FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                       THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1999


                          Commission file number 1-6627


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

              PENNSYLVANIA                              25-0927646
              ------------                              ----------
        (State or other jurisdiction of              (I.R.S. Employer
        incorporation or organization)               Identification No.)

AIRPORT OFFICE PARK, BUILDING 3, 420 ROUSER ROAD, CORAOPOLIS, PA        15108
- -----------------------------------------------------------------       -----
(Address of principal executive offices)                              (Zip Code)

                                 (412) 269-6300
                                 --------------
                        (Registrant's telephone number,
                              including area code)


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
                    ---            ---

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock, as of the latest practicable date.



            As of June 30, 1999:
            --------------------
                                    
            Common Stock               6,858,891 shares
            Series B Common Stock      1,315,864 shares






                                                                       FORM 10-Q
                                                                          PART I
                                                                          PAGE 1


                          PART I. FINANCIAL INFORMATION

ITEM 1.   FINANCIAL STATEMENTS
          --------------------

The condensed  consolidated financial statements which follow have been prepared
by Michael Baker  Corporation  ("the Company"),  without audit,  pursuant to the
rules and  regulations  of the  Securities  and  Exchange  Commission.  Although
certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been  condensed  or omitted  pursuant  to such rules and  regulations,  the
Company  believes  that the  disclosures  are  adequate to make the  information
presented not misleading.  The statements  reflect all adjustments which are, in
the opinion of management,  necessary for a fair presentation of the results for
the periods presented. All such adjustments are of a normal and recurring nature
unless specified otherwise.  These condensed  consolidated  financial statements
should be read in conjunction with the consolidated financial statements and the
notes thereto included in the Company's latest annual report and Form 10-K.

This  Quarterly  Report  on  Form  10-Q,  and in  particular  the  "Management's
Discussion  and  Analysis of  Financial  Condition  and  Results of  Operations"
section  in  Part I,  contains  forward  looking  statements  concerning  future
operations  and  performance  of the Company.  Forward  looking  statements  are
subject to market, operating and economic risks and uncertainties that may cause
the Company's  actual results in future periods to be materially  different from
any future performance suggested herein. Factors that may cause such differences
include,  among  others:  increased  competition,  increased  costs,  changes in
general  market  conditions,  and changes in  anticipated  levels of  government
spending on infrastructure. Such forward looking statements are made pursuant to
the Safe Harbor  Provisions of the Private  Securities  Litigation Reform Act of
1995.





                                                                       FORM 10-Q
                                                                          PART I
                                                                          PAGE 2



MICHAEL BAKER CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)


                                                    FOR THE THREE MONTHS ENDED
                                                  ----------------------------
                                                  JUNE 30, 1999  June 30, 1998
- --------------------------------------------------------------------------------
                                        (In thousands, except per share amounts)
                                                          
Total contract revenues                            $ 134,066    $ 127,118

Cost of work performed                               118,181      111,376
- --------------------------------------------------------------------------------
          Gross profit                                15,885       15,742

Selling, general and administrative expenses          11,971       12,828
- --------------------------------------------------------------------------------
          Income from operations                       3,914        2,914

Other income/(expense):
   Interest income                                        26          147
   Interest expense                                     (215)          (7)
   Other, net                                           (188)          69
- --------------------------------------------------------------------------------
          Income before income taxes                   3,537        3,123

Provision for income taxes                             1,662        1,468
- --------------------------------------------------------------------------------
          NET INCOME                               $   1,875    $   1,655
================================================================================
          BASIC AND DILUTED NET INCOME PER SHARE   $    0.23    $    0.20
================================================================================
<FN>
The accompanying notes are an integral part of this financial statement.
</FN>






                                                                       FORM 10-Q
                                                                          PART I
                                                                          PAGE 3

MICHAEL BAKER CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)


                                                     FOR THE SIX MONTHS ENDED
                                                  ----------------------------
                                                  JUNE 30, 1999  June 30, 1998
- --------------------------------------------------------------------------------
                                        (In thousands, except per share amounts)
                                                          
Total contract revenues                            $ 249,185    $ 238,215

Cost of work performed                               219,840      210,229
- --------------------------------------------------------------------------------
          Gross profit                                29,345       27,986

Selling, general and administrative expenses          24,690       24,016
- --------------------------------------------------------------------------------
          Income from operations                       4,655        3,970

Other income/(expense):
   Interest income                                        85          326
   Interest expense                                     (334)         (17)
   Other, net                                            (89)         222
- --------------------------------------------------------------------------------
          Income before income taxes                   4,317        4,501

Provision for income taxes                             2,029        2,116
- --------------------------------------------------------------------------------
          NET INCOME                                 $ 2,288      $ 2,385
================================================================================
          BASIC AND DILUTED NET INCOME PER SHARE     $  0.28      $  0.29
================================================================================
<FN>
The accompanying notes are an integral part of this financial statement.
</FN>



                                                                       FORM 10-Q
                                                                          PART I
                                                                          PAGE 4

MICHAEL BAKER CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)

ASSETS                                            JUNE 30, 1999   Dec. 31,  1998
- --------------------------------------------------------------------------------
                                                           (In thousands)
                                                               
CURRENT ASSETS
   Cash                                                $  1,165      $  5,014
   Receivables                                           75,802        82,672
   Cost of contracts in progress and estimated
     earnings, less billings                             23,833        22,407
   Prepaid expenses and other                             5,958        10,192
- --------------------------------------------------------------------------------
      Total current assets                              106,758       120,285
- --------------------------------------------------------------------------------

PROPERTY, PLANT AND EQUIPMENT, NET                       17,462        17,458
- --------------------------------------------------------------------------------
OTHER ASSETS
   Goodwill and other intangible assets, net              6,965         7,507
   Other assets                                           6,695         6,611
- --------------------------------------------------------------------------------
      Total other assets                                 13,660        14,118
- --------------------------------------------------------------------------------
      TOTAL ASSETS                                     $137,880      $151,861
================================================================================

LIABILITIES AND SHAREHOLDERS' INVESTMENT
- --------------------------------------------------------------------------------

CURRENT LIABILITIES
   Accounts payable                                    $ 28,015      $ 43,356
   Accrued employee compensation                         10,380         9,141
   Accrued insurance                                      8,476         6,155
   Other accrued expenses                                17,868        20,210
   Excess of billings on contracts in progress
     over cost and estimated earnings                     6,388         9,568
- --------------------------------------------------------------------------------
      Total current liabilities                          71,127        88,430
- --------------------------------------------------------------------------------

OTHER LIABILITIES
   Long-term debt                                         3,478         3,138
   Other                                                  8,068         7,431
- --------------------------------------------------------------------------------
      Total liabilities                                  82,673        98,999
- --------------------------------------------------------------------------------

SHAREHOLDERS' INVESTMENT
   Common Stock, par value $1, authorized
     44,000,000 shares, issued 7,162,030
     and 7,150,179 shares at June 30, 1999
     and December 31, 1998, respectively                  7,162         7,150
   Series B Common Stock, par value $1, authorized
     6,000,000 shares, issued 1,315,864
     and 1,319,114 shares at June 30, 1999
     and December 31, 1998, respectively                  1,316         1,319
   Additional paid-in capital                            37,048        37,002
   Retained earnings                                     11,735         9,447
   Less 303,139 and 303,359 shares of Common Stock
     in treasury, at cost, at June 30, 1999 and
     December 31, 1998, respectively                     (2,054)       (2,056)
- --------------------------------------------------------------------------------
      TOTAL SHAREHOLDERS' INVESTMENT                     55,207        52,862
- --------------------------------------------------------------------------------
      TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT   $137,880      $151,861
================================================================================
<FN>
The accompanying notes are an integral part of this financial statement.
</FN>





                                                                       FORM 10-Q
                                                                          PART I
                                                                          PAGE 5

MICHAEL BAKER CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)

                                                      FOR THE SIX MONTHS ENDED
                                                    ----------------------------
                                                    JUNE 30, 1999  June 30, 1998
- --------------------------------------------------------------------------------
                                                             (In thousands)
                                                                 
CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                                $  2,288     $  2,385
Adjustments to reconcile net income to net cash
 provided by/(used in) operating activities:
  Depreciation and amortization                              3,227        2,300
  Changes in assets and liabilities:
      Decrease/(increase) in receivables and
        contracts in progress                                2,261       (3,691)
      Decrease in accounts payable and accrued expenses    (12,386)      (7,871)
      Decrease in other net assets                           3,552        2,361
- --------------------------------------------------------------------------------
      Total adjustments                                     (3,346)      (6,901)
- --------------------------------------------------------------------------------
      Net cash used in operating activities                 (1,058)      (4,516)
- --------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Additions to property, plant and equipment                (3,150)      (3,679)
- --------------------------------------------------------------------------------
      Net cash used in investing activities                 (3,150)      (3,679)
- --------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from long-term debt                                 553           --
  Repayments of long-term debt                                (250)          --
  Proceeds from exercise of stock options                       56           34
  Payments to acquire treasury stock                            --         (444)
- --------------------------------------------------------------------------------
      Net cash provided by/(used in) financing activities      359         (410)
- --------------------------------------------------------------------------------

Net decrease in cash                                        (3,849)      (8,605)
Cash at beginning of year                                    5,014       17,302
- --------------------------------------------------------------------------------

CASH AT END OF PERIOD                                     $  1,165     $  8,697
================================================================================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA
      Interest paid                                       $    157     $     36
      Income taxes paid                                   $    247     $    419
================================================================================
<FN>
The accompanying notes are an integral part of this financial statement.
</FN>




                                                                       FORM 10-Q
                                                                          PART I
                                                                          PAGE 6

MICHAEL BAKER CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE PERIODS ENDED JUNE 30, 1999
(UNAUDITED)


NOTE 1 - RESTRUCTURING CHARGES

In connection with the construction losses recorded during the fourth quarter of
1998,  the Company  determined  during the first quarter of 1999 that it will no
longer participate in low-bid,  high-risk construction projects for buildings or
transportation infrastructure.  Accordingly, the general construction activities
of the  Company's  Buildings  unit have  been  restructured,  and the  Company's
Transportation  Construction  (heavy and highway)  business is  currently  being
offered  for sale.  Existing  low-bid,  high-risk  construction  projects in the
Buildings  unit will be completed or sold,  while  normal  construction  bidding
activity will continue in the Transportation  unit during the period through the
sale.

During the first quarter of 1999,  the Company  recorded  restructuring  charges
totaling $0.8 million, which were included entirely within selling,  general and
administrative  expenses  in  the  accompanying  Condensed  Consolidated  Income
Statement.  Such  charges  reflect  severance  costs  associated  with  employee
terminations, writedowns related to fixed asset impairments, and lease costs for
certain office space permanently idled by the restructuring.

NOTE 2 - EARNINGS PER SHARE

Basic net income per share  computations  are based upon  weighted  averages  of
8,173,248 and 8,178,792  shares  outstanding  for the three-month  periods,  and
8,170,826 and 8,184,727 for the six-month periods, ended June 30, 1999 and 1998,
respectively.  Diluted net income per share computations are based upon weighted
averages of 8,229,316  and  8,322,090  shares  outstanding  for the  three-month
periods,  and 8,242,804 and 8,320,373 for the six-month periods,  ended June 30,
1999 and 1998,  respectively.  The additional  shares included in diluted shares
outstanding are entirely attributable to stock options.

NOTE 3 - BUSINESS SEGMENT INFORMATION

In 1998, the Company  adopted  Statement of Financial  Accounting  Standards No.
("SFAS")  131,   "Disclosures  about  Segments  of  an  Enterprise  and  Related
Information." SFAS 131 requires the following quarterly  disclosure of revenues,
profitability and assets for each of the Company's seven reportable segments (in
millions):



                                                                       FORM 10-Q
                                                                          PART I
                                                                          PAGE 7


                          FOR THE THREE MONTHS ENDED   FOR THE SIX MONTHS ENDED
                         --------------------------- ---------------------------
                         JUNE 30, 1999 June 30, 1998 JUNE 30, 1999 June 30, 1998
- --------------------------------------------------------------------------------
                                                            
Total contract revenues:
  Buildings unit              $ 12.7        $ 36.7        $ 35.0        $ 64.4
  Civil unit:
     Engineering                18.2          18.2          33.6          35.6
     BSSI                       13.6          15.3          26.2          30.1
  Energy unit                   19.9          15.3          39.2          30.0
  Environmental unit             6.4           5.5          13.2          11.4
  Transportation unit:
     Engineering                21.9          17.8          40.2          34.6
     Construction               41.0          18.3          61.4          32.1
- --------------------------------------------------------------------------------
      Subtotal - Segments      133.7         127.1         248.8         238.2
  Corporate/Insurance            0.4            --           0.4            --
- --------------------------------------------------------------------------------
      TOTAL                   $134.1        $127.1        $249.2        $238.2
================================================================================
                          FOR THE THREE MONTHS ENDED   FOR THE SIX MONTHS ENDED
                         --------------------------- ---------------------------
                         JUNE 30, 1999 June 30, 1998 JUNE 30, 1999 June 30, 1998
- --------------------------------------------------------------------------------
Income/(loss) before taxes:
  Buildings unit              $  0.3        $  0.2        $ (0.9)       $  0.1
  Civil unit:
     Engineering                 0.8           0.9           1.3           1.7
     BSSI                        0.4          (0.1)          0.4          (0.4)
  Energy unit                   (0.7)          1.1           0.6           1.9
  Environmental unit             0.5           0.3           0.7           0.1
  Transportation unit:
     Engineering                 1.3           0.5           1.7           0.9
     Construction                0.4           0.2          (0.1)          0.1
- --------------------------------------------------------------------------------
      Subtotal - Segments        3.0           3.1           3.7           4.4
  Corporate/Insurance            0.5            --           0.6           0.1
- --------------------------------------------------------------------------------
      TOTAL                   $  3.5        $  3.1        $  4.3        $  4.5
================================================================================
                                                     JUNE 30, 1999 Dec. 31, 1998
- --------------------------------------------------------------------------------
Segment assets:
  Buildings unit                                          $ 12.9        $ 30.5
  Civil unit:
     Engineering                                            18.8          18.7
     BSSI                                                   14.9          15.6
  Energy unit                                               30.2          27.9
  Environmental unit                                         4.4           5.1
  Transportation unit:
     Engineering                                            25.5          21.7
     Construction                                           21.2          20.6
- --------------------------------------------------------------------------------
      Subtotal - Segments                                  127.9         140.1
  Corporate/Insurance                                       10.0          11.8
- --------------------------------------------------------------------------------
       TOTAL                                              $137.9        $151.9
================================================================================



                                                                       FORM 10-Q
                                                                          PART I
                                                                          PAGE 8



The Company has determined that intersegment revenues are immaterial for further
disclosure in these financial statements.

NOTE 4 - LONG-TERM DEBT AND BORROWING ARRANGEMENTS

The Company has an unsecured  credit  agreement  (the  "Agreement")  with Mellon
Bank,  N.A. The Agreement  provides for a commitment of $25 million  through May
31, 2001. The commitment  includes the sum of the principal  amount of revolving
credit loans outstanding and the aggregate face value of outstanding  letters of
credit. As of June 30, 1999,  borrowings  totaling $0.6 million were outstanding
under  the  Agreement  (and  included  in  long-term  debt  in the  accompanying
Condensed  Consolidated Balance Sheet), along with outstanding letters of credit
totaling $1.5 million.

NOTE 5 - CONTINGENCIES

The Company has reviewed  the status of  contingencies  outstanding  at June 30,
1999.  Management  believes that there have been no  significant  changes to the
information  disclosed  in its  Annual  Report on Form  10-K for the year  ended
December 31, 1998.


ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          ---------------------------------------------------------------
          RESULTS OF OPERATIONS
          ---------------------

RESULTS OF OPERATIONS

TOTAL CONTRACT REVENUES

Total  contract  revenues  were $134.1  million for the second  quarter of 1999,
compared to $127.1 million for the second quarter of 1998.  Revenue increases in
the Company's  Transportation,  Energy and  Environmental  units were  partially
offset by decreases in the Buildings and Civil units.  The  Transportation  unit
continued  to  post  improvements  in  both  its  engineering  and  construction
divisions  as  a  direct  result  of  state  transportation   funding  increases
associated with the U.S.  government's  1998 TEA-21  legislation.  International
growth,  including  that from two  consolidated  joint  ventures  which  provide
operations and maintenance ("O&M") services in Venezuela and Thailand, continued
to fuel the Energy  Unit.  The  decrease  in the  Buildings  unit's  revenues is
directly  attributable to a subsidiary's  March 1999  termination  from its most
significant  construction  contract at the Universal Studios theme park, and the
Company's  subsequent  restructuring,  as discussed  in Note 1 to the  financial
statements as of and for the periods ended June 30, 1999 (included herein).

Total  contract  revenues were $249.2  million for the first six months of 1999,
compared to $238.2  million  for the same period in 1998.  For the first half of
1999, the Transportation,  Energy and Environmental units again recorded revenue
increases while the Buildings and Civil units registered decreases. The reasons





                                                                       FORM 10-Q
                                                                          PART I
                                                                          PAGE 9


for  the  Transportation  and  Energy  increases  in  revenues,  as  well as the
Buildings  decrease,  for the  first  six  months  of 1999 are the same as those
stated in the preceding  paragraph.  The Civil unit's revenue  decrease was more
significant  for the six-month  period,  and resulted  primarily  from its Baker
Support  Services,  Inc. ("BSSI") division having completed its most significant
O&M contract  during the fourth  quarter of 1998, and its  engineering  division
experiencing lower revenues from a project in Alaska that is nearing completion.

GROSS PROFIT

Gross profit increased to $15.9 million in the second quarter of 1999 from $15.7
million  in the  second  quarter  of 1998.  As a  percentage  of total  contract
revenues,  the second quarter's gross profit decreased slightly to 11.8% in 1999
from 12.4% in 1998. In the Civil unit, the BSSI division  posted both dollar and
percentage  improvements  in gross profit due to an overall change in the mix of
its projects  following the  aforementioned  completion of its most  significant
contract in 1998. The Transportation  unit's significant  revenue growth in both
of its  divisions  pushed  its gross  profit in dollars  higher  than its second
quarter  of 1998;  however,  its gross  profit  percentage  declined  due to its
construction   division  having   completed  a  project  on  which   significant
profitability  was recorded  during the second  quarter of 1998.  The  Buildings
unit's  improved  profit  percentage  resulted  from  profitable  growth  in its
engineering division and improved margins on the remaining construction projects
that are being completed,  despite the much lower construction-related  revenues
in 1999.  The Energy unit  registered  second  quarter  decreases  in both gross
profit  dollars  and  percentage  due to  charges  resulting  from  nonrecurring
project-related difficulties and the writeoff of unrecoverable assets.

The Company's  gross profit  increased to $29.3 million for the first six months
of 1999 from $28.0 million for the same period in 1998; however, as a percentage
of total contract revenues, gross profit remained constant at 11.8% in the first
half of both years. The most significant overall improvements were registered in
the Civil and Environmental  units.  Despite its lower 1999 revenues,  the Civil
unit  benefitted at the gross profit line from the fact that its  aforementioned
two major  contracts,  which are  completed  or nearly so, had lower than normal
margins  associated  with them during the first half of 1998. The  Environmental
unit's improvement  resulted from the combination of its profitable 1999 revenue
growth and a project loss recorded  during the first quarter of 1998.  The gross
profit variance explanations stated for the Transportation, Buildings and Energy
units  in the  preceding  paragraph  are  also  applicable  to the 1999 and 1998
six-month periods.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative ("SG&A") expenses decreased to $12.0 million
in the second  quarter of 1999 from $12.8 million in the second quarter of 1998.
Expressed as a percentage of total  contract  revenues,  SG&A expenses were 8.9%
for the second  quarter of 1999 and 10.1% for the  comparable  1998 period.  The
second  quarter  of  1999  benefitted  from  the  resolution  of an  outstanding






                                                                       FORM 10-Q
                                                                          PART I
                                                                         PAGE 10


corporate  employee  benefits issue that had been accrued for in a prior period.
In addition,  lower  employee and office  lease costs were  incurred  during the
second  quarter  of  1999  as a  result  of the  Company's  first  quarter  1999
restructuring.

SG&A  expenses  increased to $24.7 million for the first six months of 1999 from
$24.0  million for the same period in 1998.  Expressed as a percentage  of total
contract revenues, G&A expenses decreased slightly to 9.9% for the first half of
1999 from 10.1% for the same period in 1998.  In addition to the second  quarter
1999  variances  discussed  above,  the Buildings  unit  recorded  restructuring
charges totaling $0.8 million as SG&A expenses during the first quarter of 1999.

OTHER INCOME

Interest  income  was lower and  interest  expense  was higher for the three and
six-month  periods ended June 30, 1999,  due  partially to the Company's  higher
average  1999  borrowings  under its credit  agreement  with Mellon  Bank,  N.A.
("Mellon").  During the respective  1998 periods,  the Company had no borrowings
under  this  agreement,  and was in a net  invested  position  with  Mellon.  In
addition,  interest  expense was higher in 1999 as the result of debt associated
with the purchase of certain  heavy and highway  construction  equipment and the
acquisition of GeoResearch, Inc. during the second half of 1998.

INCOME TAXES

The Company had  provisions  for income taxes of 47% for the three and six-month
periods ended June 30, 1999 and 1998.

CONTRACT BACKLOG

The funded backlog of work to be performed was $416 million as of June 30, 1999,
compared to funded backlog of $448 million at December 31, 1998.  Funded backlog
represents that portion of work supported by signed  contracts and for which the
procuring  agency has  appropriated and allocated the funds to pay for the work.
Total backlog,  which incrementally  includes that portion of contract value for
which options are still to be exercised  (unfunded  backlog),  increased to $753
million at June 30, 1999, as compared to $735 million as of December 31, 1998.

With reference to the Company's  restructuring,  funded  backlog  related to the
businesses that will be continued by the Company was $291 million as of June 30,
1999, as compared  with $285 million as of December 31, 1998.  Total backlog for
these  businesses  was $629  million  and $572  million as of June 30,  1999 and
December 31, 1998, respectively.

During the second  quarter of 1999,  the  Company  added to its funded and total
backlog in the  Environmental and Buildings units,  while the Civil,  Energy and
Transportation  units  experienced  reductions in funded and total backlog.  The
most  significant  new contracts  added during the second  quarter  included two






                                                                       FORM 10-Q
                                                                          PART I
                                                                         PAGE 11


design projects totaling $9.0 million in the Transportation Engineering division
and two heavy and highway  construction  projects  totaling  $6.5 million in the
Transportation Construction division.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in operating  activities was $1.1 million for the first six months
of 1999,  compared  to $4.5  million  for the  same  period  in  1998.  The 1999
improvement is primarily  attributable to improved  results before  depreciation
and  amortization  expense,  and a lower 1999 net investment in contracts (i.e.,
receivables, under/overbillings, payables) of $10.1 million versus $11.6 million
in  1998.  Of this  1999  amount,  approximately  $9.0  million  related  to the
terminated  construction  project at the Universal  Studios theme park and other
construction contracts which are nearing completion in the Buildings unit.

Net cash used in investing  activities was $3.2 million for the first six months
of 1999 and $3.7  million  for the same  period in 1998.  These  amounts  solely
comprise  capital  expenditures for both periods.  Fewer personal  computers and
less other computer  equipment were purchased during the first half of 1999 than
in the comparable period of 1998.

Net cash provided by financing activities totaled $0.4 million for the first six
months of 1999, compared with cash used in financing  activities of $0.4 million
for the same  period in 1998.  During the first six months of 1999,  the Company
received net proceeds of $0.6 million from borrowings under its credit agreement
with Mellon. In addition,  the  Transportation  unit paid $0.3 million to reduce
its  long-term  debt that  resulted  from 1998  purchases  of heavy and  highway
construction equipment. Pursuant to a stock repurchase program announced in late
1996,  the Company paid $0.4 million to acquire  approximately  50,000  treasury
shares during the first half of 1998.

Working  capital  increased to $35.6 million at June 30, 1999 from $31.9 million
at December  31,  1998.  The  current  ratio was 1.50:1 at the end of the second
quarter of 1999,  compared to 1.36:1 at year-end 1998.  The working  capital and
current ratio improvements were primarily attributable to significant reductions
in the Buildings  unit's trade  receivables  and payables that resulted from the
lower revenue volumes in its restructured construction operations.

In 1998, the Company  extended the term of its unsecured  credit  agreement with
Mellon Bank, N.A. through May 31, 2001. This agreement provides for a commitment
of $25 million,  which covers  borrowings and letters of credit.  As of June 30,
1999,  borrowings  totaling $0.6 million were  outstanding  under the agreement,
along with  outstanding  letters of credit  totaling  $1.5  million.  Management
believes that the Company's borrowing capacity will be adequate to meet its cash
and letter of credit requirements for at least the next year.





                                                                       FORM 10-Q
                                                                          PART I
                                                                         PAGE 12


The  Company is  required  to  provide  bid and  performance  bonding on certain
construction  contracts,  and has a $500 million bonding line available  through
Travelers  Casualty & Surety  Company of America.  Management  believes that its
bonding line will be  sufficient  to meet its bid and  performance  needs for at
least the next year.

Short and long-term  liquidity is dependent upon  appropriations of public funds
for infrastructure and other government-funded projects, capital spending levels
in the private sector,  and the demand for the Company's services in the oil and
gas  markets.  Additional  external  factors such as price  fluctuations  in the
energy  industry could affect the Company.  The current  federal  transportation
legislation  (TEA-21)  will  provide  a  significant  increase  in  funding  for
transportation  infrastructure projects during the remainder of 1999 and beyond.
At this time,  management  believes that its funds generated from operations and
its  borrowing  capacity  will be  sufficient  to meet its operating and capital
expenditure requirements for at least the next year.

YEAR 2000 COMPLIANCE

The Company has completed an assessment of its information  systems  relative to
the arrival of the 21st century.  For internal  systems,  the Company  generally
utilizes  modern  technologies  supplied and  supported by leading  hardware and
software providers suited to Baker's areas of business.  Year 2000 compliance is
primarily  being  achieved  through the normal and  recurring  process of system
upgrades,  the software  costs of which are covered  under  related  maintenance
agreements.

Vendors have asserted that the financial and project  management systems for the
Company's engineering and construction businesses,  its BSSI subsidiary, and one
of two such systems in the Energy unit are Year 2000 compliant. The other Energy
unit system is currently  being assessed and scheduled to be compliant  early in
the  fourth  quarter  of 1999.  Over 90% of the  Company  is  served  by a human
resources  system  which  the  vendor  has  stated  to be Year  2000  compliant.
Validation  testing of the Company's  financial,  project  management  and human
resources systems is expected to be completed during the third quarter of 1999.

The Company's  interrelated systems (e.g., e-mail, file sharing) are linked by a
network of servers.  Upgrades  to  compliant  versions  are already in place for
approximately 95% of the network.  The remaining two servers are scheduled to be
upgraded to compliant  versions or merged with existing compliant servers during
the third  quarter of 1999.  The Company is in the process of  evaluating  other
less  critical  operational  support  systems  being used in all business  units
(e.g., mapping, CADD, cost estimating, databases,  spreadsheets, and specialized
and customized  software) to identify any remaining  issues for resolution.  Any
related issues are scheduled for resolution early in the fourth quarter of 1999.
Normal end-user computing needs were addressed with BIOS testing of all personal
computers and a review of the operating systems and software  packages.  Patches
and upgrade  needs have been  identified  and are being applied with a scheduled
completion date by the end of 1999.






                                                                       FORM 10-Q
                                                                          PART I
                                                                         PAGE 13


The Company is a service-based organization and, as such, has little reliance on
embedded technology (e.g., microcontrollers) for its key business processes. The
relevance of embedded  technology is limited to such items as  elevators,  HVAC,
security,  etc.,  which  are  components  of the  Company's  leased  facilities.
Embedded technology is also integral to some client facilities which the Company
operates and maintains  under customer  contracts.  Responsibility  for the Year
2000 compliance of such facilities rests with the landlords or the clients.

To assess the Year 2000  compliance of significant  third  parties,  the Company
undertook a survey process to gather and evaluate  information  from significant
business  customers,  vendors  and  subcontractors.  Mailing  of the  survey was
completed  during the first  quarter of 1999.  The  majority of  responses  were
received by the end of the second  quarter of 1999. The Company will continue to
evaluate  the  readiness  of its key  suppliers  and  customers  with  follow-up
requests to  non-respondents  and respondents  that are not yet compliant;  such
requests will continue through the end of 1999.

Management  currently  believes that its "most reasonably likely worst case Year
2000  scenario"  poses the  potential  for payment  delays from some  customers,
including  agencies  of the  U.S.  federal  government,  due to  their  lack  of
readiness for the new century.  Management believes that the Company's borrowing
capacity  will be adequate to cover any payment  delays that could  result,  and
that internal  documentation will sufficiently  support receivable balances owed
to the Company at December 31, 1999.

Based on the customer survey results, the Company will also enhance its existing
disaster  recovery plans to include  assessments of potential Year 2000 impacts.
These  contingency  plans will address both internal  factors  related to staff,
computer  systems  and  facilities,  as  well as  external  factors  related  to
suppliers,  customers  and service  providers.  The Company  expects to have all
necessary contingency plans in place by the end of 1999.

Based upon information currently available, management does not believe that the
estimated  incremental  costs  associated with Year 2000 compliance have been or
will  be  material  to the  Company's  consolidated  results  of  operations  or
financial position.


ITEM 3.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
          ----------------------------------------------------------

Based upon the nature and amount of the  Company's  current and  long-term  debt
balances at June 30, 1999, Baker has no material exposure to interest rate risk.
Less than 1% of the Company's total assets and total contract revenues as of and
for the periods ended June 30, 1999 were  denominated  in currencies  other than
the U.S. Dollar;  accordingly,  the Company has no material  exposure to foreign
currency  exchange  risk.  These  materiality   assessments  are  based  on  the
assumption that either the interest rates or the foreign currency exchange rates
could change unfavorably by 10%. Based on the nature of the Company's  business,
it has no direct  exposure to  commodity  price  risk.  In  accordance  with the
foregoing,  the Company has no interest  rate swap or exchange  agreements,  nor
does it have any foreign currency exchange contracts.





                                                                       FORM 10-Q
                                                                         PART II
                                                                         PAGE 14


                           PART II. OTHER INFORMATION

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
          ---------------------------------------------------

          (a) The Company's annual meeting of shareholders  was held on July 1,
              1999.

          (b) Each of management's nominees to the board of directors, as listed
              in the  Company's  proxy  statement,  was  elected.  There  was no
              solicitation in opposition to management's nominees.

          (c) The only matter  voted upon at the meeting was the election of the
              Company's  directors to one-year  terms or until their  respective
              successors  have been  elected.  The votes  cast by holders of the
              Company's  Common Stock and Series B Common Stock in approving the
              following directors were:

              NAME OF DIRECTOR           VOTES FOR        VOTES WITHHELD
              ----------------           ---------        --------------

              Robert N. Bontempo         17,605,043          2,107,763
              Charles I. Homan           16,712,964          2,699,842
              Thomas D. Larson           17,470,264          1,942,542
              Richard L. Shaw            17,048,992          2,363,814
              Konrad M. Weis             17,187,366          2,225,440
              J. Robert White            17,029,813          2,382,993

              The  votes  cast by  holders  of the  Company's  Common  Stock  in
              approving the following directors were:

              NAME OF DIRECTOR           VOTES FOR        VOTES WITHHELD
              ----------------           ---------        --------------

              William J. Copeland         6,231,115            465,121
              Roy V. Gavert, Jr.          6,236,483            459,753
              John E. Murray              6,256,911            439,325


ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
          --------------------------------

          (b) Reports on Form 8-K

              During the quarter  ended June 30,  1999,  the  Company  filed no
              reports on Form 8-K.






                                                                       FORM 10-Q
                                                                         PART II
                                                                         PAGE 15


                                   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.


                                          MICHAEL BAKER CORPORATION


Dated: August 13, 1999               By:  /s/ J. ROBERT WHITE
                                          --------------------------------------
                                          J. Robert White
                                          Executive Vice President, Chief
                                            Financial Officer and Treasurer