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 September 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 September 30, 1999:
            -------------------------
                                  
            Common Stock             6,867,085 shares
            Series B Common Stock    1,314,255 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,  changes in anticipated levels of government spending
on  infrastructure,  unanticipated  impacts  resulting from Year 2000 compliance
issues, and changes in loan relationships or sources of financing.  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
                                               --------------------------
                                            SEPT. 30, 1999    Sept. 30, 1998
- --------------------------------------------------------------------------------
                                      (In thousands, except per share amounts)
                                                          
Total contract revenues                           $129,790          $135,803

Cost of work performed                             123,632           120,039
- --------------------------------------------------------------------------------
      Gross profit                                   6,158            15,764

Selling, general and administrative expenses        11,592            11,898
- --------------------------------------------------------------------------------
      Income/(loss) from operations                 (5,434)            3,866

Other income/(expense):
 Interest income                                        35                74
 Interest expense                                     (197)              (14)
 Other, net                                            158                21
- --------------------------------------------------------------------------------
      Income/(loss) before income taxes             (5,438)            3,947

Provision for/(benefit from) income taxes           (1,421)            1,854
- --------------------------------------------------------------------------------
      NET INCOME/(LOSS)                           $ (4,017)         $  2,093
================================================================================


      BASIC NET INCOME/(LOSS) PER SHARE           $  (0.49)         $   0.26
      DILUTED NET INCOME/(LOSS) PER SHARE         $  (0.49)         $   0.25
================================================================================
<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 nine months ended
                                               -------------------------
                                            SEPT. 30, 1999    Sept. 30, 1998
- --------------------------------------------------------------------------------
                                      (In thousands, except per share amounts)
                                                          
Total contract revenues                           $378,974          $374,018

Cost of work performed                             343,472           330,268
- --------------------------------------------------------------------------------
      Gross profit                                  35,502            43,750

Selling, general and administrative expenses        36,283            35,914
- --------------------------------------------------------------------------------
      Income/(loss) from operations                   (781)            7,836

Other income/(expense):
 Interest income                                       119               400
 Interest expense                                     (531)              (31)
 Other, net                                             72               243
- --------------------------------------------------------------------------------
      Income/(loss) before income taxes             (1,121)            8,448

Provision for income taxes                             608             3,970
- --------------------------------------------------------------------------------
      NET INCOME/(LOSS)                           $ (1,729)         $  4,478
================================================================================


      BASIC NET INCOME/(LOSS) PER SHARE           $  (0.21)         $   0.55
      DILUTED NET INCOME/(LOSS) PER SHARE         $  (0.21)         $   0.54
================================================================================
<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                                          SEPT. 30, 1999   Dec. 31, 1998
- --------------------------------------------------------------------------------
                                                       (In thousands)
                                                              
CURRENT ASSETS
Cash                                                 $  2,887        $  5,014
Receivables                                            76,101          82,672
Cost of contracts in progress and estimated
 earnings, less billings                               22,042          22,407
Prepaid expenses and other                              8,767          10,192
- --------------------------------------------------------------------------------
      Total current assets                            109,797         120,285
- --------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT, NET                     18,394          17,458
- --------------------------------------------------------------------------------
OTHER ASSETS
Goodwill and other intangible assets, net              14,918           7,507
Other assets                                            7,070           6,611
- --------------------------------------------------------------------------------
      Total other assets                               21,988          14,118
- --------------------------------------------------------------------------------
      TOTAL ASSETS                                   $150,179        $151,861
================================================================================

LIABILITIES AND SHAREHOLDERS' INVESTMENT
- --------------------------------------------------------------------------------
CURRENT LIABILITIES
Current portion of long-term debt                    $ 11,233        $    823
Accounts payable                                       26,606          43,356
Accrued employee compensation                          10,120           9,141
Accrued insurance                                       8,577           6,155
Other accrued expenses                                 22,967          19,387
Excess of billings on contracts in
 progress over cost and est. earnings                   6,751           9,568
- --------------------------------------------------------------------------------
      Total current liabilities                        86,254          88,430
- --------------------------------------------------------------------------------
OTHER LIABILITIES
Long-term debt                                          4,903           3,138
Other                                                   7,789           7,431
- --------------------------------------------------------------------------------
      Total liabilities                                98,946          98,999
- --------------------------------------------------------------------------------
SHAREHOLDERS' INVESTMENT
Common Stock, par value $1, authorized
 44,000,000 shares, issued 7,170,224 and
 7,150,179 shares at Sept. 30, 1999
 and December 31, 1998, respectively                    7,170           7,150
Series B Common Stock, par value $1,
 authorized 6,000,000 shares, issued 1,314,255
 and 1,319,114 shares at Sept. 30, 1999
 and December 31, 1998, respectively                    1,314           1,319
Additional paid-in capital                             37,085          37,002
Retained earnings                                       7,718           9,447
Less 303,139 and 303,359 shares of Common
 Stock in treasury, at cost, at Sept. 30,
 1999 and December 31, 1998, respectively              (2,054)         (2,056)
- --------------------------------------------------------------------------------
      Total shareholders' investment                   51,233          52,862
- --------------------------------------------------------------------------------
      TOTAL LIABILITIES & SHAREHOLDERS' INVESTMENT   $150,179        $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 nine months ended
                                                  -------------------------
                                               SEPT. 30, 1999   Sept. 30, 1998
- --------------------------------------------------------------------------------
                                                       (In thousands)
                                                            
CASH FLOWS FROM OPERATING ACTIVITIES
Net income/(loss)                                   $ (1,729)        $  4,478
Adjustments to reconcile net income/(loss)to net
 cash provided by (used in)/operating activities:
  Depreciation and amortization                        5,696            3,553
  Changes in assets and liabilities:
   (Increase)/decrease in receivables and
     contracts in progress                             6,604           (3,502)
   (Decrease)in accounts payable and
     accrued expenses                                (11,892)         (10,862)
    Decrease in other net assets                       2,997            1,265
- --------------------------------------------------------------------------------
      Total adjustments                                3,405           (9,546)
- --------------------------------------------------------------------------------
      Net cash provided by/(used in)
        operating activities                           1,676           (5,068)
- --------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Additions to property, plant and equipment          (4,242)          (7,990)
  Investment in Steen Production Service, Inc.,
   net of cash acquired                               (4,918)               -
- --------------------------------------------------------------------------------
      Net cash used in investing activities           (9,160)          (7,990)
- --------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds from long-term debt                         7,548            2,366
  Repayments of long-term debt                        (2,261)               -
  Proceeds from exercise of stock options                 70               89
  Payments to acquire treasury stock                       -             (728)
- --------------------------------------------------------------------------------
      Net cash provided by financing activities        5,357            1,727
- --------------------------------------------------------------------------------

Net decrease in cash                                  (2,127)         (11,331)
Cash at beginning of year                              5,014           17,302
- --------------------------------------------------------------------------------

CASH AT END OF PERIOD                               $  2,887         $  5,971
================================================================================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW DATA
   Interest paid                                    $    130         $     46
   Income taxes paid                                $     60         $    728
================================================================================
<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 SEPTEMBER 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 would 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  were   restructured,   and  the  Company's
Transportation  Construction  (heavy and highway)  business is  currently  being
offered  for 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  for the  nine-month  period ended  September  30, 1999.  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.

Certain low-bid, high-risk construction projects in the Buildings unit were sold
during the second  quarter of 1999; the remaining  construction  projects in the
Buildings  unit are expected to be completed by the end of the second quarter of
2000.  Construction bidding activity in the Transportation unit was discontinued
during the fourth quarter of 1999. If a sale of this business is not consummated
by the end of the fourth quarter of 1999,  existing  contracts will be completed
or subcontracted to a third party.

NOTE 2 - THIRD QUARTER CHARGES

During the third quarter of 1999, the Company  recorded pre-tax charges totaling
$11.6 million, primarily related to its construction operations which are in the
process of being discontinued. Such charges included $5.8 million related to the
Buildings unit's  construction  project at the Universal  Studios  ("Universal")
theme park in Orlando,  FL, from which it was terminated by the owner during the
first  quarter of 1999.  During the third  quarter of 1999,  management  and its
counsel  determined that the Company was obligated to pay amounts  totaling $5.8
million to certain  subcontractors  for work  performed  on this project and for
which they had not been paid.  Additional  third quarter  charges  totaling $4.4
million  emanated  from three  heavy and  highway  construction  projects in the
Company's Transportation unit. As these projects approached completion,  project
costs were determined to be in excess of earlier estimates.

                                                                       FORM 10-Q
                                                                          PART I
                                                                          PAGE 7


The remainder of the third quarter net charges comprise the following:

o    the writeoff of certain  intangible  assets  associated  with the Company's
     1998 GeoResearch acquisition;
o    severance  costs  related to the departure of certain  former  officers and
     employees;
o    charges against  earnings on Engineering  projects in the Buildings,  Civil
     and Transportation units; and
o    certain favorable adjustments related to the Company's normal and recurring
     process of adjusting accrued liability balances, primarily for self-insured
     casualty  insurance,  to be in line with its exposures,  and related to the
     reversal of incentive  compensation  expense  recorded during the first six
     months  of 1999 and  which is not  expected  to be paid  based on the third
     quarter charges.

After  considering  the netting of favorable and  unfavorable  adjustments,  the
foregoing net charges had the effect of reducing  gross profit by $11.7 million,
and also reducing selling,  general and administrative expenses by $0.1 million,
in the accompanying  Condensed  Consolidated Income Statements for the three and
nine-month periods ended September 30, 1999.

NOTE 3 - ACQUISITION

On September 1, 1999,  Baker/MO  Services,  Inc.  ("Baker/MO"),  a  wholly-owned
subsidiary of the Company,  purchased all of the  outstanding  shares of capital
stock of Steen Production Service, Inc. ("Steen"), a Louisiana corporation, from
its shareholders (the "Sellers"). Steen is an operations and maintenance company
which  provides  pumping and gauging  services to oil and gas  facilities in the
Gulf of Mexico.

The purchase price for the shares of Steen was $10,951,063, including promissory
notes  totaling  $4,380,425,  which  will be repaid to the  Sellers in two equal
annual installments,  and including certain non-competition  covenants valued at
$2,000,000.  Interest on the promissory notes will accrue from September 1, 1999
at the prime rate as announced by Mellon Bank, N.A. ("Mellon"), and also will be
paid  in  two  annual  installments.   The  Company  has  guaranteed  Baker/MO's
obligation to repay all principal and interest  under the promissory  notes.  In
addition, the Company,  through its Baker/MO subsidiary,  entered into five-year
employment agreements with each of the two Sellers.

This  acquisition  has  been  accounted  for  as a  purchase.  Accordingly,  the
operating  results of Steen have been  included  in the  accompanying  Condensed
Consolidated  Income  Statements  since September 1, 1999. As required under the
purchase method of accounting,  the acquisition costs have been allocated to the
net assets  acquired  based upon the fair market  value to the Company as of the
acquisition  date. A purchase  price  adjustment  based on a recently  completed
audited  balance  sheet for Steen as of  August  31,  1999,  is  expected  to be
finalized,  and its effects  recorded  in the  Company's  financial  statements,
during the fourth quarter of 1999. The excess of acquisition costs over the fair
market  value of the acquired  assets and  liabilities  is being  amortized on a
straight-line basis over 20 years.

                                                                       FORM 10-Q
                                                                          PART I
                                                                          PAGE 8


The Company's  operating  results for the first nine months of 1999 and 1998 are
required to be presented on a pro forma basis  assuming that the  acquisition of
Steen had been  effective at the beginning of each  respective  period.  The pro
forma information which follows is not necessarily  indicative of the results of
operations  as they  may be in the  future  or as they  might  have  been in the
periods  indicated,  if the acquisition had been consummated at the beginning of
each respective  period.  The pro forma information gives effect to, among other
things,  depreciation  and  amortization  expense on revalued  assets  acquired;
incremental employee benefit costs;  additional interest expense that would have
been incurred in borrowing  the initial  amounts paid for the  acquisition  (and
corresponding  adjustments  of  interest  income  earned);  additional  interest
expense  associated  with the notes  payable to the Sellers;  and the income tax
benefit associated with the foregoing pro forma adjustments.

Assuming  that Steen had been  acquired on January 1, 1999,  the  unaudited  pro
forma  operating  results of the Company for the first nine months of 1999 would
have approximated the following:  Total contract  revenues of $389,969,000;  Net
loss of  $(2,144,000);  and Basic  and  diluted  net loss per share of  $(0.26).
Assuming  that Steen had been  acquired on January 1, 1998,  the  unaudited  pro
forma  operating  results of the Company for the first nine months of 1998 would
have approximated the following:  Total contract  revenues of $386,585,000;  Net
income of $3,742,000;  and Basic net income per share of $0.46;  and Diluted net
income per share of $0.45.

NOTE 4 - EARNINGS PER SHARE

Basic net income per share  computations  are based upon  weighted  averages  of
8,177,177 and 8,181,605  shares  outstanding  for the three-month  periods,  and
8,172,966 and 8,183,798 for the nine-month periods, ended September 30, 1999 and
1998,  respectively.  Diluted net income per share  computations  are based upon
weighted  averages  of  8,220,267  and  8,284,173  shares  outstanding  for  the
three-month  periods,  and 8,235,689 and 8,308,306 for the  nine-month  periods,
ended September 30, 1999 and 1998, respectively.  The additional shares included
in diluted shares outstanding are entirely attributable to stock options.

NOTE 5 - 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 9


                      For the Three Months Ended    For the Nine Months Ended
                     ----------------------------- -----------------------------
                     SEPT. 30, 1999 Sept. 30, 1998 SEPT. 30, 1999 Sept. 30, 1998
- --------------------------------------------------------------------------------
                                                            
Total contract revenues:
  Buildings unit            $ 10.7        $ 43.8        $ 45.7        $108.3
  Civil unit:
   Engineering                16.7          15.7          50.2          51.4
   BSSI                       14.0          17.5          40.2          47.6
  Energy unit                 17.5          16.0          56.7          45.9
  Environmental unit           8.1           5.4          21.3          16.8
  Transportation unit:
   Engineering                22.9          17.7          63.1          52.3
   Construction               39.6          19.6         101.0          51.7
- --------------------------------------------------------------------------------
      Subtotal - Segments    129.5         135.7         378.2         374.0
  Corporate/Insurance          0.3           0.1           0.8            --
- --------------------------------------------------------------------------------
      TOTAL                 $129.8        $135.8        $379.0        $374.0
================================================================================
                      For the Three Months Ended    For the Nine Months Ended
                     ----------------------------- -----------------------------
                     SEPT. 30, 1999 Sept. 30, 1998 SEPT. 30, 1999 Sept. 30, 1998
- --------------------------------------------------------------------------------
Income/(loss) before taxes:
  Buildings unit            $ (5.2)       $  0.5        $ (6.1)       $  0.6
  Civil unit:
   Engineering                (0.3)          0.8           1.0           2.5
   BSSI                        0.9           0.1           1.3          (0.3)
  Energy unit                  1.0           1.1           1.6           3.0
  Environmental unit           0.5           0.4           1.2           0.4
  Transportation unit:
   Engineering                 1.1           0.7           2.9           1.6
   Construction               (3.5)          0.4          (3.7)          0.5
- --------------------------------------------------------------------------------
      Subtotal - Segments     (5.5)          4.0          (1.8)          8.3
  Corporate/Insurance          0.1          (0.1)          0.7           0.1
- --------------------------------------------------------------------------------
      TOTAL                 $ (5.4)       $  3.9        $ (1.1)       $  8.4
================================================================================
                                                    SEPT. 30, 1999 Dec. 31, 1998
- --------------------------------------------------------------------------------
Segment assets:
  Buildings unit                                        $ 11.1        $ 30.5
  Civil unit:
   Engineering                                            18.4          18.7
   BSSI                                                   15.1          15.6
  Energy unit                                             44.7          27.9
  Environmental unit                                       4.9           5.1
  Transportation unit:
   Engineering                                            25.5          21.7
   Construction                                           21.0          20.6
- --------------------------------------------------------------------------------
      Subtotal - Segments                                140.7         140.1
  Corporate/Insurance                                      9.5          11.8
- --------------------------------------------------------------------------------
       TOTAL                                            $150.2        $151.9
================================================================================


                                                                       FORM 10-Q
                                                                          PART I
                                                                         PAGE 10



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

NOTE 6 - LONG-TERM DEBT AND BORROWING ARRANGEMENTS

The Company has an unsecured credit agreement (the "Agreement") with Mellon. 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
September 30, 1999,  borrowings totaling $7.5 million were outstanding under the
Agreement, along with outstanding letters of credit totaling $1.3 million.

Certain financial covenants under the Agreement were not achieved as a result of
the third  quarter  charges  described  in Note 2 above.  Mellon  has waived its
rights related to these violations through the end of 1999; however, because the
quarterly  covenant  computations are required to be based on operating  results
for the previous four quarters,  further  violations are currently  expected for
the fourth  quarter  of 1999  under the  existing  Agreement.  Accordingly,  the
Company's  borrowings  under the  Agreement as of  September  30, 1999 have been
classified  within  current  portion  of  long-term  debt  in  the  accompanying
Condensed  Consolidated  Balance  Sheet.  Mellon has  stated  that it expects to
formally  amend the Agreement  during the fourth quarter of 1999 or early in the
first quarter of 2000.

NOTE 7 - CONTINGENCIES

The Company has reviewed the status of  contingencies  outstanding  at September
30, 1999. Except as noted below with respect to the Universal matter, 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.

As mentioned  above,  additional  charges  totaling $5.8 million  related to the
Universal  matter were recorded during the third quarter of 1999.  These charges
resulted from  consultations  with counsel and  negotiations  with several major
subcontractors  in an effort to align them with the  Company to recover  amounts
due from  Universal.  Pursuant to a court order,  non-binding  mediation  with a
mutually  accepted  mediator has been  scheduled  for the first quarter of 2000.
Pending the outcome of the mediation, the parties are continuing to move forward
with discovery and other actions related to the underlying litigation.

NOTE 8 - RECLASSIFICATIONS

Certain 1998 balance sheet amounts have been  reclassified  to conform with 1999
classifications.



                                                                       FORM 10-Q
                                                                          PART I
                                                                         PAGE 11


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

RESULTS OF OPERATIONS

TOTAL CONTRACT REVENUES

Total  contract  revenues  were $129.8  million  for the third  quarter of 1999,
compared to $135.8 million for the third quarter of 1998.  Revenue  increases in
the  Company's  Transportation,  Environmental  and Energy  units were offset by
decreases in the Buildings and Civil units. The Transportation unit continued to
post  significant  revenue  increases 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.   In  the
Environmental  unit, the third quarter 1999 increase  resulted  primarily from a
new project that was awarded in late 1998 by an existing customer. 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  notable  decrease  in  the  Buildings  unit's
construction  division revenues is directly attributable to a subsidiary's March
1999  termination  from  its  most  significant  construction  contract  at  the
Universal  Studios  ("Universal")  theme  park,  and  the  Company's  subsequent
restructuring,  as discussed in Note 1 to the financial statements as of and for
the periods ended September 30, 1999 (included  herein).  In the Civil unit, the
decrease resulted 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 which is nearing completion.

Total  contract  revenues were $379.0 million for the first nine months of 1999,
compared  to $374.0  million  for the same  period in 1998.  For the first  nine
months  of 1999,  the  Transportation,  Energy  and  Environmental  units  again
recorded  revenue  increases  while the  Buildings  and Civil  units  registered
decreases. Each of the reasons related to the revenue increases and decreases by
business  unit  for the  third  quarter,  which  were  stated  in the  preceding
paragraph,  are equally applicable to the nine-month periods ended September 30,
1999 and 1998.

GROSS PROFIT

Gross profit  decreased to $6.2 million in the third  quarter of 1999 from $15.8
million  in the  third  quarter  of 1998.  As a  percentage  of  total  contract
revenues,  gross profit for the third quarter  declined to 4.7% in 1999 compared
to 11.6% in the comparable  period of 1998. Both overall  decreases are directly
attributable to the third quarter  charges,  which as discussed in Note 2 to the
financial statements,  had the effect of reducing gross profit by $11.7 million.
In the Transportation  unit's engineering  division,  significant revenue growth
pushed its gross  profit in dollars  higher than the  comparable  third  quarter
results from 1998, while the detrimental  effect of the third quarter 1999 heavy
and highway  construction  project  losses  totaling $4.4 million  significantly

                                                                       FORM 10-Q
                                                                          PART I
                                                                         PAGE 12


impacted this unit's  construction  division.  In the Company's  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,  while the  engineering
division's   results  were   unfavorably   impacted  by  certain  third  quarter
project-related  charges.  The Buildings unit was also  unfavorably  affected by
project  charges on  engineering  contracts,  in  addition  to bearing the third
quarter charge of $5.8 million related to the Universal construction project.

The Company's gross profit  decreased to $35.5 million for the first nine months
of 1999 from $43.8 million for the same period in 1998. As a percentage of total
contract  revenues,  gross profit  decreased to 9.4% in the first nine months of
1999 from 11.7% for the same period in 1998.  Again, both decreases are directly
attributable  to  the  aforementioned  third  quarter  1999  charges.  The  most
significant  improvements  in gross profit dollars were  registered by the Civil
and  Environmental  units  and  by  the  Company's  Transportation   Engineering
division.  The  Civil  unit's  improvement  for the  first  nine  months of 1999
resulted from the same reasons discussed in the preceding  paragraph,  while 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 and
Buildings  units in the preceding  paragraph are also applicable to the 1999 and
1998 nine-month periods.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative ("SG&A") expenses decreased to $11.6 million
in the third  quarter of 1999 from $11.9  million in the third  quarter of 1998.
Expressed as a percentage of total contract  revenues,  SG&A expenses  increased
slightly to 8.9% for the third quarter of 1999 from 8.8% in the third quarter of
1998. This percentage  increase results  primarily from the decrease in revenues
for the third  quarter  of 1999.  Lower  employee  and office  lease  costs were
incurred  during the third  quarter of 1999 as a result of the  Company's  first
quarter 1999 restructuring. While the aforementioned third quarter charges had a
negligible  net effect on overall SG&A  expenses for the third  quarter of 1999,
the Civil unit's  engineering  division was most  significantly  impacted by the
writeoff  of  certain  intangible  assets  associated  with the  Company's  1998
GeoResearch acquisition.

SG&A expenses  increased  slightly to $36.3 million for the first nine months of
1999 from $35.9  million for the same period in 1998.  Expressed as a percentage
of total contract revenues, G&A expenses remained constant at 9.6% for the third
quarters  of 1999 and 1998.  In  addition to the third  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.

                                                                       FORM 10-Q
                                                                          PART I
                                                                         PAGE 13


OTHER INCOME

Interest  income  was lower and  interest  expense  was higher for the three and
nine-month  periods ended September 30, 1999, mainly due 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 notes
payable to the former owners of GeoResearch,  Inc. and Steen Production Service,
Inc., which were purchased in October 1998 and September 1999, respectively.

INCOME TAXES

The Company had a benefit from income taxes of 26% for the third quarter of 1999
versus a provision  for income taxes of 47% for the third  quarter of 1998.  The
third  quarter tax benefit  reflects  amounts  necessary to adjust  year-to-date
amounts to the current  estimate of 1999 income tax  expense,  and is lower than
the annual effective tax rate principally  because the third quaarter charge for
the Universal  contract was tax effected at the federal  staturtory rate of 34%.
For the  nine-month  periods ended  September 30, 1999 and 1998, the Company had
provisions  for income taxes that  resulted in effective  tax rates of (54%) and
47%,  respectively.  The income tax  expense  for the first nine  months of 1999
results from  certain  foreign and state taxes that more than offset the federal
tax benefits derived from the Company's consolidated pre-tax loss.

CONTRACT BACKLOG

The funded  backlog of work to be performed was $383 million as of September 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),  decreased
to $690  million at  September  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  $318  million  as of
September 30, 1999, as compared with $285 million as of December 31, 1998. Total
backlog for these  businesses  was $625 million and $572 million as of September
30, 1999 and December 31, 1998, respectively.

During the third  quarter  of 1999,  the  Company  added to its funded and total
backlog only in the Civil unit, while the Buildings,  Energy,  Environmental 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 14


engineering  projects  totaling  $10.5  million as well as  additional  O&M work
totaling  $8.7  million in the Civil unit,  two design  projects  totaling  $5.8
million in the Transportation  Engineering  division,  and two heavy and highway
construction  projects totaling $9.3 million in the Transportation  Construction
division.

LIQUIDITY AND CAPITAL RESOURCES

Net cash  provided by operating  activities  was $1.7 million for the first nine
months  of 1999,  compared  to net cash  used in  operating  activities  of $5.1
million for the same  period in 1998.  Despite  the  Company's  net loss for the
first  nine  months  of 1999,  the  1999  cash  flow  improvement  is  primarily
attributable to the Company's reduction in receivables  relative to the previous
year.  Such reduction in  receivables  was mainly driven by the decision to wind
down the Company's construction operations in the Buildings unit .

Net cash used in investing activities was $9.2 million for the first nine months
of 1999 and $8.0 million for the same period in 1998. The 1999 amount  comprises
both capital  expenditures  totaling $4.2 million and the net amount paid by the
Company  during the third  quarter to acquire  Steen  Production  Service,  Inc.
("Steen," as discussed in Note 3 to the  financial  statements),  while the 1998
amount represents only capital  expenditures.  Fewer personal computers and less
other computer  equipment  were  purchased  during the first nine months of 1999
than in the comparable period of 1998.

Net cash  provided by  financing  activities  totaled $5.4 million for the first
nine  months of 1999,  compared  to $1.7  million  for the same  period in 1998.
During the first nine months of 1999, the Company  received net proceeds of $7.5
million from  borrowings  under its credit  agreement with Mellon to finance the
initial cash payments  associated with the acquisition of Steen,  while the 1998
proceeds of $2.4 million  related to the  financing of certain heavy and highway
construction  equipment  purchases in the Transportation  unit. During the first
nine  months of 1999,  the  Company  repaid  $0.5  million of this  construction
equipment  debt,  and further  repaid  certain Steen debt totaling $1.8 million,
which existed as of the acquisition date. Pursuant to a stock repurchase program
announced in late 1996,  the Company paid $0.7 million to acquire  approximately
87,000 additional treasury shares during the first nine months of 1998.

Working  capital  decreased to $23.5  million at  September  30, 1999 from $31.9
million at December  31,  1998.  The current  ratio was 1.27:1 at the end of the
third  quarter of 1999,  compared to 1.36:1 at year-end  1998.  The decreases in
working  capital  and in the current  ratio are the result of the third  quarter
construction-related charges discussed in Note 2 to the financial statements, as
well as the  classification  of the revolving credit debt payable to Mellon as a
current liability.

                                                                       FORM 10-Q
                                                                          PART I
                                                                         PAGE 15


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 September
30, 1999, borrowings totaling $7.5 million were outstanding under the agreement,
along with outstanding  letters of credit totaling $1.3 million. As disclosed in
Note 6 to the third quarter financial statements, Mellon has waived, through the
end of 1999, its rights  related to the third quarter loan covenant  violations.
However,  under  the  calculation  mechanics  of  the  current  loan  agreement,
management  anticipates  further  violations for the fourth quarter.  Mellon has
stated that it expects to formally amend the Agreement during the fourth quarter
of 1999 or early in the first quarter of 2000.  Such an amendment  should reduce
the  risk  of  further   covenant   violations  and   limitations  on  borrowing
availability.  During the fourth quarter, the Company will continue to negotiate
with Mellon and develop contingency plans for alternative financing.

Short and long-term liquidity is further 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.

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.

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 both
systems in the Energy unit are Year 2000  compliant.  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  vendors'  assertions  for the  Company's
financial,  project  management and human resources  systems has been completed,
except for the BSSI  subsidiary  which is  expected to be  completed  during the
fourth quarter of 1999.

                                                                       FORM 10-Q
                                                                          PART I
                                                                         PAGE 16


The Company's  interrelated systems (e.g., e-mail, file sharing) are linked by a
network of servers. Upgrades to compliant versions are in place for the network.
The Company has evaluated 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.  All  identified  issues will be completed by the end 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 during the fourth quarter of 1999.

The Company is a service-based organization and, as such, has little reliance on
embedded  technology (e.g.,  micro-controllers)  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
initiated 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.  Despite  its  follow-up  efforts
throughout 1999, the Company  experienced a response rate of only  approximately
25% to this survey;  however,  no companies which responded  indicated that they
expected any problems in achieving their own Year 2000  compliance.  The Company
will  continue to monitor  the  readiness  of its key  suppliers  and  customers
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 internal
documentation will sufficiently  support receivable balances owed to the Company
as of December 31, 1999.

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  will be
material  to the  Company's  consolidated  results of  operations  or  financial
position.

                                                                       FORM 10-Q
                                                                          PART I
                                                                         PAGE 17


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

The  Company's  primary  interest  rate  risk  relates  to  its  long-term  debt
obligations.  As of September  30, 1999,  the Company had total  long-term  debt
obligations,  including the current portion of those obligations, totaling $16.1
million.  Of this  amount,  fixed rate  obligations  totaled  $2.8  million  and
variable  rate  obligations  totaled $13.3  million.  Assuming a 10% increase in
interest rates on the Company's  variable rate  obligations  (i.e.,  an increase
from the actual  weighted  average  interest  rate of 8.25% as of September  30,
1999, to a weighted  average  interest rate of 9.08%),  annual interest  expense
would be  approximately  $110,000  higher  based on the  outstanding  balance of
variable rate  obligations as of September 30, 1999. The Company has no interest
rate swap or exchange agreements.

Less than 1% of the Company's total assets and total contract revenues as of and
for the periods ended  September 30, 1999 were  denominated in currencies  other
than the U.S.  Dollar;  accordingly,  the Company  has no  material  exposure to
foreign  currency  exchange risk.  This  materiality  assessment is based on the
assumption that the foreign currency exchange rates could change  unfavorably by
10%. The Company has no foreign currency exchange contracts.

Based on the nature of the  Company's  business,  it has no direct  exposure  to
commodity price risk.


                           PART II. OTHER INFORMATION

ITEM 1.   LEGAL PROCEEDINGS
          -----------------

The Company has been named as a defendant or co-defendant  in legal  proceedings
wherein  substantial  damages are claimed.  Such proceedings are not uncommon to
the Company's business.  After  consultations with counsel,  except as discussed
below,  management  believes that the Company has recognized adequate provisions
for these  proceedings and their ultimate  resolutions  will not have a material
adverse  effect on the  consolidated  financial  position  or annual  results of
operations of the Company.

The Company  currently has two significant legal  proceedings  outstanding.  The
more  significant one relates to a contract for the construction of the CityWalk
project at the Universal Studios theme park in Orlando,  Florida,  between Baker
Mellon Stuart  Construction,  Inc. ("BMSCI"),  a wholly-owned  subsidiary of the
Company, and Universal City Development  Partners ("UCDP").  BMSCI was providing
project-related construction services to UCDP under the contract. During BMSCI's
performance under the contract, which began in 1997, the project suffered delays
due to  substantial  changes  in the  design  of the  project  and  the  related
drawings.

On March 5, 1999, UCDP terminated BMSCI's right to proceed with the project work
by alleging  default.  UCDP has also  notified  BMSCI of UCDP claims for damages
resulting  from the alleged  default,  including the cost to complete or correct

                                                                       FORM 10-Q
                                                                         PART II
                                                                         PAGE 18


the work,  additional  maintenance or operation costs, and alleged lost revenues
or other damages.  UCDP simultaneously  filed a lawsuit against BMSCI for breach
of  contract  in the Federal  District  Court in the Middle  District of Florida
("Federal  Court").  On October 26, 1999, the Court granted UCDP's Motion to add
the Company and its bonding  company as additional  defendants.  The Company was
not a party to the  contract  underlying  the lawsuit and  contends it cannot be
held  liable  for any  conduct  of the  subsidiary.  BMSCI and the  Company  are
vigorously  defending  this  action.  On March 8,  1999,  BMSCI  filed a lawsuit
against  UCDP in the  Circuit  Court for the Ninth  Judicial  Circuit in and for
Orange County,  Florida  ("State Court")  alleging breach of contract,  wrongful
termination  and other  counts and seeking  damages,  interest,  court costs and
other relief,  including  potential  counterclaims.  This action was voluntarily
dismissed on July 6, 1999,  and BMSCI is pursuing its claims against UCDP by way
of counterclaims  filed in UCDP's Federal Court action.  While the Federal Court
action is  proceeding,  on September  27, 1999,  the Court  ordered  non-binding
mediation  of this matter to occur by February  1, 2000.  BMSCI,  UCDP and other
parties with significant interests will participate in the mediation.

In  addition,  several  BMSCI  subcontractors  and vendors  have also filed suit
against BMSCI in connection with the project. The most significant subcontractor
suits were brought by ADF International, Inc. ("ADF"), BMSCI's subcontractor for
structural  steel/miscellaneous  metals,  and Martin K. Eby  Construction,  Inc.
("Eby"), BMSCI's subcontractor for foundations.  On November 24, 1998, ADF filed
suit in Federal Court against BMSCI and its surety seeking damages for breach of
contract  relating to the project.  BMSCI and its surety  answered the complaint
(and amended  complaint) and BMSCI filed a  counterclaim.  On November 17, 1999,
BMSCI and ADF entered into  agreements to jointly defend and pursue their claims
against UCDP. On February 10, 1999, Eby also filed suit in Federal Court against
BMSCI and its surety  seeking  damages  for breach of  contract  relating to the
project. BMSCI and its surety answered the complaint. On November 9, 1999, BMSCI
and Eby settled this matter,  and Eby has agreed to cooperate  with BMSCI in its
defense and pursuit of claims against UCDP.

Additional  claims may be filed in  connection  with this matter.  Baker and its
counsel  believe that BMSCI has valid  defenses  and claims  against  UCDP,  its
consultants and subcontractors,  and BMSCI's  subcontractors and vendors.  BMSCI
intends to defend and pursue these claims  vigorously.  However,  an unfavorable
resolution  of  these  matters  could  have a  material  adverse  effect  on the
Registrant's  consolidated  financial  position,  results of operations and cash
flow.

The other  proceeding  relates to a lawsuit brought in 1987 in the Supreme Court
of the State of New York, Bronx County, by the Dormitory  Authority of the State
of New York against a number of parties, including the Registrant and one of its
wholly-owned  subsidiaries,  that asserts breach of contract and alleges damages
of $13 million. The Registrant, which was not a party to the contract underlying
the  lawsuit,  contends  that  there  is no  jurisdiction  with  respect  to the
Registrant and that it cannot be held liable for any conduct of the  subsidiary.
Both the Registrant and the subsidiary are contesting  liability issues and have
filed cross-claims and third-party claims against the other entities involved in
the project.

                                                                       FORM 10-Q
                                                                         PART II
                                                                         PAGE 19


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

Reports on Form 8-K
- -------------------

During the quarter ended  September 30, 1999, the Company filed a Form 8-K dated
September 15, 1999, and reported in Item 2 its  acquisition of Steen  Production
Service, Inc. ("Steen"), which became effective September 1, 1999. The financial
information required by Item 7 was not included with this filing.

On November 15, 1999, the Company also filed a Form 8-K/A amendment to the above
Form 8-K filing. Such Form 8-K/A contained the financial information required by
Item 7 in connection  with the  acquisition of Steen,  as discussed in Note 3 to
the  unaudited  condensed  consolidated  financial  statements  included in this
Report on Form 10-Q.



                                   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: November 22, 1999            By:  /s/ J. Robert White
                                          --------------------------------------
                                          J. Robert White
                                          Executive Vice President, Chief
                                           Financial Officer and Treasurer