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


                           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 June 30, 1999

                                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: 48,902,404 shares
                  outstanding as of June 30, 1999

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



                      INTERGRAPH CORPORATION
                            FORM 10-Q*
                           June 30, 1999

                               INDEX


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

  Item 1. Financial Statements


          Consolidated Balance Sheets at June 30, 1999 and
             December 31, 1998                                           2

          Consolidated Statements of Operations for the quarters
             and six months ended June 30, 1999 and 1998                 3

          Consolidated Statements of Cash Flows for the six months
             ended June 30, 1999 and 1998                                4

          Notes to Consolidated Financial Statements                   5 - 12

  Item 2. Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                   13 - 25

  Item 3. Quantitative and Qualitative Disclosures About Market Risk    26



PART II.  OTHER INFORMATION

  Item 1. Legal Proceedings                                             26

  Item 4. Submission of Matters to a Vote of Security Holders         26 - 27

  Item 6. Exhibits and Reports on Form 8-K                              27


SIGNATURES                                                              28




*Information contained in this Form 10-Q includes statements that
are forward looking as defined in Section 21-E 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 quarter ended March 31, 1999, and this Form
10-Q.



PART I.   FINANCIAL INFORMATION


              INTERGRAPH CORPORATION AND SUBSIDIARIES
                    CONSOLIDATED BALANCE SHEETS
                            (Unaudited)

-----------------------------------------------------------------------------
                                             June 30,       December 31,
                                               1999             1998
-----------------------------------------------------------------------------
(In thousands except share and per share amounts)

Assets
  Cash and cash equivalents                  $ 75,244         $ 95,473
  Accounts receivable, net                    274,605          312,123
  Inventories                                  51,359           38,001
  Other current assets                         38,455           48,928
-----------------------------------------------------------------------------
      Total current assets                    439,663          494,525

  Investments in affiliates                     9,191           12,841
  Other assets                                 74,150           61,240
  Property, plant, and equipment, net         115,819          127,368
-----------------------------------------------------------------------------
      Total Assets                           $638,823         $695,974
=============================================================================

Liabilities and Shareholders' Equity
  Trade accounts payable                     $ 60,763         $ 64,545
  Accrued compensation                         45,558           42,445
  Other accrued expenses                       77,126           79,160
  Billings in excess of sales                  57,822           68,137
  Short-term debt and current
   maturities of long-term debt                16,754           23,718
-----------------------------------------------------------------------------
      Total current liabilities               258,023          278,005

  Deferred income taxes                         3,073            3,142
  Long-term debt                               57,983           59,495
-----------------------------------------------------------------------------
      Total liabilities                       319,079          340,642
-----------------------------------------------------------------------------

  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                 220,267          222,705
   Retained earnings                          220,158          249,808
   Accumulated other comprehensive income
     - cumulative translation adjustment     (  3,138)           4,161
-----------------------------------------------------------------------------
                                              443,023          482,410
   Less - cost of 8,458,958 treasury shares
     at June 30, 1999 and 8,719,612 treasury
     shares at December 31, 1998             (123,279)        (127,078)
-----------------------------------------------------------------------------
      Total shareholders' equity              319,744          355,332
-----------------------------------------------------------------------------
      Total Liabilities and Shareholders'
        Equity                               $638,823         $695,974
=============================================================================

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



              INTERGRAPH CORPORATION AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS
                            (Unaudited)

-----------------------------------------------------------------------------
                                  Quarter Ended June 30,   Six Months Ended
                                                               June 30,
                                     1999        1998       1999       1998
-----------------------------------------------------------------------------
(In thousands except per share amounts)

Revenues
 Systems                           $158,263    $168,314   $328,571   $336,697
 Maintenance and services            75,381      78,299    157,150    155,734
-----------------------------------------------------------------------------
   Total revenues                   233,644     246,613    485,721    492,431
-----------------------------------------------------------------------------

Cost of revenues
 Systems                            108,324     121,358    228,283    242,346
 Maintenance and services            45,981      48,785     94,755     95,692
-----------------------------------------------------------------------------
   Total cost of revenues           154,305     170,143    323,038    338,038
-----------------------------------------------------------------------------

   Gross profit                      79,339      76,470    162,683    154,393

Product development                  17,620      22,249     34,789     45,949
Sales and marketing                  48,872      59,306     96,785    119,244
General and administrative           29,848      24,436     56,013     50,970
Nonrecurring operating
  charges (credit)                    2,472     (   859)     2,472     13,902
-----------------------------------------------------------------------------

   Loss from operations             (19,473)    (28,662)   (27,376)   (75,672)

Gains on sales of assets             11,505       8,275     11,505    111,042
Arbitration settlement                  ---         ---    ( 8,562)       ---
Interest expense                    ( 1,410)    ( 1,861)   ( 2,828)   ( 4,050)
Other income (expense) - net        ( 2,714)      1,260    ( 2,389)       634
-----------------------------------------------------------------------------

   Income (loss) before
     income taxes                   (12,092)    (20,988)   (29,650)    31,954

Income tax expense                      ---         ---        ---      3,500
-----------------------------------------------------------------------------

   Net income (loss)               $(12,092)   $(20,988)  $(29,650)  $ 28,454
=============================================================================

   Net income (loss) per share -
      basic and diluted            $(   .25)   $(   .43)  $(   .61)  $    .59
=============================================================================

Weighted average shares outstanding -
      basic and diluted (1)           48,831     48,311     48,765     48,265
=============================================================================

(1) Diluted shares were 48,358 for the six months ended June 30, 1998.

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



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

-----------------------------------------------------------------------------
Six Months Ended June 30,                                1999         1998
-----------------------------------------------------------------------------
(In thousands)

Cash Provided By (Used For):
Operating Activities:
  Net income (loss)                                   $(29,650)     $ 28,454
  Adjustments to reconcile net income (loss) to net
  cash used for operating activities:
   Gains on sales of assets                            (11,505)     (111,042)
   Depreciation and amortization                        23,940        26,921
   Noncash portion of arbitration settlement             3,530           ---
   Noncash portion of nonrecurring operating charges     2,472        11,947
   Net changes in current assets and liabilities         7,112        21,181
-----------------------------------------------------------------------------
   Net cash used for operating activities              ( 4,101)     ( 22,539)
-----------------------------------------------------------------------------

Investing Activities:
  Proceeds from sales of assets                         22,983       118,002
  Purchases of property, plant, and equipment          ( 5,723)     (  8,008)
  Capitalized software development costs               ( 9,627)     (  5,037)
  Capitalized internal use software costs              ( 2,967)     (    239)
  Business acquisition, net of cash acquired           ( 1,874)          ---
  Purchase of software rights                              ---      ( 26,292)
  Other                                                (   311)          253
-----------------------------------------------------------------------------
   Net cash provided by investing activities             2,481        78,679
-----------------------------------------------------------------------------

Financing Activities:
  Gross borrowings                                          45           168
  Debt repayment                                       (17,897)     ( 18,196)
  Proceeds of employee stock purchases and exercise
    of stock options                                     1,361         1,449
-----------------------------------------------------------------------------
   Net cash used for financing activities              (16,491)     ( 16,579)
-----------------------------------------------------------------------------
Effect of exchange rate changes on cash                ( 2,118)     (    750)
-----------------------------------------------------------------------------
Net increase (decrease) in cash and cash equivalents   (20,229)       38,811
Cash and cash equivalents at beginning of period        95,473        46,645
-----------------------------------------------------------------------------
Cash and cash equivalents at end of period            $ 75,244      $ 85,456
=============================================================================

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 six months ended June  30,  1998
         to   provide   comparability  with   the   current   period
         presentation.

NOTE 2:  Litigation.  As further described in the Company's Form 10-
         K  filing for its year ended December 31, 1998 and its Form
         10-Q for the quarter ended March 31, 1999, the Company  has
         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 in the  second  quarter  of
         1999.

NOTE 3:  Arbitration  Settlement.  The Company maintains  an  equity
         ownership   position   in  Bentley  Systems,   Incorporated
         ("BSI"),  the  developer  and  owner  of  MicroStation,   a
         software   product  utilized  in  many  of  the   Company's
         software  applications and for which the Company serves  as
         a  nonexclusive distributor.  In March 1996, BSI  commenced
         arbitration   against  the  Company   with   the   American
         Arbitration Association, Atlanta, Georgia, relating to  the
         respective  rights of the companies under their April  1987
         Software  License  Agreement and other  matters,  including
         the  Company's alleged failure to properly account for  and
         pay  to  BSI certain royalties on its sales of BSI software
         products, and seeking significant damages.

         On  March  26,  1999,  the  Company  and  BSI  executed   a
         Settlement  Agreement  and  Mutual  General  Release  ("the
         Agreement")   to  settle  this  arbitration  and   mutually
         release   all   claims  related  to  the   arbitration   or
         otherwise,  except  for a) certain litigation  between  the
         companies  that  is  the subject of a  separate  settlement
         agreement   and  b)  payment  for  products  and   services
         obtained  or  provided  in the normal  course  of  business
         since  January 1, 1999.  Both the Company and BSI expressly
         deny  any  fault, liability, or wrongdoing  concerning  the
         claims that were the subject matter of the arbitration  and
         have  settled  solely to avoid continuing  litigation  with
         each other.

         Under  the terms of the Agreement, the Company on April  1,
         1999 made payment to BSI of $12,000,000 and transferred  to
         BSI  ownership  of  three million of the  shares  of  BSI's
         Class   A   common  stock  owned  by  the   Company.    The
         transferred shares were valued at approximately  $3,500,000
         on  the  Company's books, and the Company's  investment  in
         BSI  (reflected in "Investments in affiliates" in the  June
         30,  1999  consolidated  balance sheet)  has  been  reduced
         accordingly.   As a result of the settlement,  Intergraph's
         equity  ownership in BSI has been reduced to  approximately
         33%.   Additionally,  the  Company  had  a  $1,200,000  net
         receivable  from  BSI relating to business conducted  prior
         to  January  1,  1999 which was written off  in  connection
         with the settlement.

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

         The  April  1st  $12,000,000  payment  to  BSI  was  funded
         primarily   from  existing  cash  balances.   For   further
         discussion   regarding   the   Company's   liquidity,   see
         Management's   Discussion   and   Analysis   of   Financial
         Condition and Results of Operations in this Form 10-Q.

NOTE 4:  Zydex.  On January 15, 1998, the Company's litigation  with
         Zydex,   Inc.  was  settled,  resulting  in  the  Company's
         purchase  of  100%  of  the  common  stock  of  Zydex   for
         $26,300,000  with  $16,000,000  paid  at  closing  of   the
         agreement and the remaining amount to be paid in  15  equal
         monthly  installments, including interest.  In March  1998,
         the  Company  prepaid in full the remaining amount  payable
         to  Zydex.   The  former  owner of  Zydex  retains  certain
         rights  to  use, but not sell or sublicense,  plant  design
         system  application software ("PDS") for  a  period  of  15
         years  following the date of closing.  In addition  to  the
         purchase  price of common stock, the Company  was  required
         to  pay  additional royalties to Zydex  in  the  amount  of
         $1,000,000  at  closing of the agreement.  These  royalties
         were  included in the Company's 1997 results of  operations
         and  therefore  did  not affect 1998  results.   The  first
         quarter  1998  cash payments to Zydex were  funded  by  the
         Company's primary lender and by proceeds from the  sale  of
         the  Company's  Solid Edge and Engineering Modeling  System
         product  lines.  See Management's Discussion  and  Analysis
         of  Financial Condition and Results of Operations  in  this
         Form 10-Q for a discussion of the Company's liquidity.

         The  Company capitalized the $26,300,000 cost  of  the  PDS
         software  rights  and is amortizing it  over  an  estimated
         useful  life  of  seven  years.  The  unamortized  balance,
         approximately $20,700,000 at June 30, 1999, is included  in
         "Other  assets"  in the June 30, 1999 consolidated  balance
         sheet.

NOTE 5:  Inventories  are  stated at the lower of  average  cost  or
         market and are summarized as follows:

         -----------------------------------------------------------
                                June 30,         December 31,
                                  1999               1998
         -----------------------------------------------------------
         (In thousands)

         Raw materials            $ 7,580          $ 2,739
         Work-in-process           11,839            3,594
         Finished goods            16,387           15,597
         Service spares            15,553           16,071
         -----------------------------------------------------------
         Totals                   $51,359          $38,001
         ===========================================================

         On  June  30, 1999, the Company repurchased inventory  from
         SCI  having  a  value  of  approximately  $10,200,000,  the
         majority of which is classified as raw materials and  work-
         in-process.    For   a   complete   discussion   of    this
         transaction, see Note 8.

NOTE 6:  Property,  plant,  and equipment - net includes  allowances
         for  depreciation of $246,557,000 and $259,074,000 at  June
         30, 1999 and December 31, 1998, respectively.

NOTE 7:  In  January 1999, the Company acquired the assets  of  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 accounts and results of operations of PID  have
         been  combined with those of the Company since the date  of
         acquisition using the purchase method of accounting.   This
         acquisition   did  not  materially  affect  the   Company's
         revenues,  net loss, or loss per share for the  six  months
         ended  June  30,  1999,  nor  is  it  expected  to  have  a
         significant  impact  on results for the  remainder  of  the
         year.

NOTE 8:  In  November  1998, the Company sold substantially  all  of
         its   U.S.  manufacturing  inventory  and  assets  to   SCI
         Technology,  Inc.  (SCI) a wholly-owned subsidiary  of  SCI
         Systems,   Inc.,   and   SCI  assumed  responsibility   for
         manufacturing   of  substantially  all  of  the   Company's
         hardware   products.    The  total   purchase   price   was
         $62,404,000,  $42,485,000  of  which  was  received  during
         fourth  quarter 1998.  The final purchase price installment
         of  $19,919,000 (included in "Other current assets" in  the
         December  31, 1998 consolidated balance sheet) was received
         on  January 12, 1999.  For a complete discussion of the SCI
         transaction and its anticipated impact on future  operating
         results and cash flows, see the Company's Form 10-K  annual
         report for the year ended December 31, 1998.

         As  part  of this transaction, SCI retained the  option  to
         sell  to  the Company any inventory included in the initial
         sale  which  had  not been utilized in the manufacture  and
         sale  of  finished goods within six months of the  date  of
         the  sale (the "unused inventory").  On June 30, 1999,  SCI
         exercised  this  option  and sold  to  the  Company  unused
         inventory  having a value of approximately  $10,200,000  in
         exchange  for a cash payment of $2,000,000 and a short-term
         installment  note  payable  in  the  principal  amount   of
         $8,200,000.    This  note  is  payable  in  three   monthly
         installments  due  August 2, September 1,  and  October  1,
         1999  and  bears  interest at a rate of 9%.   At  June  30,
         1999,   the  Company  has  increased  the  value   of   its
         inventories  by  the  amount  repurchased  from  SCI.   The
         $8,200,000  note  payable is included in  "Short-term  debt
         and  current maturities of long-term debt" in the June  30,
         1999  consolidated  balance sheet.  The  Company  plans  to
         fund its payments to SCI with existing cash balances.   For
         further  discussion regarding the Company's liquidity,  see
         Management's   Discussion   and   Analysis   of   Financial
         Condition and Results of Operations in this Form 10-Q.

NOTE 9:  In  first quarter 1998, the Company sold its Solid Edge and
         Engineering  Modeling System product  lines  to  Electronic
         Data  Systems  Corporation and its  Unigraphics  Solutions,
         Inc.  subsidiary  for $105,000,000 in  cash.   The  Company
         recorded a gain on this transaction of $102,767,000  ($2.13
         per  share).  This gain is included in "Gains on  sales  of
         assets"  in  the  consolidated statement of operations  for
         the six months ended June 30, 1998.

         In  second quarter 1998, the Company sold the assets of its
         printed   circuit   board   manufacturing   facility    for
         $16,002,000 in cash.  The Company recorded a gain  on  this
         transaction of $8,275,000 ($.17 per share).  This  gain  is
         included  in "Gains on sales of assets" in the consolidated
         statements  of  operations for the quarter and  six  months
         ended  June  30, 1998.  The Company is now outsourcing  its
         printed  circuit board needs.  This operational change  did
         not  materially impact the Company's results of  operations
         in 1998.

NOTE 10: Nonrecurring  Operating Charges.   In  second  quarter
         1999,  in  response to continued operating  losses  in  its
         Intergraph  Computer Systems (ICS) operating  segment,  the
         Company  implemented  a resizing of its  European  computer
         hardware   sales  organization.   This  resizing   involved
         closing  most of the Company's ICS subsidiaries  in  Europe
         and  consolidating  the  European  hardware  sales  efforts
         within  the  Intergraph subsidiaries in that  region.   The
         associated  cost  of  $2,500,000,  primarily  for  employee
         severance  pay,  is  included  in  "Nonrecurring  operating
         charges   (credit)"  in  the  consolidated  statements   of
         operations  for the quarter and six months ended  June  30,
         1999.     Approximately   46   European   positions    were
         eliminated,  all  in the sales and marketing  area.   There
         were  no cash outlays during the second quarter related  to
         this  charge.  This amount is expected to be paid over  the
         remainder  of  1999.   The  Company  estimates  that   this
         resizing   will  result  in  annual  savings   of   up   to
         $3,000,000.

         In   first  quarter  1998,  the  Company  reorganized   its
         European  operations  to reflect the  organization  of  the
         Company  into  four distinct business units  and  to  align
         operating  expenses  more closely with  revenue  levels  in
         that  region.   The cost of this reorganization,  primarily
         for   employee  severance  pay  and  related   costs,   was
         originally  estimated  at  $5,400,000  and  recorded  as  a
         nonrecurring  operating charge in the  first  quarter  1998
         consolidated  statement of operations.  In  second  quarter
         1998,  $900,000 of the costs accrued in the  first  quarter
         were   reversed  as  the  result  of  incurrence  of  lower
         severance  costs than originally anticipated.   The  second
         quarter  credit  and year-to-date charge of $4,500,000  are
         included  in  "Nonrecurring operating charges (credit)"  in
         the  consolidated statements of operations for the  quarter
         and  six  months ended June 30, 1998.  During the remainder
         of  1998, an additional $1,300,000 of the costs accrued  in
         the  first quarter were reversed.  In fourth quarter  1998,
         additional  European  reorganization  costs  of  $2,000,000
         were    recorded   for   further   headcount    reductions.
         Approximately 80 European positions were eliminated in  the
         sales  and marketing, general and administrative, and  pre-
         and   post-sales  support  areas.   Cash  outlays  to  date
         related   to  this  charge  approximate  $4,000,000,   with
         $2,000,000  and $900,000 expended in the first  six  months
         of  1998  and 1999, respectively.  The remaining costs  are
         expected  to  be  paid  over the remainder  of  1999.   The
         Company  estimates the European reorganization will  result
         in annual savings of approximately $7,000,000.

         The  remainder of first quarter 1998 nonrecurring operating
         charges  consists  primarily of write-offs  of  a)  certain
         intangible  assets, primarily capitalized  business  system
         software no longer in use, b) goodwill recorded on a  prior
         acquisition of a domestic subsidiary and determined  to  be
         of  no  value, and c) a noncompete agreement with a  former
         third   party   consultant.   Prior   to   the   write-off,
         amortization    of   these   intangibles   accounted    for
         approximately $3,400,000 of the Company's annual  operating
         expenses.

NOTE 11: Supplementary cash flow information is  summarized  as
         follows:

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

         -----------------------------------------------------------
                Cash Provided By (Used For) Operations
         Six Months Ended June 30,          1999            1998
         -----------------------------------------------------------
         (In thousands)

         (Increase) decrease in:
           Accounts receivable, net        $27,871        $31,249
           Inventories                      (3,341)       ( 2,732)
           Other current assets             (3,712)       ( 1,888)
         Increase (decrease) in:
           Trade accounts payable           (2,303)       (10,737)
           Accrued compensation and other
             accrued  expenses              (4,273)           216
           Billings in excess of sales      (7,130)         5,073
         -----------------------------------------------------------
         Net changes in current assets
            and  liabilities               $ 7,112        $21,181
         -----------------------------------------------------------

         Investing and financing transactions in the first  half  of
         1999 that did not require cash included the acquisition  of
         a   business  in  part  for  future  obligations   totaling
         approximately  $3,475,000 (see  Note  7),  the  sale  of  a
         subsidiary  in  part for future receivables  of  $8,297,000
         (see  Note  16),  the  purchase  of  inventory  for  future
         obligations totaling $10,200,000 (see Note 8), the sale  of
         fixed  assets  in  part  for a $2,100,000  short-term  note
         receivable,   and  the  financing  of  new  financial   and
         administrative  systems with a long-term  note  payable  of
         approximately   $2,000,000.   There  were  no   significant
         noncash  investing and financing transactions in the  first
         half of 1998.

NOTE 12: 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 13: Effective  January  1,  1998,  the  Company   adopted
         Statement  of  Financial  Accounting  Standards  No.   131,
         Disclosures  about  Segments of an Enterprise  and  Related
         Information.     This    Statement    replaces     previous
         requirements  that  segment information be  reported  along
         industry  lines  with  a  new operating  segment  approach.
         Operating segments are defined as components of a  business
         for  which  separate  financial  information  is  regularly
         evaluated  in determining resource allocation and operating
         performance.    The   Company's  operating   segments   are
         Intergraph   Computer  Systems  (ICS),  Intergraph   Public
         Safety,  Inc.  (IPS),  VeriBest, Inc.  (VeriBest)  and  the
         Software   and   Federal   Systems   ("Federal")   business
         (collectively,  the  Software and Federal  businesses  form
         what   is   termed  "Intergraph"),  none  of   which   were
         considered   to  be  reportable  segments  under   previous
         external reporting standards.

         The  Company's  reportable segments are strategic  business
         units  which  are organized by the types of  products  sold
         and   the   specific  markets  served.   They  are  managed
         separately due to unique technology and marketing  strategy
         resident in each of the Company's markets.

         ICS  supplies  high  performance Windows NT-based  graphics
         workstations and PCs, 3D graphics subsystems, servers,  and
         other  hardware  products.   IPS  develops,  markets,   and
         implements  systems  for public safety agencies.   VeriBest
         serves  the electronic design automation market,  providing
         software  design  tools, design processes,  and  consulting
         services  for developers of electronic systems.  Intergraph
         supplies   software   and  solutions,  including   hardware
         purchased  from  ICS,  consulting,  and  services  to   the
         process  and  building  and infrastructure  industries  and
         provides   services   and   specialized   engineering   and
         information   technology  to  support  Federal   government
         programs.

         The   Company   evaluates  performance  of  the   operating
         segments  based  on  revenue and  income  from  operations.
         Sales  among  the operating segments, the most  significant
         of  which  are sales of hardware products from ICS  to  the
         other  segments, are accounted for under a transfer pricing
         policy.   Transfer prices approximate prices that would  be
         charged  for  the  same  or similar property  to  similarly
         situated  unrelated  buyers.   In  the  U.S.,  intersegment
         sales  of  products  and services to be used  for  internal
         purposes   are   charged   at  cost.    For   international
         subsidiaries,  transfer  price is charged  on  intersegment
         sales  of  products  and services to  be  used  for  either
         internal purposes or sale to customers.

         The  following  table  sets forth  revenues  and  operating
         income  (loss)  by operating segment for the  quarters  and
         six months ended June 30, 1999 and 1998.

         --------------------------------------------------------------------
                                  Quarter Ended June 30,      Six Months
                                                            Ended June 30,
                                      1999     1998         1999      1998
         --------------------------------------------------------------------
         (In thousands)

         Revenues
         ICS:
           Unaffiliated customers   $52,844   $62,169    $115,021   $116,402
           Intersegment revenues     33,261    45,351      64,409    102,128
         --------------------------------------------------------------------
                                     86,105   107,520     179,430    218,530
         --------------------------------------------------------------------

         IPS:
           Unaffiliated customers    22,198    13,035      42,532     25,410
           Intersegment revenues      2,547        69       3,504        134
         --------------------------------------------------------------------
                                     24,745    13,104      46,036     25,544
         --------------------------------------------------------------------

         VeriBest:
           Unaffiliated customers     6,568     6,046      14,035     12,951
           Intersegment revenues         48         7         101        192
         --------------------------------------------------------------------
                                      6,616     6,053      14,136     13,143
         --------------------------------------------------------------------

         Intergraph Software:
           Unaffiliated customers   114,406   128,746     235,300    268,230
           Intersegment revenues      3,953       370       8,566      1,001
         --------------------------------------------------------------------
                                    118,359   129,116     243,866    269,231
         --------------------------------------------------------------------

         Intergraph Federal:
           Unaffiliated customers    37,628    36,617      78,833     69,438
           Intersegment revenues      2,147     1,053       3,706      2,477
         --------------------------------------------------------------------
                                     39,775    37,670      82,539     71,915
         --------------------------------------------------------------------
                                    275,600   293,463     566,007    598,363
         --------------------------------------------------------------------
         Eliminations               (41,956)  (46,850)    (80,286)  (105,932)
         --------------------------------------------------------------------
         Total revenues            $233,644  $246,613    $485,721   $492,431
         ====================================================================

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

         ICS                       $(12,839) $(19,832)   $(19,506)  $(39,383)
         IPS                          3,259       446       5,186      1,303
         VeriBest                   ( 2,261)  ( 3,761)    ( 4,062)   ( 8,459)
         Intergraph Software          4,137     1,934       7,530      2,359
         Intergraph Federal           1,402   (   858)      5,635    ( 3,316)
         Corporate                  (10,699)  ( 7,450)    (19,687)   (14,274)
         --------------------------------------------------------------------
         Total                     $(17,001) $(29,521)   $(24,904)  $(61,770)
         ====================================================================

         Effective  January  1,  1999,  the  Utilities  business  of
         Intergraph  was merged into IPS, increasing  the  operating
         segment's first half 1999 revenues and operating income  by
         $19,711,000 and $2,734,000,  respectively,  and  reducing
         the Intergraph Software operating segment figures by those
         amounts.

         Amounts  included  in  the "Corporate"  column  consist  of
         general   corporate   expenses,   primarily   general   and
         administrative   expenses   (including   legal   fees    of
         $7,595,000 and $5,215,000 for the first six months of  1999
         and  1998,  respectively) remaining after  charges  to  the
         operating  segments  based  on  segment  usage   of   those
         services.

         Significant profit and loss items for the first six  months
         of  1999  that  are not allocated to the segments  and  not
         included  in  the  analysis  above  include  an  $8,562,000
         charge  for  an  arbitration settlement  agreement  reached
         with  Bentley  Systems, Inc. (see Note 3),  an  $11,505,000
         gain  on  the  sale  of a subsidiary  (see  Note  16),  and
         nonrecurring  operating  charges of  $2,472,000  (see  Note
         10).   Such items for the first six months of 1998  include
         gains  on sales of assets of $111,042,000 (see Note 9)  and
         nonrecurring  operating charges of  $13,902,000  (see  Note
         10).

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

NOTE 14: Effective  January  1,  1998,  the  Company   adopted
         Statement  of  Financial  Accounting  Standards  No.   130,
         Reporting Comprehensive Income.  Under this Statement,  all
         nonowner changes in equity during a period are reported  as
         a  component  of comprehensive income (loss).   During  the
         first   six   months  of  1999  and  1998,  the   Company's
         comprehensive income (loss) totaled $(36,949,000) and
         $28,172,000, respectively.  Comprehensive income (loss)
         differs from net income (loss) due to foreign currency
         translation adjustments.

NOTE 15: Effective January 1, 1999, the Company adopted American
         Institute  of  Certified  Public Accountants  Statement  of
         Position   98-1,  Accounting  for  the  Costs  of  Computer
         Software  Developed  or Obtained for  Internal  Use,  which
         defines  computer  software  costs  to  be  capitalized  or
         expensed   to  operations.   Implementation  of  this   new
         accounting  standard  did  not  significantly  affect   the
         Company's  results of operations for the six  months  ended
         June  30,  1999, nor is it expected to have  a  significant
         impact  on  results for the remainder of the year,  as  the
         Company  has  historically been in  substantial  compliance
         with the practice required by the Statement.

NOTE 16: On  April 16, 1999, the Company completed the sale  of
         InterCAP   Graphics   Systems,   Inc.,   a   wholly   owned
         subsidiary, to Micrografx, a global provider of  enterprise
         graphics   software,   for   $12,150,000,   consisting   of
         $3,853,000 in cash received at closing, a deferred  payment
         of  $2,500,000  due  in  August 1999  (included  in  "Other
         current  assets" in the June 30, 1999 consolidated  balance
         sheet),   and   a   $5,797,000   convertible   subordinated
         debenture due in March 2002 (included in "Other assets"  in
         the   June  30,  1999  consolidated  balance  sheet).   The
         resulting  gain  on  this  transaction  of  $11,505,000  is
         included  in "Gains on sales of assets" in the consolidated
         statements  of  operations for the quarter and  six  months
         ended  June  30, 1999.  InterCAP's revenues and losses  for
         1998   were   $4,660,000   and  $1,144,000,   respectively,
         ($3,600,000  and  $1,853,000  for  1997).   Assets  of  the
         subsidiary  at  December 31, 1998 totaled $1,550,000.   The
         subsidiary did not have a material effect on the  Company's
         results of operations for the period in 1999 prior  to  the
         sale.

NOTE 17: In June 1998, the Financial Accounting Standards Board
         (FASB)  issued Statement of Financial Accounting  Standards
         No.  133, Accounting for Derivatives and Hedging Activities
         (SFAS   133),   requiring  companies   to   recognize   all
         derivatives as either assets or liabilities on the  balance
         sheet  and  to measure the instruments at fair  value.   In
         July 1999, the FASB delayed the implementation of this  new
         accounting  standard to fiscal years beginning  after  June
         15,  2000  (calendar  year  2001  for  the  Company).   The
         Company  is  evaluating the effects of adopting  SFAS  133,
         but  does  not  anticipate that it  will  have  a  material
         impact  on  its consolidated operating results or financial
         position.


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

SUMMARY
-------

Earnings.  In second quarter 1999, the Company incurred a net loss
of  $.25  per  share on revenues of $233.6 million,  including  an
$11.5  million ($.24 per share) gain on the sale of  a  subsidiary
company and a $2.5 million ($.05 per share) nonrecurring operating
charge  for  the resizing of its European computer hardware  sales
organization.  The second quarter 1998 loss was $.43 per share  on
revenues  of $246.6 million, including an $8.3 million  ($.17  per
share) gain on the sale of its printed circuit board manufacturing
facility.  The second quarter 1999 loss from operations  was  $.40
per  share versus a loss of $.59 per share for the second  quarter
of  1998.   This  loss improvement resulted primarily  from  a  9%
decline  in  operating  expenses and a 3.7  point  improvement  in
systems  gross  margin.  For the first half of 1999,  the  Company
incurred  a  net  loss  of $.61 per share on  revenues  of  $485.7
million,  including an $8.6 million ($.18 per  share)  charge  for
settlement  of  its arbitration proceedings with Bentley  Systems,
Inc.  (See "Arbitration Settlement" following), the $.24 per share
gain  on  the sale of a subsidiary, and the $.05 per share  charge
for resizing of the European computer hardware sales organization.
For  the first half of 1998, the Company earned net income of $.59
per  share  on  revenues  of $492.4 million,  including  a  $102.8
million  ($2.13 per share) gain on the sale of its Solid Edge  and
Engineering  Modeling System product lines, a $13.9 million  ($.29
per  share)  charge for nonrecurring operating expenses (primarily
employee  termination  costs and write-off of  certain  intangible
assets),  and the $.17 per share gain on the sale of  the  printed
circuit  board facility.  Excluding nonrecurring charges  and  one
time gains, the first half 1999 loss from operations was $.51  per
share versus a loss of $1.28 per share for the first half of 1998.
The  improvement  is  the  result of a 13%  decline  in  operating
expenses  and  a  2.1 point increase in gross margin.   While  the
Company  has  realized considerable improvements in its  operating
expense  levels  and gross margin, they have been insufficient  to
return  the  Company  to profitability, as revenue  levels  remain
suppressed and inadequate to cover the current level of expenses.

Remainder of the Year.  The Company expects that the industry will
continue  to  be  characterized by higher  performance  and  lower
priced    products,   intense   competition,   rapidly    changing
technologies, shorter product cycles, and development and  support
of  software  standards that result in less specific hardware  and
software dependencies by customers.  The Company believes that its
operating  system  and hardware architecture  strategies  are  the
correct   choices.   However,  competing  operating  systems   and
products  are  available  in the market, and  competitors  of  the
Company  offer  Windows  NT and Intel as  the  systems  for  their
products.  The Company has lost significant market share  in  this
generic undifferentiated market due to the actions of Intel and is
attempting  to  recover  from  the  resulting  loss  of  momentum.
Improvement in the Company's operating results will depend on  its
ability   to  accurately  anticipate  customer  requirements   and
technological trends and to rapidly and continuously  develop  and
deliver  new hardware and software products that are competitively
priced,   offer   enhanced  performance,   and   meet   customers'
requirements  for standardization and interoperability,  and  will
further  depend  on  its  ability to  successfully  implement  its
strategic  direction.  In addition, the Company faces  significant
operational and financial uncertainty of unknown duration  due  to
its  dispute  with  Intel.  (See the Company's  Form  10-K  annual
report for the year ended December 31, 1998 and "Intel litigation"
following for a complete description of the Company's dispute with
Intel  and for a discussion of the effects of this dispute on  the
Company's operations.)  To achieve and maintain profitability, the
Company  must increase its sales volume and/or align its operating
expenses  more closely with the level of revenue and gross  margin
currently  being  generated.  The Company is currently  evaluating
the  performance  of  each of its operating segments  relative  to
recovery  plans  developed  in  January  1999  and  may  implement
corrective actions during the third quarter, which could result in
significant operating charges during that quarter.  There  can  be
no  assurance  that any actions taken by the Company will  restore
profitability.

Nonrecurring  Operating  Charges.   In  second  quarter  1999,  in
response  to continued operating losses in its Intergraph Computer
Systems  (ICS)  operating  segment,  the  Company  implemented   a
resizing  of  its  European computer hardware sales  organization.
This   resizing  involved  closing  most  of  the  Company's   ICS
subsidiaries  in  Europe and consolidating the  European  hardware
sales  efforts within the Intergraph subsidiaries in that  region.
The  associated  cost  of  $2.5 million,  primarily  for  employee
severance  pay,  is  included in "Nonrecurring  operating  charges
(credit)"  in  the consolidated statements of operations  for  the
quarter  and  six  months ended June 30, 1999.   Approximately  46
European positions were eliminated, all in the sales and marketing
area.   There  were  no  cash outlays during  the  second  quarter
related  to this charge, and as such, the entire cost is  included
in  "Other  accrued  expenses" in the June 30,  1999  consolidated
balance  sheet.   This  amount is expected to  be  paid  over  the
remainder of 1999.  The Company estimates that this resizing  will
result in annual savings of up to $3 million.

In  first  quarter  1998,  the Company  reorganized  its  European
operations  to reflect the organization of the Company  into  four
distinct  business  units  and to align  operating  expenses  more
closely  with  revenue levels in that region.  The  cost  of  this
reorganization, primarily for employee severance pay  and  related
costs, was originally estimated at $5.4 million and recorded as  a
nonrecurring   operating  charge  in  the   first   quarter   1998
consolidated statement of operations.  In second quarter 1998, $.9
million of the costs accrued in the first quarter were reversed as
the  result of incurrence of lower severance costs than originally
anticipated.  The second quarter credit and year-to-date charge of
$4.5  million  are  included  in "Nonrecurring  operating  charges
(credit)"  in  the consolidated statements of operations  for  the
quarter  and six months ended June 30, 1998.  During the remainder
of  1998, an additional $1.3 million of the costs accrued  in  the
first  quarter were reversed.  In fourth quarter 1998,  additional
European  reorganization  costs of $2 million  were  recorded  for
further headcount reductions.  Approximately 80 European positions
were   eliminated  in  the  sales  and  marketing,   general   and
administrative,  and  pre-  and post-sales  support  areas.   Cash
outlays  to date related to this charge approximate $4.0  million,
with $2.0 million and $.9 million expended in the first six months
of  1998 and 1999, respectively.  The remaining costs are expected
to  be  paid over the remainder of 1999 and are included in "Other
accrued expenses" in the June 30, 1999 consolidated balance sheet.
The  Company estimates the European reorganization will result  in
annual savings of approximately $7 million.

The  remainder  of  the first quarter 1998 nonrecurring  operating
charges  consists primarily of write-offs of a) certain intangible
assets,  primarily capitalized business system software no  longer
in  use, b) goodwill recorded on a prior acquisition of a domestic
subsidiary  and determined to be of no value, and c) a  noncompete
agreement  with  a former third party consultant.   Prior  to  the
write-off,   amortization  of  these  intangibles  accounted   for
approximately  $3.4  million  of the  Company's  annual  operating
expenses.

Litigation.   As  further  described in the  Company's  Form  10-K
filing for its year ended December 31, 1998 and its Form 10-Q  for
the  quarter  ended  March  31, 1999, the  Company  has  extensive
ongoing  litigation with Intel Corporation, and  its  business  is
subject   to   certain   risks  and  uncertainties.    Significant
litigation  developments during the second  quarter  of  1999  are
discussed below.

Intel  Litigation.  On June 17, 1998, Intel filed a motion  before
the  U.S.  District  Court,  the  Northern  District  of  Alabama,
Northeastern  Division  (the "Alabama Court")  seeking  a  summary
judgment  holding that Intel is licensed to use the  patents  that
the  Company  asserted  against Intel in  the  Company's  original
complaint.    This   "license  defense"  was  based   on   Intel's
interpretation  of  the facts surrounding the acquisition  by  the
Company   of   the  Advanced  Processor  Division   of   Fairchild
Semiconductor  Corporation  in  1987.   (For  further   background
information regarding the Company's complaints against Intel,  see
the  Company's Form 10-K annual report for the year ended December
31,   1998.)     The   Company   filed   a   cross   motion   with
the   Alabama   Court   September  15,  1998  requesting   summary
adjudication  in  favor of the Company.   On  June  4,  1999,  the
Alabama  Court granted the Company's motion and ruled  that  Intel
has  no license to use the Company's Clipper patents as Intel  had
claimed  in its motion for summary judgment.  Intel has  requested
leave  of the Alabama Court to appeal this ruling, but no  further
decision  has been entered.  The Company is confident of its  sole
ownership of the Clipper patents.

In a separate order on June 15, 1999, the Alabama Court has
extended the discovery phase of the lawsuit through October 11,
1999 and rescheduled the trial date to June 12, 2000.

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

Arbitration Settlement.  The Company maintains an equity ownership
position  in Bentley Systems, Incorporated ("BSI"), the  developer
and owner of MicroStation, a software product utilized in many  of
the  Company's  software applications and for  which  the  Company
serves  as  a  nonexclusive  distributor.   In  March  1996,   BSI
commenced  arbitration  against  the  Company  with  the  American
Arbitration  Association,  Atlanta,  Georgia,  relating   to   the
respective rights of the companies under their April 1987 Software
License  Agreement  and  other matters,  including  the  Company's
alleged  failure to properly account for and pay  to  BSI  certain
royalties  on  its  sales of BSI software  products,  and  seeking
significant damages.

On  March  26,  1999,  the Company and BSI executed  a  Settlement
Agreement  and Mutual General Release ("the Agreement") to  settle
this  arbitration and mutually release all claims related  to  the
arbitration or otherwise, except for a) certain litigation between
the  companies  that  is  the subject  of  a  separate  settlement
agreement  and  b) payment for products and services  obtained  or
provided  in the normal course of business since January 1,  1999.
Both  the Company and BSI expressly deny any fault, liability,  or
wrongdoing concerning the claims that were the subject  matter  of
the  arbitration  and  have  settled solely  to  avoid  continuing
litigation with each other.

Under the terms of the Agreement, the Company on April 1, 1999
made  payment  to  BSI  of  $12 million  and  transferred  to  BSI
ownership of three million of the shares of BSI's Class  A  common
stock owned by the Company.  The transferred shares were valued at
approximately  $3.5  million  on  the  Company's  books,  and  the
Company's   investment  in  BSI  (reflected  in  "Investments   in
affiliates" in the June 30, 1999 consolidated balance  sheet)  has
been   reduced  accordingly.   As  a  result  of  the  settlement,
Intergraph's  equity  ownership  in  BSI  has  been   reduced   to
approximately 33%.  Additionally, the Company had a  $1.2  million
net  receivable from BSI relating to business conducted  prior  to
January  1,  1999  which was written off in  connection  with  the
settlement.

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

The April 1st $12 million payment to BSI was funded primarily from
existing  cash  balances.   For further discussion  regarding  the
Company's   liquidity,  see  "Liquidity  and  Capital   Resources"
following.

Year  2000 Issue.  As further described in the Company's Form 10-K
annual report for the year ended December 31, 1998 and its Form 10-
Q  for the quarter ended March 31, 1999, the Company has initiated
a  program to mitigate and/or prevent the possible adverse effects
on  its  operations  of Year 2000 problems  in  its  software  and
hardware  products  sold to customers and in its  internally  used
software and hardware.

The  Company's  efforts to identify and resolve Year  2000  issues
related  to  its  hardware  and  software  product  offerings  are
substantially  complete.  All products currently  offered  in  the
Company's  standard price list have a Year 2000 compliant  version
available.   In addition, the Company has completed a  significant
effort  to  contact its customers and business partners to  ensure
that  customers  are  aware of how to acquire detailed  Year  2000
information   regarding  any  Intergraph-produced  product.    The
Company's  Web  site allows customers to request specific  product
information  related  to  the  Year 2000  issue,  and  provides  a
mechanism   for   requesting  specific  product   upgrade   paths.
Customers  under maintenance contract with the Company  are  being
upgraded  to  compliant  versions of the Company's  software,  and
selected  hardware remedies have been completed where appropriate.
Accordingly,  the  Company does not believe  that  any  Year  2000
problems  in  its  installed base of products or  in  its  current
product  offerings present a material exposure  for  the  Company.
However,  the  Company could suffer a loss of maintenance  revenue
should its customers discontinue any noncompliant products and not
replace them with other products of the Company, and product sales
could  be  lost should customers replace any noncompliant products
with  products  of  other companies.  In addition,  any  liability
claims  by  customers would increase the Company's legal  expenses
and, if successful, could have an adverse impact on the results of
operations  and financial position of the Company.  The  Company's
product  compliance costs have not had and are not anticipated  to
have  a  material impact on its results of operations or financial
condition.

Year  2000  readiness of the Company's business critical  internal
systems is a top priority of the Company's Year 2000 program team.
All   U.S.   business  critical  internal  systems  upgrades   and
programming changes have been implemented and tested as of the end
of  second  quarter 1999.  Remaining Year 2000 efforts related  to
the  Company's  U.S.  internal systems involve  only  non-critical
business systems and  are expected to be completed by the  end  of
the  third quarter.  The Company believes that it has successfully
implemented   all   internal  systems  changes  and   replacements
necessary  to  ensure the Year 2000 compliance of  these  internal
systems, but has contingency plans to perform further upgrades  to
existing systems if unanticipated problems occur.  The majority of
the Company's business systems were developed internally, and as a
result,  the  Company has the available source code and  staff  to
correct  any  problems which might arise.  Efforts to upgrade  and
replace  noncompliant international accounting systems are nearing
completion.   All Year 2000 efforts with respect to these  systems
are scheduled to be completed by October 31, 1999, and the Company
has  not  identified  any significant risks  in  this  area.   The
Company  has  employed  no  additional resources  to  perform  the
upgrades  and  programming  changes  necessary  for  its  internal
systems, and as such, the related costs have not had and  are  not
anticipated to have a material impact on its results of operations
or financial condition.

The  Company  is  conducting a program of investigation  with  its
critical suppliers to ensure continuous and uninterrupted  supply,
and  includes Year 2000 provisions in its new supplier agreements.
This  program  consists primarily of a major survey  campaign  and
follow-up  with significant suppliers to monitor compliance.   The
Company  has  also initiated discussions with other entities  with
which   it  interacts  electronically,  including  customers   and
financial  institutions, to ensure those parties have  appropriate
plans to remedy any Year 2000 issues.  To date, responses to third
party Year 2000 surveys provide assurance that these third parties
will  achieve Year 2000 compliance, and no significant risks  have
been  identified.   There cannot be complete  assurance  that  the
systems  of  other companies on which the Company relies  will  be
timely  converted, and the Company could be adversely impacted  by
any   suppliers,  customers,  and  other  businesses  who  do  not
successfully address this issue.  The Company continues to  assess
these  risks  in  order  to reduce any potential  adverse  impact.
Development of contingency plans to address potential third  party
noncompliance issues is underway and will be completed by the  end
of third quarter 1999.

The  Company  believes it has effectively resolved the  Year  2000
issue  with  respect to its internal systems in a  timely  manner;
however,  there  cannot  be  complete  assurance  that  unforeseen
problems will not occur, which could conceivably result in  delays
in  sales  order processing, shipping, invoicing, and collections,
among  other  areas.   The Company believes  its  most  reasonably
likely  worst  case scenarios, however, relate  to  the  potential
noncompliance  of third parties.  If Year 2000 compliance  is  not
achieved by significant vendors and other third parties, including
utilities and transportation providers, among others, the  Company
could  experience interruptions in its normal business activities,
potentially resulting in material adverse effects on its operating
results.

The  costs  of  the Year 2000 project and the Company's  state  of
readiness  are  based on management's best estimates,  which  have
been  derived  utilizing numerous assumptions  of  future  events,
including  the continued availability of certain resources,  third
party  modification plans, and other factors.   There  can  be  no
assurance  that  these  estimates will  be  achieved,  and  actual
results  could differ materially from those anticipated.  Specific
factors  that  might cause such material differences include,  but
are not limited to, the availability and cost of personnel trained
in  this  area,  the  ability to locate and correct  all  relevant
computer codes in a timely manner, and similar uncertainties.


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

Orders.  Second quarter and first half 1999 systems orders totaled
$163.7   million  and  $307.7  million,  respectively,  reflecting
declines  of  approximately 27% and 19% from the same  prior  year
periods.  Order volumes have declined worldwide, primarily in  the
Company's hardware business, though some weakness occurred in  the
Company's   software  segments  as  well.   U.S.  systems   orders
decreased  30% and 24%, respectively, from the second quarter  and
first  half 1998 levels as a result of weakness in both commercial
and  federal  product sectors.  The decline  in  orders  from  the
federal government was also the result of weakening demand for the
Company's  hardware  product  offerings.   International   systems
orders  declined by 21% and 12% from the second quarter and  first
half 1998 levels.

Revenues.   Total revenues for second quarter and first half  1999
were $233.6 million and $485.7 million, respectively, down 5%  and
1%,  from  the  comparable prior year periods.  The factors  noted
previously  as  contributing to the  orders  decline  have  had  a
similar  impact on the Company's revenues.  Year-to-date  declines
in  systems  and maintenance revenues of 2% and 6%,  respectively,
were  partially offset by a 16% increase in professional  services
revenue.    Geographically,  the  composition  of  the   Company's
revenues has remained consistent with the first half and full year
1998  levels,  with European revenues representing  31%  of  total
revenues and total international revenues representing 50% of  the
consolidated  total.   Currency  fluctuations  did  not   have   a
significant  impact  on revenues for the first  half  of  1999  as
weakening  of the U.S. dollar in the Company's Asian  markets  was
offset  by  strengthening  of  the  dollar  in  Europe  and  other
international regions.

Systems.  Systems revenue for the second quarter and first half of
1999 was $158.3 million and $328.6 million, respectively, down  6%
and   2%,   respectively,  from  the  same  prior  year   periods.
Competitive  conditions  manifested in declining  per  unit  sales
prices continue to adversely affect the Company's systems revenues
and  margin.  In addition, the Company's hardware revenues  remain
low  as  the  recovery  of momentum lost due  to  Intel's  actions
continues  to be slow.  U.S. systems revenues were flat with  both
second  quarter  1998  and first half 1998 levels.   International
systems  revenues were down approximately 12% from second  quarter
1998  and  6% from the first half of 1998.  Asia Pacific  revenues
remained relatively  flat  with  the first half  of  1998,  while
European revenues  have declined by 2%.  Excluding the impact of a
weaker dollar, the revenue decline in the Asia Pacific region  was
5%.  Currency fluctuations did not significantly affect the
decline in European revenues.  Revenues for the Americas  declined
by approximately 22% primarily due to weak economic conditions  in
Latin  America.  Currency devaluation accounted for  approximately
one third of this decline.

Hardware revenues for the first half of 1999 declined 15% from the
prior year period.  Unit sales of workstations and servers were up
8%  from  first  half 1998, while workstation and server  revenues
declined  by  8%  due  to a 15% decline in the  average  per  unit
selling  price.   Price competition in the industry  continues  to
erode  per  unit  selling  prices.  Sales of  peripheral  hardware
products  declined by 25% from the prior year period due primarily
to  a 44% decline in sales of storage devices and memory and a 47%
decline  in  sales of Intel options and upgrades, as well  as  the
loss  of  revenue  resulting  from the  April  1998  sale  of  the
Company's printed circuit board manufacturing facility.   Software
revenues  declined  6%  from the prior  year  level.   Significant
increases  in sales of Geomedia, photogrammetry, ICS  and  Federal
software    were    offset   by   declines   in   revenues    from
interoperability,  Microstation,  and  other  software   products.
Plant   design  remains  the  Company's  highest  volume  software
offering,  representing 29% of total software sales for the  first
half   of  1999.   Sales  of  Windows-based  software  represented
approximately 90% of total software revenues in the first half  of
1999 and 1998.

Maintenance  and  Services.   Maintenance  and  services   revenue
consists of revenues from maintenance of Company systems and  from
Company  provided  services, primarily  training  and  consulting.
These  forms  of  revenue  totaled $75.4 million  for  the  second
quarter and $157.2 million for the first half of 1999, down 4% and
1%,   respectively,  from  the  comparable  prior  year   periods.
Maintenance  revenues for the first half of  1999  totaled  $100.2
million,  down 6% from the same prior year period.  The  trend  in
the  industry  toward  lower priced products and  longer  warranty
periods  has limited the growth potential for maintenance revenue,
and  the  Company believes this trend will continue in the future.
Services revenue represents approximately 12% of total first  half
1999  revenues  and  has increased 16% from the  same  prior  year
period.   Growth  in  services revenue has  acted  to  offset  the
decline  in  maintenance revenue.  The Company is  endeavoring  to
grow  its services business and has redirected the efforts of  its
hardware maintenance organization to focus increasingly on systems
integration.  Revenues from these services, however, typically
produce lower gross margins than maintenance revenues.


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

The  Company's total gross margin for the second quarter  of  1999
was  34%, up 3 points from the second quarter 1998 level.  For the
first  half  of 1999, total gross margin was 33.5%, up 2.1  points
from  the first half of 1998 and 2 points from the full year  1998
level.

Systems  margin for the second quarter was 31.6%, up  3.7  points
from second quarter 1998.  First half 1999 margin was 30.5%,  up
2.5  points from the first half of 1998 and 1.3 points  from  the
full  year  1998  level  primarily due to an  increased  software
content   in  the  product  mix  and  a  decline  in  unfavorable
manufacturing   variances  as  the  result  of  outsourcing   the
Company's manufacturing operations to SCI in fourth quarter 1998.

In  general, the Company's systems margin may be lowered by  price
competition,  a  higher hardware content in  the  product  mix,  a
stronger  U.S.  dollar in international markets,  the  effects  of
technological changes on the value of existing inventories, and  a
higher  mix  of federal government sales, which generally  produce
lower  margins  than  commercial sales.  Systems  margins  may  be
improved  by  higher  software content in the  product,  a  weaker
dollar  in  international markets, a higher mix  of  international
systems sales to total systems sales, and reductions in prices  of
component parts, which generally tend to decline over time in  the
industry.  While the Company is unable to predict the effects that
many  of these factors may have on its systems margins, it expects
continuing  pressure  on  its systems  margin  as  the  result  of
increasing industry price competition.

Maintenance and services margin for the second quarter of 1999 was
39%,  up 1.3 points from the second quarter of 1998.  Year to date
maintenance  and services margin is 39.7%, up 1.1 point  from  the
same  prior  year period and 2.8 points from the  full  year  1998
level   primarily  due  to  significant  improvement  in  services
revenues  without a corresponding increase in cost.   The  Company
continues to monitor its maintenance and services cost closely and
has taken certain measures, including reductions in headcount,  to
align  these  costs with the current revenue level.   The  Company
believes  that  the  trend  in the industry  toward  lower  priced
products and longer warranty periods will continue to curtail  its
maintenance revenue, which will pressure maintenance margin in the
absence of corresponding cost reductions.


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

Operating expenses for the second quarter and first half  of  1999
declined  by  9% and 13%, respectively, from the comparable  prior
year  periods.  In response to the level of its operating  losses,
the   Company  has  taken  various  actions,  including   employee
terminations  and  sales of unprofitable business  operations,  to
reduce  its average employee headcount by approximately  12%  from
first half 1998.

Product development expense for the second quarter and first  half
of 1999 declined by 21% and 24%, respectively, from the same prior
year  periods  due  primarily to decreases in labor  and  overhead
expenses  resulting from the headcount decline and to an  increase
in  software  development projects qualifying for  capitalization,
primarily  related  to the Company's federal shipbuilding  effort.
Sales and marketing expense for the second quarter and first  half
of 1999 declined by 18% and 19%, respectively, from the same prior
year  periods.  Sales and marketing expenses have declined  across
the  board,  with  the  largest decreases occurring  in  salaries,
commissions,  advertising,  trade  shows,  and  public   relations
expenses.    The  Company's  sales  and  marketing  expenses   are
inherently  activity  based and can be  expected  to  increase  in
quarters  of  higher activity levels.  General and  administrative
expense for the second quarter and first half of 1999 increased by
22% and 10%, respectively, from the same prior year periods due to
an increase in legal fees and U.S. bad debts expense.


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

Interest  expense  was $1.4 million for second  quarter  and  $2.8
million  for the first half of 1999 versus $1.9 million  and  $4.1
million,  respectively, for the corresponding prior year  periods.
The  Company's average outstanding debt has declined in comparison
to  the  same  prior year periods due primarily  to  repayment  of
borrowings under the Company's revolving credit facility utilizing
proceeds  from  sales  of  assets.   See  "Liquidity  and  Capital
Resources" following for a discussion  of  the  Company's  current
financing arrangements.

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

In  first  quarter  1998,  the Company sold  its  Solid  Edge  and
Engineering  Modeling  System product  lines  to  Electronic  Data
Systems Corporation and its Unigraphics Solutions, Inc. subsidiary
for  $105  million in cash.  The Company recorded a gain  on  this
transaction of $102.8 million.  This gain is included in "Gains on
sales  of assets" in the consolidated statement of operations  for
the  six months ended June 30, 1998.  Full year 1997 revenues  and
operating loss for these product lines were $35.2 million and $4.1
million,  respectively.  The Company estimates the  sale  of  this
business  has  resulted in an annual improvement in its  operating
results of approximately $5 million.

In second quarter 1998, the Company sold the assets of its printed
circuit board manufacturing facility for $16 million in cash.  The
Company recorded a gain on this transaction of $8.3 million.  This
gain is included in "Gains on sales of assets" in the consolidated
statements of operations for the quarter and six months ended June
30,  1998.   The  Company is now outsourcing its  printed  circuit
board  needs.   This operational change did not materially  impact
the Company's results of operations in 1998.

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


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

Fluctuations  in  the  value of the U.S. dollar  in  international
markets can have a significant impact on the Company's results  of
operations.   For the first half of 1999, approximately  50%  (51%
for  the  full  year 1998) of the Company's revenues were  derived
from  customers  outside  the  United  States,  primarily  through
subsidiary  operations.  Most subsidiaries sell to  customers  and
incur  and pay operating expenses in local currency.  These  local
currency revenues and expenses are translated to U.S. dollars  for
reporting purposes.  A weaker U.S. dollar will increase the  level
of  reported U.S. dollar orders and revenues, increase the  dollar
gross  margin, and increase reported dollar operating expenses  of
the  international subsidiaries.  For the first half of 1999,  the
U.S.  dollar  weakened on average from its first half 1998  level,
which  increased  reported  dollar  revenues,  orders,  and  gross
margin,  but also increased reported dollar operating expenses  in
comparison  to the prior year period.  The Company estimates  that
this  weakening  of the U.S. dollar in its international  markets,
primarily  in  Asia,  improved its results of operations  for  the
first  half  of 1999 by approximately $.03 per share in comparison
to  the first half of 1998.  Operating results for first half 1998
were reduced by $.10 per share from first half 1997 as a result of
strengthening of the U.S. dollar.

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.  With respect to  the  currency
exposures  in  these regions, the objective of the Company  is  to
protect  against  financial  statement  volatility  arising   from
changes in exchange rates with respect to amounts denominated  for
balance  sheet  purposes in a currency other than  the  functional
currency  of  the local entity.  The Company will therefore  enter
into  forward exchange contracts related to certain balance  sheet
items,   primarily   intercompany   receivables,   payables,   and
formalized  intercompany  debt, when  a  specific  risk  has  been
identified.   Periodic  changes in the value  of  these  contracts
offset  exchange  rate related changes in the financial  statement
value  of  these balance sheet items.  Forward exchange contracts,
generally  less than three months in duration, are purchased  with
maturities reflecting the expected settlement dates of the balance
sheet items being hedged, and only in amounts sufficient to offset
possible significant currency rate related changes in the recorded
values  of these balance sheet items, which represent a calculable
exposure  for the Company from period to period.  Since this  risk
is   calculable,  and  these  contracts  are  purchased  only   in
offsetting  amounts,  neither  the contracts  themselves  nor  the
exposed  foreign  currency denominated  balance  sheet  items  are
likely  to  have  a significant effect on the Company's  financial
position or results of operations.  The Company does not generally
hedge exposures related to foreign currency denominated assets and
liabilities  that  are  not of an intercompany  nature,  unless  a
significant risk has been identified.  It is possible the  Company
could  incur significant exchange gains or losses in the  case  of
significant,  abnormal fluctuations in a particular currency.   By
policy,  the  Company  is prohibited from market  speculation  via
forward  exchange contracts and therefore does not  take  currency
positions  exceeding its known financial statement exposures,  and
does not otherwise trade in currencies.

At June 30, 1999, the Company's only outstanding forward contracts
related  to  formalized intercompany loans between  the  Company's
European subsidiaries and are immaterial to the Company's  present
financial position.  The Company is not currently hedging  any  of
its  foreign currency risks in the Asia Pacific region or its U.S.
exposures  related  to  foreign currency denominated  intercompany
loans.

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".
The  national  currencies  of  the  participating  countries  will
continue to exist through July 1, 2002.  Euro currency will  begin
to  circulate  on January 1, 2002.  With respect to  the  Company,
U.S.   and  European  business  systems  are  being  upgraded   to
accommodate the Euro.  Conversion of all financial systems will be
completed  at  various times through the remainder of  1999.   The
Company is prepared to conduct business in Euros during 1999  with
those  customers  and  vendors who choose to  do  so.   While  the
Company continues to evaluate the potential impacts of the  common
currency, at present, it has not identified any significant  risks
related  to  the  Euro  and  does not anticipate  that  full  Euro
conversion  in 2002 will have a material impact on its results  of
operations or financial condition.  To date, the conversion to one
common  currency  has not impacted the Company's  pricing  in  its
European  markets.  The Euro did not have a significant impact  on
the  Company's results of operations or cash flows in  the  second
quarter or first half of 1999.


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

The  Company incurred a pretax loss of $29.7 million in the  first
half of 1999 versus pretax income of $32 million in the first half
of  1998.   The  first half 1999 loss generated no  net  financial
statement  tax benefit, as tax expenses in individually profitable
international subsidiaries offset available tax benefits.   Income
tax  expense  for the first half of 1998 resulted  primarily  from
taxes  on  individually profitable international subsidiaries  and
U.S.  federal alternative minimum tax.  The sale of the Solid Edge
and  Engineering Modeling System product lines did  not  create  a
significant  regular  tax liability for the  Company  due  to  the
availability  of  net  operating  loss  carryforwards  to   offset
earnings.


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

In  second  quarter 1999, Intergraph Computer Systems incurred  an
operating  loss  of  $12.8 million on revenues of  $86.1  million,
compared to a second quarter 1998 operating loss of $19.8  million
on  revenues of $107.5 million.  Year-to-date, ICS has incurred an
operating  loss  of $19.5 million on revenues of  $179.4  million,
compared  to  an  operating loss of $39.4 million on  revenues  of
$218.5  million  for  first  half 1998.   These  operating  losses
exclude  the  impact of certain nonrecurring income and  operating
expense  items  associated  with ICS's operations,  including  the
second  quarter  1998 gain of $8.3 million  on  the  sale  of  the
printed  circuit  board  manufacturing facility  and  nonrecurring
operating charges of $2.5 million incurred in second quarter 1999.
ICS's  operating loss improvement for both the second quarter  and
first  half  of  1999 resulted primarily from an  approximate  25%
decline in operating expenses due to headcount reductions achieved
in   1998.    During  1998,  ICS's  headcount   was   reduced   by
approximately  33%  as  the result of employee  terminations,  the
outsourcing  of manufacturing, and normal attrition.  ICS's  first
half  1998  results  of  operations were  significantly  adversely
impacted  by  factors associated with the Company's  dispute  with
Intel,  the effects of which included lost momentum, lost  revenue
and  margin as well as increased operating expenses, primarily for
marketing and public relations expenses.  (See the Company's  Form
10-K  annual  report for the year ended December 31,  1998  for  a
complete description of the Company's dispute with Intel  and  its
effects  on  the operations of ICS and the Company.)  ICS's  first
half  1998  margins  were  also severely impacted  by  volume  and
inventory value related manufacturing variances incurred prior  to
the  outsourcing  of its manufacturing to SCI  in  fourth  quarter
1998.   In  1999, this outsourcing has contributed to a 7.6  point
improvement  in  ICS's  systems margins.  However,  systems  gross
margin  remains  insufficient  to cover  the  operating  segment's
current  level  of  operating expenses, and the recovery  of  lost
momentum  caused  by Intel's actions continues  to  be  slow.   In
response to these negative circumstances, in second quarter  1999,
the  Company incurred a $2.5 million charge to consolidate its ICS
operations  with Intergraph operations in most European  locations
in   order  to  reduce  duplicate  expenses.   (See  "Nonrecurring
Operating  Charges"  preceding.)  The  Company  is  continuing  to
investigate  possibilities for further expense reductions  in  ICS
and may take additional actions in third quarter 1999.

In  second quarter 1999, Intergraph Public Safety earned operating
income  of $3.3 million on revenues of $24.7 million, compared  to
operating income in second quarter 1998 of $.4 million on revenues
of  $13.1 million.  Year-to-date, IPS has earned operating  income
of $5.2 million on revenues of $46 million versus operating income
of  $1.3 million on revenues of $25.5 million in first half  1998.
Effective  January 1, 1999, the Utilities business  of  Intergraph
was  merged  into  IPS, increasing the operating  segment's  first
half  1999 revenues and operating income by $19.7 million and $2.7
million, respectively.  First half 1998 operating results for  the
Utilities  business  are  reflected  in  the  Intergraph  Software
operating segment.

VeriBest  incurred  operating losses  of  $2.3  million  and  $3.8
million in the second quarters of 1999 and 1998, respectively,  on
revenues  of  $6.6  million and $6.1 million.  In  the  first  six
months  of  1999 and 1998, VeriBest incurred operating  losses  of
$4.1  million and $8.5 million, respectively, on revenues of $14.1
million and $13.1 million.  Systems gross margin has increased  by
18  points from the first half 1998 level as the result of  a  16%
increase  in  revenues  combined  with  declining  royalty  costs.
Operating  expenses have declined by 14% from the  first  half  of
1999,  primarily as the result of restructuring actions  taken  in
fourth  quarter 1998.  Average employee headcount has declined  by
approximately  10%  from  the first  half  1998  level.   VeriBest
continues  to direct its selling efforts toward a newly  developed
line  of  proprietary products and monitor its operating  expenses
versus the level of revenues being generated.

In  second  quarter 1999, the Software business  earned  operating
income of $4.1 million on revenues of $118.4 million, compared  to
second  quarter 1998 operating income of $1.9 million on  revenues
of $129.1 million.  Year-to-date, the Software business has earned
operating  income  of $7.5 million on revenues of  $243.9  million
versus  operating  income of $2.4 million on  revenues  of  $269.2
million in first half 1998.  Operating income excludes the  impact
of   certain  nonrecurring  income  and  operating  expense  items
associated  with Software operations, including the first  quarter
1999  arbitration settlement charge of $8.6 million and the second
quarter  1999  gain  on the sale of InterCAP.   Year-to-date  1998
operating income excludes the $102.8 million gain on the  sale  of
the  business  unit's Solid Edge and Engineering  Modeling  System
product lines and nonrecurring operating charges of $13.9 million,
primarily for asset write-offs and employee terminations.  Margins
have  remained  relatively stable in this operating segment  while
operating expenses have declined by 15% from the 1998 year-to-date
level.   This  decline  is  due in part to  the  transfer  of  the
Utilities  organization to IPS, but the majority  of  the  expense
savings is the result of headcount reductions, particularly in the
sales  and marketing area as the operating segment has reorganized
its  sales  force  to align expenses with the  volume  of  revenue
generated.

In  second quarter 1999, Federal earned operating income  of  $1.4
million on revenues of $39.8 million, compared to a second quarter
1998  operating loss of $.9 million on revenues of $37.7  million.
Year-to-date, Federal has earned operating income of $5.6  million
on  revenues  of $82.5 million, compared to an operating  loss  of
$3.3 million on revenues of $71.9 million in first half 1998.  The
improvement from the prior year-to-date period resulted  primarily
from a 38% decline in operating expenses, due in part to headcount
reductions and to an increase in shipbuilding software development
costs qualifying for capitalization.  Systems revenue increased by
8%  from  the first half 1998 level, contributing to a  1.6  point
improvement in systems gross margin.  Revenues and margins in both
1998 and 1999 have been adversely impacted by weakened demand  for
the Company's hardware product offerings.

The   Company  continues  to  evaluate  the  performance  of  each
operating  segment  relative  to  recovery  plans  established  in
January 1999 and may take further actions in third quarter 1999 to
improve operating results of all segments.

See  Note  13  of  Notes to Consolidated Financial Statements  for
further   explanation  and  details  of  the   Company's   segment
reporting.


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

At  June  30, 1999, cash totaled $75.2 million compared  to  $95.5
million at December 31, 1998.  Cash consumed by operations in  the
first half of 1999 totaled $4.1 million, compared to a consumption
of  $22.5  million  in  the  first half of  1998,  both  generally
reflecting the negative cash flow effects of operating losses.  In
addition, first half 1999 cash consumption included the April  1st
$12   million  payment  to  Bentley  Systems,  Incorporated   (See
"Arbitration Settlement" preceding.)

Net cash generated by investing activities totaled $2.5 million in
the first half of 1999, compared to a $78.7 million net generation
in  the  first half of 1998.  First half 1999 investing activities
included  $19.9 million in proceeds from the fourth  quarter  1998
sale of the Company's manufacturing assets (See Note 8 of Notes to
Consolidated  Financial Statements) and $3.1 million net  proceeds
from  the  sale of InterCAP.  First half 1998 investing activities
included  $102 million in proceeds from the sale of the  Company's
Solid  Edge  and  Engineering Modeling System product  lines,  $16
million in proceeds from the sale of the Company's printed circuit
board  manufacturing facility, and an expenditure of $26.3 million
for  the  purchase  of  Zydex software rights.  Other  first  half
1999  investing activities included expenditures for capitalizable
software  development costs of $9.6 million  ($5  million  in  the
first  half of 1998) and capital expenditures of $5.7 million  ($8
million  in  the  first  half of 1998), primarily  for  Intergraph
products  used in hardware and software development and sales  and
marketing   activities.    The  Company   expects   that   capital
expenditures  will require $20 to $25 million for  the  full  year
1999, 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 $16.5 million  in
the  first  half of 1999, compared to $16.6 million in  the  first
half  of  1998.  Both periods included a net repayment of debt  of
approximately  $18  million.  This activity relates  primarily  to
borrowings under the Company's revolving credit facility and  term
loan.

Under  the  Company's January 1997 four year fixed term  loan  and
revolving credit agreement (as amended in October 1998), available
borrowings are determined by the amounts of eligible assets of the
Company  (the  "borrowing  base"), as defined  in  the  agreement,
primarily  accounts  receivable, with maximum borrowings  of  $125
million.   The  $25 million 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.
The  rate of interest on all borrowings under the agreement is the
greater  of  7% or the Norwest Bank Minnesota National Association
base  rate  of interest (7.75% at June 30, 1999) plus .625%.   The
agreement requires the Company to pay a facility fee at an  annual
rate  of  .15%  of the maximum amount available under  the  credit
line,  an unused credit line fee at an annual rate of .25% of  the
average unused portion of the revolving credit line, and a monthly
agency  fee.   At  June  30,  1999, the  Company  had  outstanding
borrowings of $25 million (the term loan), which was classified as
long-term  debt  in  the  consolidated  balance  sheet,   and   an
additional  $34.7  million  of  the  available  credit  line   was
allocated  to support letters of credit issued by the Company  and
the  Company's forward exchange contracts.  As of this same  date,
the  borrowing  base,  representing the maximum  available  credit
under  the  line, was approximately $71 million ($69.5 million  at
July 31, 1999).

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.
In  addition,  the agreement includes 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.
On April 29, 1999, the term loan and security agreement was
amended to reduce the minimum net worth covenant to $300 million
through December 31, 1999.  Effective January 1, 2000, the minimum
net worth will be increased back to its original level of $325
million.

At  June  30, 1999, the Company had approximately $56  million  in
debt  on  which  interest is charged under various  floating  rate
arrangements,  primarily  under  its  four  year  term  loan   and
revolving  credit  agreement, mortgages, and  an  Australian  term
loan.   The  Company is exposed to market risk of future increases
in  interest  rates  on  these loans, with the  exception  of  the
Australian  term  loan, on which the Company has entered  into  an
interest rate swap agreement.

In  November 1998, the Company sold substantially all of its  U.S.
manufacturing inventory and assets to SCI Technology Inc. ("SCI"),
a  wholly owned subsidiary of SCI Systems, Inc.  As part  of  this
transaction,  SCI retained the option to sell to the  Company  any
inventory included in the initial sale which had not been utilized
in the manufacture and sale of finished goods within six months of
the  date of sale (the "unused inventory").  On June 30, 1999, SCI
exercised  this  option and sold to the Company  unused  inventory
having  a value of approximately $10.2 million in exchange  for  a
cash  payment  of  $2  million and a short-term  installment  note
payable  in  the principal amount of $8.2 million.  This  note  is
payable  in three monthly installments due August 2, September  1,
and  October 1, 1999 and bears interest at a rate of 9%.  At  June
30,  1999,  the Company has increased the value of its inventories
by  the  amount  repurchased from SCI, with the  majority  of  the
increase reflected in raw materials and work-in-process.  The $8.2
million  note payable is included in "Short-term debt and  current
maturities  of  long-term debt" in the June 30, 1999  consolidated
balance sheet.  The Company plans to fund its payments to SCI with
existing cash balances and does not anticipate that they will have
a  material  impact  on  its operating cash  flow  or  outstanding
borrowings under its revolving credit agreement.

After  generating positive operating cash flow for two consecutive
quarters, the Company did not generate sufficient cash to fund its
operations  for the second quarter of 1999.  As noted  previously,
this second quarter shortfall is primarily attributable to the $12
million  payment made in April to settle the Bentley  arbitration.
The  Company  is managing its cash very closely; however,  in  the
near  term,  it  must increase its sales volume and/or  align  its
operating  expenses more closely with the level of  revenue  being
generated if it is to fund its operations and build cash  reserves
without  reliance  on funds generated from asset  sales  and  from
external financing.



              INTERGRAPH CORPORATION AND SUBSIDIARIES


  Item 3:  Quantitative and Qualitative Disclosures About
           Market Risk

           The Company has experienced no material changes in
           market risk exposures that affect the quantitative and
           qualitative disclosures presented in the Company's
           Form 10-K filing for its year ending December 31, 1998.



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

  Item 1:  Legal Proceedings

           On June 17, 1998, Intel filed a motion before  the U.S.
           District Court, the Northern District of Alabama,
           Northeastern Division (the "Alabama Court") seeking a
           summary judgment holding that Intel is licensed to use
           the patents that the Company asserted against Intel in
           the Company's original complaint.  This "license
           defense"  was based on Intel's interpretation of the
           facts  surrounding the  acquisition  by the Company of
           the Advanced  Processor Division  of Fairchild
           Semiconductor Corporation  in  1987. (For  further
           background   information   regarding   the Company's
           complaints against Intel, see the Company's  Form 10-K
           annual report for the year ended December 31,  1998.)
           The Company filed a cross motion with the  Alabama
           Court September  15,  1998  requesting  summary
           adjudication in favor of the Company.  On June 4, 1999,
           the Alabama  Court granted  the Company's motion and
           ruled that Intel  has  no license  to use the Company's
           Clipper patents as Intel  had claimed  in  its  motion
           for summary judgment.   Intel  has requested  leave  of
           the  Alabama  Court  to  appeal  this ruling,  but  no
           further decision has been  entered.   The Company  is
           confident of its sole ownership of the Clipper patents.

           In a separate order on June 15, 1999, the Alabama Court
           has  extended  the discovery phase of the  lawsuit
           through October 11, 1999 and rescheduled the trial date
           to  June 12, 2000.

  Item 4:  Submission of Matters to a Vote of Security Holders

           Intergraph Corporation's Annual Meeting of Shareholders
           was held on May 13, 1999.  The results of  the  meeting
           follow.

           (1)  Seven directors were  elected  to  the  Board   of
                Directors  to  serve  for the ensuing  year  and
                until their  successors are duly elected and
                qualified.   All nominees  were serving as
                Directors of the Company at the time of their
                nomination for the current year.

                                                    Votes
                                       ------------------------------
                                           For       Against/Withheld
                                       ------------  ----------------
                Larry J. Laster         43,506,261       1,607,553
                Thomas J. Lee           43,506,227       1,607,587
                Sidney L. McDonald      43,506,100       1,607,714
                James W. Meadlock       43,442,086       1,671,728
                Keith H. Schonrock Jr.  43,504,557       1,609,257
                James F. Taylor Jr.     43,497,558       1,616,256
                Robert E. Thurber       43,502,401       1,611,413


           (2)  Ratification of the appointment of Ernst  &  Young
                LLP as the Company's independent auditors for  the
                current year was approved by a vote of 44,529,621
                for, 535,846 against, and 48,347 abstentions.

           (3)  Amendment One to the Intergraph Corporation  1997
                Stock  Option Plan was approved by a vote of
                42,840,199 for, 2,149,858 against, and 123,757
                abstentions.


  Item 6:  Exhibits and Reports on Form 8-K

      (a)  Exhibit 10(a), agreement between Intergraph Corporation
           and Green Mountain, Inc., dated April 1, 1999.  *(1)

           Exhibit  10(b),  Intergraph Corporation 1997  Stock
           Option Plan (3) and amendment dated January 11, 1999.
           * (4)

           Exhibit 10(c), Loan and Security Agreement, by and
           between Intergraph  Corporation and Foothill  Capital
           Corporation, dated  December 20, 1996 and amendments
           dated  January  14, 1997 (3), November 25, 1997 (2),
           October 30, 1998 (5), and April 29, 1999.

           Exhibit 27, Financial Data Schedule


           *Denotes  management  contract  or  compensatory  plan,
           contract,  or  arrangement  required  to  be  filed  as
           an exhibit to this Form 10-Q.


           (1) Incorporated by reference to exhibit filed with the
               Company's Quarterly Report on Form 10-Q for the
               quarter ended March 31, 1999, under the Securities
               Exchange Act of 1934, File No. 0-9722.

           (2) Incorporated by reference to exhibits filed with
               the Company's Annual Report on Form 10-K for the
               year ended December 31, 1997, under the Securities
               Exchange Act of 1934, File No. 0-9722.

           (3) Incorporated by reference to exhibits filed with
               the Company's Annual Report on Form 10-K for the
               year ended December 31, 1996, under the Securities
               Exchange Act of 1934, File No. 0-9722.

           (4) Incorporated by reference to exhibit filed with the
               Company's Registration Statement on Form S-8 dated
               May 24, 1999, under the Securities Exchange Act of
               1933, File No. 333-79137.

           (5) Incorporated by reference to exhibit filed  with
               the Company's Current Report on Form 8-K dated
               November  13, 1998,  under the Securities Exchange
               Act of  1934,  File No 0-9722.

      (b)  Reports on Form 8-K - on April 9,  1999,  the  Company
           filed  a  Current Report on Form 8-K (dated April 1,
           1999) which  reported the settlement of an arbitration
           proceeding with  Bentley  Systems, Incorporated.  This
           settlement  is further  described in Management's
           Discussion and  Analysis of  Financial Condition and
           Results of Operations and  Note 3  of  Notes to
           Consolidated Financial Statements contained in this
           Form 10-Q.



              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 W. Meadlock            By:  /s/ John W. Wilhoite
     -------------------------             ---------------------------
     James W. Meadlock                     John W. Wilhoite
     Chairman of the Board and             Executive Vice President
     Chief Executive Officer               and Chief Financial Officer
                                           (Principal Financial and
                                           Accounting Officer)

Date:  August 16, 1999                Date:  August 16, 1999