  the
first nine months of 2000), primarily for computer equipment  used
in  product  development and sales and marketing activities.   The
first  nine  months  of 2000 investing activities  included  $22.3
million  in  proceeds  from  sales of  various  assets,  primarily
property,  plant,  and equipment, less a $1.1 million  expenditure
related to a prior year business acquisition.  The Company expects
that  capital expenditures will require $7 to $10 million for  the
full  year 2001, 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 $14.5 million  in
the  first nine months of 2001, including a net repayment of  debt
of   approximately  $15.6  million,  primarily   related   to   an
approximate  $9.2 million repayment to its primary  lender  and  a
$4.7 million mortgage prepayment in the United Kingdom.  Financing
cash flows in the first nine months of 2000 totaled $19.7 million,
including repayment of debt of approximately $21 million.

Under  the  Company's January 1997 seven year loan  and  revolving
credit  agreement as amended, 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  a  maximum availability  of  $50  million.   An
amendment was executed on August 1, 2001 that extends the  current
agreement  through  January 2004 and  should  provide  for  annual
savings  of approximately $650,000 to the Company.  The term  loan
portion  of  the agreement 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 6.5% or the Wells Fargo base  rate  of
interest  (6%  at  September  30, 2001)  plus  .125%.   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 .20% of  the  average
unused  portion of the revolving credit line, a letter  of  credit
fee  at  an  annual  rate  of .75% of the undrawn  amount  of  all
outstanding letters of credit, and a monthly agency fee.

At September 30, 2001, the Company had outstanding borrowings from
its  primary  lender of $10.2 million, of which $10.0 million  was
classified  as  long-term debt in the consolidated balance  sheet,
and  an additional $11.7 million of the available credit line  was
allocated  to  support  the  Company's letters  of  credit  ($11.7
million  at  October  31, 2001).  As of September  30,  2001,  the
borrowing  base, representing the maximum available  credit  under
the  line, was approximately $50 million.  As of the date of  this
filing,  the  Company has repaid $9.9 million of  the  outstanding
borrowings from its primary lender in the fourth quarter of 2001.

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.

At  September 30, 2001, the Company had approximately $15  million
in  debt on which interest is charged under various floating  rate
arrangements,  primarily its seven year term  loan  and  revolving
credit agreement and the remaining balance of the mortgage in  the
United  Kingdom.  The Company is exposed to market risk of  future
increases in interest rates on these loans.

The  Company expects to achieve positive operating cash  flows  in
2001 as a result of headcount reductions and other expense savings
actions  taken during 2000 and 2001.  The Company is managing  its
cash  very  closely  and  believes that a combination of cash flow
from operations, its existing  cash balances,  and  cash available
under its revolving credit agreement will be adequate to meet cash
requirements for 2001. For the near term, the  Company anticipates
that its cash position may benefit  from further  sales of  excess
real  estate.  The Company anticipates no significant nonoperating
events  that  will  require  the use  of cash,  with  the possible
exception  of  its  stock repurchase  program  (see  the Company's
Annual  Report  on Form 10-K for the year ended  December 31, 2000
for further  discussion), and correspondingly the adequacy of  its
cash  reserves will be dependent on improvement  in  its operating
results.

   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 ended December 31, 2000.



               INTERGRAPH CORPORATION AND SUBSIDIARIES

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

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

           On  March  1, 2001, the United States Court of Appeals  for
           the  Federal  Circuit  (the "Appeals Court")  reversed  the
           October  12, 1999 decision of the U.S. District  Court  for
           the  Northern  District  of Alabama, Northeastern  Division
           (the "Alabama Court"), specifically holding that Intel  was
           never  licensed to use the Company's Clipper  patents.   On
           March  15, 2001, Intel filed a petition for rehearing  with
           the  Appeals Court, requesting that it reconsider its March
           1,  2001  decision.  The Appeals Court denied this  request
           on  April  9, 2001, and mandated that the case be  remanded
           to  the Alabama Court effective April 16, 2001. The Company
           believes that the patent case is well supported by law  and
           fact,  and will continue to aggressively pursue its  patent
           case  for  the payment of royalties by Intel for their  use
           of  the  Company's  Clipper technology in  Intel's  Pentium
           line of products.

           On  July 30, 2001, the Company filed a separate lawsuit  in
           U.S.   District  Court,  the  Eastern  District  of  Texas,
           charging  Intel  Corporation  with  infringement   of   two
           Intergraph   patents  pertaining  to  parallel  instruction
           computing  (PIC). The complaint alleges that Intel's  IA-64
           EPIC   (Trademark)    (explicitly    parallel   instruction
           computing) architecture, which is at the  heart  of Intel's
           new  Itanium (Trademark) chip, infringes upon the Company's
	   two PIC  patents.  The PIC  patents, which Intergraph filed
           for in 1993, cover (1) the   techniques   used  to   convey
	   compiler-recognized parallelism to the hardware and (2) the
	   novel approach  to routing  instructions  to  any   of  the
	   processing  units.  The Company   believes   an  evaluation
	   of  available public materials  confirms that Intel's IA-64
	   Itanium  products, which  became  commercially available in
	   2001, infringe  upon Intergraph's patented PIC technology.

           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.


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

           (b) There  were  no reports  on  Form 8-K filed during  the
               quarter ended September 30, 2001.



                 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/  Larry J. Laster
       ----------------------------       ----------------------------
       James F. Taylor, Jr.               Larry J. Laster
       Chief Executive Officer            Executive Vice President and
                                          Chief Financial Officer

  Date:  November 13, 2001            Date:  November 13, 2001



  By:  /s/  Larry T. Miles
       ----------------------------
       Larry T. Miles
       Vice President of Finance
       (Principal Financial and
       Accounting Officer)

  Date:  November 13, 2001