Engineering & Energy 1 MICHAEL BAKER CORPORATION 2002 Annual Shareholders Meeting optimize maximize...
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Transcript of Engineering & Energy 1 MICHAEL BAKER CORPORATION 2002 Annual Shareholders Meeting optimize maximize...
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Engineering & Energy
MICHAEL BAKER CORPORATION2002 Annual Shareholders Meeting
optimizeoptimize
maximizemaximize
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Inn
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Engineering & EnergySafe HarborSafe Harbor
This presentation will contain information related to events which may occur in the future. These
forward-looking statements may include future business trends, revenue and earnings forecasts,
and acquisition and corporate finance activity. These statements are subject to market, regulatory, operating and other risks and uncertainties and, as
a result, actual results may vary. Such forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
This presentation will contain information related to events which may occur in the future. These
forward-looking statements may include future business trends, revenue and earnings forecasts,
and acquisition and corporate finance activity. These statements are subject to market, regulatory, operating and other risks and uncertainties and, as
a result, actual results may vary. Such forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
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Engineering & Energy
Financial Review: 2001
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Engineering & EnergyTotal Revenues
$390.7$403.2
$506.0
$401.8
$348.7
$281.9
$0
$100
$200
$300
$400
$500
$600
1999 2000 2001
Do
llars
in M
illio
ns
Revenues Engineering Energy
$80.2$120.7
$201.7 $228.0
$158.2
$243.6
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Engineering & EnergyIncome from Operations
$17.5
$31.4
-$0.5
$31.4
$26.1
$18.8
-$5
$0
$5
$10
$15
$20
$25
$30
$35
Do
lla
rs i
n M
illi
on
s
Total Reported Engineering Energy
1999 2000
$5.5
$13.4
$9.3
$16.8
(Pre-Corp. O/H and I/C Ins. Premiums)
2001
$12.8
$18.6
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Engineering & EnergyOperating Performance(in Thousands of $)
Operating Performance(in Thousands of $)
Adjusted for $1 Million Non-Recurring ChargeAdjusted for $1 Million Non-Recurring Charge
1999 2000 2001TOTAL CONTRACT REVENUES
Total Reported $506,012 $390,710 $403,222Less Non-Core 223,236 41,625 1,372
ENERGY 80,158 120,708 158,236ENGINEERING 202,618 228,377 243,614
Total Core 282,776 349,085 401,850
TOTAL OPERATING INCOME (Pre-Corp. O/H and I/C Ins. Premiums)Total Reported (511) 17,543 31,436% -.1% 4.5% 7.8%
ENERGY 4,252 9,759 12,842% 6.6% 8.1% 8.1%ENGINEERING 12,544 16,007 18,582% 6.2% 7.0% 7.6%
Total Core $17,796 $25,766 $31,424% 6.4% 7.4% 7.8%
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Engineering & EnergyBalance Sheet(in millions of $)
Balance Sheet(in millions of $)
1999 2000 2001ASSETSCash $3.7 $9.1 $18.5Short-Term Investment - 9.0 -A/R 77.4 67.7 67.6Cost in Excess of Billing 26.6 20.5 25.3
PPE 17.1 10.1 10.3Intangibles 14.6 10.8 9.8Other 15.6 10.2 20.1
$155.0 $137.4 $151.6LIABILITIESCurrent Portion LTD 3.5 2.2 -Trade A/P 28.9 25.7 21.9Accrued Other 62.9 59.1 68.2
Long-Term Debt 14.9 0.1 -
Owners’ Equity 44.8 50.3 61.5$155.0 $137.4 $151.6
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Engineering & EnergyCash Flow(in millions of $)
Cash Flow(in millions of $)
1999 2000 2001Net Income $(8.2) $5.4 $11.2
Depreciation & Amortization 7.4 7.1 5.2Other 1.9 (0.1) 3.2
Cash from Operations 1.1 12.4 19.6
Capital Expenditures (5.3) (2.9) (4.1)Acquisition/Investments (4.9) (9.0) 9.0Funding of Litigation Escrow - - (12.7)Share Repurchase - - (0.4)Proceeds from Sale of Assets/Stock Options - 15.0 0.3NET Borrowings (Repayments) 7.8 (10.1) (2.3)
NET Increase (Decrease) in Cash $(1.3) $5.4 $9.4
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Engineering & EnergyEPS GrowthEPS Growth
1999 2000 2001Reported
EPS $(1.00) $.65 $1.33
Pro Forma EPSCore Operating Income 17,796 25,766 31,424Less Corporate Overhead (7,664) (7,715) (11,058)Operating Income 10,132 18,051 20,366
Provisions for Income Tax (47% for 1999, 51% for 2001 and 45.5% for 2001) 4,764 (9,206) (9,267)
5,370 8,845 11,099
Pro Forma EPS $0.66 $1.07 $1.32
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Engineering & Energy
Financial Review:1st QTR 2002
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Engineering & EnergyTotal Revenues (1st QTR)
$95.0$95.9
$108.3
$0
$25
$50
$75
$100
$125
2000 2001 2002
Do
llars
in M
illio
ns
Revenues Engineering Energy
$25.6
$57.6
$37.5
$57.0
$37.6
$58.3
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Engineering & EnergyIncome from Operations (1st QTR)
$3.9
$3.2
$4.5
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
2000 2001 2002
Do
llars
in M
illio
ns
Income Engineering Energy
$1.2
$2.8
$2.1
$2.2 $2.8
$0.9
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Engineering & EnergyOperating Margins (1st QTR)
3.6%
4.7%
3.3%
4.9%
4.0%
4.8%4.7%
5.9%
2.4%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
2000 2001 2002
%
Consolidated Engineering Energy
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Engineering & EnergyStock Performance (24 mos.)Stock Performance (24 mos.)
$5.38
$15.14
$14.25$14.00
$15.00$15.20
$13.60$13.38
$12.26
$12.70
$14.00
$13.85
$6.50
$6.50
$6.69$7.13
$7.75
$8.06
$10.00
$11.55
$7.75
$8.25
$8.30
$8.93$8.13
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
$14.00
$16.00
Clo
sin
g S
ha
re P
ric
e
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Engineering & Energy2001 Financial Highlights
Eliminated Series B Super Voting Shares
Secured $40 Million Credit Facility
Added 7 New Institutional Holders 1.3 Millions Shares
Eliminated Series B Super Voting Shares
Secured $40 Million Credit Facility
Added 7 New Institutional Holders 1.3 Millions Shares
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Engineering & Energy
Operations Review
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Engineering & Energy2001 Highlights
Record Earnings Share Price Increase Energy Growth and Profitability Engineering Steady Improvement Credit Facility B Series Elimination Energy OPCOSM Value-Added Model Engineering Market Initiatives Segment Leverage
Record Earnings Share Price Increase Energy Growth and Profitability Engineering Steady Improvement Credit Facility B Series Elimination Energy OPCOSM Value-Added Model Engineering Market Initiatives Segment Leverage
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Engineering & EnergyVision
Perform Biggest and Most Challenging Projects
Be Paid for Content, Not Hours
Share Knowledge and Resources
Make Money
Perform Biggest and Most Challenging Projects
Be Paid for Content, Not Hours
Share Knowledge and Resources
Make Money
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Engineering & EnergyFour-Point StrategyFour-Point Strategy
Maximize the growth potential of the Energy business
Optimize the overall performance of the Engineering business
Innovate by investing to enhance service delivery methods
Leverage the relationships and skills of the entire company
Maximize the growth potential of the Energy business
Optimize the overall performance of the Engineering business
Innovate by investing to enhance service delivery methods
Leverage the relationships and skills of the entire company
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Engineering & EnergyElements of Success
People
Performance
Profit
People
Performance
Profit
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Engineering & Energy
President’s Award Runner-upEngineering – Rt. 29 Tunnel CM/CI
One-half mile cut and cover tunnel for NJDOT in Trenton, NJ First External CM/CI Contract Awarded in 2000
$9 million, Performance-based Troubled Project Since 1997
Delays Over 2 years Claims totaling $20 million Environmental Clean-up Sites 160 Potential Change Orders
Solutions Centralized Project Records Claims Resolution Process
Global Settlement Package “New Spirit of Project Partnering”
Community Outreach Delivered Project Ahead of Schedule
One-half mile cut and cover tunnel for NJDOT in Trenton, NJ First External CM/CI Contract Awarded in 2000
$9 million, Performance-based Troubled Project Since 1997
Delays Over 2 years Claims totaling $20 million Environmental Clean-up Sites 160 Potential Change Orders
Solutions Centralized Project Records Claims Resolution Process
Global Settlement Package “New Spirit of Project Partnering”
Community Outreach Delivered Project Ahead of Schedule
Biggest and Most Challenging Project
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Engineering & EnergyEngineering – PennDOT Bridge Software
Baker-developed Bridge Analysis, Design and Rating Software Innovative Support and Maintenance Contracting Method
Payments in Advance Quarterly Billing Baker Holds Exclusive Licensing Agreement to Source Code Baker Usage Requires No License
Baker-developed Bridge Analysis, Design and Rating Software Innovative Support and Maintenance Contracting Method
Payments in Advance Quarterly Billing Baker Holds Exclusive Licensing Agreement to Source Code Baker Usage Requires No License
Be Paid for Content, Not Hours
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Engineering & Energy
Energy – SMARTSM Compliance Management System
Heightened Focus on HSE&C Standards and Performance Implemented SMARTSM Compliance Management System in GOM Reduced INCs by 50-65% in 2001 Significant Cost Savings to Clients
Heightened Focus on HSE&C Standards and Performance Implemented SMARTSM Compliance Management System in GOM Reduced INCs by 50-65% in 2001 Significant Cost Savings to Clients
Be Paid for Content, Not Hours
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Engineering & EnergyEngineering – USARAK Equipment Inventory
Client – U.S. Army Alaska (USARAK) Commercial Activities Study at 3 Locations
Fort Wainwright Fort Richardson Seward
Prepare for Privatization of O&M Programs Project Team from Multiple Offices
Anchorage Coraopolis Beaver Elmsford Fairbanks Merrillville
Communication, Coordination, Information Sharing Key to Success
Client – U.S. Army Alaska (USARAK) Commercial Activities Study at 3 Locations
Fort Wainwright Fort Richardson Seward
Prepare for Privatization of O&M Programs Project Team from Multiple Offices
Anchorage Coraopolis Beaver Elmsford Fairbanks Merrillville
Communication, Coordination, Information Sharing Key to Success
Share Knowledge & Resources
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Engineering & EnergyEnergy – Applied Technologies
Significant Growth Opportunities in 2001 Aberdeen Proving Ground CMMS BP Deepwater CMMS BP Grangemouth/Hull Refinery
BP Center of Expertise
Added 62 People 50% Revenue Growth / 17% Margins
Significant Growth Opportunities in 2001 Aberdeen Proving Ground CMMS BP Deepwater CMMS BP Grangemouth/Hull Refinery
BP Center of Expertise
Added 62 People 50% Revenue Growth / 17% Margins
Make Money
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Engineering & Energy
President’s Award Runner-upFunctional – Support Services Group
Travel, Fleet and Mail Services Travel
3rd Largest Expenditure in 2000 - $8.5 million Created Corporate Travel Department (CTD) Saved $1.5 Million in 7 Months Service Provided on September 11
Mail Established Monthly Postage Account for All Offices Web-based iShip for Packages
Available in Beaver & Coraopolis Reduce Shipping Costs 33% All Offices in 2002
Fleet Bid Process for Purchases & Leases Short-Term Agreement with Enterprise Fuel and Maintenance Costs
Total Cost Savings in 2001 - $1.8 million
Travel, Fleet and Mail Services Travel
3rd Largest Expenditure in 2000 - $8.5 million Created Corporate Travel Department (CTD) Saved $1.5 Million in 7 Months Service Provided on September 11
Mail Established Monthly Postage Account for All Offices Web-based iShip for Packages
Available in Beaver & Coraopolis Reduce Shipping Costs 33% All Offices in 2002
Fleet Bid Process for Purchases & Leases Short-Term Agreement with Enterprise Fuel and Maintenance Costs
Total Cost Savings in 2001 - $1.8 million
Make Money
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Engineering & Energy2002 Focus
Balanced Scorecard Planning
Training
Branding the Baker Identity
Acquisitions
Tax Reduction
Balanced Scorecard Planning
Training
Branding the Baker Identity
Acquisitions
Tax Reduction
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Engineering & Energy2002 Growth & Profitability
Grow OPCO Model (Organically and Acquisition)
Chase Customers – Not Projects (Marketing Method)
Expand Engineering U.S. Domestic Geographic Presence
Expand Water/Wastewater Treatment Capability
Build on Leading Maximo MMS Developer for both Public and Private Facilities
Grow OPCO Model (Organically and Acquisition)
Chase Customers – Not Projects (Marketing Method)
Expand Engineering U.S. Domestic Geographic Presence
Expand Water/Wastewater Treatment Capability
Build on Leading Maximo MMS Developer for both Public and Private Facilities
29
Engineering & Energy2002 Growth & Profitability
Develop New Generation Web-Enabled Competency-based Training for O&G Clients Worldwide
Extend Environmental Capabilities Internationally Leveraging Energy’s Relationships and Geographic Presence
Build on Long-standing Alaskan Presence to Extend Energy’s O&M Skills into Local Market
Develop New Generation Web-Enabled Competency-based Training for O&G Clients Worldwide
Extend Environmental Capabilities Internationally Leveraging Energy’s Relationships and Geographic Presence
Build on Long-standing Alaskan Presence to Extend Energy’s O&M Skills into Local Market
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Engineering & EnergyConclusion
PASSIONCOMMITMENT
CHANGESPEED
PASSIONCOMMITMENT
CHANGESPEED
MAKE MONEYMAKE MONEY
Energy Engineering
31
Engineering & Energy
MICHAEL BAKER CORPORATION2002 Annual Shareholders Meeting
optimizeoptimize
maximizemaximize
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Inn
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