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For the quarter, Intergraph reported operating income of $1.9 million and net income of $4.4 million on revenues of $123.1 million. Net income per share was $.08 (diluted), including $.03 per share earned from the sale of assets. Revenues were slightly below plan, but income from operations was above plan due to higher margins and lower operating expenses.

On the ongoing litigation:
Patent infringement suit against Intel in Texas
The Texas PIC patent case was initiated last July in the Federal Court of the Eastern District of Texas. The Texas case is simpler than the Alabama case because it involves only patent
infringement. In the Texas case, Intergraph alleges that Intel's new IA64 products infringe two Intergraph patents that relate to parallel instruction computing (PIC). The Texas case was not settled and will proceed to trial on July 2, 2002. The parties did, however, agree to set a value for the Texas case. Under the agreement, Intel will pay $150 million immediately upon a finding of infringement. This $150 million is non-refundable regardless of any outcome on appeal. Intel also agreed to pay an additional $100 million if they lose on appeal. Intel is not obligated to pay the additional $100 million if they win on appeal or if they are able to prove and implement a workaround to the infringement. Intel will pay nothing if they are found not to have infringed Intergraph's PIC patents.

Also they have founded a separate IP (intellectual property) business. Plan to license the Clipper patents to other businesses now that Intel has "legitimized" the patents by the $ 300M settlement!

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