1 m ichael b aker c orporation the oil service conference february 20, 2003 engineering & energy

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MICHAEL BAKER CORPORATION

The Oil Service ConferenceFebruary 20, 2003

Engineering & Energy

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Engineering & EnergySafe HarborSafe Harbor

This presentation will contain information related to events which may occur in the future. These

forward-looking statements may include future business trends, revenue and earnings forecasts,

and acquisition and corporate finance activity. These statements are subject to market, regulatory, operating and other risks and uncertainties and, as

a result, actual results may vary. Such forward-looking statements are made pursuant to the safe

harbor provisions of the Private Securities Litigation Reform Act of 1995.

This presentation will contain information related to events which may occur in the future. These

forward-looking statements may include future business trends, revenue and earnings forecasts,

and acquisition and corporate finance activity. These statements are subject to market, regulatory, operating and other risks and uncertainties and, as

a result, actual results may vary. Such forward-looking statements are made pursuant to the safe

harbor provisions of the Private Securities Litigation Reform Act of 1995.

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Engineering & EnergySummary / HighlightsSummary / Highlights

Focused on Two Segments Energy and Engineering

Leader in Professional Services Oil & Gas Production O&M

Transportation and Civil Infrastructure Engineering

Energy Segment Refocused Following

Management Transition

Debt-free, Leverageable Balance Sheet

Added to Russell 2000®

Currently Valued at 3x EBITDA

Focused on Two Segments Energy and Engineering

Leader in Professional Services Oil & Gas Production O&M

Transportation and Civil Infrastructure Engineering

Energy Segment Refocused Following

Management Transition

Debt-free, Leverageable Balance Sheet

Added to Russell 2000®

Currently Valued at 3x EBITDA

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Engineering & Energy

Performance Record of Core BusinessesPerformance Record of Core Businesses

$150 $162 $165 $179$203

$228 $244

$39$43 $55

$69

$80

$121

$158

$93$127$115 $134

$43$42

$72 $45

$402

$199

$136$157

$349

$205$189

$283

$210$248

$179

$0

$100

$200

$300

$400

$500

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Dollars in Millions

Engineering Energy

Co

nti

nu

ing

Bu

sin

es

s R

ev

en

ue

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Engineering & EnergyGlobal ReachGlobal Reach

Bangkok, ThailandBangkok, Thailand

Abu Dhabi, UAEAbu Dhabi, UAE

London, EnglandLondon, England

Caracas, VenezuelaCaracas, Venezuela

Mexico City, MexicoMexico City, Mexico

Lagos, NigeriaLagos, Nigeria

Pittsburgh, Pa. (HQ)Pittsburgh, Pa. (HQ)

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Engineering & Energy

Key Customer RelationshipsKey Customer Relationships

Engineering Engineering Energy Energy

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Engineering & Energy

Core Energy Service OfferingsCore Energy Service Offerings

Oil & Gas Operations & Maintenance Operations Engineering Competency-Based Training Supply Chain Management Total Asset Management

Oil & Gas Operations & Maintenance Operations Engineering Competency-Based Training Supply Chain Management Total Asset Management

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Engineering & EnergyMarkets and ServicesMarkets and Services

HoustonHouston

LafayetteLafayette

LondonLondon

LagosLagos

CaracasCaracas

BangkokBangkok

AnchorageAnchorage

Supply Chain ManagementSupply Chain Management

O&M ServicesO&M Services

ManpowerManpower

TrainingTraining

RecruitingRecruiting

Major and Large Independent Oil & Gas Producers

Major and Large Independent Oil & Gas Producers

LOC

ATIO

N

LOC

ATIO

N

SE

RV

ICE

S

SE

RV

ICE

SCUSTOMERSCUSTOMERS Abu DhabiAbu DhabiOperations EngineeringOperations Engineering

Total Asset ManagementTotal Asset Management

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Engineering & Energy

Energy Differentiation of ServicesEnergy Differentiation of Services

Integrated Services and Solutions for Global O&G Upstream Production Operations

OPCOSM and Total Asset Management (TAM)

Competency-Based Training and Nationalization Programs

Integrated Services and Solutions for Global O&G Upstream Production Operations

OPCOSM and Total Asset Management (TAM)

Competency-Based Training and Nationalization Programs

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Engineering & EnergyEnergy Growth DriversEnergy Growth Drivers

ClientBaker Fixed Fee Income Annual Performance Bonus Shared Cost Savings

Reduced Operating Costs Increased Revenues Better Efficiencies

OPCOSM

Value CreationShared Savings

Leveraged Economies of Scale

Flexibility Reliability Innovation Asset Utilization Information Regulatory Compliance Safety

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Engineering & Energy

Our OPCO/TAM Potential MarketOur OPCO/TAM Potential Market

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Engineering & EnergyOur OPCO/TAM-Served MarketOur OPCO/TAM-Served Market

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Engineering & EnergyTarget Business ModelTarget Business Model

72.0% 70.0%

40.0%

28.0%

60.0%

30.0%

0.0%

25.0%

50.0%

75.0%

100.0%

2000 2001 Targets

% o

f E

ne

rgy

To

tal C

on

tra

ct

Re

ve

nu

es

OPCO All Other Services (Dom. & Int'l.)

OPCO/TAM@ 10-14%Margins

All Others@ 5-8%Margins

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Engineering & EnergyDeepwater OpportunitiesDeepwater Opportunities

Largest Supplier of Manpower to Deepwater GOM

Ops Engineering Support to New Facilities Worldwide

Largest Supplier of Manpower to Deepwater GOM

Ops Engineering Support to New Facilities Worldwide

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Engineering & Energy

The Energy Value StepsThe Energy Value Steps

Ops. Eng.

Training

Contract Labor

Supply Chain Management

OPCO / TAMV

AL

UE

TIME

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Engineering & Energy

Core Engineering Service OfferingsCore Engineering Service Offerings

Transportation Engineering Services Highways Bridges (Structures) Program Management Asset Management

Civil InfrastructureServices DoD / Federal Markets Water/Waste Water Cold Region Pipelines Asset Management

Transportation Engineering Services Highways Bridges (Structures) Program Management Asset Management

Civil InfrastructureServices DoD / Federal Markets Water/Waste Water Cold Region Pipelines Asset Management

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Engineering & EnergyFederal Budget ImpactFederal Budget Impact

1999 2000 2001 2002 2003 (E) 2004 (E)

? ?

Transportation Funding (Highways, Transit, Aviation)

Funding Redirects (Homeland Security, Emergency Response, FEMA, EPA, INS, etc.)

TEA-21 Reauthorization

• Baker Strengths: Highways, Bridges, Transit, Aviation

• Baker Strengths: CCMP, DoD, FEMA, Pipelines (OPS), Aviation (TSA)

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Engineering & EnergyEngineering HighlightsEngineering Highlights

New Work Added $290mm in 2001

$258mm in 2002

Have $118mm in Open-End Contracts with

Department of Defense/Federal Programs

Won $10.4mm GIS Contract for NYC DEP

Successful Entry into Texas Market

New Work Added $290mm in 2001

$258mm in 2002

Have $118mm in Open-End Contracts with

Department of Defense/Federal Programs

Won $10.4mm GIS Contract for NYC DEP

Successful Entry into Texas Market

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Engineering & Energy

Total RevenuesTotal Revenues

$390.7$403.2

$506.0

$401.8

$348.7

$281.9

$0

$100

$200

$300

$400

$500

$600

1999 2000 2001 2002 Est.

Do

lla

rs i

n M

illi

on

s

Total Reported Revenues Engineering Energy

$400-$410m

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Engineering & Energy

Operating Performance(in Thousands of $)

Operating Performance(in Thousands of $)

Adjusted for $1 Million Non-Recurring ChargeAdjusted for $1 Million Non-Recurring Charge

1999 2000 2001TOTAL CONTRACT REVENUES

Total Reported $506,012 $390,710 $403,222Less Non-Core 223,236 41,625 1,372

ENERGY 80,158 120,708 158,236ENGINEERING 202,618 228,377 243,614

Total Core 282,776 349,085 401,850

TOTAL OPERATING INCOME (Pre-Corp. O/H and I/C Ins. Premiums)Total Reported (511) 17,543 31,436% -.1% 4.5% 7.8%

ENERGY 4,252 9,759 12,842% 6.6% 8.1% 8.1%ENGINEERING 12,544 16,007 18,582% 6.2% 7.0% 7.6%

Total Core $17,796 $25,766 $31,424% 6.4% 7.4% 7.8%

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Engineering & Energy

Cash Flow(in millions of $)

Cash Flow(in millions of $)

1999 2000 2001Net Income $(8.2) $5.4 $11.2

Depreciation & Amortization 7.4 7.1 5.2Other 1.9 (0.1) 3.2

Cash from Operations 1.1 12.4 19.6

Capital Expenditures (5.3) (2.9) (4.1)Acquisition/Investments (4.9) (9.0) 9.0Funding of Litigation Escrow - - (12.7)Share Repurchase - - (0.4)Proceeds from Sale of Assets/Stock Options - 15.0 0.3NET Borrowings (Repayments) 7.8 (10.1) (2.3)

NET Increase (Decrease) in Cash $(1.3) $5.4 $9.4

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Engineering & Energy

Balance Sheet(in millions of $)

Balance Sheet(in millions of $)

1999 2000 2001ASSETSCash $3.7 $9.1 $18.5Short-Term Investment - 9.0 -A/R 77.4 67.7 67.6Cost in Excess of Billing 26.6 20.5 25.3

PPE 17.1 10.1 10.3Intangibles 14.6 10.8 9.8Other 15.6 10.2 20.1

$155.0 $137.4 $151.6LIABILITIESCurrent Portion LTD 3.5 2.2 -Trade A/P 28.9 25.7 21.9Accrued Other 62.9 59.1 68.2

Long-Term Debt 14.9 0.1 -

Owners’ Equity 44.8 50.3 61.5$155.0 $137.4 $151.6

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Engineering & EnergyEPS GrowthEPS Growth

1999 2000 2001 2002 Est.Reported

EPS $(1.00) $.65 $1.33 $1.11 - $1.15

Pro Forma EPSCore Operating Income 17,796 25,766 31,424Less Corporate Overhead (7,664) (7,715) (11,058)Operating Income 10,132 18,051 20,366

Provisions for Income Tax (47% for 1999, 51% for 2001 and 45.5% for 2001) 4,764 (9,206) (9,267)

5,370 8,845 11,099

Pro Forma EPS $0.66 $1.07 $1.32 $1.11 - $1.15

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Engineering & Energy

Stock Performance (24 mos.)Stock Performance (24 mos.)

$8.30

$12.26

$15.00$15.20

$13.60$13.38 $14.25

$14.00

$12.70

$14.00$13.85

$11.55$10.00

$8.93

$14.90

$15.48

$15.00$14.25

$13.75

$10.30

$10.00 $9.78

$10.95

$8.60$8.45

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

$16.00

Clo

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Engineering & EnergyOwnershipOwnership

Top Holders Shares

Baker ESOP 3,247,039

Dimensional Fund Advisors 458,814

Dalton, Greiner 451,500

Wellington Management 406,000

CL King & Associates 309,900

Smith (Donald) & Co. 308,100

Corbyn Investment Management 288,587

Barclay Global Investors 285,239

Munder Capital Management 200,575

Tontine Management L.L.C. 127,500

Emerald Advisers 122,800

Brandywine Asset Management 101,500

Top Holders Shares

Baker ESOP 3,247,039

Dimensional Fund Advisors 458,814

Dalton, Greiner 451,500

Wellington Management 406,000

CL King & Associates 309,900

Smith (Donald) & Co. 308,100

Corbyn Investment Management 288,587

Barclay Global Investors 285,239

Munder Capital Management 200,575

Tontine Management L.L.C. 127,500

Emerald Advisers 122,800

Brandywine Asset Management 101,500

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Engineering & EnergyFinancial HighlightsFinancial Highlights

Eliminated Series B Super Voting Shares

Secured $40 Million Credit Facility

Added 8 New Institutional Holders

Added to Russell 2000®

Reactivated Stock Repurchase Program

Eliminated Series B Super Voting Shares

Secured $40 Million Credit Facility

Added 8 New Institutional Holders

Added to Russell 2000®

Reactivated Stock Repurchase Program

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Engineering & EnergyFour-Point StrategyFour-Point Strategy

Maximize the growth potential of the Energy business

Optimize the overall performance of the Engineering business

Innovate by investing to enhance service delivery methods

Leverage the relationships and skills of the entire company

Maximize the growth potential of the Energy business

Optimize the overall performance of the Engineering business

Innovate by investing to enhance service delivery methods

Leverage the relationships and skills of the entire company

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Engineering & EnergyConclusionConclusion Energy Segment Refocused Following

Management Transition

Rapidly Changing Energy Market Favoring Increased Outsourcing

Transportation Infrastructure and DoD/Federal Markets Providing Opportunity

Debt-free, Leverageable Balance Sheet

Currently Valued at 3x EBITDA

Energy Segment Refocused Following Management Transition

Rapidly Changing Energy Market Favoring Increased Outsourcing

Transportation Infrastructure and DoD/Federal Markets Providing Opportunity

Debt-free, Leverageable Balance Sheet

Currently Valued at 3x EBITDA

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MICHAEL BAKER CORPORATION

The Oil Service ConferenceFebruary 20, 2003

Engineering & Energy