10-K

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

Form 10-K

(MARK ONE)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM                        TO

Commission File Number 000-27261

CH2M HILL Companies, Ltd.
(Exact name of registrant as specified in its charter)

Oregon (State or other jurisdiction of incorporation or organization)	93-0549963 (I.R.S. Employer Identification Number)
9191 South Jamaica Street, Englewood, CO (Address of principal executive offices)	80112-5946 (Zip Code)
(303) 771-0900 (Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: CH2M HILL common stock, Par Value $0.01 per share

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o    No ý

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o    No ý

         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 ý    No o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer ý Non-accelerated filer o
(Do not check if a smaller
reporting company) Smaller reporting company o

         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

         The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price as of June 30, 2007 was approximately $292 million. For purposes of this calculation, it is assumed that the registrant's affiliates include the registrant's Board of Directors, its executive officers and certain of its employee benefit plans. The registrant disclaims the existence of any control relationship between it and such employee benefit plans.

         As of February 26, 2008, there were 34,030,775 shares of the registrant's common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

         Portions of the definitive Proxy Statement for the 2008 Annual Meeting of Shareholders are incorporated by reference in Part III of this Annual Report on Form 10-K where indicated.

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

ANNUAL REPORT ON FORM 10-K

TABLE OF CONTENTS

		Page
PART I.
Item 1.	Business	4
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	20
Item 2.	Properties	20
Item 3.	Legal Proceedings	20
Item 4.	Submission of Matters to a Vote of Security Holders	22
PART II.
Item 5.	Market for Registrant's Common Equity and Related Shareholder Matters	23
Item 6.	Selected Financial Data	29
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	30
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 8.	Financial Statements and Supplementary Data	43
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	43
Item 9A.	Controls and Procedures	43
Item 9B.	Other Information	44
PART III.
Item 10.	Directors, Executive Officers and Corporate Governance	45
Item 11.	Executive Compensation	45
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	45
Item 13.	Certain Relationships and Related Transactions, and Director Independence	45
Item 14.	Principal Accountant Fees and Services	45
PART IV.
Item 15.	Exhibits and Financial Statement Schedules	46
SIGNATURES

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Forward-Looking Statements

        The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on our behalf. We may from time-to-time make statements that are "forward-looking," including statements contained in this Annual Report on Form 10-K and other filings with the Securities and Exchange Commission (SEC) and in reports to our shareholders. Such statements may, for example, express expectations or projections about future actions that we may take or about developments beyond our control including changes in domestic or global economic conditions. These statements are made on the basis of our management's views and assumptions as of the time the statements are made and we undertake no obligation to update these statements. Our actual results may differ significantly from the results discussed in the forward-looking statements. General factors that might cause such differences include, but are not limited to:

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The continuance of and funding for certain governmental regulation and enforcement programs which create demand for our services



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Our ability to attract, finance and perform large, longer-term projects



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Our ability to insure against or otherwise cover the liability risks inherent in our business, including environmental liabilities and professional engineering liabilities



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Our ability to manage the risks inherent in the government contracting business



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Our ability to manage the costs associated with our fixed-price contracts



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Our ability to manage the risks inherent in international operations, including operations in war and conflict zones



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Our ability to successfully integrate future acquisitions



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Our ability to attract and retain professional personnel



•

Changes in economic conditions

        For more information on these and other risk factors that may affect our business, refer to Item 1A. included in this Annual Report on Form 10-K.

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PART I

Item 1.    Business

Summary

        We are one of the largest professional engineering services firms worldwide and are employee-owned. Our business provides engineering, construction, operations, major project management and related technical services to municipal, state, federal and private sector clients worldwide. Founded in 1946, we have approximately 22,000 employees worldwide.

        We believe we provide our clients with innovative project delivery using cost-effective approaches and advanced technologies. We continuously monitor acquisition and investment opportunities that will expand our portfolio of services, add value to the projects undertaken for clients, or enhance our capital strength. We believe that we are well positioned geographically, technically and financially to compete worldwide in the key markets we have elected to pursue and the clients we serve.

Our Operating Segments

        We provide services to our clients through three operating segments: Federal, Civil Infrastructure and Industrial. The structure is intended to provide for better decision making on an enterprise-wide basis.

        Our Federal segment generally provides a comprehensive range of services to the U.S. federal government and to international governments. Our Civil Infrastructure segment generally provides a comprehensive range of services to various state, local, and provincial governments. Our Industrial segment generally provides a comprehensive range of services to private sector companies. Financial information for each segment for each of the last three years, including 2007, is included in Note 15 of the Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K.

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Our Clients and Key Markets

        The following table summarizes our primary client types, revenues and key markets served by each of our operating segments.

Operating Segment	Client Type	% of 2007 Revenues		Key Markets
Federal	U.S. Federal Government and Governmental Authorities	28	%	• • •	Nuclear Environmental Government Facilities and Infrastructure
Civil Infrastructure	State and Local Governments	33	%	•	Water, Wastewater and Water Resources
				•	Transportation
				•	Water and Wastewater Operations and Maintenance
				•	City Operations
Industrial	Private Sector	39	%	•	Information Technology—Enterprise Management Solutions
				•	Energy, Chemicals and Industrial Systems
				•	Manufacturing and Life Sciences
				•	Electronics and Advanced Technology
				•	Power

Clients

        We provide our services to a broad range of domestic and international clients, including the U.S. federal government, state, local and provincial governments and private sector businesses. We perform services as the prime contractor, as subcontractors, or through joint ventures or partnership agreements with other service providers. The demand for our services generally comes from budgeting and capital

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spending decisions made by our clients. The following table shows representative clients by each of our operating segments:

Federal		Civil Infrastructure		Industrial
• • • • • • • • • •	U.S. Department of Energy (DOE) U.S. Department of Defense U.S. Air Force U.S. Navy U.S. Army Corps of Engineers U.S. Agency for International Development U.S. Environmental Protection Agency U.S. Federal Emergency Management Agency United Kingdom Atomic Energy Authority London 2012 Olympic Delivery Authority	• • • • • •	U.S. cities Foreign cities U.S. airports and seaports U.S. and State Departments of Transportation Water and Wastewater Municipalities Panama Canal Authority	• • • • • • •	Microelectronics manufacturers Power utilities Pharmaceutical and biotechnology companies Automotive, food and beverage, metals and consumer product manufacturers Chemicals, bioprocessing and refining companies Wireless network operators Major oil and gas companies, refiners and pipeline operators

Key Markets

        The following is a description of each of our key markets and the services we provide.

        Nuclear.    We provide program management, integration, engineering, design, construction management and a broad array of technical services for the DOE, U.S. commercial nuclear utility customers and various nuclear research, development and demonstration facilities. We manage the decommissioning (characterization, decontamination, dismantling and demolition), remediation and/or closure of weapons production facilities and research reactors, and are involved in the siting, permitting and design of nuclear waste treatment and handling facilities. Additionally, we provide services for special nuclear material processing and operations.

        Environmental.    We provide program management, compliance and environmental consulting for contaminated site assessment and remediation projects (including remediation of unexploded ordnance and chemical and biological agents), ecological and natural resource and sediment damage assessments, strategic environmental management and permitting services, environmental liability management services, ordnance and explosives management services, site investigations, remedial design, implementation and construction services, treatment systems for hazardous and toxic waste contaminated properties, and sustainable development planning and design services.

        Government Facilities and Infrastructure.    We provide lifecycle services for facilities and infrastructure to the U.S. federal and other national governments. Services include planning, consulting, design, engineering, program management, design/build, contingency planning and logistics support, and operations and maintenance. Operations and maintenance activities include outsourcing of facilities maintenance and management, utilities operations and maintenance, environmental support, other base operating services and minor capital construction projects. Contracts are typically long-term. Contingency planning and logistics support services include technical support, material expediting, supply and value chain management, transportation and distribution, and deployment logistics.

        Water, Wastewater and Water Resources.    We provide a complete range of services for the planning, design build, construction, construction management and program management of water supply and

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delivery systems, and wastewater collection and treatment facilities. Services are provided for new and expanded water storage, transmission, treatment (including desalination plants and membrane technology) and disposal systems, wastewater distribution systems, and wastewater collection and conveyance systems. Additionally, we provide water resources management, environmental restoration and watershed management, ground water modeling and protection, wastewater reclamation and reuse, biosolids management and financial planning.

        Transportation.    We provide consulting, engineering and construction services for airports, highways, bridges, seaports, railroads and transit systems. These services include transportation planning, environmental planning, project siting, permitting, design, construction and program management, management consulting and design/build delivery.

        Water and Wastewater Operations and Maintenance.    We provide water, wastewater and public works operations and maintenance services, including startup and performance testing, consulting, asset management, facility operations, and on-going maintenance and management. The facility operations services include water and wastewater treatment, collection and distribution, equipment and process maintenance, and replacement and site grounds maintenance.

        City Operations.    We provide operational support services to cities. These services include business operations such as accounting, human resources, procurement, public works, community development, and parks and recreation functions. Services are provided for new city start-up and on-going support of operations typically for a five year contract period.

        Information Technology—Enterprise Management Solutions.    We provide program management, consulting, integration and managed services for specialized information technology, software and integrated security industries. We are focused on infrastructure and asset management along with geospatial program management solutions for all customers within the government and industrial sectors. We also are focused on new and emerging program management and deployment opportunities within the next generation of WiFi/WiMax information management systems.

        Energy, Chemicals, and Industrial Systems.    We provide a broad array of life cycle services to the energy, mining, and chemicals markets. The energy markets include upstream oil and gas, oil sands, refining, biofuels, pipelines and terminals, and clean energy application projects such as gasification, wind, solar and carbon offset. Our services include major program management, consulting, front end engineering and design (FEED Services), engineering-procurement-construction (EPC) projects, fabrication and module assembly of client-owned facilities, construction services, operations and maintenance (O&M), integrated planning, permitting, and EPC delivery and sustaining services to reduce cycle times and to meet the energy needs of the future in a sustainable manner. We also provide consulting and project delivery services for a diverse portfolio of projects including greenhouse gas management, energy conservation (e.g., LEED certification), water technology/management, process optimization and waste minimization. We also bring our clients specialized know-how in planning, logistics, modular design and construction, constructing, and maintaining facilities in extreme climatic conditions throughout the Arctic region (including Alaska, Russia, Canada and other locations), South America and the Middle East.

        We also provide a broad array of life cycle services to industrial markets to improve the performance and operations of industrial facilities. These services typically include consulting, design, project delivery, licensing, air quality management, environmental, health and safety auditing and performance, regulatory compliance, renewable energy and facility sustainability analysis, risk assessment and ecosystems management.

        Manufacturing and Life Sciences.    We provide a full range of EPC, project management, and program management services to the automotive, aerospace and aviation, food and beverage, metals,

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and consumer product sectors of the manufacturing industry. Additionally, we provide consulting and technology services for lean and agile manufacturing, supply chain and logistics management, manufacturing, packaging and material handling technology and strategic initiatives for optimizing customer operations. We provide EPC management and validation services to major pharmaceuticals and biotech companies focusing on active pharmaceutical ingredients, fill/finish, and integrated project delivery, including validation and commissioning.

        Electronics and Advanced Technology.    We provide program management, consulting, planning, architectural and engineering design, construction services and products, and facility support/optimization to manufacturing clients in the high-technology research and manufacturing markets including circuit, wafer, foundry, nanotechnology, research laboratory, data center and flat panel display industries. Our clients typically require integrated design and construction services for complex manufacturing systems, including cleanrooms, ultrapure water and wastewater systems, chemical and gas systems and production tools.

        Power.    We provide engineering and EPC services to regulated and nonregulated sectors of the power industry, including new generation capacity utilizing gas, coal, and alternative fuel technologies, industrial co-generation and environmental compliance-driven projects. These services include integrated EPC and startup competencies that employ enhanced engineering and management tools.

Competition

        The market for our design, consulting, engineering construction, operations and maintenance, and program management services is highly competitive. We compete with large multinational firms having substantially greater financial, management and marketing resources as well as smaller firms with less resources who offer lower prices for particular services. In addition, some of our clients, including government agencies, occasionally utilize their own internal resources to perform design, engineering and construction services where we might have been the service provider.

        Numerous mergers and acquisitions in the engineering services industry have resulted in a group of large firms that offer a full complement of single-source services including studies, designs, construction, operations, maintenance and in some instances, facility ownership. Included in the current trend is movement towards larger program and contract awards and longer-term contract periods for a full suite of services, (e.g., 5 to 20 year full-service contracts). While these larger, longer, more comprehensive contracts require us to have substantially greater financial and human capital than in the past, we are poised to effectively compete for such full service programs.

        To our knowledge, no single company or group of companies currently dominates any significant portion of the engineering services markets. Competition in the engineering services industry is based on quality of performance, reputation, expertise, price, technology, customer relationships, range of service offerings and domestic and international office networks. For additional information regarding competition, see "Risk Factors—Our industry is highly competitive" in Item 1A of this Annual Report on Form 10-K.

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Backlog

        The following table provides backlog revenues by operating segment for the years ended December 31:

($ in millions)	2007		2006
Federal	$	935.6	$	725.1
Civil Infrastructure		2,015.1		2,399.4
Industrial		2,594.2		812.0
	$	5,544.9	$	3,936.5

        We define backlog as contracted task orders less previously recognized revenue on such task orders. Our backlog does not reflect any future activities related to unconsolidated joint ventures. Many of our contracts require us to provide services that span over a number of fiscal quarters and often over fiscal years. U.S. government agencies operate under annual fiscal appropriations by Congress and fund various federal contracts only on an incremental basis. The same is true of many state, local and foreign contracts. For more information on backlog, see "Risk Factors—Our backlog is subject to unexpected adjustments and cancellations and is, therefore, an uncertain indicator of our future performance" in Item 1A of this Annual Report on Form 10-K. The increase in the Federal segment backlog is due to an extension of the Hanford River Protection project in the nuclear group and multiple projects with the Air Force Center for Engineering and the Environment awarded in the current year. The decrease in the Civil Infrastructure segment backlog was the result of fewer significant awards as compared to the prior period, and working off prior period backlog. The Industrial segment backlog increased due to new projects awarded including backlog acquired and those brought on by the current year acquisitions.

Available Information

        For additional information regarding CH2M HILL, including free copies of filings with the Securities and Exchange Commission (SEC), please visit our web site at www.ch2m.com. The SEC filings, which include our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K are located in the About Us/Employee Ownership section of our web site and are made available as soon as practicable after they are filed with the SEC.

Item 1A.    Risk Factors

You should carefully consider the following factors and other information contained in this Annual Report on Form 10-K before deciding to invest in our common stock.

Risks Related to Our Business

Unpredictable economic cycles, uncertain demand for our engineering capabilities and related services, and failure by our major customers to pay our fees, could cause our revenues to fluctuate.

        Demand for our engineering and other services is affected by the general level of economic activity in the markets in which we operate, both in the U.S. and internationally. Our customers, particularly our private sector customers, and the markets in which we compete to provide services, are likely to experience periods of economic decline from time-to-time. In particular, world markets are experiencing increasing commodity prices, including oil and raw materials prices, which could reduce or curtail projects by industrial customers. Similarly, the prolonged downturns in the telecommunications and semiconductor markets have subsided to a limited degree, but our customers in those markets have been slower than expected in starting new capital expenditure programs.

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        Adverse economic conditions may decrease our customers' willingness to make capital expenditures or otherwise reduce their spending to purchase our services, which could result in diminished revenues and margins for our business. In addition, adverse economic conditions could alter the overall mix of services that our customers seek to purchase, and increased competition during a period of economic decline could force us to accept contract terms that are less favorable to us than we might be able to negotiate under other circumstances. Changes in our mix of services or a less favorable contracting environment may cause our revenues and margins to decline. Moreover, our customers may experience difficult business climates from time-to-time and could delay or fail to pay our fees as a result. If a customer failed to pay a significant outstanding fee, our financial results could be adversely affected and our stock price could be reduced.

        The uncertainty of large-scale domestic and international projects makes it particularly difficult to predict whether and when we will receive a contract award. The uncertainty of contract award timing can present difficulties in matching our workforce size with our contract needs. If an expected contract award is delayed or not received, we could incur costs resulting from reductions in staff or redundancy of facilities that would have the effect of reducing our profits.

Changes and fluctuations in government's spending priorities could adversely affect our revenue expectations.

        Because a substantial part of our overall business is generated either directly or indirectly as a result of federal and local government regulatory and infrastructure priorities, shifts in these priorities due to changes in policy imperatives or economic conditions are often unpredictable and may affect our revenues.

        Political instability in key regions around the world coupled with the U.S. federal government's commitment to the war on terror put at risk federal discretionary spending, including spending on infrastructure projects that are of particular importance to our business. At the state and local levels, the need to compensate for reductions in the federal matching funds, as well as financing of federal unfunded mandates, creates tremendous pressures to cut back on infrastructure project expenditures as well. While we have won and are continuing to seek federal contracts related to changing U.S. federal government priorities, such as unforeseen disaster response, rebuilding Iraq and Afghanistan, and some other projects that reflect current government focus, there can be no assurances that potential reduction of federal infrastructure project funding would not adversely affect our business.

Environmental regulations and related compliance investigations are expensive, may adversely impact our project performance and could expose us to environmental liability.

        The assessment, analysis, remediation, handling, management and disposal of hazardous substances represent a significant portion of our business and involve significant risks. As a result, we are subject to a variety of environmental laws and regulations governing, among other things, discharges of pollutants and hazardous substances to air and water and the handling and disposal of hazardous waste including nuclear materials and related record keeping requirements. These laws and regulations and related investigations into our compliance, as it pertains to facility operations and remediation of hazardous substances, can cause project delays and, substantial management time commitment and may significantly add to our costs. Violations of these environmental laws and regulations could subject us to civil and criminal penalties and other liabilities, which can be very large. Although we have not been subject to any material civil or criminal penalties for violations of these laws to date, we have had to expend funds and divert resources to respond to reviews that have had a negative impact on the profitability of some projects. While the costs of these reviews have not been material to our consolidated results of operations in the past, additional or expanded reviews or proceedings relating to these laws, or any substantial fines or penalties, could affect our profitability and our stock price in the future, or could adversely affect our ability to compete for new business. Moreover, these laws and

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regulations may become more stringent, or may be more stringently enforced in the future, which could increase our costs of operations and reduce our profitability.

We may not be successful in growing through acquisitions or integrating effectively and efficiently any businesses and operations we may acquire.

        Our success depends on our ability to continually enhance and broaden our service offerings in response to changing customer demands, technology, and competitive pressures. Numerous mergers and acquisitions in our industry have resulted in a group of larger firms that offer a full complement of single-source services including studies, design, engineering, procurement, construction, operations, maintenance and, in some instances, facility ownership. To remain competitive, we may acquire new and complementary businesses to expand our portfolio of services, add value to the projects undertaken for clients or enhance our capital strength. We do not know if we will be able to complete any future acquisitions or whether we will be able to successfully integrate any acquired businesses, operate them profitably, or retain their key employees.

        Even if we do identify suitable acquisition candidates, we anticipate significant competition when trying to acquire these candidates, and there can be no assurance that we will be able to acquire such candidates at reasonable prices or on favorable terms. Some of the competing buyers may be stronger financially than we are. As a result of this competition, we may not succeed in acquiring suitable candidates or may have to pay more than we would prefer to make an acquisition. If we cannot identify or successfully acquire suitable acquisition candidates, we may not be able to successfully expand our operations. Further, there can be no assurance that we will be able to generate sufficient cash flow from an acquisition to service any indebtedness incurred to finance such acquisitions or realize any other anticipated benefits. Nor can there be any assurance that our profitability will be improved by any one or more acquisitions. Any acquisition may involve operating risks, such as:

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the difficulty of assimilating the acquired operations and personnel and integrating them into our current business;



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the potential disruption of our ongoing business;



•

the diversion of management's attention and other resources;



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the possible inability of management to maintain uniform standards, controls, procedures and policies;



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the risks of entering markets in which we have little or no experience;



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the potential impairment of relationships with employees;



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the possibility that any liabilities we may incur or assume may prove to be more burdensome than anticipated; and



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the possibility that any acquired firms do not perform as expected.

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Inability to secure adequate bonding would impact our ability to win projects.

        As is customary in our industry, we are often required to provide performance and surety bonds to customers in connection with our construction, EPC and fixed price projects. These bonds indemnify the customer if we fail to perform our obligations under the contract. Failure to provide a bond on terms and conditions desired by a customer may result in an inability to compete for or win a project. Historically we have had and continue to have good relationships with our sureties and have a strong bonding capacity. The issuance of bonds under any bonding facilities, however, is at the sureties' sole discretion. Bonds may be more difficult to obtain in the future or they may only be available at significant additional cost. There can be no assurance that bonds will continue to be available to us on reasonable terms. Our inability to obtain adequate bonding may result in our ineligibility to bid for construction, EPC and fixed price projects, which could have a material adverse effect on our growth and financial condition.

It can be difficult or expensive to obtain the insurance we need for our business operations.

        As part of our business operations, we maintain insurance both as a corporate risk management strategy and in order to satisfy the requirements of many of our contracts. Insurance products go through market fluctuations and can become expensive and sometimes very difficult to obtain. Although in the past we have generally been able to cover our insurance needs, there can be no assurances that we can secure all necessary or appropriate insurance in the future. Our failure to obtain such insurance, could lead to uninsured losses that could materially adversely affect our results of operations or financial condition.

        Our risk management personnel continuously monitor the developments in the insurance market. The financial stability of the insurance and surety providers is one of the major factors that we have taken into account when buying our insurance coverage. Currently our insurance and bonds are purchased from several of the world's leading and financially stable providers often in layered insurance or co-surety arrangements. The built-in redundancy of such arrangements usually enables us to call upon existing insurance and surety suppliers to fill gaps that may arise if other such suppliers become financially unstable.

The success of our joint ventures depends on the satisfactory performance by our joint venture partners of their joint venture obligations. The failure of our joint venture partners to perform their joint venture obligations could impose on us additional financial and performance obligations that could result in reduced profits or, in some cases, significant losses for us with respect to the projects that our joint ventures undertake.

        We enter into joint ventures as part of our business. The success of these joint ventures depends, in large part, on the satisfactory performance of our joint venture partners meeting their obligations. If our joint venture partners fail to satisfactorily perform their joint venture obligations as a result of financial or other difficulties, the joint venture may be unable to adequately perform or deliver its contracted services. Under these circumstances, we may be required to make additional investments and provide additional services to ensure the adequate performance and delivery of the contracted services. These additional obligations could result in reduced profits or, in some cases, significant losses for us with respect to the joint venture.

We may be restricted in our ability to access the cash flows or assets from our subsidiaries and joint venture partners upon which we are substantially dependent.

        We are dependent on the cash flows generated by our subsidiaries and, consequently, on their ability to collect on their respective accounts receivables. Substantially all of our cash flows necessary to meet our operating expenditures are generated by our subsidiaries. The financial condition and operational requirements of our subsidiaries may limit our ability to obtain cash from them. In

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addition, we conduct some operations through foreign subsidiaries and joint ventures. We do not manage all of these entities. Even in those joint ventures that we manage, we are often required to consider the interests of our joint venture partners in connection with decisions concerning the operations of the joint ventures. Arrangements involving these foreign subsidiaries and joint ventures may restrict us from gaining access to the cash flows or assets of these entities. In addition, these foreign subsidiaries and joint ventures sometimes face governmentally imposed restrictions on their abilities to transfer funds to us.

Our dependence on subcontractors and equipment manufacturers could adversely affect us.

        We rely on third-party subcontractors as well as third-party equipment manufacturers to complete our projects. To the extent that we cannot engage subcontractors or acquire equipment or materials, our ability to complete a project in a timely fashion or at a profit may be impaired. If the amount we are required to pay for these goods and services exceeds the amount we have estimated in bidding for fixed-price contracts, we could experience losses in the performance of these contracts. In addition, if a subcontractor or a manufacturer is unable to deliver its services, equipment or materials according to the negotiated terms for any reason, including the deterioration of its financial condition, we may be required to purchase the services, equipment or materials from another source at a higher price. This may reduce the profit to be realized or result in a loss on a project for which the services, equipment or materials were needed.

We face risks associated with our international business.

        In 2007, we derived approximately 15% of our revenues from operations outside of the U.S. compared to 14% in 2006. Conducting business internationally is subject to a variety of risks including:

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Currency exchange rate fluctuations, either independently or together with the impact of international tax laws, and restrictions on currency movements could adversely affect our results of operations if we are forced to maintain assets in currencies other than the U.S. dollar because our results are reported in U.S. dollars.



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Political and economic instability and unexpected changes in regulatory requirements in foreign countries could adversely affect our projects overseas and our ability to repatriate cash.



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Inconsistent regulations and diverse licensing and legal requirements may increase our costs because our operations must comply with a variety of laws that differ from one country to another.



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Terrorist attacks and civil unrest in some of the countries where we do business may delay project schedules, threaten the health and safety of our employees and increase our cost of operations.



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Challenges in managing risks inherent in international operations, such as unique labor rules and corrupt business environments may cause inadvertent violations of laws that we may not immediately detect or correct.

        We do not know the impact that such regulatory, geopolitical and other factors may have on our business in the future.

Special risks associated with doing business in highly corrupt environments.

        Our international business operations include projects in developing countries and countries torn by war and conflict. Many of these countries are rated poorly by Transparency International, the independent watchdog organization for government and institutional corruption around the world. To the extent we operate outside of the U.S., we are subject to the Foreign Corrupt Practices Act (FCPA),

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which generally prohibits U.S. companies and their intermediaries from paying or offering anything of value to foreign government officials for the purpose of obtaining or keeping business, or otherwise receiving discretionary favorable treatment of any kind. In particular, we may be held liable for actions taken by our local partners, subcontractors and agents even though such parties are not always subject to our control. Any determination that we have violated the FCPA (whether directly or through acts of others, intentionally or through inadvertence) could result in sanctions that could have a material adverse effect on our business and on our ability to secure U.S. federal government contracts. While our staff is trained on the FCPA issues and we have procedures and controls in place to monitor compliance, situations outside of our control may arise that could potentially put us in violation of the FCPA inadvertently and thus negatively impact our business.

Government contracts present risks of termination for convenience, adjustment of payments received, restrictions on ability to compete for government work and funding constraints.

        In 2007, we derived approximately 28% of our total revenues from contracts with the U.S. federal government and foreign national governments. We own equity interests in joint ventures with revenues attributable primarily or entirely to contracts with U.S. federal government clients. The following risks are inherent in U.S. federal government contracts:

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Because federal laws permit government agencies to terminate a contract for convenience, our government clients may terminate or decide not to renew our contracts with little or no prior notice.



•

U.S. federal government clients may audit contract payments we receive for several years after these payments are made. Based on these audits, the clients may adjust or demand repayment of payments we previously received. Audits have been completed on our federal contracts through December 31, 2005, and are continuing for subsequent periods. None of the audits performed to date on our federal contracts has resulted in any significant adjustments to our financial statements. It is possible, however, that an audit in the future could have an adverse effect on our consolidated financial statements.



•

U.S. federal government contract regulations provide that any company convicted of a crime or indicted on a violation of statutes related to federal contracting may lose its right to receive future contract awards or extensions.



•

Our ability to earn revenues from our existing and future U.S. federal government projects will depend upon the availability of funding from U.S. federal government agencies. We cannot control whether those clients will fund or continue funding our outstanding projects.



•

In years when the U.S. federal government does not complete its budget process before the end of its fiscal year on September 30, government operations are typically funded pursuant to a "continuing resolution" that authorizes agencies of the U.S. government to continue to operate, but does not authorize new spending initiatives, which can delay the award of new contracts. These delays could have an adverse effect on our operating results.



•

Many U.S. federal government programs require contractors to have security clearances. Depending on the level of required clearances, security clearances can be difficult and time-consuming to obtain. If we or our employees are unable to obtain or retain necessary security clearances, we may not be able to win new business, and our existing customers could terminate their contracts with us or decide not to renew them. To the extent we cannot obtain or maintain the required security clearances for our employees working on a particular contract, we may not derive the revenue anticipated from the contract, which could adversely affect our business and results of operations.

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        Our ability to secure new government contracts and our revenues from existing government contracts could be adversely affected by any one or a combination of the factors listed above.

Many of our projects are funded under federal, state and local government contracts and if we are found to have violated the terms of the government contracts or applicable statutes and regulations, we are subject to the risk of suspension or debarment from government contracting activities, which could have a material adverse affect on our business and results of operations.

        If we fail to comply with the terms of one or more of our government contracts or governmental statutes and regulations, or if any of our companies or employees are indicted or convicted on criminal charges (including misdemeanors) relating to any of our government contracts, in addition to any civil or criminal penalties and costs we may incur, we could be suspended or debarred from government contracting activities for a period of time. Some federal and state statutes and regulations provide for automatic debarment in certain circumstances, such as upon a conviction for a violation. The suspension or debarment in any particular case may be limited to the facility, contract or subsidiary involved in the violation or could be applied to the whole CH2M HILL family of companies if the circumstances were deemed severe enough. Even a narrow suspension or debarment could result in negative publicity that could adversely affect our ability to renew contracts and to secure new contracts, both with governments and private customers, which could materially and adversely affect our business and results of operations.

Ongoing government investigations of VECO Corporation could have an adverse effect on our reputation in the business community or future business operations.

        On September 7, 2007, we acquired VECO Corporation (VECO) and substantially all of its operating businesses. Prior to the acquisition, on May 2, 2007, the founder, then chief executive officer, and principal shareholder of VECO, Bill Allen, entered into a plea agreement with the United States Department of Justice pursuant to which he pled guilty to certain criminal charges involving bribery of public officials, violation of campaign contribution laws, and tax fraud. In connection with the investigation of the allegations against Mr. Allen, the United States Department of Justice, the Internal Revenue Service and certain State of Alaska government agencies commenced investigations of VECO and certain of its employees. In the process of reviewing VECO's business and operations prior to the acquisition, we engaged in special due diligence designed to address concerns related to the conduct of VECO's past operations and various investigations underway by the Department of Justice, the Internal Revenue Service and certain State of Alaska government agencies. Although we were satisfied with the results of the due diligence review, no assurances can be given that the ongoing investigations will not result in civil or criminal charges against VECO, now a CH2M HILL subsidiary. Any such charges and related publicity could have an adverse effect on our reputation in the business community or future business operations.

Our backlog is subject to unexpected adjustments and cancellations and is, therefore, an uncertain indicator of our future performance.

        Our backlog at December 31, 2007 was $5.5 billion. We cannot assure that the revenues projected in our backlog will be realized or, if realized, will result in profits. Projects may remain in our backlog for an extended period of time prior to project execution and, once project execution begins, it may occur unevenly over the current and multiple future periods. In addition, our ability to earn revenues from our backlog depends on the availability of funding for various U.S. federal, state, local and foreign government agencies. Most of our domestic and international industrial clients have termination for convenience provisions in their contracts. Therefore, project terminations, suspensions or reductions in scope may occur from time-to-time with respect to contracts reflected in our backlog. Some backlog reductions would adversely affect the revenue and profit we actually receive from contracts reflected in

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our backlog. Future project cancellations and scope adjustments could further reduce the dollar amount of our backlog and the revenues and profits that we actually earn.

We could sustain losses on contracts that contain "fixed price" or "not to exceed" pricing provisions if our costs exceed the fixed or maximum prices.

        In 2007, we derived approximately 40% of our revenues from "fixed price" contracts and approximately 39% of our revenues from time-and-materials contracts, most of which had "not to exceed" price limits. Under "fixed price" contracts, we agree to deliver projects for a definite, predetermined price regardless of our actual costs incurred over the life of the project. Under time-and-materials contracts with "not to exceed" provisions, we are compensated for the labor hours expended at agreed-upon hourly rates plus cost of materials used; however, there is a stated maximum compensation for the services to be provided under the contract. Many fixed price and "not to exceed" contracts involve large industrial facilities and public infrastructure projects and present the risk that our costs to complete a project may exceed the fixed price or "not to exceed" price agreed upon with the client. The fixed or maximum fees negotiated for such projects may not cover our actual costs and desired profit margins. If our actual costs for a fixed or "not to exceed" price project are higher than we expect, our profit margins on the project will be reduced or we could suffer a loss.

Rising inflation, interest rates and/or construction costs could reduce the demand for our services as well as decrease our profit on our existing contracts, in particular with respect to our fixed price contracts.

        Because a significant portion of our revenues is earned from time-and-materials type contracts, guaranteed maximum price contracts and fixed price contracts, as well as contracts that base significant financial incentives on our ability to keep costs down, we bear some or all of the risk of rising inflation with respect to those contracts. In addition, rising inflation, interest rates and/or construction costs could reduce the demand for our services. Furthermore, if we expand our business into markets and geographic areas where "fixed price" work is more prevalent, inflation may have a larger impact on our results of operations in the future. Therefore, increases in inflation, interest rates and/or construction costs could have a material adverse impact on our business and financial results.

Our industry is highly competitive.

        We are engaged in a highly competitive business in which most of our contracts with public sector clients are awarded through a competitive bidding process that places no limit on the number or type of potential service providers. The process usually begins with a government agency request for proposal that delineates the size and scope of the proposed contract. The government agency evaluates the proposals on the basis of technical merit and cost. In the water, wastewater and water resources markets, some contracts are awarded through qualification selection processes that vary among projects.

        In both the private and public sectors, acting either as a prime contractor or as a subcontractor, we may join with other firms that we otherwise compete with to form a team to compete for a single contract. Because a team can often offer stronger combined qualifications than any firm standing alone, these teaming arrangements can be very important to the success of a particular contract competition or proposal. Consequently, we maintain a network of relationships with other companies to form teams that compete for particular contracts and projects. Failure to maintain technical and price competitiveness, as well as failure to maintain access to strong teaming partners may impact our ability to win work.

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Our projects may result in liability for faulty engineering services.

        Because our projects are often large and can affect many people, our failure to make judgments and recommendations in accordance with applicable professional standards could result in large damages and, perhaps, punitive damages. Our engineering practice involves professional judgments regarding the planning, design, development, construction, operations and management of industrial facilities and public infrastructure projects. Although we have adopted a range of insurance, risk management and risk avoidance programs designed to reduce potential liabilities, there can be no assurance that such programs will protect us fully from all risks and liabilities.

Our inability to attract and retain professional personnel could adversely affect our business.

        Our ability to attract, retain and expand our staff of qualified engineers and technical professionals will be an important factor in determining our future success and growth. A shortage of qualified technical professionals currently exists in the engineering industry. The market for these professionals is competitive in the U.S. and internationally. We cannot assure that we will continue to be successful in attracting and retaining such professionals. Since we derive a significant part of our revenues from services performed by our professional staff, our failure to retain and attract professional staff could adversely affect our business by impacting our ability to complete our projects and secure new contracts.

A reduction in the scope of environmental regulations or changes in government environmental policies could adversely affect our revenues.

        A substantial portion of our business is generated either directly or indirectly as a result of federal, state, local and foreign laws and regulations related to environmental matters. Changes in environmental regulations could affect our business more significantly than they would affect some other engineering firms. Accordingly, a reduction in the number or scope of these laws and regulations, or changes in government policies regarding the funding, implementation or enforcement of such laws and regulations, could significantly reduce the size of one of our most important markets and limit our opportunities for growth or reduce our revenues below their current levels. In addition, any significant effort by government agencies to reduce the role of private contractors in regulatory programs, including environmental compliance projects, could have the same adverse effects.

Percentage-of-completion accounting used for our engineering and construction contracts can result in overstated or understated profits or losses.

        The revenue for our engineering and construction contracts is accounted for on the percentage-of-completion method of accounting. This method of accounting requires us to calculate revenues and profit to be recognized in each reporting period for each project based on our predictions of future outcomes, including our estimates of the total cost to complete the project, project schedule and completion date, the percentage of the project that is completed and the amounts of any probable unapproved change orders. Our failure to accurately estimate these often subjective factors could result in reduced profits or losses for certain contracts.

Actual results could differ from the estimates and assumptions used to prepare our financial statements.

        In order to prepare financial statements in conformity with generally accepted accounting principles in the United States of America, we are required to make estimates and assumptions as of the date of the financial statements which affect the reported values of our assets, liabilities, revenues

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and expenses, and disclosures of contingent assets and liabilities. Areas requiring significant estimates by us include:

•

Recognition of contract revenues, costs, profit or losses in applying the percentage-of-completion method of accounting;



•

Recognition of recoveries under contract change orders or claims;



•

Collectibility of billed and work-in-process unbilled accounts receivables and the need for and the amount of allowances for problematic accounts;



•

Estimated amounts for anticipated project losses, warranty costs and contract close-out costs;



•

Determination of potential liabilities under pension and other post-retirement benefit programs;



•

Income tax provisions and related valuation allowances;



•

Accruals for other estimated liabilities; and



•

Asset valuations.

Systems failures could disrupt our business and impair our ability to effectively provide our products and services to our customers, which could damage our reputation and adversely affect our operating results.

        As a global company, we are heavily reliant on computer, information and communications technology and related systems in order to properly operate. From time to time, we may be subject to systems failures, including network, software or hardware failures, whether caused by us, third-party service providers, intruders or hackers, computer viruses, natural disasters, power shortages or terrorist attacks. Such failures could cause loss of data and interruptions or delays in our or our customers' businesses and could damage our reputation. In addition, the failure or disruption of our communications or utilities could cause us to interrupt or suspend our operations or otherwise adversely affect our business. Our property and business interruption insurance may be inadequate to compensate us for all losses that may occur as a result of any system or operational failure or disruption and, as a result, our actual results could differ materially from those anticipated.

Weather

        Our businesses could be materially and adversely affected by severe weather. Repercussions of severe weather conditions may include:

•

Evacuation of personnel and curtailment of services;



•

Increased labor and materials costs in areas resulting from weather-related damage and subsequent increased demand for labor and materials for repairing and rebuilding;



•

Weather-related damage to our jobsites or facilities;



•

Inability to deliver materials to jobsites in accordance with contract schedules; and



•

Loss of productivity.

We typically remain obligated to perform our services after a natural disaster unless the contract contains a force majeure clause relieving us of our contractual obligations in such an extraordinary event. If we are

        not able to react quickly to force majeure, our operations may be affected significantly, which would have a negative impact on our financial condition, results of operations or cash flows.

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Risks Related to Our Internal Market

Absence of a public market may prevent you from selling your stock and cause you to lose all or part of your investment.

        There is no public market for our common stock. While we intend the internal market to provide liquidity to shareholders, there can be no assurance that there will be enough orders to purchase shares to permit shareholders to sell their shares on the internal market, or that a regular trading market will be sustained in the future. The price in effect on any trade date may not be attractive enough to both buyers and sellers to result in a balanced market because the price will be fixed in advance by our Board of Directors, using their judgment of the fair market value of our common stock, and not by actual market trading activity. Moreover, although we may enter the internal market as a buyer of common stock if there are more sell orders than buy orders, we have no obligation to engage in internal market transactions and will not guarantee market liquidity. Consequently, insufficient buyer demand could cause sell orders to be prorated, or could prevent the internal market from opening on any particular trade date. Insufficient buyer demand could cause shareholders to suffer a total loss of investment or substantial delay in their ability to sell their common stock. No assurance can be given that shareholders desiring to sell all or a portion of their shares of common stock will be able to do so. Accordingly, the investment in our common stock is suitable for you only if you have limited need for liquidity in your investment.

Transfer restrictions on our common stock could prevent you from selling your common stock and cause you to lose all or part of your investment.

        Since all of the shares of our common stock are subject to transfer restrictions, you will generally only be able to sell your common stock through our internal market on the four trade dates in each year. Unlike shares that are actively traded in the public markets, you may not be able to sell at a particular time even though you would like to do so. Our common stock price could decline between the time you want to sell and the time you become able to sell. For a detailed discussion of the transfer restrictions on our common stock, see "Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities" in Item 5 of this Annual Report on Form 10-K.

Our stock prices are and will continue to be determined by our Board of Directors' judgment of fair market value and not by market trading activity.

        The offering prices at each trade date will be established by our Board of Directors approximately four weeks before each trade date. In establishing the price, our Board of Directors will take into consideration the factors that are described in Item 5 of this Annual Report on Form 10-K. Our Board of Directors will, however, set the offering price in advance of each trade date, and all trades on our internal market will take place at the price established for each trade date. Therefore, market trading activity on any given trade date cannot affect the price on that trade date. This is a risk to you because our common stock price will not change to reflect supply of and demand for shares on a given trade date as it would in a public market. You may not be able to sell shares or you may have to sell your shares at a price that is lower than the price that would prevail if the internal market price could change on a given trade date to reflect supply and demand. Our Board of Directors intends to use the common stock valuation methods that result in offering prices that represent fair market value. The valuation method for our common stock is subject to change at the discretion of our Board of Directors.

The limited market and transfer restrictions on our common stock will likely have anti-takeover effects.

        Only our employees, directors, eligible consultants and employee benefit plans may own our common stock and participate in our internal market. In addition, we have imposed significant

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restrictions on the transfer of our common stock other than through sales on our internal market. These limitations make it extremely difficult for a potential acquirer who does not have the prior consent of our Board of Directors to acquire control of our company, regardless of the price per share an acquirer might be willing to pay and whether or not our shareholders would be willing to sell at that price.

Future returns on our common stock may be significantly lower than historical returns.

        We cannot assure you that our common stock will provide returns in the future comparable to those achieved historically or that the price will not decline.

Changes in our business may increase the volatility of the stock price.

        The stock price could be subject to significant fluctuations. The volatility is expected to result from the impact on our stock price of:

•

our significant investments in publicly and privately traded companies and the volatility of the price of those companies' shares



•

the mix of our commercial and international business as a proportion of our overall business and the volatility associated with companies in those business areas



•

the impact of acquisitions, investments, joint ventures and divestitures that we may undertake

        Finally, the market factor used in the formula may change from quarter to quarter, as appropriate, to reflect changing business, financial, investment and market conditions.

Restrictions in our restated articles of incorporation and bylaws may discourage takeover attempts that you might find attractive.

        Our restated articles of incorporation and bylaws may discourage or prevent attempts to acquire control of us that are not approved by our board of directors, including transactions in which stockholders might receive a premium for their shares above the stock price. Our stockholders may view such a takeover attempt favorably. In addition, the restrictions may make it more difficult for our stockholders to elect directors not endorsed by us.

Item 1B.    Unresolved Staff Comments

        We do not currently have any unresolved written comments from the Staff of the SEC regarding our periodic or current reports under the Securities Exchange Act of 1934.

Item 2.    Properties

        Operations of CH2M HILL and our subsidiaries are conducted at both owned and leased properties in several countries throughout the world. Our corporate headquarters are located in Englewood, Colorado, where we lease approximately 155,000 square feet of space. The lease on our corporate headquarters building expires in 2017, with an option to extend the term twice for either a ten or five year term. The office space that we lease is based upon commercially available terms. We believe that our existing facilities are adequate for the present needs of our business and that suitable additional or substitute space will be available as needed to accommodate any expansion of operations.

Item 3.    Legal Proceedings

        We are a party to various contractual guarantees and legal actions arising in the normal course of our business. From time to time, agencies of the U.S. government investigate whether we conduct our operations in accordance with applicable regulatory requirements. Because a large portion of our

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business comes from federal, state, and municipal sources, our procurement practices at times also are subject to review and occasional investigations by U.S. and state attorneys offices. Such state and U.S. government investigations, whether relating to government contracts or conducted for other reasons, could result in administrative, civil or criminal liabilities, including repayments, fines or penalties. These investigations often take years to complete and many result in no adverse action. Damages assessed in connection with and the cost of defending any such actions could be substantial. While the outcomes of pending proceedings are often difficult to predict, as of the date of this filing, our management believes that no ongoing litigation or investigation is likely to result in a material adverse impact on our consolidated financial statements.

        In January 2006, a subsidiary entered into a Deferred Prosecution Agreement (DPA) with the office of the United States Attorney for the District of Connecticut. The DPA relates to an investigation of a Clean Water Act (CWA) violation at two wastewater treatment facilities in Connecticut. Pursuant to the DPA, the subsidiary contributed $2.0 million to community projects and took other agreed upon steps to enhance CH2M HILL's CWA compliance procedures at the two wastewater treatment facilities in Connecticut. Provided CH2M HILL complies with its obligations under the DPA through January 2008, the U.S. District Attorney for the District of Connecticut will recommend dismissal of all actions against the subsidiary in connection with this matter. The violation is related to failure to comply with sampling and reporting requirements of the CWA and there is no evidence the violation resulted in harm to human health or the environment. Although the term of the DPA ended in January 2008 and we believe we have fully complied with the DPA, the DPA will not be released and the criminal charge will not be removed until the U.S. District Attorney for the District of Connecticut is satisfied all conditions have been met. We are currently in discussions with the U.S. District Attorney for the District of Connecticut to achieve this resolution.

        In September 7, 2007, we acquired VECO and substantially all of its operating businesses. Prior to the acquisition, on May 2, 2007, the founder, then chief executive officer and principal shareholder of VECO, Bill Allen, entered into a plea agreement with the United States Department of Justice pursuant to which he agreed to plead guilty to certain criminal charges involving bribery of public officials, violation of campaign contribution laws, and tax fraud. In connection with the investigation of the allegations against Mr. Allen, the United States Department of Justice, the Internal Revenue Service and certain State of Alaska government agencies commenced investigations of VECO and certain of its other employees. In the process of reviewing VECO's business and operations prior to the acquisition, we engaged in special due diligence designed to address concerns related to the conduct of VECO's past operations and various investigations underway by the Department of Justice, the Internal Revenue Service and certain State of Alaska government agencies. Although we were satisfied with the results of the due diligence review, no assurances can be given that the ongoing investigations will not result in civil or criminal charges against VECO, now a subsidiary of ours. Any such charges and related publicity could have an adverse effect on our reputation in the business community or future business operations.

        On July 27, 2007, our subsidiary, CH2M HILL Hanford Group ("CH2M Hanford") caused a spill of approximately 85 gallons of radioactive waste, during routine maintenance operations on the Hanford Reservation owned by the United States Department of Energy ("DOE"). No one was injured, and the DOE's accident investigation concluded that "[because] of low concentrations and short duration of the exposure, it is not likely that the spill event caused an overexposure or chronic health impacts". CH2M Hanford took all prompt and appropriate steps to formulate and implement a corrective action plan that has been accepted by the DOE. In connection with the event, the DOE's Office of Health, Safety and Security has conducted an investigation under its Price Anderson Act nuclear safety authority. The DOE has not yet taken any formal action against CH2M Hanford as a result of this investigation. The DOE has broad discretion in setting fines, but it takes into account a contractor's prompt acceptance of responsibility and the formulation of an appropriate corrective action

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plan, which is what CH2M HILL has done to what we believe to be the DOE's satisfaction. The Washington Department of Ecology has proposed to fine the DOE $.5 million in connection with the spill and, if the fine is levied, CH2M HILL will be financially liable for it under our contract with the DOE. CH2M Hanford is in discussions with the the Washington Department of Ecology about a possible reduction of the proposed fine. Finally, the Environmental Protection Agency ("EPA") proposed to fine both the DOE and CH2M HILL in connection with the spill. CH2M HILL settled that fine for $6,800 and $24,000 in in-kind services to support the local Tri-County emergency response team. CH2M HILL's management does not believe that this event will materially impact CH2M HILL's business or results of operations.

Item 4.    Submission of Matters to a Vote of Security Holders

        No items were submitted to a vote of security holders during the fourth quarter of 2007.

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PART II

Item 5.    Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

        We are employee owned. As a result, our stock is only available to certain employees, directors, eligible consultants and benefit plans. There is no market for our stock with the general public. In order to provide liquidity for our shareholders, however, an internal market (Internal Market) is maintained through an independent broker, currently Neidiger, Tucker and Bruner, Inc. (NTB).

        The Internal Market permits existing shareholders to offer to sell or purchase shares of our common stock on predetermined days (each, a Trade Date). Generally, there are four Trade Dates each year which typically occur approximately four weeks after the quarterly meetings of our Board of Directors. Currently our Board of Directors meetings are scheduled for February, May, August and November. All sales of our common stock are made at the price determined by our Board of Directors pursuant to the valuation methodology described below.

        All sales of common stock on the Internal Market are restricted to the following authorized buyers:

•

Our employees, directors and eligible consultants



•

Trustees of the benefit plans



•

Administrator of the Payroll Deduction Stock Purchase Plan (PDSPP)

        We may impose limitations on the number of shares that an individual may purchase when there are more buy orders than sell orders for a particular Trade Date. After our Board of Directors determines the stock price for use on the next Trade Date, which is approximately four weeks prior to such Trade Date, all shareholders, employees, directors and eligible consultants will be advised as to the new stock price and the next Trade Date.

        Our Internal Market is managed through an independent broker, currently NTB, which acts upon instructions from the buyers and sellers to effect trades at the stock price set by our Board of Directors and in accordance with the Internal Market rules. NTB does not play a role in determining the price of our common stock and is not affiliated with us. Individual stock ownership account records are currently maintained by our in-house transfer agent.

        We may purchase shares if the Internal Market is under-subscribed. We may, but are not obligated to, purchase shares of common stock on the Internal Market on any Trade Date at the price in effect on that Trade Date, but only to the extent that the number of shares offered for sale by shareholders exceeds the number of shares sought to be purchased by authorized buyers. The decision as to whether or not we will purchase shares in the Internal Market, if the Internal Market is under-subscribed, is solely within our discretion and we will not notify investors as to whether or not we will participate prior to the Trade Date. Investors should understand that there can be no assurance that they will be able to sell their CH2M HILL stock without substantial delay or that their stock will be able to be sold at all on the Internal Market. We will consider a variety of factors including our cash position, financial performance and number of shares outstanding in making the determination as to whether to participate in an under-subscribed market. The terms of our existing unsecured revolving line of credit do not play a role in the decision as to whether to buy shares in the Internal Market. To date, no other factors have been considered by us in our decisions as to whether or not to participate in an under-subscribed market.

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        If the aggregate number of shares offered for sale on the Internal Market on any Trade Date is greater than the number of shares sought to be purchased, shareholder offers to sell will be accepted as follows:

•

If enough orders to buy are received to purchase all the shares offered by each seller selling fewer than 500 shares and at least 500 shares from each other seller, then all sell orders will be accepted up to the first 500 shares and the portion of any sell orders exceeding 500 shares will be accepted on a pro-rata basis



•

If not enough orders to buy are received to purchase all the shares offered by each seller selling fewer than 500 shares and at least 500 shares from each other seller, then the purchase orders will be allocated equally to each seller

        We may sell shares if the Internal Market is over-subscribed. To the extent that the aggregate number of shares sought to be purchased exceeds the aggregate number of shares offered for sale, we may, but are not obligated to, sell authorized but unissued shares of common stock on the Internal Market at the price in effect on that Trade Date to satisfy purchase demands. The decision as to whether or not we will sell shares in the Internal Market, if the Internal Market is over-subscribed, is solely within our discretion and we will not notify investors as to whether or not we will participate prior to the Trade Date. Investors should understand that there can be no assurance that they will be able to buy as many shares as they would like on a given Trade Date. We will consider a variety of factors including our cash position, financial performance and number of shares outstanding in making the determination as to whether to participate in an over-subscribed market. The terms of our existing unsecured revolving line of credit do not play a role in the decision as to whether to sell shares in the Internal Market. To date, no other factors have been considered by us in our decisions as to whether or not to participate in an over-subscribed market.

        If the aggregate purchase orders exceed the number of shares available for sale and we choose not to issue additional shares, the following prospective purchasers will have priority to purchase shares, in the order listed:

•

Administrator of the PDSPP



•

Trustees of the 401(k) Plan



•

Individual employees, directors and eligible consultants on a pro-rata basis

        All sellers on the Internal Market, other than us and the trustees of the 401(k) Plan, will pay NTB a commission equal to two percent of the proceeds from such sales. Employees who sell their common stock upon retirement from CH2M HILL will have the option to sell the common stock they own on the Internal Market and pay a commission on the sale or to sell to us without paying a commission. In the latter case, the employee will sell their common stock to us at the price in effect on the date of their termination in exchange for a four-year note at a market interest rate determined biannually. No commission is paid by buyers on the Internal Market.

Price of our Common Stock

        Our Board of Directors will determine the price, which is intended to be the fair market value, of the shares of our common stock to be used for buys and sells on each Trade Date pursuant to the valuation methodology described below. The price per share of our common stock generally is set as follows:

Share Price = [(7.8 × M × P) + (SE)] / CS

        In order to determine the fair market value of the common stock in the absence of a public trading market, our Board of Directors felt it appropriate to develop a valuation methodology to use as

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a tool to determine a price that would be a valid approximation of the fair market value. In determining the fair market value stock price, our Board of Directors believes that the use of a going concern component (i.e., net income, which we call profit after tax, as adjusted by the market factor) and a book value component (i.e., total shareholders' equity) is important. Our Board of Directors believes that the process we have developed reflects modern equity valuation techniques and is based on those factors that are generally used in the valuation of equity securities.

        The existence of an over-subscribed or under-subscribed market on any given Trade Date will not affect the stock price on that Trade Date. However, our Board of Directors, when determining the stock price for a future Trade Date, may take into account the fact that there have been under-subscribed or over-subscribed markets on prior Trade Dates.

        Market Factor ("M").    "M" is the market factor, which is subjectively determined in the sole discretion of our Board of Directors. In determining the market factor, our Board of Directors will take into account factors the directors considered to be relevant in determining the fair market value of our common stock, including:

•

The market for publicly traded equity securities of companies comparable to us



•

The merger and acquisition market for companies comparable to us



•

The prospects for our future performance



•

General economic conditions



•

General capital market conditions



•

Other factors our Board of Directors deem appropriate

        Our Board of Directors has not assigned predetermined weights to the various factors it may consider in determining the market factor. A market factor greater than one would increase the price per share and a market factor less than one would decrease the price per share.

        In its discretion, our Board of Directors may change, from time-to-time, the market factor used in the valuation process. Our Board of Directors could change the market factor, for example, following a change in general market conditions that either increased or decreased stock market equity values for companies comparable to us, if our Board of Directors felt that the market change was applicable to our common stock as well. Our Board of Directors will not make any other changes in the method of determining the price per share of common stock unless in the good faith exercise of its fiduciary duties and, if appropriate, after consultation with its professional advisors, our Board of Directors determines that the method for determining the price per share of common stock no longer results in a stock price that reasonably reflects our fair market value on a per share basis.

        As part of the total mix of information that our Board of Directors considers in determining the "M" factor, our Board of Directors also may take into account company appraisal information prepared by The Environmental Financial Consulting Group, Inc. (EFCG), an independent appraiser engaged by the trustees of our benefit plans. In setting the stock price, our Board of Directors compares the total of the going concern and book value components used in the valuation methodology to the enterprise value of the Company in the appraisal provided by EFCG. If, after such comparison, our Board of Directors concludes that its initial determination of the "M" factor should be re-examined, our Board of Directors may review, and if appropriate adjust, the "M" factor. Since the inception of the program on January 1, 2000, the total of the going concern and book value components used by our Board of Directors in setting the price for our stock has always been within the enterprise appraisal range provided quarterly by EFCG.

        Since the inception of the program on January 1, 2000, the "M" factor has not deviated from 1.0. In recent years, however, our engineering and construction industry has seen a sustained upward

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valuation trend. To reflect this industry trend in CH2M HILL stock price and to arrive at a fair value for our stock, the Board of Directors decided to increase the market factor from 1.0 to 1.2 in the third quarter of this year.

        Profit After Tax ("P").    "P" is profit after tax, otherwise referred to as net income, for the four fiscal quarters immediately preceding the Trade Date. Our Board of Directors, at its discretion, may exclude nonrecurring or unusual transactions from the calculation. Nonrecurring or unusual transactions are developments that the market would not generally take into account in valuing an equity security. A change in accounting rules, for example, could increase or decrease net income without changing the fair market value of our common stock. Similarly, such a change could fail to have an immediate impact on the value of our common stock, but still have an impact on the value of our common stock over time. As a result, our Board of Directors believes that in order to determine the fair market value of our common stock, it needs the ability to review unusual events that affect net income. In the past, our Board of Directors has excluded unusual items from the calculation of "P", including nonrecurring revenue from Kaiser-Hill Company, LLC and a write off of an investment in an international telecommunications company. Because "P" is calculated on a four quarter basis, an exclusion impacts the calculation of fair market value for four consecutive quarters. Our Board of Directors may determine to exclude other future unusual or non-recurring items from the calculation of "P".

        Total Shareholders' Equity ("SE").    "SE" is total shareholders' equity, which includes intangible items, as set forth on our most recent available quarterly or annual financial statements. Our Board of Directors, at its discretion, may exclude from the Shareholders' Equity parameter nonrecurring or unusual transactions that the market would not generally take into account in valuing an equity security. The exclusions from Shareholders' Equity will generally be those transactions that are non-cash and are reported as "accumulated other comprehensive income (loss)" on the face of our consolidated balance sheet. For example, during 2005, 2006 and 2007, our Board of Directors excluded, and will continue to exclude, a non-cash reduction in shareholders' equity related to the accounting for our defined benefit pension and other postretirement plans. Because this adjustment is unusual and will fluctuate from period to period, our Board of Directors excluded it from the "SE" parameter for stock valuation purposes. Similarly, other items that are reported as components of "accumulated other comprehensive income (loss)" are excluded from "SE" and include items such as unrealized gains/losses on securities and foreign currency translation adjustments.

        Common Stock Outstanding ("CS").    "CS" is the weighted-average number of shares of our common stock outstanding during the four fiscal quarters immediately preceding the Trade Date, calculated on a fully-diluted basis. By "fully-diluted" we mean that the calculations are made as if all outstanding options to purchase our common stock had been exercised and other "dilutive" securities were converted into shares of our common stock. In addition, an estimate of the weighted-average number of shares that we reasonably anticipate will be issued under our stock-based compensation programs and employee benefit plans is included in this calculation.

        The "CS" calculation is done on a fully-diluted basis since we believe that taking into account the issuance of all securities that will affect the per share value is a better representation of the share value over time. We have more than a 30-year history in making annual grants of stock-based compensation. Therefore, we believe that we have sufficient information to reasonably estimate the number of such "to be issued" shares. This approach avoids an artificial variance in share value during the first calendar quarter of each year when the bulk of shares of our common stock are issued by us pursuant to our employee benefit plans and stock-based compensation programs.

        The following table shows a comparison of the "CS" value actually used by our Board of Directors to calculate stock prices on the dates indicated versus the year-to-date weighted-average number of

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shares of common stock as reflected in the diluted earnings per share calculation in our financial statements for the past three years.

(in thousands) Effective Date	CS	YTD Weighted- Average Number of Shares as reflected in Diluted EPS calculation
February 11, 2005	33,348	31,944
May 12, 2005	33,428	32,208
August 12, 2005	33,546	32,430
November 11, 2005	33,696	32,496
February 10, 2006	33,904	32,482
May 11, 2006	34,153	33,030
August 11, 2006	34,351	33,179
November 10, 2006	34,497	33,135
February 9, 2007	34,570	33,047
May 10, 2007	34,611	33,027
August 10, 2007	34,690	33,254
November 9, 2007	34,943	33,326
February 8, 2008	35,322	33,508

        Constant 7.8.    In the course of developing this valuation methodology, it became apparent to our Board of Directors that a multiple would be required in order for the stock price derived by this methodology to approximate our historical, pre-Internal Market stock price. Another objective of our Board of Directors when developing the valuation methodology was to establish the fair market value of our common stock using a market factor of 1.0. We believe that it was important to begin the Internal Market program with an "M" factor equal to 1.0 in order to make it easier for shareholders to understand future changes, if any, to the market factor.

        Therefore, the constant 7.8 was introduced into the formula. The constant 7.8 is the multiple that our Board of Directors determined necessary (i) for the new stock price to approximate our historical stock price derived using the pre-Internal Market formula as well as (ii) to allow the use of the market factor of 1.0 at the beginning of the Internal Market program.

        We intend to announce the new stock price and the Trade Date approximately four weeks prior to each Trade Date. The information will be delivered by the broker to all employees, eligible consultants and eligible participants in the internal market. In addition, we will file a Current Report on Form 8-K disclosing the new stock price and all components used by our Board of Directors in determining such price in accordance with the valuation methodology described above. Trade Dates are expected to occur approximately 75 days after the end of each quarter.

        We will also distribute the most current prospectus for our common stock and our audited annual financial statements to all shareholders, as well as other employees and eligible consultants, and to participants in the Internal Market through the employee benefit plans. Such information will be distributed at the same time as our annual reports, proxy information and solicitations are distributed for voting instructions from shareholders and participants in the employee benefit plans each year.

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Current Price of Our Common Stock

        Starting in 2000, with the introduction of the Internal Market and its quarterly trades, our Board of Directors reviews the common stock price quarterly using the valuation methodology described above to set the price for the common stock. The prices of our common stock for the past three years, along with the various factors and values used by our Board of Directors to determine such stock prices on each date, are as follows:

Effective Date	M	P	SE	CS	Price Per Share	Percentage Price Increase (Decrease)
		(in thousands)	(in thousands)	(in thousands)
February 11, 2005	1.0	32,338	245,298	33,348	14.92	1.8	%
May 12, 2005	1.0	31,952	250,246	33,428	14.94	0.1	%
August 12, 2005	1.0	31,244	263,139	33,546	15.11	1.1	%
November 11, 2005	1.0	31,316	319,533	33,696	16.73	10.7	%
February 10, 2006	1.0	38,367	335,301	33,904	18.72	11.9	%
May 11, 2006	1.0	35,143	334,897	34,153	17.83	(4.8	)%
August 11, 2006	1.0	38,074	345,509	34,351	18.70	4.9	%
November 10, 2006	1.0	37,479	354,464	34,497	18.75	0.3	%
February 9, 2007	1.0	38,901	375,206	34,570	19.63	4.7	%
May 10, 2007	1.0	43,804	381,932	34,611	20.91	6.5	%
August 10, 2007	1.0	48,656	412,028	34,690	22.82	9.1	%
November 9, 2007	1.2	56,782	444,803	34,943	27.94	22.4	%
February 8, 2008	1.2	64,550	466,926	35,322	30.32	8.5	%

Holders of Our Common Stock

        As of February 26, 2008, there were 10,112 holders of record of our common stock. As of such date, all of our common stock of record was owned by our current employees, directors, eligible consultants, and by our various employee benefit plans.

Dividend Policy

        We have never declared or paid any cash dividends on our capital stock and no cash dividends are contemplated in the foreseeable future. We intend to retain any future earnings to finance the growth and development of our business. Under our existing unsecured revolving line of credit, payment of dividends would represent a violation of our covenants.

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Issuer Purchases of Equity Securities

        The following table covers the purchases of our securities by CH2M HILL during the quarter ended December 31, 2007:

Period		Total Number of Shares	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
October(a)		2,766	$	22.82	—	—
November		—		—	—	—
December(a)(b)		181,656	$	27.94	—	—
	Total	184,422	$	27.86	—	—

(a)

Shares purchased by CH2M HILL from terminated employees.

(b)

Shares purchased by CH2M HILL in the Internal Market.

Item 6.    Selected Financial Data

        The selected financial data presented below under the captions "Selected Statement of Operations Data" and "Selected Balance Sheet Data" as of and for each of the years in the five-year period ended December 31, 2007, are derived from the consolidated financial statements of CH2M HILL Companies, Ltd. and subsidiaries, which financial statements have been audited by KPMG LLP, an independent registered public accounting firm. The consolidated financial statements as of December 31, 2007 and 2006, and the results of operations and cash flows for each of the years in the three-year period ended December 31, 2007, and the report thereon, are included in Item 15 of this Annual Report on Form 10-K. The following information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Item 7, and the consolidated financial statements and related notes thereto, included in this Annual Report on Form 10-K.

        The comparability of the following selected financial data has been impacted by the adoption of Statement of Financial Accounting Standards (SFAS) No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R), on December 31, 2007; the adoption of Financial Accounting Standards Board (FASB) Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes, on January 1, 2007; the adoption of SFAS No. 123(R), Share-Based Payment, on January 1, 2006 and the adoption of FIN 46 (R), Consolidation of Variable Interest Entities, on January 1, 2005.

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        During the periods presented, we paid no cash dividends on our common stock.

		Years Ended December 31,
($ in millions, except per share data)		2007			2006		2005			2004		2003
Selected Statement of Operations Data:
Revenues		$	4,376.2		$	4,006.9	$	3,152.2		$	2,715.4	$	2,154.3
Operating income			79.1			63.6		134.1	(b)		51.2		39.6
Net income			66.0			38.9		81.6	(b)		32.3		23.8
Net income per common share
	Basic	$	2.01		$	1.20	$	2.56	(b)	$	1.03	$	0.77
	Diluted	$	1.97		$	1.18	$	2.51	(b)	$	1.01	$	0.74
Selected Balance Sheet Data:
Total assets		$	1,909.9		$	1,279.5	$	1,103.9		$	829.9	$	746.0
Long-term debt, including current maturities			197.8	(a)		0.6		4.1			7.0		9.3
Total shareholders' equity			463.5			366.0		320.0			229.9		200.2

(a)

The majority of the increase in long-term debt outstanding at December 31, 2007 relates to the debt incurred to fund the acquisition of VECO and Trigon and the debt assumed in those business combinations.

(b)

The increase in operating income, net income and basic and diluted net income per common share was primarily the result of equity in earnings from Kaiser-Hill Company, LLC recorded during the year of approximately $95.7 million.

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations

        The following discussion and analysis explains our general financial condition, changes in financial condition and results of operations as a whole and each of our operating segments including:

•

Factors affecting our business



•

Our revenues and profits



•

The source of our revenues and profits



•

Why those revenues and profits were different from year to year



•

Where our cash came from and how it was used



•

How all of this affects our overall financial condition

        The following discussion contains, in addition to historical information, forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those described here. You should read this section in conjunction with Item 1A "Risk Factors" and the consolidated financial statements and notes thereto contained in this Annual Report on Form 10-K.

Business Summary

        We are one of the largest engineering services firms worldwide and are employee-owned. Our business provides engineering, construction, operation, major project management and related technical services to municipal, state, federal and private sector clients worldwide. Founded in 1946, we have approximately 22,000 employees worldwide.

        We believe that our diversified business portfolio allows us to (1) provide our clients with innovative project delivery using cost-effective approaches and advanced technologies, and

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(2) experience weakness in one or two areas and still overcome these challenges with strong financial and operating performance in other areas.

        The engineering and construction industry continues to undergo substantial change as public and private clients privatize and outsource many of the services that were formerly provided internally. Numerous mergers and acquisitions in the industry have resulted in a group of larger firms that offer a full complement of single-source services including studies, designs, construction, operations, maintenance and in some instances, facility ownership. Included in the current trend is the movement towards longer-term contracts for the expanded array of services, e.g., 5 to 20 year contracts. These larger, longer, more full-service contracts require us to have substantially greater financial capital than has historically been necessary to remain competitive.

        We believe that we are well positioned geographically, technically and financially to compete worldwide in the key markets we have elected to pursue and the clients we serve. The combination of our expanding domestic and global reach and diverse service portfolio also positions us to capitalize on client-driven changes in the market. For example, projects in the engineering services market are increasingly global in scope, and clients around the world are increasingly focused on strategic global issues such as supply chain management, procurement, sustainability, and cross-sector innovation. These issues cut across our client and service portfolios. We believe that our strategic focus on full service project delivery, using cross functional business capabilities and finding innovative technological solutions for clients, position us to capitalize on these market forces.

        We provide services to our clients through three operating segments: Federal, Civil Infrastructure and Industrial. The structure is intended to provide for better decision making on an enterprise-wide basis. Our Federal segment generally provides a comprehensive range of services to the U.S. federal government and to international governments. Our Civil Infrastructure segment generally provides a comprehensive range of services to various state, local, and provincial governments. Our Industrial segment generally provides a comprehensive range of services to various private sector clients.

Acquisitions

        We continuously monitor acquisition and investment opportunities that will expand our portfolio of services, add value to the projects undertaken for clients, or enhance our capital strength. During 2007, we completed several acquisitions that will expand our services into new markets and new geographical locations. Two of the acquisitions will expand our presence in the water sector including a wastewater management company and a company that specializes in planning, design, and construction management of water and wastewater treatment, distribution and collections systems. The other two acquisitions are part of our strategic initiative to expand operations into the energy industry. These services include engineering, construction and field support services, as well as engineering services for pipeline and related facilities.

        The most significant of the transactions is the acquisition of VECO Corporation, which occurred on September 7, 2007. CH2M HILL purchased the outstanding stock of VECO and substantially all of VECO's operating businesses. The results of VECO have been included in the consolidated financial statements since that date and are included in the Industrial operating segment.

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Summary of Operations

Results of Operations for the Year Ended December 31, 2007 Compared to 2006

	2007							2006							Change
($ in millions)	Revenue		Equity in Earnings		Operating Income (Loss)			Revenue		Equity in Earnings		Operating Income (Loss)			Revenue					Equity in Earnings		Operating Income (Loss)
Federal	$	1,246.2	$	30.0	$	67.8		$	1,435.7	$	12.9	$	87.4		$	(189.5	)	(13.2	%)	$	17.1	$	(19.6	)	(22.4	%)
Civil Infrastructure		1,445.3		12.9		64.8			1,298.3		3.6		61.3			147.0		11.3	%		9.3		3.5		5.7	%
Industrial		1,684.7		1.3		(13.7	)		1,272.9		0.5		(68.6	)		411.8		32.4	%		0.8		54.9		80.0	%
Corporate		—		—		(39.8	)		—		—		(16.5	)		—		—			—		(23.3	)	(141.2	%)
Total	$	4,376.2	$	44.2	$	79.1		$	4,006.9	$	17.0	$	63.6		$	369.3		9.2	%	$	27.2	$	15.5		24.4	%

Federal

        Revenue decreased for the year ended December 31, 2007, compared to the same period in the prior year by $189.5 million or 13.2%. The current year's decrease was primarily due to the completion of Hurricane Katrina relief and clean-up efforts and the Mound Nuclear Closure project in 2006. The effects of these large project completions were somewhat offset by significant growth related to a clean-up project in Ohio, additional services performed for an underground waste tank clean-up project in Southeast Washington, and expanded services performed in Saudi Arabia and Australia. We increased the amount of work performed for the London 2012 Olympic Delivery Authority during the year and we expect continued growth for the next several years.

        Operating income decreased during the year ended December 31, 2007, compared to last year, by $19.6 million or 22.4%. This decrease was comprised of an increase in equity in earnings year over year of $17.1 million offset by a decrease in operating income from other projects of $36.7 million. The increase in equity in earnings of $17.1 million was primarily the result of the work performed for the London 2012 Olympic Delivery Authority as well as several nuclear projects that recorded favorable operating results. The decrease of $36.7 million was directly associated with the completion of the Hurricane Katrina cleanup efforts offset by incentive fees earned from a large nuclear project which achieved contractual milestones.

Civil Infrastructure

        Revenue increased for the year ended December 31, 2007, compared to last year by $147.0 million or 11.3%. This year we saw continued growth in water and transportation through design build projects, program management and consulting services both domestically and internationally. Growth in North American consulting services was primarily due to design and program management services for municipal clients in the eastern United States and Canada, while the design build growth was primarily due to water treatment projects in southern California and Hawaii. Our revenue also increased from the prior year due to increased transportation program management projects in California and Washington. The growth in our international markets was primarily due to new or continued water projects in Australia, United Arab Emirates, Singapore and Iraq as well as transportation projects including the canal expansion project in Panama and work performed on the Mumbai International Airport.

        Operating income increased during 2007, compared to the prior year by $3.5 million or 5.7%. The increase was comprised of an increase in equity in earnings year over year of $9.3 million offset by a decrease in operating income from other projects of $5.8 million. The increase in equity in earnings of $9.3 million is primarily due to the favorable operating results on new transportation and water projects. The remaining decrease in operating income is a result of favorable operating results in the operations and maintenance business offset by certain project delivery issues.

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Industrial

        Revenue increased by $411.8 million or 32.4% for the year ended December 31, 2007, compared to the year ended December 31, 2006. Approximately $245.9 million of the growth related to the acquisition of VECO and Trigon in September and October of 2007, respectively. The results of these energy services companies from the date of acquisition through December 31, 2007 are included in this segment's operating results. We expect to see continued growth in 2008 when compared to 2007 due to these acquisitions.

        The remaining increase in the Industrial segment revenue was driven by growth from four engineering, procurement and construction ("EPC") contracts with major utility companies in the United States to build power generation facilities. Our electronics and advanced technology business realized growth in design build projects, including a large project in Singapore. During the same period, the manufacturing and life sciences business experienced a decrease in service revenue due to the completion of several large projects earlier in the year that had provided significant revenue in the prior year.

        The Industrial segment had an operating loss of $13.7 million during the current year compared to an operating loss of $68.6 million for the prior year, representing an improvement of 80.0%. The improvement of $54.9 million during this year is attributable to improved margins across several of the businesses in this segment offset by a loss recognized by our energy services businesses. Most notably the power and electronics and advanced technology businesses realized significant margin improvements consistent with the increase in revenues for the same periods. The improvement in the power business was primarily due to significant growth in EPC contracts for the period as discussed above. A higher percentage of design build work versus other services in the electronics and advanced technology business also resulted in significantly higher margins. Furthermore, we had experienced a significant loss in the prior period related to a manufacturing facility project whose costs increased significantly as a result of the absorption of commodities and skilled laborers by Hurricane Katrina clean-up efforts. These improvements were partially offset by a loss of approximately $12.9 million in the energy services business primarily resulting from the recognition of depreciation and amortization on the intangible assets and the real and personal property acquired from VECO and Trigon.

Results of Operations for the Year Ended December 31, 2006 Compared to 2005

	2006							2005							Change
($ in millions)	Revenue		Equity in Earnings		Operating Income (Loss)			Revenue		Equity in Earnings		Operating Income (Loss)			Revenue				Equity in Earnings			Operating Income (Loss)
Federal	$	1,435.7	$	12.9	$	87.4		$	1,150.0	$	104.1	$	128.0		$	285.7	24.8	%	$	(91.2	)	$	(40.6	)	(31.7	%)
Civil Infrastructure		1,298.3		3.6		61.3			1,051.4		5.6		31.0			246.9	23.5	%		(2.0	)		30.3		97.7	%
Industrial		1,272.9		0.5		(68.6	)		950.8		0.4		(10.6	)		322.1	33.9	%		0.1			(58.0	)	547.2	%
Corporate		—		—		(16.5	)		—		—		(14.3	)		—	—			—			(2.2	)	15.4	%
Total	$	4,006.9	$	17.0	$	63.6		$	3,152.2	$	110.1	$	134.1		$	854.7	27.1	%	$	(93.1	)	$	(70.5	)	(52.6	%)

Federal

        Revenue increased $285.7 million or 24.8% for the year ended December 31, 2006 compared to 2005. This increase in revenue was primarily due to work associated with the Hurricane Katrina relief and cleanup efforts. Partially offsetting these favorable results was a reduction in spending by the DOE during 2005 on our contract at the Hanford River Protection Project.

        Operating income decreased for the year ended December 31, 2006 compared to 2005 by $40.6 million or 31.7%. The decrease in operating income is primarily associated with the completion of the Kaiser-Hill project which contributed $95.7 million in equity in earnings of joint ventures during

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2005. This decrease is partially offset by operating income from the Hurricane Katrina relief and cleanup as well as performance based incentives earned on a contract at the Department of Energy's Savannah River complex.

Civil Infrastructure

        Revenue increased by $246.9 million or 23.5% for the year ended December 31, 2006 compared to the same period in 2005. The largest increase was attributed to several new water projects in North America and international markets. The growth in North America is primarily due to a water treatment project in Southern California and the growth in our international markets is primarily due to projects located predominately in Australia, United Arab Emirates, Singapore and Iraq. We had continued growth due to successful pursuits in transportation design build and consulting. These new projects included significant highway contracts in Colorado, Washington, Virginia and Vancouver, British Columbia and program management projects. We also had an improvement in revenue from operations and maintenance (O&M) contracts including a new municipal operations project in Georgia, an amendment to an existing project and new projects in Las Vegas and Puerto Rico.

        Operating income increased by $30.3 million or 97.7% for the year ended December 31, 2006 compared to the same period in the prior year. The increase in operating income is primarily associated with our water projects which produced significant improvements due to an increase in North American consulting and international revenue as described above. We also experienced growth in operating income due to revenue growth from transportation and O&M projects, as described above.

Industrial

        Revenue increased for the year ended December 31, 2006 compared to 2005 by $322.1 million or 33.9%. The increase in revenue was largely due to new projects in the power, manufacturing, energy and industrial systems and enterprise management solutions markets. Our significant growth in power was driven primarily from two new contracts with major utility companies in North America. Our manufacturing business experienced new business growth in 2006 as a result of business development pursuits. Our energy and industrial systems business revenue growth was associated with O&M support services at two petroleum facilities and increased consulting. Communications had signs of renewed spending by clients particularly in the wireless sector worldwide which has increased revenue. These increases were partially offset by a decline in our chemicals and plastics business due to low volume, the completion of several bio-pharma projects in Puerto Rico, and the continued delay in some customer awards of large projects.

        Operating loss for the year ended December 31, 2006 was $68.6 million compared to an operating loss of $10.6 million for the year ended December 31, 2005. This decrease was primarily due to significant cost overruns on a project to construct a manufacturing facility. This project experienced increased costs due to project delivery issues and increased commodity prices. In addition, the clean up efforts required from Hurricane Katrina caused significant shortages in experienced craft laborers in the area and thus materially increased wage rates and reduced overall productivity. Partially offsetting these declines were improvements on manufacturing contracts due to strong market conditions, execution of projects at higher margins and monitoring of indirect costs.

Corporate Expenses

        Corporate expenses represent centralized management costs that are not allocable to individual operating segments and primarily include expenses associated with administrative compliance functions such as legal, treasury, accounting, tax and general business development efforts. Corporate expenses for the year ended December 31, 2007 were $39.8 million compared to $16.5 million in 2006, and $14.3 million in 2005. The increase of $25.1 million in 2007 compared to the prior year is primarily due

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to a $7.8 million lease termination fee and a $1.0 million write off of deferred financing lease costs associated with the purchase of CH2M HILL's corporate headquarters and the subsequent sale-leaseback of these properties in September 2007. In addition, expenditures for strategic initiatives and business development efforts undertaken in the current year added to this variance.

Income Taxes

        The income tax provisions for the years ended December 31, 2007, 2006 and 2005 are as follows:

($ in millions)	Income Tax Provision		Effective Tax Rate
2007	$	11.7	15.1	%
2006		24.8	38.9	%
2005		52.6	39.2	%

        The significant decrease in the effective tax rate for the year ended December 31, 2007 compared to 2006 was primarily due to the impacts of the settlement with the Internal Revenue Service with respect to the research and experimentation credit for the years 1996 through 2003, as well as the extraterritorial income exclusion for the years 2001 through 2003 and an increase in foreign earnings subject to lower tax rates. Our effective tax rate continues to be impacted by the effect of state income taxes, non-deductible foreign net operating losses in selected countries, the Section 199 deduction and disallowed portions of meals and entertainment expenses. The decrease in the effective tax rate for the year ended December 31, 2006 compared to 2005 was primarily due to the impact of an increase in the blended state tax rate applied against the balance in net deferred tax assets.

        During 2007, CH2M HILL reached a settlement on research and experimentation credit and extraterritorial income exclusion with the Internal Revenue Service for years 1996 through 2003. This settlement resulted in the recognition of net tax benefits of $15.3 million.

Liquidity and Capital Resources

        Our primary sources of liquidity are cash flows from operations and borrowings under our unsecured revolving line of credit. Our primary uses of cash are to fund our working capital, acquisitions, capital expenditures and purchases of stock presented on our internal market. Based on our total cash and credit capacity available at December 31, 2007 of $445.1 million, we believe that we have sufficient resources to fund our operations, any future acquisition and capital expenditure requirements, as well as purchases of stock presented on our internal market, should we choose to do so, for the next 12 months and beyond.

        The following table reflects our available capacity as of December 31, 2007 (in millions):

Cash on hand					$	124.1
Available for sale securities						2.7
Line of credit capacity		$	500.0
Outstanding borrowings			(116.0	)
Issued letters of credit			(65.7	)
	Net credit capacity available					318.3
	Total available capacity				$	445.1

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        We are dependent, however, on the cash flows generated by our subsidiaries and, consequently, on their ability to collect on their respective accounts receivables. Substantially all of our cash flows necessary to meet our operating expenditures are generated by our subsidiaries. The financial condition and operational requirements of our subsidiaries may limit our ability to obtain cash from them.

        Billings and collections on accounts receivable can impact our operating cash flows. We continuously monitor collection efforts and assess the allowance for doubtful accounts. Based on this assessment at December 31, 2007, we have deemed the allowance for doubtful accounts to be adequate; however, future economic conditions may adversely impact some of our clients' ability to pay our bills or the timeliness of their payments. Consequently, it may also impact our timing of cash receipts necessary to meet our operating needs.

        Cash used in investing activities in the year ended December 31, 2007 was $121.9 million compared to $47.9 million and $15.5 million for the same period in 2006 and 2005, respectively. This significant increase was due to a number of factors.

        In the third quarter of 2007, we purchased the outstanding stock of VECO and substantially all of VECO's operating businesses as part of a strategic initiative to expand operations into the energy industry. The results of VECO have been included in the consolidated financial statements since that date and are included in the Industrial operating segment. VECO's 4,000 employees provide engineering, construction and field support services to the energy, resource and process industries in Alaska, Canada, the United States, Russia and the Middle East. We acquired VECO's net assets of $256.2 million for cash paid to the VECO selling shareholders, our common stock and cash paid to certain VECO employees, direct acquisition costs and a holdback contingency. Additionally, as part of the acquisition we assumed debt in the amount of $97.3 million.

        In the fourth quarter of 2007, we acquired the assets and liabilities of Trigon EPC, LLC (Trigon) for $30.6 million, net of cash acquired, and assumed $4.0 million in debt. Trigon is an engineering consulting firm that provides engineering services for pipeline and related facilities, specializing in projects for the crude oil, refined products, natural gas and energy industries. The operating results of Trigon are included in the Industrial operating segment.

        In the first quarter of 2007, we acquired a wastewater management company for $2.5 million. The acquisition is reported in the Civil Infrastructure operating segment.

        We completed preliminary purchase price allocations for these transactions based on a preliminary valuation of the fair values of the tangible and identifiable intangible assets acquired and liabilities assumed.

        In total, we paid cash of $176.1 million (net of cash acquired, hold back liabilities assumed and common stock issued) for these acquisitions and additional earnout payments on a previous acquisition.

        Additionally, we spent $95.9 million upon the exercise of our option to purchase our corporate headquarters buildings. Simultaneous with the purchase of these buildings we sold them for $137.6 million, net of related transaction costs. Net proceeds on the sale of our buildings totaled approximately $41.7 million. Net proceeds received on the sale of securities during the year ended December 31, 2007 was $27.6 million. Capital expenditures, primarily for office equipment and leasehold improvements during the year ended December 31, 2007, were $20.7 million. Historically, as a professional services organization, we have not had significant outflows of cash for capital expenditures. While we expect capital spending to increase significantly in future periods as a result of the acquisition of VECO, we cannot estimate the outlays with certainty at this time due to variability in project awards. We expect to finance future capital expenditures through our financing vehicles as well as available cash flows. We also have a formal operating lease program under which most of our computers and related equipment is procured on an ongoing basis.

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        Cash provided by financing activities was $57.2 million in the twelve month period ended December 31, 2007 compared to cash used by financing activities of $38.2 million and $28.2 million for the same period in 2006 and 2005, respectively. The cash inflow was primarily a result of net borrowings on long-term debt of $90.7 million. The funds from our revolving credit facility were primarily used for the acquisition of VECO and Trigon.

        Offsetting the cash provided by borrowings was $36.9 million in cash used for repurchases of stock presented on our internal market during the year ended December 31, 2007 similar to that used in 2006 for the same purpose.

        We are party to a credit agreement which provides for a $500.0 million revolving credit facility (RLOC) which expires on August 31, 2012. The credit agreement includes an option to increase the initial borrowing capacity by up to an additional $250.0 million. While the credit agreement may be used for general corporate purposes and permitted acquisitions, it also provides that up to $250.0 million is available for the issuance of letters of credit to support various trade activities. At our option, the credit agreement bears interest at a rate equal to either the London InterBank Offered Rate (LIBOR) plus 0.75% to 1.50%, or the lender's applicable base rate less a discount rate up to 0.25% based on our ratio of funded debt to earnings before interest, taxes, depreciation and amortization. A commitment fee of approximately 0.10% to 0.25% per year on the unused portion of the line of credit is payable based on our ratio of funded debt to earnings before interest, taxes, depreciation and amortization. As of December 31, 2007, we had $116.0 million in borrowings outstanding on the RLOC.

        The RLOC agreement contains financial and other covenants, as well as limitations on other indebtedness, liens, acquisitions, mergers and dispositions. The credit agreement also contains customary events of default, including a default of covenant, a material inaccuracy of representations or warranties, bankruptcy events, and a change in control. As of December 31, 2007, we were in compliance with the covenants required by the credit agreement.

        As part of the acquisition of VECO, we assumed three mortgages related to buildings and property. Two of the mortgages pertain to VECO's offices in Anchorage, Alaska. The primary mortgage on one property of $15.1 million is secured by real estate, rents and leases. The secondary mortgage of $10.9 million is secured by investments. We have scheduled the maturity of these investments to meet the debt service requirements of this mortgage. The third mortgage of $4.6 million, which relates to a building used for warehousing spare parts, is secured by real estate. Additionally, in September 2007, we entered into an equipment financing agreement for $48.5 million. This note was used to refinance a portion of the debt that we assumed in connection with the VECO acquisition. The note is secured by certain equipment and matures in September 2012.

Depreciation and Amortization

        Depreciation and amortization expense for the year ended December 31, 2007 of $35.2 million was $21.4 million greater than the same period in 2006. This 155% increase is the result of the acquisition of VECO and Trigon during the current year. As part of the acquisition we allocated approximately $58.2 million and $56.2 million to customer relationships and backlog acquired, respectively. Additionally, we acquired approximately $180.8 million of fixed assets in these acquisitions. As a result of these acquisitions, we recognized an additional $10.0 million of amortization expense and $12.8 million of depreciation expense related to the intangible and fixed assets, respectively, during the current year. These increases were partially offset by decreases in depreciation and amortization expense on previously held fixed assets during the current year.

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Off-Balance Sheet Arrangements

        In September 2007, we exercised our option to purchase the properties comprising our corporate headquarters and three adjacent buildings located in Englewood, Colorado ("Headquarters Campus") which were previously held under three operating lease arrangements. As a result of exercising our purchase option, we were required to pay a lease termination fee totaling $7.8 million and write off previously capitalized lease costs of $1.0 million. We contemporaneously sold these buildings to a third party for proceeds of $138.5 million and entered into an operating lease agreement to lease these buildings back from the new owner. The initial term of the lease is ten years, with an option to extend the term twice for either a ten or five year period. The sale resulted in a $42.6 million deferred gain which is being amortized over the ten year term of the lease as an offset to rent expense. Rental payments under the lease are approximately $0.8 million per month, or approximately $10.0 million in the first year, escalating over time up to approximately $1.0 million per month, or approximately $11.7 million in the tenth year.

        We have interests in multiple joint ventures, some of which are considered variable interest entities under FASB Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities (FIN46 (R)). These entities facilitate the completion of contracts that are jointly owned with our joint venture partners. These joint ventures are formed to leverage the skills of the respective partners and include consulting, construction, design, project management and operations and maintenance contracts. Our risk of loss on joint ventures is similar to what the risk of loss would be if the project was self-performed, other than the fact that the risk is shared with our partners.

Aggregate Commercial Commitments

        We maintain a variety of commercial commitments that are generally made available to provide support for various provisions in engineering and construction contracts. Letters of credit are provided to clients in the ordinary course of the contracting business in lieu of retention or for performance and completion guarantees on engineering and construction contracts. We post surety and bid bonds, which are contractual agreements issued by a surety, for the purpose of guaranteeing our performance on contracts and to protect owners and are subject to full or partial forfeiture for failure to perform obligations arising from a successful bid. We also carry substantial premium paid, traditional insurance for our business risks including professional liability and general casualty insurance and other coverage which is customary in our industry.

        We believe that we will be able to continue to have access to professional liability and general casualty insurance, as well as bonds, with sufficient coverage limits, and on acceptable financial terms necessary to support our business. The cost of such coverage has increased and is expected to continue to increase in the short term. Such cost increases are expected to range annually between 5.0% and 10.0% for various insurance policies and surety bonds. We do not believe that such increases will have a material impact on our business. See "Risk Factors—It can be difficult or expensive to obtain the insurance we need for our business operations" in Item 1A of this Annual Report on Form 10-K for additional information.

        Our risk management personnel continuously monitor the developments in the insurance market. The financial stability of the insurance and surety providers is one of the major factors that we take into account when buying our insurance coverage. Currently our insurance and bonds are purchased from several of the world's leading and financially stable providers often in layered insurance or co-surety arrangements. The built-in redundancy of such arrangements usually enables us to call upon existing insurance and surety suppliers to fill gaps that may arise if other such suppliers become financially unstable.

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Contractual Obligations

        Contractual obligations outstanding as of December 31, 2007 are summarized below:

($ in millions)		Amount of Commitment Expiration Per Period
Contractual Obligations		Less than 1 Year		1-3 Years		4-5 Years		Over 5 Years		Total Amount Committed
Letters of credit		$	62.9	$	0.3	$	2.5	$	—	$	65.7
Long-term debt, including current maturities			12.5		34.6		137.5		13.2		197.8
Interest payments			10.9		19.5		14.4		8.0		52.8
Operating lease obligations			85.4		123.7		72.4		87.5		369.0
Surety and bid bonds			1,523.2		113.0		—		—		1,636.2
	Total	$	1,694.9	$	291.1	$	226.8	$	108.7	$	2,321.5

Critical Accounting Policies

        Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). The preparation of these financial statements requires us to make estimates and judgments that affect both the results of operations as well as the carrying values of our assets and liabilities. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. We base estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities as of the date of the financial statements that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

        Although our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements in Item 15 of this Annual Report on Form 10-K, below is a summary of our most critical accounting policies.

Revenue Recognition

        We earn our revenues from different types of services under a variety of different types of contracts, including cost-plus, fixed-price and time-and-materials. In recognizing revenue, we evaluate each contractual arrangement to determine the appropriate authoritative literature to apply. We recognize revenue and profit for most of our contracts on the percentage-of-completion method where progress towards completion is measured by relating the actual cost of work performed to date to the current estimated total cost of the respective contracts. In making such estimates, judgments are required to evaluate potential variances in schedule, the cost of materials and labor, productivity, liability claims, contract disputes, or achievement of contract performance standards.

        Change orders are included in total estimated contract revenue when it is probable that the change order will result in an addition to contract value and can be reliably estimated. Losses on construction and engineering contracts in process are recognized in their entirety when the loss becomes evident and the amount of loss can be reasonably estimated.

        We have a history of making reasonable estimates of the extent of progress towards completion, total contract revenue and total contract costs on our engineering and construction contracts. However, due to uncertainties inherent in the estimation process, actual total contract revenue and completion costs can vary from estimates.

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        Below is a description of the three basic types of contracts from which we may earn revenues under the percent complete basis.

        Cost-Plus Contracts.    Cost-plus contracts can be cost plus a fixed fee or rate, or cost plus an award fee. Under these types of contracts, we charge our clients for our costs, including both direct and indirect costs, plus a fixed negotiated fee or award fee. We generally recognize revenue based on the actual labor costs and non-labor costs we incur, plus the portion of the fixed fee or award fee we have earned to date. If the actual labor hours and other costs we expend are lower than the total number of hours and other costs we have estimated, our revenues related to cost recoveries from the project will be lower than originally estimated. If the actual labor hours and other costs we expend exceed the original estimate, we must obtain a change order, contract modification, or successfully prevail in a claim in order to receive payment for the additional costs.

        In the case of a cost-plus award fee, we include in the total contract value the portion of the fee that we are probable of receiving. Award fees are influenced by the achievement of contract milestones, cost savings and other factors.

        Fixed Price Contracts.    Under fixed price contracts, our clients pay us an agreed amount negotiated in advance for a specified scope of work. For engineering and construction contracts, we recognize revenue on fixed price contracts using the percentage-of-completion method. For operations and maintenance contracts, we recognize revenue on fixed price contracts using the straight-line method over the life of the contract. Prior to completion, our recognized profit margins on any fixed price contract depend on the accuracy of our estimates and will increase to the extent that our actual costs are below the original estimated amounts. Conversely, if our costs exceed these estimates, our profit margins will decrease and we may realize a loss on a project. If our actual costs exceed the original estimate, we attempt to obtain a change order or contract modification.

        Time-and-Materials Contracts.    Under our time-and-materials contracts, we negotiate hourly billing rates and charge our clients based on the actual time that we expend on a project. In addition, clients reimburse us for our actual out-of-pocket costs of materials and other direct expenditures that we incur in connection with our performance under the contract. Our profit margins on time-and-materials contracts fluctuate based on actual labor and overhead costs that we directly charge or allocate to contracts compared with the negotiated billing rate and markup on other direct costs. Some of our time-and-materials contracts are subject to maximum contract values, and accordingly, revenue under these contracts are recognized under the percentage-of-completion method. Revenue on contracts that are not subject to maximum contract values are recognized based on the actual number of hours we spend on the projects plus any actual out-of-pocket costs of materials and other direct expenditures that we incur on the projects. Our time-and-materials contracts generally include annual billing rate escalation provisions.

        A portion of our contracts are operations and maintenance type contracts. Typically, these contracts may include fixed and variable components along with incentive fees. Revenue is recognized on operations and maintenance contracts on a straight-line basis over the life of the contract once we have an arrangement, delivery has occurred, the price is fixed or determinable and collectibility is reasonably assured.

Income Taxes

        In determining net income for financial statement purposes, we must make estimates and judgments in the calculation of tax assets and liabilities and in the determination of the recoverability of the deferred tax assets. The tax assets and liabilities arise from temporary differences between the tax return and the financial statement recognition of revenue and expenses.

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        We must assess the likelihood that we will be able to recover our deferred tax assets. If recovery is not likely, we must increase our tax provision by recording a valuation allowance for the deferred tax assets that we estimate will not ultimately be recoverable. As of December 31, 2007 and 2006, we reported a valuation allowance of $20.2 million and $6.9 million, respectively. Included in the total valuation allowance at December 31, 2007 is $5.8 million which was acquired with the VECO acquisition and will not have future income tax effect.

        In addition, the calculation of our income tax provision involves uncertainties in the application of complex tax regulations. For income tax benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

Pension and Postretirement Employee Benefits

        We have two frozen and one active noncontributory defined benefit pension plans, a medical benefit plan for retired employees and other benefit plans. The determination of pension plan expense and the requirements for funding our pension plans are based on a number of actuarial assumptions. These valuations include many assumptions, but the two most critical assumptions are the discount rate and the expected long-term rate of return on plan assets. For our medical benefit plan, which provides certain health care benefits to qualified retired employees, critical assumptions in determining the employee benefit expense are the discount rate applied to benefit obligations and the assumed health care cost trend rates used in the calculation of benefit obligations. We use judgment in selecting these assumptions each year because we have to consider not only current market conditions, but also make judgments about future market trends, changes in the interest rates and equity market performance. We also have to consider factors like the timing and amounts of expected contributions to the plans and benefit payments to plan participants.

        On December 31, 2007, the Company adopted Statement of Accounting Standard 158 "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106 and 132(R)" (SFAS 158). According to SFAS 158, the funded status of a benefit plan is measured as the difference between plan assets at fair value and the benefit obligation. In accordance with SFAS 158, we recorded long-term assets for overfunded plans and liabilities for underfunded plans, with a corresponding entry recorded to accumulated other comprehensive loss, net of tax, at December, 31, 2007. For underfunded plans, the estimated liability to be payable in the next twelve months is recorded as a current liability, with the remaining portion recorded as long-term.

Recently Adopted Accounting Standards

        On January 1, 2007, we adopted Financial Accounting Standards Board (FASB) Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes: an interpretation of FASB Statement No. 109 (FIN 48). FIN 48 establishes a process to measure the impact of an uncertainty associated with an income tax position. Under FIN 48, the effect of an income tax position on the income tax provision must be recognized at the amount that is more likely than not to be sustained upon examination by the relevant taxing authority. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. Under our previous policy, tax positions were recognized to the extent they were probable of being sustained. As a result of the implementation of FIN 48, we recognized a $1.4 million decrease in the liability for uncertain tax positions, which was accounted for as an increase to the January 1, 2007 balance of retained earnings.

        On December 31, 2007, we adopted SFAS No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of SFAS No. 87, 88, 106 and 132(R) (SFAS 158), which requires employers to recognize the funded status of pension and other postretirement benefit plans on the balance sheet and to recognize changes in the funded status through comprehensive

41

income in the year in which the changes occur. SFAS 158 also requires plan assets and benefit obligations to be measured as of the balance sheet date beginning December 31, 2008.

        On January 1, 2006, we adopted the provisions of, and account for stock-based compensation in accordance with Statement of Financial Accounting Standards (SFAS) No. 123 (revised 2004) (SFAS 123(R)), Share-Based Payment. We account for awards of company stock granted to our employees prior to 2006 under the intrinsic-value recognition and measurement principles of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees (APB 25). SFAS 123(R) requires that compensation expense be measured at the grant date based on the fair value of the award and is recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. We elected the prospective method of adoption, under which prior periods are not revised for comparative purposes. Under the prospective method, the provisions of SFAS 123(R) apply to new grants after January 1, 2006. Accordingly, at the adoption date, SFAS 123(R) had no impact on our consolidated financial position, results of operations or cash flows. SFAS 123(R) was not applied to our Payroll Deduction Stock Purchase Plan (PDSPP) as the plan is available to all shareholders and incorporates no option features such as a look-back period. Accordingly, no compensation cost is recognized in the financial statements for the PDSPP.

Recently Issued Accounting Standards

        In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS 141(R)). SFAS 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141(R) also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141(R) is effective for us beginning January 1, 2009. This will change the purchase price accounting for acquisitions beginning January 1, 2009.

        In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of Accounting Research Bulletin No. 51 (SFAS 160). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent's ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effective for us beginning January 1, 2009. This will change the accounting for noncontrolling interests beginning January 1, 2009.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk

        In the ordinary course of our operations we are exposed to certain market risks, primarily changes in foreign currency exchange rates and interest rates. This risk is monitored to limit the effect of foreign currency exchange rate and interest rate fluctuations on earnings and cash flows.

        Foreign currency exchange rates.    We are exposed to foreign currency exchange risks in the normal course of our international business operations. Our investments in foreign subsidiaries with a functional currency other than the U.S. dollar are generally considered long-term. Although historically we have not, we may engage in forward foreign exchange contracts to reduce our economic exposure to changes in exchange rates. A five percent change in foreign currency rates would not have a significant impact on our financial position, results of operations or cash flows.

        Interest rates.    Our interest rate exposure is generally limited to our unsecured revolving credit agreement, purchase of interest bearing short-term investments and the holdback contingency balance outstanding related to our acquisition of VECO. There was $116.0 million and $69 million outstanding

42

under the unsecured revolving credit agreement and holdback contingency, respectively, at December 31, 2007. We have assessed the market risk exposure on these financial instruments and determined that any significant changes to the fair value of these instruments would not have a material impact on our consolidated results of operations, financial position or cash flows. Based upon the amount outstanding under the unsecured revolving credit agreement and the holdback contingency, a one percentage point change in the assumed interest rate would change our annual interest expense by approximately $1.9 million.

Item 8.    Financial Statements and Supplementary Data

        Reference is made to the information set forth beginning on page F-1.

Item 9.    Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

        None.

Item 9A.    Controls and Procedures

Disclosure Controls and Procedures

        We carried out an evaluation as of the last day of the period covered by this Annual Report on Form 10-K, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934 (Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (a) are effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is timely recorded, processed, summarized and reported and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

        There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2007 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The Company is in the process of reviewing the internal controls of VECO and, if necessary, will make appropriate changes as we incorporate our controls and procedures into this recently acquired business.

Management's Report on Internal Control Over Financial Reporting

        Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

        We acquired VECO Corporation (VECO) on September 7, 2007. Our management has excluded the VECO business from its assessment of the effectiveness of internal control over financial reporting on December 31, 2007. The acquired business has $530.8 million of total assets and $239.2 million of

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total revenues included in our consolidated financial statements as of and for the year ended December 31, 2007.

        Based on our evaluation under the framework in Internal Control—Integrated Framework, our management concluded that our internal control over financial reporting was effective as of December 31, 2007.

        The effectiveness of our internal control over financial reporting as of December 31, 2007 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in their report which is included herein on page F-2.

Item 9B.    Other Information

        Not applicable.

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PART III

Item 10.    Directors, Executive Officers and Corporate Governance

        The following table shows our directors and executive officers as of December 31, 2007:

Name	Age	Title
Robert W. Bailey	52	Director
Robert G. Card	55	Director and Senior Vice President
Carolyn Chin	60	Director
Donald S. Evans	57	Director and Senior Vice President
Jerry D. Geist	73	Director
Garry M. Higdem	54	Director and Senior Vice President
Samuel H. Iapalucci	55	Executive Vice President, Secretary and Chief Financial Officer
Mark A. Lasswell	53	Director
Lee A. McIntire	58	President and Chief Operating Officer
Joan M. Miller	50	Director
Ralph R. Peterson	63	Chairman of the Board and Chief Executive Officer
David B. Price	62	Director
M. Catherine Santee	46	Director
JoAnn Shea	43	Vice President and Chief Accounting Officer
Michael A. Szomjassy	56	Director
Nancy R. Tuor	59	Vice Chair of the Board
Barry L. Williams	63	Director

        On February 15, 2008, Samuel H. Iapalucci announced his intention to retire from his position as Executive Vice President, Secretary and Chief Financial Officer of CH2M HILL, effective April 15, 2008. Mr. Iapalucci has served as our Chief Financial Officer since 1994 and as our Executive Vice President since 2001. Ms. M. Catherine Santee, CH2M HILL's Senior Vice President of Finance and a member of our Board of Directors, has been appointed to replace Mr. Iapalucci as our Chief Financial Officer effective April 15, 2008.

        The information required under this Item is contained in the Proxy Statement under the captions "Proposal 1—Election of Directors" and "Corporate Governance" and is incorporated herein by reference.

Item 11.    Executive Compensation

        See the information set forth under "Executive Compensation" in the Proxy Statement, which is incorporated herein by reference.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

        See the information set forth under "Security Ownership of Certain Shareholders and Management" in the Proxy Statement, which is incorporated herein by reference.

Item 13.    Certain Relationships and Related Transactions, and Director Independence

        The information required under this Item is contained in the Proxy Statement under the captions "Proposal 1—Election of Directors" and "Corporate Governance" and is incorporated herein by reference.

Item 14.    Principal Accountant Fees and Services

        See the information set forth under "Audit Subcommittee" in the Proxy Statement which is incorporated herein by reference.

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PART IV

Item 15.    Exhibits and Financial Statement Schedules

        Documents Filed as Part of this Report

1.

Financial Statements

Report of Independent Registered Public Accounting Firm—KPMG LLP	F-1
Report on Internal Control Over Financial Reporting—KPMG LLP	F-2
Consolidated Balance Sheets at December 31, 2007 and 2006	F-4
Consolidated Statements of Income for the Years Ended December 31, 2007, 2006 and 2005	F-5
Consolidated Statements of Shareholders' Equity and Comprehensive Income for the Years Ended December 31, 2007, 2006 and 2005	F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and 2005	F-7
Notes to Consolidated Financial Statements	F-8

2.

Financial Statement Schedules and Other

        The consolidated balance sheets of Kaiser-Hill Company, LLC as of December 31, 2007 and 2006, and the related consolidated statements of income, members' equity, and cash flows for each of the years in the three-year period ended December 31, 2007.

        All financial statement schedules have been omitted because the required information is included in the consolidated financial statements or notes thereto, or because such schedules are not applicable.

3.

Exhibits

        The following exhibits are filed as part of this annual report:

Plan of Acquisition

Exhibit Number

Description

2.1

Stock Purchase Agreement, dated September 7, 2007, between CH2M HILL Companies, Ltd., VECO Corporation and its stockholders (certain portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 24b-2 as promulgated under the Securities Exchange Act of 1934) filed as exhibit 2.1 to CH2M HILL's Current Report on Form 8-K (Commission File No. 000-27261) on September 13, 2007

Articles of Incorporation and Bylaws

Exhibit Number		Description
	3.1	Restated Articles of Incorporation of CH2M HILL Companies, Ltd. filed as Exhibit 3.1 on Amendment No. 2 on Form S-1 to Registration Statement on Form S-3, on August 3, 2001 (File No. 333-60700)
*3.2		Restated Bylaws of CH2M HILL Companies, Ltd. filed herein

46

Material Contracts—Management Agreements, Compensatory Plans or Arrangements

Exhibit Number	Description
10.1	CH2M HILL Retirement and Tax-Deferred Savings Plan, as amended and restated effective June 1, 2000 filed as Exhibit 10.1 on Form 10-K, on March 29, 2000
10.2	CH2M HILL Companies, Ltd. 1999 Stock Option Plan, as amended and restated on November 12, 1999 filed as Exhibit 10.3 on Form 10-K, on March 29, 2000
10.3	CH2M HILL Companies, Ltd. Deferred Compensation Retirement Plan effective January 1, 2000 filed as Exhibit 10.21 on Form 10-K, on March 20, 2001
10.4	CH2M HILL Companies, Ltd. Executive Deferred Compensation Plan effective January 1, 2000 filed as Exhibit 10.22 on Form 10-K, on March 20, 2001
10.5	CH2M HILL Companies, Ltd. Deferred Compensation Plan effective January 1, 2001 filed as Exhibit 10.23 on Form 10-K, on March 20, 2001
10.6	CH2M HILL Companies, Ltd. Restricted Stock Policy and Administration Plan effective January 1, 2000 filed as Exhibit 10.25 on Form 10-K, on March 20, 2001
10.7	CH2M HILL Companies, Ltd. Short Term Incentive Plan effective January 1, 2000 filed as Exhibit 10.26 on Form 10-K, on March 20, 2001
10.8	CH2M HILL Companies, Ltd. 2004 Stock Option Plan filed as Appendix A on Schedule 14A Definitive Proxy Statement, on March 26, 2004
10.9	CH2M HILL Companies, Ltd. Payroll Deduction Stock Purchase Plan as amended and restated effective January 1, 2004 filed as Appendix B on Schedule 14A Definitive Proxy Statement, on March 26, 2004
10.10	CH2M HILL Companies, Ltd. Amended and Restated Executive Officers Long Term Incentive Plan effective January 1, 2005 filed as Exhibit 10.14 on Form 10-K on February 23, 2007; amended to comply with IRS Code sec. 409A, no shareholders approval required
10.11	CH2M HILL Companies, Ltd. Amended and Restated Long Term Incentive (LTI) Plan effective January 1, 2005 filed as Exhibit 10.15 on form 10-K on February 23, 2007

47

Material Contracts—Other

Exhibit Number	Description
10.12	Contract with Neidiger, Tucker, Bruner, Inc., filed as Exhibit 99.1 on Form 8-K, on June 24, 2002
10.13	Amended and Restated Credit Facility closed on September 6, 2007, by and among CH2M HILL Companies, Ltd. and certain of its wholly owned subsidiaries. Wells Fargo Bank, National Association, as agent and sole arranger, and other lenders as party thereto (certain portions of this exhibit have been omitted and filed separately with the Commission pursuant to a request for confidential treatment under Rule 24b-2 as promulgated under the Securities Exchange Act of 1934) filed as exhibit 10.1 to CH2M HILL's Current Report on Form 8-K (Commission File No. 000-27261) on September 13, 2007
10.14	Agreement of Purchase and Sale executed on September 26, 2007 (dated September 11, 2007) by and between CH2M HILL, Inc. and WELLS REIT II—South Jamaica Street, LLC filed as exhibit 10.44 to CH2M HILL's Current Report on Form 8-K (Commission File No. 000-27261) on September 27, 2007
10.15	Lease Agreement dated as of September 26, 2007, by and between CH2M HILL, Inc. and WELLS REIT II—South Jamaica Street, LLC filed as exhibit 10.43 to CH2M HILL's Current Report on Form 8-K (Commission File No. 000-27261) on September 27, 2007 and incorporated herein

Code of Ethics

Exhibit Number	Description
14.1	CH2M HILL Companies, Ltd. Ethics Code for Executive and Financial Officers filed as Exhibit 14.1 on Form 10-K on February 23, 2007

48

Subsidiaries of the Registrant

Exhibit Number	Description
*21.1	Subsidiaries of CH2M HILL Companies, Ltd.

Consent of Experts and Counsel

Exhibit Number	Description
*23.1	Consent of KPMG LLP

Power of Attorney

Exhibit Number	Description
*24.1	Power of Attorney authorizing signature

Rule 13a-14(a)/15d-14(a) Certifications

Exhibit Number	Description
*31.1	Written Statement of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2	Written Statement of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Section 1250 Certifications

Exhibit Number	Description
*32.1	Written Statement of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
*32.2	Written Statement of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)

Additional Exhibits

Exhibit Number	Description
99.1	Internal Market Rules, filed as Exhibit 99 to Registration Statement on Form S-1 on March 15, 1999 (File No. 333-74427)

*

Filed herewith

49

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
CH2M HILL Companies, Ltd.:

        We have audited the accompanying consolidated balance sheets of CH2M HILL Companies, Ltd. (an Oregon corporation) and subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of income, shareholders' equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2007. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

        We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of CH2M HILL Companies, Ltd. and subsidiaries as of December 31, 2007 and 2006, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.

        As discussed in note 1 to the accompanying consolidated financial statements, effective December 31, 2007, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R); effective January 1, 2007, the Company adopted Financial Accounting Standards Board (FASB) Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes; effective January 1, 2006, the Company adopted SFAS No. 123(R), Share-Based Payment; and effective January 1, 2005 the Company adopted FIN 46 (R), Consolidation of Variable Interest Entities.

        We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), CH2M HILL Companies, Ltd. and subsidiaries internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 29, 2008 expressed an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

	KPMG LLP
Denver, Colorado February 29, 2008

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
CH2M HILL Companies, Ltd.:

        We have audited CH2M HILL Companies, Ltd. and subsidiaries internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). CH2M HILL Companies, Ltd. and subsidiaries management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

        We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

        A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        In our opinion, CH2M HILL Companies Ltd. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

        CH2M HILL Companies, Ltd. and subsidiaries acquired VECO Corporation and subsidiaries during 2007, and management excluded from its assessment of the effectiveness of CH2M HILL Companies, Ltd. and subsidiaries internal control over financial reporting as of December 31, 2007, VECO Corporation and subsidiaries internal control over financial reporting associated with total assets of $530.8 million and total revenues of $239.2 million, included in the consolidated financial statements of CH2M HILL Companies, Ltd. and subsidiaries as of and for the year ended December 31, 2007. Our audit of internal control over financial reporting of CH2M HILL Companies, Ltd. and subsidiaries also excluded an evaluation of the internal control over financial reporting of VECO Corporation and subsidiaries.

F-2

        We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of CH2M HILL Companies, Ltd. and subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of income, shareholders' equity and comprehensive income, and cash flows for each of the years in the three-year period ended December 31, 2007, and our report dated February 29, 2008 expressed an unqualified opinion on those consolidated financial statements.

	KPMG LLP
Denver, Colorado February 29, 2008

F-3

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

(Dollars in thousands)

				December 31, 2007			December 31, 2006
ASSETS
Current assets:
	Cash and cash equivalents			$	124,105		$	105,205
	Available-for-sale securities				2,705			30,898
	Receivables, net—
		Client accounts			670,984			449,790
		Unbilled revenue			391,502			389,039
		Other			10,563			6,171
	Current deferred income taxes				60,415			38,968
	Prepaid expenses and other current assets				57,285			28,248
			Total current assets		1,317,559			1,048,319
Investments in unconsolidated affiliates					35,285			30,305
Property, plant and equipment, net					214,348			32,244
Goodwill					126,690			41,968
Intangible assets, net					125,933			21,429
Deferred income taxes					26,968			59,788
Other assets					63,163			45,488
			Total assets	$	1,909,946		$	1,279,541
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Current portion of long-term debt			$	12,458		$	390
	Accounts payable and accrued subcontractor costs				401,511			322,104
	Billings in excess of revenue				255,862			147,755
	Accrued payroll and employee related liabilities				248,704			179,676
	Current income tax payable				4,099			58,429
	Other accrued liabilities				113,271			72,253
			Total current liabilities		1,035,905			780,607
Long-term employee related liabilities and other					225,179			132,661
Long-term debt					185,329			236
			Total liabilities		1,446,413			913,504
Commitments and contingencies (Note 16)
Shareholders' equity:
	Preferred stock, Class A $0.02 par value, 50,000,000 shares authorized; none issued				—			—
	Common stock, $0.01 par value, 100,000,000 shares authorized; 33,158,068 and 32,109,200 issued and outstanding at December 31, 2007 and 2006, respectively				332			321
	Additional paid-in capital				70,596			46,330
	Retained earnings				395,998			328,559
	Accumulated other comprehensive loss				(3,393	)		(9,173	)
			Total shareholders' equity		463,533			366,037
			Total liabilities and shareholders' equity	$	1,909,946		$	1,279,541

The accompanying notes are an integral part of these consolidated financial statements.

F-4

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Consolidated Statements of Income

(Dollars in thousands except per share amounts)

			For The Years Ended
			December 31, 2007			December 31, 2006			December 31, 2005
Gross revenue			$	4,376,238		$	4,006,944		$	3,152,221
Equity in earnings of joint ventures and affiliated companies				44,184			17,000			110,136
Operating expenses:
	Direct cost of services and overhead			(3,507,770	)		(3,286,450	)		(2,539,401	)
	General and administrative			(833,534	)		(673,857	)		(588,867	)
Operating income				79,118			63,637			134,089
Interest income (expense):
	Interest income			4,331			2,550			1,957
	Interest expense			(5,728	)		(2,506	)		(1,818	)
Income before provision for income taxes				77,721			63,681			134,228
Provision for income taxes				(11,722	)		(24,780	)		(52,589	)
Net income			$	65,999		$	38,901		$	81,639
Net income per common share:
		Basic	$	2.01		$	1.20		$	2.56
		Diluted	$	1.97		$	1.18		$	2.51
Weighted average number of common shares:
		Basic		32,864,202			32,419,751			31,930,217
		Diluted		33,507,802			33,046,914			32,482,265

The accompanying notes are an integral part of these consolidated financial statements.

F-5

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Consolidated Statements of Shareholders' Equity and Comprehensive Income

(Dollars in thousands)

				Common Stock										Accumulated Other Comprehensive Loss
									Additional Paid-In Capital			Retained Earnings					Total Shareholders' Equity
				Shares		Amount
Balance at December 31, 2004				31,214,918		$	312		$	36,968		$	208,019	$	(15,449	)	$	229,850
	Net income						—			—			81,639		—			81,639
	Other comprehensive income (loss):
		Foreign currency translation adjustments					—			—			—		(2,398	)		(2,398	)
		Minimum pension liability adjustment					—			—			—		472			472
		Unrealized gain on equity investments					—			—			—		2,053			2,053
			Comprehensive income															81,766
	Shares issued in connection with stock based compensation and employee benefit plans			2,337,087			23			34,867			—		—			34,890
	Shares purchased and retired			(1,659,957	)		(16	)		(26,510	)		—		—			(26,526	)
Balance at December 31, 2005				31,892,048			319			45,325			289,658		(15,322	)		319,980
	Net income						—			—			38,901		—			38,901
	Other comprehensive income (loss):
		Foreign currency translation adjustments					—			—			—		4,844			4,844
		Minimum pension liability adjustment					—			—			—		2,439			2,439
		Unrealized loss on equity investments					—			—			—		(1,134	)		(1,134	)
			Comprehensive income															45,050
	Shares issued in connection with stock based compensation and employee benefit plans			1,667,543			17			28,936			—		—			28,953
	Shares purchased and retired			(1,450,391	)		(15	)		(27,931	)		—		—			(27,946	)
Balance at December 31, 2006				32,109,200			321			46,330			328,559		(9,173	)		366,037
	Net income						—			—			65,999		—			65,999
	Other comprehensive income (loss):
		Foreign currency translation adjustments					—			—			—		6,867			6,867
		Minimum pension liability adjustment					—			—			—		8,641			8,641
		Unrealized loss on equity investments					—			—			—		(1,284	)		(1,284	)
			Comprehensive income															80,223
	Impact of adoption of SFAS 158						—			—			—		(8,444	)		(8,444	)
	Cumulative effect of change in accounting principle						—			—			1,440		—			1,440
	Shares issued in connection with stock based compensation and employee benefit plans			2,091,252			21			45,180			—		—			45,201
	Shares purchased and retired			(1,042,384	)		(10	)		(20,914	)		—		—			(20,924	)
Balance at December 31, 2007				33,158,068		$	332		$	70,596		$	395,998	$	(3,393	)	$	463,533

The accompanying notes are an integral part of these consolidated financial statements.

F-6

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Dollars in thousands)

					For The Years Ended
					December 31, 2007			December 31, 2006			December 31, 2005
Cash flows from operating activities:
	Net income				$	65,999		$	38,901		$	81,639
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization				35,119			13,823			15,910
		Stock-based employee compensation expense				51,266			37,403			27,180
		Net (gain)/loss on disposal of property, plant and equipment				1,013			(1,845	)		484
		Allowance for uncollectible accounts				1,952			3,523			3,241
		Deferred income tax benefit				(55,339	)		(56,524	)		(10,206	)
		Distributed/(undistributed) earnings of unconsolidated affiliates				(6,071	)		91,263			(51,251	)
		Changes in current assets and liabilities, net of businesses acquired:
			Receivables and unbilled revenue			(53,869	)		(142,468	)		(160,945	)
			Prepaid expenses and other			(21,413	)		(7,720	)		(12,504	)
			Accounts payable and accrued subcontractor costs			45,351			55,581			50,767
			Billings in excess of revenues			104,264			26,993			23,935
			Employee related liabilities			32,855			31,078			6,668
			Other accrued liabilities			(3,798	)		9,685			39,724
			Current taxes payable			(107,042	)		(4,592	)		27,807
			Long term employee related liabilities and other			(16,718	)		22,863			14,550
				Net cash provided by operating activities		73,569			117,964			56,999
Cash flows from investing activities:
	Capital expenditures					(20,679	)		(13,134	)		(8,176	)
	Cash increase upon adoption of FIN 46(R)					—			—			7,699
	Acquisitions and earnout payments, net of cash acquired					(176,116	)		(2,018	)		(7,470	)
	Investments in affiliates, net of distributions of capital					5,999			(11,673	)		(7,617	)
	Purchases of available-for-sale investments					(224,440	)		(76,131	)		—
	Proceeds from sale of available-for-sale investments					252,050			48,541			—
	Proceeds from sale-leaseback of buildings, net and other					41,267			6,538			27
				Net cash used in investing activities		(121,919	)		(47,877	)		(15,537	)
Cash flows from financing activities:
	Borrowings on long-term debt					441,402			456,900			236,300
	Payments on long-term debt					(350,736	)		(460,525	)		(239,234	)
	Repurchases and retirements of stock					(36,931	)		(37,145	)		(25,262	)
	Excess tax benefits from stock-based compensation					3,425			2,606			—
				Net cash provided by (used in) financing activities		57,160			(38,164	)		(28,196	)
Effect of exchange rate changes on cash						10,090			6,788			(2,657	)
Increase in cash and cash equivalents						18,900			38,711			10,609
Cash and cash equivalents, beginning of year						105,205			66,494			55,885
Cash and cash equivalents, end of year					$	124,105		$	105,205		$	66,494
Supplemental disclosures:
	Cash paid for interest				$	4,453		$	2,848		$	1,264
	Cash paid for income taxes				$	170,296		$	84,607		$	35,264

The accompanying notes are an integral part of these consolidated financial statements.

F-7

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(1) Summary of business and significant accounting policies

Summary of Business

        CH2M HILL Companies, Ltd. and subsidiaries (CH2M HILL) is a project delivery firm that was founded in 1946. CH2M HILL provides engineering, consulting, design, construction, procurement, operations and maintenance, and program and project management services to federal, state, municipal and local government entities and U.S. federal government agencies, as well as private industry, in the U.S. and internationally. CH2M HILL is an employee-owned Oregon corporation. A substantial portion of CH2M HILL's professional fees arises from projects that are funded directly or indirectly by government entities.

Principles of Consolidation and Basis of Presentation

        The consolidated financial statements include the accounts of CH2M HILL and all of its wholly owned subsidiaries after elimination of all intercompany accounts and transactions. Partially owned affiliates and joint ventures are evaluated for consolidation in accordance with Financial Accounting Standards Board (FASB) Interpretation No. (FIN) 46 (revised December 2003), Consolidation of Variable Interest Entities (FIN 46(R)). The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). Certain amounts in prior years' consolidated financial statements have been reclassified to conform to the current year presentation.

Use of Estimates

        The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the periods presented. Actual results could differ from those estimates.

Capital Structure

        CH2M HILL has authorized 100,000,000 shares of common stock, par value $0.01 per share, and 50,000,000 shares of Class A preferred stock, par value $0.02 per share. CH2M HILL's Restated Bylaws and Articles of Incorporation provide for the imposition of certain restrictions on the stock including, but not limited to, the right but not the obligation to repurchase shares upon termination of employment or affiliation, the right of first refusal and ownership limits.

Foreign Currency Translation

        All assets and liabilities of CH2M HILL's foreign subsidiaries are translated into U.S. dollars as of each balance sheet date. Revenues and expenses are translated at the average exchange rate for the period. Translation gains and losses are reflected in shareholders' equity as part of accumulated other comprehensive loss. Transaction gains and losses are recognized as incurred in the consolidated statements of income.

F-8

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(1) Summary of business and significant accounting policies (Continued)

Revenue Recognition

        CH2M HILL earns its revenue from different types of contracts, including cost-plus, fixed-price and time-and-materials. In recognizing revenue, CH2M HILL evaluates each contractual arrangement to determine the appropriate authoritative literature to apply. CH2M HILL primarily performs engineering and construction related services and recognizes revenue for these contracts on the percentage-of-completion method where progress towards completion is measured by relating the actual cost of work performed to date to the current estimated total cost of the respective contracts. In making such estimates, judgments are required to evaluate potential variances in schedule, the cost of materials and labor, productivity, liability claims, contract disputes, or achievement of contract performance standards.

        Change orders are included in total estimated contract revenue when it is probable that the change order will result in an addition to contract value and can be estimated. Management evaluates when a change order is probable based upon its experience in negotiating change orders, the customer's written approval of such changes or separate documentation of change order costs that are identifiable. Losses on construction and engineering contracts in process are recognized in their entirety when the loss becomes evident and the amount of loss can be reasonably estimated.

        CH2M HILL also performs operations and maintenance services. Revenue is recognized on operations and maintenance contracts on a straight-line basis over the life of the contract once CH2M HILL has an arrangement, delivery has occurred, the price is fixed or determinable and collectibility is reasonably assured.

Unbilled Revenue and Billings in Excess of Revenue

        Unbilled revenue represents the excess of contract revenue recognized over billings to date on contracts in process. These amounts become billable according to the contract terms, which usually consider the passage of time, achievement of certain milestones or completion of the project.

        Billings in excess of revenue represent the excess of billings to date, per the contract terms, over revenue recognized on contracts in process.

Allowance for Uncollectible Accounts Receivable

        CH2M HILL reduces accounts receivable by estimating an allowance for amounts that may become uncollectible in the future. Management determines the estimated allowance for uncollectible amounts based on their judgments in evaluating the aging of the receivables and the financial condition of CH2M HILL's clients, which may be dependent on the type of client and the client's current economic conditions.

Income Taxes

        CH2M HILL accounts for income taxes utilizing an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax effects of events that have been recognized in the financial statements or tax returns. In estimating future tax consequences, CH2M HILL generally considers all expected future events other than enactment of changes in the tax laws or rates. Deferred tax assets and liabilities are determined based on the difference between the tax bases of assets and liabilities and their reported amounts using enacted tax rates in effect for the year

F-9

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(1) Summary of business and significant accounting policies (Continued)

in which differences are expected to reverse. Annually, CH2M HILL determines the amount of undistributed foreign earnings invested indefinitely in its foreign operations. Deferred taxes are not provided on those earnings.

        In addition, the calculation of tax assets and liabilities involves uncertainties in the application of complex tax regulations. For income tax benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities.

Cash and Cash Equivalents

        CH2M HILL maintains a cash management system which provides for cash in the bank sufficient to pay checks as they are submitted for payment and invests cash in excess of this amount in interest bearing short-term investments such as certificates of deposit, commercial paper and repurchase agreements. These investments have original short-term maturities of less than three months and are considered cash equivalents in the consolidated balance sheets and statements of cash flows.

Available-for-Sale Securities

        Available-for-sale securities are carried at fair value, with unrecognized gains and losses reported in accumulated other comprehensive loss, net of taxes. Losses on available-for-sale securities are recognized when a loss is determined to be other than temporary or when realized. Fair values were estimated based on market prices, where available, or dealer quotes.

        CH2M HILL occasionally invests excess cash in auction rate and variable rate demand notes. Although the maturities on the underlying securities are long-term, CH2M HILL intends to hold the investments for less than one year. Therefore, these securities are considered short-term, available-for-sale securities and are recorded in the consolidated balance sheets at a fair value. Of the $30.9 million fair value of available-for-sale securities at December 31, 2006, approximately $27.6 million related to these types of securities. There were no such securities at December 31, 2007. Income in 2007 and 2006 related to these securities was not significant.

Property, Plant and Equipment

        All additions, including betterments to existing facilities, are recorded at cost. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost of the assets and the related accumulated depreciation are removed from the accounts. Any gain or loss on retirements is reflected in operating income in the year of disposition.

        Depreciation for owned property is based on the estimated useful lives of the assets using both straight-line and accelerated methods for financial statement purposes. Useful lives for buildings range from 5 to 32 years. Furniture, fixtures and equipment are depreciated over their useful lives from 2 to 10 years. Leasehold improvements are depreciated over the shorter of their estimated useful life or the remaining term of the associated lease.

Other Long-Lived Assets

        CH2M HILL may acquire goodwill or other intangible assets in business combinations which are accounted for using the purchase method of accounting. Intangible assets are stated at fair value as of the date acquired in a business combination. CH2M HILL amortizes intangible assets with finite lives

F-10

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(1) Summary of business and significant accounting policies (Continued)

on a straight-line basis over their expected useful lives, currently up to seven years. Where there are no legal, regulatory, contractual or other factors that would reasonably limit the useful life of the intangible asset, such as goodwill or tradenames, management has determined that those intangible assets have an indefinite life and therefore are not amortized.

Impairment of Long-Lived Assets

        Goodwill and intangible assets with indefinite lives are tested for impairment on an annual basis, or on an interim basis if events or circumstances indicate that the carrying amount of the assets may not be fully recoverable. An impairment charge is recognized for any amount by which the carrying amount of goodwill or intangible assets with indefinite lives exceeds their fair value.

        CH2M HILL reviews its finite-lived intangibles and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Assets which are held and used in operations are considered impaired if the undiscounted future cash flows from the asset do not exceed the net book value. If impaired, the assets are written down to their estimated fair value. CH2M HILL generally measures fair value by considering sale prices for similar assets or by discounting estimated future cash flows from the asset group using an appropriate discount rate.

Accumulated Other Comprehensive Loss

        Accumulated other comprehensive loss consists of foreign currency translation adjustments, items not recognized as a component of net periodic benefit cost, net of tax of $5.9 million, and unrealized gains/losses on investments, net of tax of $.4 million. These components are included in the consolidated statements of shareholders' equity and comprehensive income. Taxes are not provided on the foreign currency translation gains and losses as deferred taxes are not provided on the unremitted earnings of the foreign subsidiaries to which they relate.

        The after-tax composition of accumulated other comprehensive loss consists of the following at December 31:

($ in thousands)	2007			2006
Foreign currency translation adjustment	$	10,461		$	3,594
Items not recognized as a component of net periodic benefit cost, net of tax		(14,908	)		(15,105	)
Unrealized gain on investment, net of tax		1,054			2,338
	$	(3,393	)	$	(9,173	)

Concentrations of Credit Risk

        Financial instruments which potentially subject CH2M HILL to concentrations of credit risk consist principally of cash, cash equivalents, short term investments and trade receivables. CH2M HILL's cash, cash equivalents and short term investments are maintained in accounts held primarily in the U.S. with some accounts held by major banks and financial institutions located in Europe, Canada and Asia. Concentrations of credit risk relative to trade receivables are limited due to our diverse client base, which includes the U.S. federal government, various states and municipalities and a variety of U.S. and foreign corporations operating in a broad range of industries and geographic areas.

F-11

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(1) Summary of business and significant accounting policies (Continued)

        Contracts with the U.S. federal government and its prime contractors usually contain standard provisions for permitting the government to modify, curtail or terminate the contract for convenience of the government or such prime contractors if program requirements or budgetary constraints change. Upon such a termination, CH2M HILL is generally entitled to recover costs incurred, settlement expenses and profit on work completed prior to termination.

Recently Adopted Accounting Standards

        On January 1, 2007, CH2M HILL adopted Financial Accounting Standards Board (FASB) Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes: an interpretation of FASB Statement No. 109 (FIN 48). FIN 48 establishes a process to measure the impact of an uncertainty associated with an income tax position. Under FIN 48, the effect of an income tax position on the income tax provision must be recognized at the amount that is more likely than not to be sustained upon examination by the relevant taxing authority. For tax positions meeting the more likely than not threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. Under our previous policy, tax positions were recognized to the extent they were probable of being sustained. As a result of the implementation of FIN 48, we recognized a $1.4 million decrease in the liability for uncertain tax positions, which was accounted for as an increase to the January 1, 2007 balance of retained earnings. See Footnote 11 for further discussion of the impact of adopting FIN 48.

        On December 31, 2007, CH2M HILL adopted Statement of Financial Accounting Standard (SFAS) No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of SFAS No. 87, 88, 106 and 132(R) (SFAS 158), which requires employers to recognize the funded status of pension and other postretirement benefit plans on the balance sheet and to recognize changes in the funded status through comprehensive income in the year in which the changes occur. SFAS 158 also requires plan assets and benefit obligations to be measured as of the balance sheet date beginning December 31, 2008. See Footnote 14 for further discussion of the impact of adopting SFAS 158.

Recently Issued Accounting Standards

        In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (SFAS 141(R)). SFAS 141(R) establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, any noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141(R) also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141(R) is effective for CH2M HILL beginning January 1, 2009. This will change the purchase price accounting for acquisitions consummated after January 1, 2009.

        In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of Accounting Research Bulletin No. 51 (SFAS 160). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, the amount of consolidated net income attributable to the parent and to the noncontrolling interest, changes in a parent's ownership interest and the valuation of retained noncontrolling equity investments when a subsidiary is deconsolidated. SFAS 160 also establishes disclosure requirements that clearly identify and distinguish between the interests of the parent and the

F-12

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(1) Summary of business and significant accounting policies (Continued)

interests of the noncontrolling owners. SFAS 160 is effective for CH2M HILL beginning January 1, 2009. This will change the accounting for noncontrolling interests beginning January 1, 2009.

(2) Accounts receivable, net

        Receivables are stated at net realizable values and consist of receivables billed to clients as well as receivables for which revenue has been earned but has not yet been billed. The U.S. federal government accounted for approximately 15% of CH2M HILL's net receivables at December 31, 2007 and 2006. No other customers exceeded 10% of total receivables at December 31, 2007 or 2006.

        The change in the allowance for uncollectible accounts consists of the following for the years ended December 31:

($ in thousands)		2007			2006			2005
Balance at beginning of year		$	8,317		$	5,992		$	3,917
	Provision charged to expense		1,952			3,523			3,241
	Accounts written off		(3,436	)		(1,051	)		(759	)
	Other		130			(147	)		(407	)
Balance at end of year		$	6,963		$	8,317		$	5,992

(3) Investments in unconsolidated affiliates

        CH2M HILL routinely enters into joint ventures to service the needs of its clients. Such arrangements are customary in the engineering and construction industry and generally are project specific and facilitate the completion of contracts that are jointly owned with CH2M HILL's joint venture partners. These joint ventures are formed to leverage the skills of the respective partners and include consulting, construction, design, project management and operations and maintenance contracts. CH2M HILL's risk of loss on joint ventures is similar to what the risk of loss would be if the project was self-performed, other than the fact that the risk is shared with CH2M HILL's partner.

        CH2M HILL's interests in certain joint ventures are considered variable interest entities (VIE's) under FIN 46(R). CH2M HILL has classified entities identified as VIE's into two groups, the first of which includes those entities that CH2M HILL has consolidated under the guidance of FIN 46(R), as CH2M HILL is considered the primary beneficiary, and the second group which includes those entities which CH2M HILL was not required to consolidate. As of December 31, 2007, the assets and liabilities of the identified VIE's that were not consolidated were $317.2 million and $293.1 million, respectively. For VIE's where CH2M HILL is not the primary beneficiary and those entities which are not VIE's, CH2M HILL accounts for its investments in affiliated unconsolidated companies primarily using the equity method of accounting.

        As of December 31, 2007 and 2006, the investments in unconsolidated affiliates were $35.3 million and $30.3 million, respectively. CH2M HILL's proportionate share of net income or loss is included as equity in earnings of joint ventures and affiliated companies in the consolidated statements of income. In general, the equity investment in our joint ventures is equal to those entities' undistributed earnings. CH2M HILL provides certain services, including engineering, construction management and computer and telecommunication support, to these unconsolidated partnerships. For the years ended December 31, 2007, 2006 and 2005, CH2M HILL reported revenue from these services of

F-13

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(3) Investments in unconsolidated affiliates (Continued)

$78.2 million, $61.4 million and $46.4 million, respectively. These services are billed to the joint ventures in accordance with the provisions of the joint venture agreements. CH2M HILL has the following significant investments in affiliated unconsolidated companies accounted for under the equity method of accounting:

		% Ownership
Domestic:
	AGVIQ—CH2M HILL Joint Venture I	49.0	%
	AGVIQ—CH2M HILL Joint Venture II	49.0	%
	ATKINSON/CH2M HILL, Joint Venture	30.0	%
	CH2M HILL /TILDON COIL Joint Venture	50.0	%
	CH2M HILL /URS Team, Joint Venture	50.0	%
	CH2M HILL/ VT Griffin, Joint Venture	49.0	%
	CH2M—WG Idaho, LLC	50.5	%
	Clark-Nexsen/CH2M HILL—Norfolk	50.0	%
	Coastal Estuary Services	49.9	%
	Connecting Idaho Partners	49.0	%
	HEBL, Inc.	100.0	%
	IAP-Hill, LLC	25.0	%
	Kaiser-Hill Company, LLC	50.0	%
	Kakivik Asset Management LLC	33.0	%
	Milwaukee Transportation Partners, LLC	50.0	%
	MW/CH2M HILL HILL, Joint Venture	50.0	%
	Nana/VECO Joint Venture	50.0	%
	National Security Technologies, LLC	10.0	%
	OMI Caribe LLC	50.0	%
	OMI/Thames Water Stockton, Inc.	50.0	%
	Parsons CH2M HILL Program Management Consultants, Joint Venture	47.5	%
	Sargent & Lundy—CH2M HILL—Worely Parsons	33.3	%
	Stockton D/B Joint Venture	50.0	%
	TIC/LG Groton II Joint Venture	25.0	%
	Washington Closure, LLC	30.0	%
	Washington Group—IDC	38.6	%
Foreign:
	CH2M HILL BECA, Ltd.	50.0	%
	CH2M HILL—Kunwon PMC	54.0	%
	CH2M HILL/Parsons, Joint Venture	50.0	%
	CH2M PB JV, Pte, Ltd.	50.0	%
	CHDE Water	50.0	%
	CHBM Water Joint Venture	50.0	%
	CLM Delivery Partner, Limited	37.5	%
	CPG Consultants—CH2M HILL NIP Joint Venture	50.0	%
	ECC-VECO, LLC	50.0	%
	EMH/APCC Joint Venture	40.0	%
	Golden Crossing Constructors, Joint Venture	33.3	%
	Luggage Point Alliance	50.0	%
	Maroochy Alliance Joint Venture	40.0	%
	OMI BECA, Ltd.	50.0	%
	SMNM/VECO Joint Venture.	50.0	%

F-14

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(3) Investments in unconsolidated affiliates (Continued)

        As part of the acquisition of VECO Corporation (VECO), CH2M HILL acquired equity interests in five joint ventures, including HEBL, Inc., Nana/VECO Joint Venture, EMH/APCC Joint Venture, ECC-VECO, LLC, and SMNM/VECO Joint Venture. The results of these affiliated unconsolidated companies from the date of acquisition through December 31, 2007 are included as equity in earnings of joint ventures and affiliated companies on the consolidated statements of income.

        Summarized unaudited financial information for CH2M HILL's unconsolidated affiliates as of and for the years ended December 31 is as follows:

($ in thousands)		2007		2006
FINANCIAL POSITION:
	Current assets	$	509,587	$	322,579
	Noncurrent assets		67,574		32,649
		$	577,161	$	355,228
	Current liabilities	$	424,202	$	289,143
	Noncurrent liabilities		45,504		2,417
	Owners' equity		107,455		63,668
		$	577,161	$	355,228

($ in thousands)		2007		2006		2005
RESULTS OF OPERATIONS:
	Revenue	$	2,357,988	$	1,308,959	$	1,373,842
	Direct costs		2,209,273		1,258,642		1,135,938
	Gross margin		148,715		50,317		237,904
	General and administrative expenses		5,403		9,224		13,714
	Operating income		143,312		41,093		224,190
	Other income, net		2,654		4,403		358
	Net income	$	145,966	$	45,496	$	224,548

(4) Property, plant and equipment

        Property, plant and equipment consists of the following as of December 31:

($ in thousands)		2007			2006
Land		$	15,171		$	—
Buildings			59,892			—
Furniture, fixtures and equipment			180,923			56,669
Leasehold improvements			32,017			24,834
			288,003			81,503
Less: Accumulated depreciation			(73,655	)		(49,259	)
	Net property, plant and equipment	$	214,348		$	32,244

        The depreciation expense reflected in the consolidated statements of income totaled $24.2 million in 2007, $9.1 million in 2006 and $8.0 million in 2005.

F-15

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(5) Other assets

        Other assets consists of the following as of December 31:

($ in thousands)	2007		2006
Employee benefit plan assets	$	49,489	$	43,493
Investment securities held to maturity		10,741		—
Other		2,933		1,995
	$	63,163	$	45,488

        As a result of the acquisition of VECO, CH2M HILL holds U.S. Treasury securities as a contractual requirement for an outstanding nonrecourse mortgage. The contractual terms of these investments do not permit the issuer to settle the securities at a price less than the amortized cost of the investment. Because CH2M HILL has scheduled the maturity of these investments to meet debt service requirements of certain nonrecourse debt through April 2009 and has the ability and intent to hold these investments until maturity, these investments are classified as held-to-maturity. These investments are carried at cost and periodically evaluated for impairment. As of December 31, 2007, no impairment had occurred and the unrecognized holding losses are not significant.

(6) Acquisitions

        On September 7, 2007, CH2M HILL purchased all of the outstanding stock of VECO and substantially all of VECO's operating businesses as part of a strategic initiative to expand operations into the energy industry. The results of VECO have been included in the consolidated financial statements since that date and are included in the Industrial operating segment. VECO's 4,000 employees provide engineering, construction and field support services to the energy, resource and process industries in Alaska, Canada, the United States, Russia and the Middle East.

        CH2M HILL acquired VECO's net assets of $256.2 million for cash paid to the VECO selling shareholders, CH2M HILL common stock and cash paid to certain VECO employees, direct acquisition costs and a holdback contingency. The holdback contingency, which had an original balance of $70.0 million, relates to known and unknown contingencies that may arise within three years after the acquisition date. Interest accrues on this balance at the London InterBank Offered Rate (LIBOR) plus 1.25% per annum and is payable to the selling shareholders quarterly. As of December 31, 2007, the balance outstanding was $69.0 million. Subject to the resolution of potential contingencies, $29.0 million of this holdback amount will be payable to former VECO shareholders on September 7, 2008 and the remaining $40.0 million is due on September 7, 2010. Additionally, as part of the acquisition we assumed debt in the amount of $97.3 million.

        Included in the intangible assets acquired is the preliminary calculation of fair value for customer relationships and contracted backlog valued at $49.5 million and $48.9 million, respectively. Customer relationships acquired have a useful life of seven years. The contracted backlog will be serviced within approximately two years. The fair value of the property, plant and equipment acquired was $179.0 million. This property, plant and equipment will be depreciated over estimated remaining useful lives of approximately 2.5 to 11.5 years.

F-16

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(6) Acquisitions (Continued)

        The following table summarizes the estimated fair values of the assets acquired and liabilities assumed from VECO as of September 7, 2007 (in thousands):

Current assets	$	237,667
Property, plant and equipment		179,014
Intangible assets		98,400
Goodwill		76,151
Other long-term assets		10,781
Total assets acquired		602,013
Current liabilities		(140,185	)
Debt		(97,264	)
Other long-term liabilities		(108,329	)
Total liabilities assumed		(345,778	)
Net assets acquired	$	256,235

        The following unaudited pro forma combined financial information is presented as if CH2M HILL and VECO had been combined as of the beginning of the periods presented. This information is presented for illustrative purposes only and is not necessarily indicative of the results that actually would have been realized had the entities operated as a combined entity during the periods presented.

        The proforma results of operations as if the acquisition occurred on January 1, 2006 for the years ended December 31 are as follows:

($ in thousands)	2007		2006
Revenue	$	5,057,217	$	4,882,024
Net income		48,412		69,854
Basic earnings per share		1.46		2.14
Diluted earnings per share		1.43		2.10

        In the first quarter of 2007, CH2M HILL acquired a wastewater management company for $2.5 million. The results of this acquired company are reported in the Civil Infrastructure operating segment.

        In the fourth quarter of 2007, CH2M HILL acquired the assets and liabilities of Trigon EPC, LLC (Trigon) for $30.6 million. Trigon is an engineering consulting firm that provides engineering services for pipeline and related facilities, specializing in projects for the crude oil, refined products, natural gas and energy industries. The operating results of Trigon are included in the Industrial operating segment.

        The consideration for the acquisition consisted of cash, net of cash acquired, in the amount of $27.6 million, and a holdback contingency of $3.0 million. Subject to the resolution of potential contingencies, the holdback amount will be payable to the selling shareholders in April 2009. Additionally, CH2M HILL assumed long-term debt on the date of acquisition of $4.0 million.

        Included in the intangible assets acquired is the preliminary fair value of contracted backlog, and customer relationships valued at $7.7 million and $8.4 million, respectively. The contracted backlog will be serviced within approximately three years. Customer relationships acquired have a useful life of

F-17

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(6) Acquisitions (Continued)

seven years. In addition to the identified intangibles, CH2M HILL recognized $7.0 million in goodwill related to the acquisition.

        CH2M HILL is in the process of evaluating the fair value of the assets acquired and liabilities assumed on all current year acquisitions. The Company performed a preliminary purchase price allocation based on our current assessment of fair values. CH2M HILL is diligently completing post acquisition procedures including searches for unrecognized liabilities, final tax returns and other items that may affect the allocation of the purchase price. As such, the purchase price allocations are subject to change as these valuations are completed.

(7) Goodwill and intangible assets

        Goodwill and the tradename as of December 31 consists of the following:

($ in thousands)	2007		2006
Goodwill	$	126,690	$	41,968
Tradename		20,326		20,326
	$	147,016	$	62,294

        Goodwill and the tradename were reviewed for impairment during the year ended December 31, 2007. Management's review of the recoverability of goodwill and the tradename indicated that there was no impairment. During 2007 and 2006, CH2M HILL recorded additional goodwill as a result of the acquisitions discussed above and earn-out targets being achieved on a previous acquisition.

        Intangible assets with finite lives consists of the following:

($ in thousands)		Cost		Accumulated Amortization			Net finite-lived intangible assets
December 31, 2007
Contracts-in-place		$	2,513	$	(2,513	)	$	—
Contracted backlog			58,871		(9,679	)		49,192
Customer relationships			58,162		(2,338	)		55,824
Non-compete agreements and other			1,065		(474	)		591
	Total finite-lived intangible assets	$	120,611	$	(15,004	)	$	105,607
December 31, 2006
Contracts-in-place		$	26,594	$	(26,173	)	$	421
Patents and trademarks			5,219		(5,219	)		—
Contracted backlog			2,230		(2,088	)		142
Non-compete agreements and other			807		(267	)		540
	Total finite-lived intangible assets	$	34,850	$	(33,747	)	$	1,103

        All intangible assets are being amortized over their expected lives up to seven years. The amortization expense reflected in the consolidated statements of income totaled $11.0 million in 2007, $4.7 million in 2006 and $8.0 million in 2005. These intangible assets are expected to be fully amortized

F-18

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(7) Goodwill and intangible assets (Continued)

in 2014. At December 31, 2007, the future estimated amortization expense related to these intangible assets is (in thousands):

Year Ending:
2008	$	37,085
2009		27,845
2010		10,407
2011		8,515
2012		8,515
Thereafter		13,240
	$	105,607

(8) Fair value of financial instruments

        Cash and cash equivalents, receivables, unbilled revenue, accounts payable and billings in excess of revenue are carried at cost, which approximates fair value due to their short maturities. Fair values of equity investments and short-term investments (available-for-sale securities), where a readily determinable market value exists, have been estimated using market prices or dealer quotes. The fair value of long-term debt, including the current portion, is estimated based on quoted market prices for the same or similar issues or on the current rates offered to CH2M HILL for debt of similar maturities.

        The estimated fair values of CH2M HILL's financial instruments as of December 31 are as follows:

		2007				2006
($ in thousands)		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
	Equity investments	$	2,705	$	2,705	$	3,308	$	3,308
	Short-term investments		—		—		27,590		27,590
	U.S. Treasury securities		10,741		10,583		—		—
Liabilities:
	Long-term debt, including current portion	$	197,787	$	197,013	$	626	$	592

(9) Line of credit and long-term debt

        CH2M HILL is party to a credit agreement which provides for a $500.0 million revolving credit facility (RLOC) which expires on August 31, 2012. The credit agreement includes an option to increase the initial borrowing capacity by up to an additional $250.0 million. While the credit agreement may be used for general corporate purposes and permitted acquisitions, it also provides that up to $250.0 million is available for the issuance of letters of credit to support various trade activities. At CH2M HILL's option, the credit agreement bears interest at a rate equal to either LIBOR plus 0.75% to 1.50%, or the lender's applicable base rate less a discount rate up to 0.25% based on CH2M HILL's ratio of funded debt to earnings before interest, taxes, depreciation and amortization. A commitment fee of approximately 0.10% to 0.25% per year on the unused portion of the line of credit is payable

F-19

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(9) Line of credit and long-term debt (Continued)

based on CH2M HILL's ratio of funded debt to earnings before interest, taxes, depreciation and amortization. As of December 31, 2007, CH2M HILL had $116.0 million in borrowings outstanding on the RLOC.

        The RLOC agreement contains financial and other covenants, as well as limitations on other indebtedness, liens, acquisitions, mergers and dispositions. The credit agreement also contains customary events of default, including a default of covenant, a material inaccuracy of representations or warranties, bankruptcy events, and a change in control. As of December 31, 2007, CH2M HILL was in compliance with the covenants required by the credit agreement.

        At December 31, 2007, issued and outstanding letters of credit of $65.7 million were reserved against the borrowing base of the credit agreement, compared to $39.8 million at December 31, 2006.

        As part of the acquisition of VECO, CH2M HILL assumed three mortgage notes related to VECO's offices in Anchorage, Alaska and a building used for warehousing spare parts. Additionally, in connection with the acquisition of VECO, CH2M HILL entered into an equipment financing agreement with an initial balance outstanding of $48.5 million.

        CH2M HILL's nonrecourse and other long-term debt, as of December 31 consists of the following:

($ in thousands)		2007		2006
Nonrecourse:
	Mortgages payable in monthly installments to July 2020, secured by real estate, rents and leases. The note bears interest at 5.35%	$	15,126	$	—
	Mortgages payable in monthly installments to December 2016, secured by real estate. The note bears interest at 6.59%		4,591		—
	Mortgages payable in monthly installments to April 2009, secured by investment securities (See Note 5). The note bears interest at 8.06%		10,942		—
			30,659		—
Other:
	Revolving credit facility		116,000		—
	Equipment note payable, due in monthly installments to September 2012, secured by equipment. The note bears interest at 6.34%		45,390		—
	Various capital leases and other debt secured by equipment		5,479		—
	Shareholder notes payable		259		626
Total long-term debt			197,787		626
Less current portion of long-term debt			12,458		390
Total		$	185,329	$	236

F-20

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(9) Line of credit and long-term debt (Continued)

        At December 31, 2007, future principal payments on long-term debt are as follows (in thousands):

Year Ending:
2008	$	12,458
2009		22,508
2010		12,101
2011		12,240
2012		125,274
Thereafter		13,206
	$	197,787

(10) Operating lease obligations

        CH2M HILL has entered into certain noncancellable leases, which are being accounted for as operating leases. At December 31, 2007, future minimum lease payments are as follows (in thousands):

Year Ending:
2008	$	85,415
2009		69,230
2010		54,429
2011		40,198
2012		32,223
Thereafter		87,470
	$	368,965

        In September 2007, CH2M HILL exercised its option to purchase the properties comprising their corporate headquarters and three adjacent buildings located in Englewood, Colorado previously held under three operating lease arrangements for $95.9 million. As a result of exercising its purchase option, CH2M HILL paid a lease termination fee totaling $7.8 million and wrote off previously capitalized lease costs of $1.0 million. CH2M HILL contemporaneously sold these buildings to a third party for proceeds of $138.5 million and entered into an operating lease agreement to lease these buildings back from the new owner. The initial term of the lease is ten years, with an option to extend the term twice for either a ten or five year period. The sale resulted in a $42.6 million deferred gain which is being amortized over the 10 year term of the lease as a reduction of rent expense. Rental payments under the lease are approximately $0.8 million per month, or approximately $10.0 million in the first year, escalating over time up to approximately $1.0 million per month, or approximately $11.7 million in the tenth year.

        Rental expense charged to operations was $119.4 million, $97.1 million and $82.6 million during 2007, 2006 and 2005, respectively. Certain of CH2M HILL's operating leases contain provisions for a specific rent-free period. CH2M HILL accrues rental expense during the rent-free period based on total expected rent payments to be made over the life of the related lease.

F-21

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(11) Income taxes

        Income from continuing operations before income taxes for the years ended December 31 consists of the following:

($ in thousands)	2007		2006			2005
U.S. income	$	72,463	$	84,628		$	160,524
Foreign income (loss)		5,258		(20,947	)		(26,296	)
Income before taxes	$	77,721	$	63,681		$	134,228

        The provision for income taxes for the years ended December 31 consists of the following:

($ in thousands)				2007			2006			2005
Current income tax expense:
	Federal			$	29,967		$	58,458		$	51,869
	Foreign				12,983			10,423			1,725
	State and local				12,438			12,423			9,201
		Total current income tax expense			55,388			81,304			62,795
Deferred income tax expense (benefit):
	Federal				(36,819	)		(44,048	)		(9,879	)
	Foreign				3,797			(3,115	)		1,425
	State				(10,644	)		(9,361	)		(1,752	)
		Total deferred income tax benefit			(43,666	)		(56,524	)		(10,206	)
			Total income tax expense	$	11,722		$	24,780		$	52,589

        The reconciliations of income tax computed at the U.S. federal statutory tax rate to CH2M HILL's effective income tax rate for the years ended December 31 are as follows:

($ in thousands)		2007			2006			2005
Pretax income		$	77,721		$	63,681		$	134,228
Federal statutory rate			35	%		35	%		35	%
Expected tax expense			27,202			22,288			46,980
Reconciling items:
	State income taxes, net of federal benefit		2,064			1,636			5,704
	Permanent expenses, exclusions and credits		832			1,966			(132	)
	Foreign permanent expenses, taxes, credits and other		(1,164	)		3,418			1,223
	Tax settlements		(15,259	)		—			—
	Other		(1,953	)		(4,528	)		(1,186	)
Provision for income taxes		$	11,722		$	24,780		$	52,589

F-22

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(11) Income taxes (Continued)

        The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31 are as follows:

($ in thousands)			2007			2006
Deferred tax assets:
	Net operating loss carryforwards		$	20,388		$	7,110
	Investments in affiliates			7,153			—
	Deferred recognition of income until collection occurs			4,763			—
	Accrued employee benefits			131,085			122,233
	Total deferred tax assets			163,389			129,343
	Valuation allowance			(20,205	)		(6,940	)
	Net deferred tax assets			143,184			122,403
Deferred tax liabilities:
	Deferred recognition of income until collection occurs			—			10,359
	Investments in affiliates			—			1,790
	Depreciation and amortization			55,801			11,498
	Total deferred tax liabilities			55,801			23,647
		Net deferred tax asset	$	87,383		$	98,756

        A valuation allowance is required to be established for those deferred tax assets that it is more likely than not that they will not be realized. The above valuation allowances relate primarily to foreign net operating losses of $66.7 million and $27.8 million for the years ended December 31, 2007 and 2006, respectively. Included in the total valuation allowance at December 31, 2007 is $5.8 million which was acquired with the VECO acquisition, which will not have future income tax effect. Taxable income within the applicable foreign subsidiary must be reported in order for the deferred tax asset to be realized. The foreign net operating losses can be carried forward for varying terms depending on the foreign jurisdiction.

        Undistributed earnings of CH2M HILL's foreign subsidiaries amounted to approximately $65.0 million at December 31, 2007. These earnings are considered to be indefinitely reinvested. Accordingly, no provision for U.S. federal and state income taxes or foreign withholding taxes has been made. Upon distribution of those earnings, CH2M HILL would be subject to U.S. income taxes (subject to a reduction for foreign tax credits) and withholding taxes payable to the various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax liability is not practicable; however, the potential foreign tax credit associated with the deferred income would be available to reduce the resulting U.S. tax liabilities.

        The tax benefit from share-based compensation awards for the years ended December 31, 2007 and 2006 was $3.5 million and $2.6 million, respectively. These amounts are reflected as additions to additional paid-in capital in the consolidated statements of shareholders' equity and comprehensive income and are reported as financing activities in the 2007 and 2006 consolidated statements of cash flows.

        As a result of the implementation of FIN 48, CH2M HILL recorded a $1.4 million decrease in the liability for uncertain tax positions, which was accounted for as a cumulative effect of a change in

F-23

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(11) Income taxes (Continued)

accounting principle, increasing the January 1, 2007 retained earnings balance. At the adoption date of January 1, 2007, CH2M HILL had $63.1 million recorded as a liability for uncertain tax positions. At December 31, 2007 the liability for uncertain tax positions had decreased to $10.6 million. This significant decrease in the liability for uncertain tax positions was a result of the settlement with the Internal Revenue Service of the research and experimentation tax credits and extraterritorial income exclusion. A reconciliation of the beginning and ending amount of unrecognized tax benefits as of December 31, 2007 is as follows (in thousands):

Balance at January 1, 2007	$	49,200
Additions for current year tax positions		3,852
Additions for prior year tax positions		56
Reductions for prior year tax positions		(1,523	)
Settlement with taxing authorities		(42,112	)
Reductions as a result of lapse of applicable statue of expirations		(453	)
Balance at December 31, 2007	$	9,020

        Included in the balance at December 31, 2007, are $8.3 million in tax positions that if recognized would affect the effective tax rate. It is also reasonably possible that of the total amount of unrecognized tax benefits at December 31, 2007, the reserve could experience a significant change within twelve months of the reporting date related to state research and experimentation tax credits. The estimated range of unrecognized change is zero to approximately $1.6 million as of December 31, 2007.

        CH2M HILL recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2007 and January 1, 2007, CH2M HILL has approximately $1.5 million and $12.6 million, respectively, of accrued interest and penalties related to uncertain tax positions.

        CH2M HILL files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities throughout the world, including such major jurisdictions as the United States and Canada. With few exceptions, CH2M HILL is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities in major tax jurisdictions for years before 2000.

(12) Earnings per share

        Basic earnings per share (EPS) excludes the dilutive effect of common stock equivalents and is computed by dividing net income by the weighted-average number of shares outstanding during the period. Diluted EPS includes the dilutive effect of common stock equivalents, which consists of stock options, and is computed using the weighted-average number of shares and common stock equivalents outstanding during the period.

F-24

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(12) Earnings per share (Continued)

        Reconciliations of basic and diluted EPS for the years ended December 31 are as follows:

($ in thousands)		2007		2006		2005
Numerator:
	Net income	$	65,999	$	38,901	$	81,639
Denominator:
	Basic weighted-average shares outstanding		32,864		32,420		31,930
	Dilutive effect of common stock equivalents		644		627		552
	Diluted adjusted weighted-average shares outstanding, assuming conversion of common stock equivalents		33,508		33,047		32,482
Basic net income per share		$	2.01	$	1.20	$	2.56
Diluted net income per share		$	1.97	$	1.18	$	2.51

(13) Employee benefit plans

Deferred Compensation Plans

        CH2M HILL has two nonqualified deferred compensation plans that provide benefits payable to officers and certain highly compensated employees at specified future dates, upon retirement, or death. Under one plan, a participant could elect to defer base compensation and incentive compensation, in cash or common stock. Under another plan, a participant, whose 401(k) Plan contributions are limited by the Employee Retirement Income Security Act (ERISA), could elect to defer additional base compensation to which CH2M HILL may make a matching contribution. It is also used by CH2M HILL to provide additional retirement benefits for certain of its senior executives at levels to be determined from time-to-time by the Board of Directors.

        These deferred compensation plans are unfunded; therefore, benefits are paid from the general assets of CH2M HILL. The participant's cash deferrals earn a return based on the participant's investment in several hypothetical investment options. Each hypothetical investment option is based on an investment fund that is similar to the 401(k) Plan. All deferrals of common stock must remain invested in common stock and are distributed in common stock.

        Compensation expense related to the plans was $4.3 million, $4.1 million, and $2.9 million for the years ended December 31, 2007, 2006, and 2005, respectively. The total of participant deferrals, which is reflected in other long-term liabilities, was $44.5 million and $38.5 million at December 31, 2007 and 2006, respectively.

Stock Option Plans

        CH2M HILL's 2004 and 1999 stock option plans were approved by the Board of Directors and shareholders to reserve 5,000,000 and 8,000,000 shares, respectively, of CH2M HILL common stock for issuance upon exercise of stock options granted under these plans. Stock options are granted at an exercise price equal to the fair market value of CH2M HILL's common stock at the date of grant. Stock options granted generally become exercisable 25%, 25% and 50% after one, two and three years, respectively, and have a term of five years from date of grant.

F-25

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(13) Employee benefit plans (Continued)

        The following table summarizes the activity relating to the 2004 and 1999 stock option plans during 2007:

Stock Options:	Number of Shares		Weighted Average Exercise Price
Outstanding at December 31, 2006	3,924,382		$	14.10
Granted	1,278,449		$	21.48
Exercised	(928,592	)	$	11.94
Forfeited	(99,081	)	$	17.56
Expired	(56,241	)	$	11.98
Outstanding at December 31, 2007	4,118,917		$	16.83
Exercisable at December 31, 2007	1,770,586		$	13.46
Available for future grants	3,233,212

        The weighted-average remaining contractual term for all options outstanding at December 31, 2007 and 2006 was 2.8 years and 2.6 years, respectively, and the aggregate intrinsic value was $45.8 million and $18.2 million, respectively. The weighted-average remaining contractual term for options vested and exercisable at December 31, 2007 and 2006 was 1.5 years and 1.4 years, respectively, and the aggregate intrinsic value was $25.6 million and $12.1 million, respectively. The remaining unrecognized compensation expense related to nonvested awards as of December 31, 2007 is $20.1 million. CH2M HILL expects to recognize this compensation expense over the weighted average remaining recognition period of 1.75 years, subject to forfeitures that may occur during that period. CH2M HILL received $2.9 million, $3.3 million and $2.7 million from options exercised during the years ended December 31, 2007, 2006 and 2005, respectively. CH2M HILL 's stock option plans also allow participants to satisfy the exercise price by tendering shares of company stock that have been owned by the participants for at least six months. The intrinsic value associated with these exercises was $8.7 million, $6.7 million and $5.7 million during the years ended December 31, 2007, 2006 and 2005, respectively.

        CH2M HILL adopted SFAS 123(R) on January 1, 2006, using the prospective method, under which prior periods are not revised for comparative purposes. Prior to January 1, 2006, CH2M HILL accounted for stock-based payments under the recognition and measurement provisions of Accounting Principles Board Opinion 25 (APB 25) and related interpretations, as permitted by SFAS 123(R). In accordance with APB 25, no compensation expense was required to be recognized for options granted that had an exercise price equal to the market value of the underlying common stock on the date of grant. The provisions of SFAS 123(R) apply to new grants on or after January 1, 2006. CH2M HILL measures the fair value of each stock option grant at the date of grant using a Black-Scholes option pricing model. The weighted-average grant date fair value of options granted during the twelve months

F-26

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(13) Employee benefit plans (Continued)

ended December 31, 2007 and 2006 was $4.49 and $3.62, respectively. The following assumptions were used in determining the fair value of options granted during 2007 and 2006:

	2007	2006
Risk-free interest rate	4.98%	5.03%
Expected dividend yield	0.00%	0.00%
Expected option life	4.26 Years	4.36 Years
Expected stock price volatility	11.36%	8.38%

        CH2M HILL estimates the expected term of options granted by taking the average of the vesting term and the contractual term of the option. CH2M HILL estimates the volatility of its common stock by using a weighted-average of historical volatility over the same period as the term of the option. CH2M HILL uses the U.S. Treasury zero-coupon issues for the risk-free interest rate in the option valuation model with remaining terms similar to the expected term on the options. CH2M HILL does not anticipate paying any cash dividends in the foreseeable future and therefore uses an expected dividend yield of zero in the option valuation model. CH2M HILL is required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. CH2M HILL uses historical data to estimate pre-vesting option forfeitures and records stock-based compensation expense only for those awards that are expected to vest. All stock-based payment awards are amortized on a straight-line basis over the requisite service periods of the awards.

        The total compensation cost recognized under SFAS 123(R) for stock options granted in 2007 and 2006 was $2.2 million and $0.5 million, respectively. No stock option expense was required prior to the adoption of SFAS 123(R) on January 1, 2006.

Payroll Deduction Stock Purchase Plan

        In November 1999, CH2M HILL established the Payroll Deduction Stock Purchase Plan (PDSPP) which provides for the purchase of common stock at 90% of the market value as of the date of purchase through payroll deductions by participating employees. CH2M HILL has reserved 13,000,000 shares of common stock to be issued under the PDSPP. Eligible employees may purchase common stock totaling up to 15% of an employee's compensation through payroll deductions. An employee cannot purchase more than $25,000 of common stock under the PDSPP in any calendar year. The PDSPP is intended to qualify under Section 423 of the Internal Revenue Code (IRC). The PDSPP is not intended to qualify under Section 401(a) of the IRC and is not subject to ERISA. Our PDSPP is non-compensatory under SFAS 123(R) since the plan is available to all shareholders and incorporates no option features such as a look-back period. Accordingly, no compensation cost is recognized in the financial statements for the PDSPP. During the years ended December 31, 2007, 2006 and 2005, a total of 667,407 shares, 712,919 shares and 766,692 shares, respectively, were issued under the PDSPP, for total proceeds of $13.5 million, $11.9 million and $10.3 million, respectively.

F-27

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(13) Employee benefit plans (Continued)

Phantom Stock Plan

        In January 2000, CH2M HILL established the Phantom Stock Plan, which provides eligible individuals with added incentives to continue in the long-term service of CH2M HILL. Eligible individuals are generally individuals who are not residents of the United States. Phantom stock grants are 100% vested on the grant date and may be redeemed after six months from the grant date. The value of phantom stock is equal to the fair market value of CH2M HILL's common stock. All amounts granted under the Phantom Stock Plan are payable in cash only and are generally granted in connection with the short and long term incentive plans. Compensation expense under this plan is based on the value of the units on the date of grant.

        During the years ended December 31, 2007, 2006 and 2005, a total of 3,619, 2,120 and 4,645 phantom stock units, respectively, were granted under the Phantom Stock Plan. At December 31, 2007, there were 76,526 outstanding units.

        The weighted-average fair values of the units granted under the Phantom Stock Plan during 2007, 2006 and 2005 were $19.63, $18.72 and $14.92, respectively.

        Compensation expense related to the Phantom Stock Plan during 2007, 2006 and 2005 was $0.8 million, $0.4 million, and $0.5 million, respectively.

        The following table summarizes the activity relating to the Phantom Stock Plan during 2007:

	Number of Units
Balance at December 31, 2006	107,381
Granted	3,619
Exercised	(14,805	)
Cancelled	(19,669	)
Balance at December 31, 2007	76,526

Stock Appreciation Rights Plan

        In February 1999, CH2M HILL established the Stock Appreciation Rights (SARs) Plan. Eligible individuals are generally individuals who are not residents of the United States. SARs are granted at an exercise price equal to the fair market value of CH2M HILL's common stock and generally become exercisable 25%, 25% and 50% after one, two and three years, respectively, and have a term of five years from the date of the grant. All amounts granted under the SARs Plan are payable in cash only. Compensation expense under this plan is based on the vesting provisions and the fair market value of CH2M HILL's common stock.

        During the years ended December 31, 2007, 2006 and 2005, a total of 12,875, 25,020 and 29,050 SARs, respectively, were granted. At December 31, 2007, there were 140,713 SARs that remained outstanding.

        The weighted-average fair values of SARs granted during 2007, 2006 and 2005 were $20.91, $17.87 and $14.94, respectively.

        Compensation expense related to the SARs Plan amounted to $1.3 million, $0.5 million and $0.6 million in 2007, 2006 and 2005, respectively.

F-28

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(13) Employee benefit plans (Continued)

        The following table summarizes the activity relating to the SARs Plan during 2007:

	Number of Rights		Weighted Average Exercise Price
Balance at December 31, 2006	189,801		$	13.14
Granted	12,875		$	20.91
Exercised	(56,700	)	$	11.72
Cancelled	(5,263	)	$	17.11
Balance at December 31, 2007	140,713		$	14.29

Short Term Incentive Plan

        In January 2000, CH2M HILL established the Short Term Incentive Plan (STIP) to aid in the motivation, recruitment, retention and reward of employees. Management determines which employees, directors, and eligible consultants participate in the STIP. During the years ended December 31, 2007, 2006 and 2005, a total of 634,680 shares, 599,471 shares and 898,899 shares, respectively, were issued under the STIP.

        The fair values of the shares issued under the STIP during 2007, 2006 and 2005 were $19.63, $18.72 and $14.92, respectively.

        Compensation expense related to common stock awards under the STIP amounted to $18.8 million, $12.6 million and $11.7 million in 2007, 2006 and 2005, respectively.

Long Term Incentive Plan

        In January 1999, CH2M HILL established the Long Term Incentive Plan (LTIP) to reward certain executives, project managers, and technologists for the creation of value in the organization through the achievement of specific long-term (3 year) goals of earnings growth and strategic initiatives. The Board of Directors of CH2M HILL determines which employees are eligible to participate in the LTIP in any program year and a new plan is established each year.

        During the years ended December 31, 2007, 2006 and 2005, a total of 364,825 shares, 181,351 shares and 164,598 shares, respectively, were issued under the LTIP at a fair value of $19.63, $18.72 and $14.92 per share, respectively.

        Compensation expense related to common stock awards under the LTIP amounted to $11.1 million, $9.4 million and $5.9 million in 2007, 2006 and 2005, respectively.

Restricted Stock Plan

        In January 2000, CH2M HILL established the Restricted Stock Plan which provides eligible individuals with added incentives to continue in the long-term service of CH2M HILL. The awards are made for no consideration and vest over various periods, but are considered outstanding at the time of grant. During the years ended December 31, 2007, 2006 and 2005, a total of 263,942 shares, 357,783 shares and 55,419 shares, respectively, were granted under the Restricted Stock Plan.

F-29

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(13) Employee benefit plans (Continued)

        CH2M HILL recognizes compensation costs, net of estimated forfeitures, over the vesting term based on the fair value of the restricted stock at the date of grant. The amount of compensation expense recognized under the Restricted Stock Plan was $3.0 million, $2.6 million and $1.0 million for the years ended December 31, 2007, 2006 and 2005, respectively. In determining the amount of compensation expense, CH2M HILL has estimated that forfeitures of restricted stock shares will be less than 3% of total restricted stock shares outstanding based upon prior experience. As of December 31, 2007, there was $7.6 million of unrecognized compensation costs related to non-vested restricted stock grants. The cost is expected to be recognized over a weighted average period of 3.0 years.

        The following table summarizes the activity relating to the Restricted Stock Plan during 2007:

	Non-vested Shares		Weighted Average Grant Date Fair Value
Balance at December 31, 2006	485,212		$	16.92
Granted	263,942		$	22.72
Vested	(125,496	)	$	13.68
Cancelled and expired	(9,151	)	$	20.28
Balance at December 31, 2007	614,507		$	19.51

        The weighted-average fair values of the shares granted under the Restricted Stock Plan during 2007, 2006 and 2005 were $22.72, $18.08 and $15.62, respectively.

(14) Employee retirement plans

Retirement and Tax-Deferred Savings Plan

        The Retirement and Tax-Deferred Savings Plan (401(k) Plan) is a profit sharing plan that includes a cash or deferred arrangement that is intended to qualify under Sections 401(a) and 401(k) of the Internal Revenue Code. Employees are eligible to participate in the 401(k) Plan on the first date of hire with respect to employee contributions and matching contributions. Each eligible employee begins to participate in the 401(k) Plan with respect to defined contributions as of the first day of the first month that begins on or after the eligible employee completes a twelve-month period of service during which the employee is credited with at least 1,000 hours of service.

        The 401(k) Plan allows for both matching cash and stock contributions. Matching contributions may be made in an amount that is based on a percentage of the employee's contributions for the calendar quarter up to 4% of the employee's base compensation.

        Participants of the 401(k) Plan are, at all times, 100% vested in the employee contribution account. Amounts allocated to a participant's defined contribution account and matching contribution account generally vest over six years of completed service.

        Expenses related to matching contributions made in cash for the 401(k) Plan for 2007, 2006 and 2005 were $22.6 million, $18.7 million and $13.9 million, respectively. Expenses related to defined contributions made in common stock for the 401(k) Plan for 2007, 2006 and 2005 were $12.1 million, $10.9 million and $8.2 million, respectively.

F-30

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(14) Employee retirement plans (Continued)

Pension and Other Postretirement Benefits

        CH2M HILL has three noncontributory defined benefit pension plans. Plan benefits in two of the plans were frozen while one plan remains active. Benefits are based on years of service and compensation during the span of employment.

        CH2M HILL sponsors a medical benefit plan for retired employees of certain subsidiaries. The plan is contributory, with retiree premiums based on years of service at retirement. The benefits contain limitations and a cap on future cost increases. CH2M HILL funds postretirement medical benefits on a pay-as-you-go basis.

        CH2M HILL also has a supplemental executive retirement plan that will provide an additional retirement benefit to certain senior executives if they remain employed and retire from CH2M HILL on or after age 65. The amount of the annual benefit, which may change from time-to-time based on the decision of the Board of Directors of CH2M HILL, currently is equal to 50% of the participant's projected base salary for fiscal year 2007. The benefit is reduced by the value of the offsetting retirement benefits paid by CH2M HILL under other plans. For the years ended December 31, 2007, 2006 and 2005, CH2M HILL expensed $1.0 million, $1.2 million, and $1.1 million, respectively, for the anticipated benefit obligations.

        On December 31, 2007, the Company adopted SFAS 158 which requires employers to (i) recognize the funded status of their defined benefit pension and other postretirement plans on the consolidated balance sheet, (ii) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost and (iii) measure defined benefit plan assets and obligations as of the date of the employer's statement of financial position. The Company adopted the recognition and disclosure requirements of SFAS 158 as of December 31, 2007. The impact of adopting these provisions was an increase in net liabilities for pension and postretirement health care benefits of $14.0 million and an increase in accumulated other comprehensive loss of $8.4 million, net of taxes. In accordance with the transition provisions of SFAS 158, we will change our measurement date to December 31^st in 2008. The standard provides two transition approaches related to the change in measurement date provisions. CH2M HILL will adopt the following approach: a twelve month measurement period starting with the prior year ending measurement date of October 31^st and ending October 31, 2008 will be performed to determine the net benefit expense or income which will be recorded in 2008. Another measurement will then be performed from November 1, 2008 through December 31, 2008 with this net benefit expense or income being recorded as an adjustment to accumulated other comprehensive loss at December 31, 2008.

F-31

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(14) Employee retirement plans (Continued)

        The following table summarizes the initial impact upon adoption of SFAS No. 158 at December 31, 2007:

($ in thousands)			Before Adoption		Adjustment			After Adoption
ASSETS
	Total current assets		$	1,317,559	$	—		$	1,317,559
	Investments in unconsolidated affiliates			35,285		—			35,285
	Property, plant and equipment, net			214,348		—			214,348
	Goodwill and other intangible assets, net			252,623		—			252,623
	Non-current deferred income taxes			21,455		5,513			26,968
	Other assets			61,644		1,519			63,163
		Total assets	$	1,902,914	$	7,032		$	1,909,946
LIABILITIES AND SHAREHOLDERS' EQUITY
	Total current liabilities		$	1,033,603	$	2,302		$	1,035,905
	Long-term employee related liabilities and other			212,005		13,174			225,179
	Long-term debt			185,329		—			185,329
		Total liabilities		1,430,937		15,476			1,446,413
	Shareholder's Equity:
	Common stock			332		—			332
	Additional paid-in capital			70,596		—			70,596
	Retained earnings			395,998		—			395,998
	Accumulated other comprehensive loss			5,051		(8,444	)		(3,393	)
		Total shareholders' equity		471,977		(8,444	)		463,533
		Total liabilities and shareholders' equity	$	1,902,914	$	7,032		$	1,909,946

Expected Cash Flows

        The Company expects to make contributions of $3.0 million to the pension plans in 2008. The pension, non-qualified pension and post-retirement healthcare benefit payments, including expected future services, are expected to be paid from plan assets and operating cash flow as follows:

($ in thousands)	Pension Plans		Non-Qualified Pension Plans		Post-Retirement Benefit Plans
2008	$	5,707	$	944	$	1,380
2009		6,161		140		1,518
2010		6,644		1,991		1,738
2011		7,173		125		1,974
2012		7,959		494		2,274
2013-2017		52,268		1,980		17,439
	$	85,912	$	5,674	$	26,323

F-32

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(14) Employee retirement plans (Continued)

Benefit Expense

        The measurement dates used to determine pension, non-qualified pension and other post-retirement benefits for the plans are October 31, 2007, 2006 and 2005. The actuarial assumptions used to compute the net pension benefit expense, non-qualified pension benefit expense and post-retirement benefit expense are based upon information available as of the beginning of the year, as presented in the following table.

		Pension Plans						Non-Qualified Pension Plans						Post-Retirement Benefit Plans
		2007		2006		2005		2007		2006		2005		2007		2006		2005
Actuarial assumptions at beginning of year:
	Discount rate	5.80	%	5.75	%	5.90	%	5.80	%	5.75	%	5.90	%	5.80	%	5.75	%	5.90	%
	Rate of compensation increase	4.00	%	4.00	%	5.00	%	na		na		na		na		na		na
	Expected long-term rate of return on plan assets	8.00	%	8.00	%	8.00	%	na		na		na		na		na		na
	Initial healthcare costs trend rate	na		na		na		na		na		na		6.51	%	6.65	%	6.64	%
	Ultimate healthcare cost trend rate	na		na		na		na		na		na		4.50	%	4.05	%	4.00	%
	Year ultimate trend rate is reached	na		na		na		na		na		na		2011		2011		2011

na—not applicable

        The components of the pension benefit expense, non-qualified pension benefit expense and post-retirement benefit expense for the years ended December 31 are detailed below:

	Pension Plans									Non-Qualified Pension Plans							Post-Retirement Benefit Plans
($ in thousands)	2007			2006			2005			2007		2006		2005			2007		2006		2005
Service costs	$	4,267		$	4,128		$	4,163		$	275	$	249	$	279		$	2,988	$	1,475	$	943
Interest costs		8,649			8,183			7,826			325		357		250			2,005		1,287		1,333
Expected return on plan assets		(9,866	)		(9,012	)		(8,144	)		—		—		—			—		—		—
Amortization of transition (asset)/obligation		(9	)		(9	)		(9	)		—		—		—			299		299		299
Amortization of prior service costs		87			87			87			297		413		413			541		27		27
Recognized net actuarial loss (gain)		1,674			2,066			2,455			100		334		(1	)		209		—		94
Net expense included in current income	$	4,802		$	5,443		$	6,378		$	997	$	1,353	$	941		$	6,042	$	3,088	$	2,696

F-33

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(14) Employee retirement plans (Continued)

Benefit Obligations

        The actuarial assumptions used to compute the benefit obligations for the plans which are based upon information available as of December 31 are:

		Pension Plans				Non-Qualified Pension Plans				Post-Retirement Benefit Plans
		2007		2006		2007		2006		2007		2006
Actuarial assumptions at end of year:
	Discount rate	6.25	%	5.80	%	6.25	%	5.80	%	6.25	%	5.80	%
	Rate of compensation increase	4.00	%	4.00	%	na		na		na		na
	Initial healthcare cost trend rate	na		na		na		na		6.51	%	6.65	%
	Ultimate healthcare cost trend rate	na		na		na		na		4.50	%	4.05	%
	Year ultimate trend rate is reached	na		na		na		na		2011		2011

na—not applicable

        The discount rate assumptions are set annually based on several factors such as: a) the prevailing market rates for high-quality, fixed-income debt instruments that, if the obligation was settled at the measurement date, would provide the necessary future cash flows to pay the benefit obligation when due and b) the duration of the plan liabilities as compared to the Citigroup pension discount curve.

        The following table summarizes the change in benefit obligation and the change in plan assets for the pension, non-qualified pension and post-retirement benefit plans for the years ended December 31:

		Pension Plans						Non-Qualified Pension Plans						Post-Retirement Benefit Plans
($ in thousands)		2007			2006			2007			2006			2007			2006
Benefit obligation accrued at beginning of year		$	151,739		$	144,552		$	5,771		$	6,408		$	25,731		$	25,173
	Service cost		4,267			4,127			275			249			2,987			1,475
	Interest cost		8,649			8,183			325			357			2,005			1,287
	Plan contributions		—			—			—			—			1,192			462
	Actuarial (gain) loss		(9,514	)		(199	)		(833	)		(1,116	)		7,358			(711	)
	Benefits paid		(4,878	)		(4,925	)		(233	)		(127	)		(2,435	)		(1,955	)
Benefit obligation at end of year		$	150,263		$	151,739		$	5,305		$	5,771		$	36,838		$	25,731
Fair value of plan assets at beginning of year			124,799			113,860			—			—			—			—
	Actual gain on plan assets		21,996			11,412			—			—			—			—
	Employer & employee contributions		4,478			4,452			—			—			—			—
	Benefits paid		(4,878	)		(4,925	)		—			—			—			—
Fair value of plan assets at end of year		$	146,395		$	124,799			—			—			—			—

F-34

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(14) Employee retirement plans (Continued)

        The weighted-average asset allocations for the benefit plans as of December 31, 2007 and 2006 by asset category are as follows:

		Pension Plans
($ in thousands)		2007		2006
Equity		76	%	71	%
Debt		23	%	24	%
Real estate		0	%	0	%
Other		1	%	5	%
	Total	100	%	100	%

        The investment philosophy for the pension plans is based on a balanced asset approach allocated primarily between equity securities and debt securities. The equity security holdings are distributed in large and small cap index funds and an international fund. The debt securities consist of two fixed income funds. The Company uses long-term historical actual return experience with consideration of the expected investment mix of the plans' assets, as well as future estimates of long-term investment returns to develop its expected rate of return assumption used in calculating the net periodic pension cost.

        The following table summarizes the effect of a 1% change in the health care cost trend rate (HCCTR) on the postretirement obligation and costs:

($ in thousands)		2007			2006
Effect of 1% increase in HCCTR as of December 31 on:
	Postretirement benefit obligation	$	494		$	84
	Total of service and interest cost components		113			8
Effect of 1% decrease in HCCTR for the year ended December 31 on:
	Postretirement benefit obligation		(324	)		(86	)
	Total of service and interest cost components		(80	)		(8	)

F-35

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(14) Employee retirement plans (Continued)

Funded Status

        The following table presents the funded status of the pension, non-qualified pension and post-retirement benefit plans at December 31, 2007 after the adoption of SFAS 158:

			Pension Plans
								Non-Qualified Pension Plans			Post-Retirement Benefit Plans
($ in thousands)			Overfunded		Underfunded
Projected benefit obligation			$	94,293	$	55,970		$	5,305		$	—
Accumulated benefit obligation				—		—			—			36,838
Fair value of plan assets				95,812		50,583			—			—
Funded (unfunded) status			$	1,519	$	(5,387	)	$	(5,305	)	$	(36,838	)
Amounts recognized in accumulated other comprehensive income consist of:
	Net actuarial loss		$	10,562	$	515		$	124		$	3,994
	Net prior service cost			—		444			1,008			6,502
	Transition obligation (asset)			—		(2	)		—			1,496
		Total	$	10,562	$	957		$	1,132		$	11,992
Amounts to be recognized in 2008 as a component of net periodic cost:
	Net actuarial loss		$	91	$	—		$	6		$	28
	Transition obligation (asset)			—		(2	)		—			299
	Net prior service cost (credit)			—		87			297			541
		Total	$	91	$	85		$	303		$	868

        The following table sets forth the defined benefit pension plans and other plan amounts recognized in the consolidated balance sheets at December 31, 2006, prior to the adoption of SFAS 158:

($ in thousands)		Pension Plans			Non-Qualified Pension Plans			Post-Retirement Benefit Plans
Benefit obligations in excess of plan assets:
	Benefit obligation	$	(151,739	)	$	(5,771	)	$	(25,731	)
	Fair value of plan assets		124,799			—			—
	Unfunded status		(26,940	)		(5,771	)		(25,731	)
	Unrecognized transition (asset) obligation		(11	)		—			1,795
	Unrecognized net actuarial (gain) loss		34,395			1,057			3,770
	Unrecognized prior service cost		531			1,305			122
	Prepaid benefit (accrued) cost	$	7,975		$	(3,409	)	$	(20,044	)

(15) Segment information

        CH2M HILL provides services to clients through three operating segments: Federal, Civil Infrastructure and Industrial. The structure is intended to provide for better decision making on an

F-36

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(15) Segment information (Continued)

enterprise-wide basis. The Federal segment generally provides a comprehensive range of services to the U.S. federal government, and to international governments. The Civil Infrastructure segment generally provides a comprehensive range of services to various state and local governments including foreign cities. The Industrial segment generally provides a comprehensive range of services to various private sector clients.

        CH2M HILL evaluates performance based on several factors, of which the primary financial measure is operating income. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. CH2M HILL uses operating income (loss) as its measurement of segment profit (loss). Other includes the elimination of unallocated corporate expenses.

        Certain financial information for each segment is provided below (in thousands):

2007	Federal		Civil Infrastructure		Industrial			Other			Financial Statement Balances
Revenue from external customers	$	1,246,191	$	1,445,293	$	1,684,754		$	—		$	4,376,238
Equity in earnings of joint ventures and affiliated companies		30,006		12,893		1,285			—			44,184
Depreciation and amortization		3,097		3,931		28,091			—			35,119
Operating income (loss)		67,819		64,826		(13,701	)		(39,826	)		79,118
Segment assets		509,097		501,478		899,371			—			1,909,946

2006	Federal		Civil Infrastructure		Industrial			Other			Financial Statement Balances
Revenue from external customers	$	1,435,724	$	1,298,276	$	1,272,944		$	—		$	4,006,944
Equity in earnings of joint ventures and affiliated companies		12,894		3,614		492			—			17,000
Depreciation and amortization		4,126		4,316		5,381			—			13,823
Operating income (loss)		87,404		61,301		(68,592	)		(16,476	)		63,637
Segment assets		306,650		341,185		631,706			—			1,279,541

2005	Federal		Civil Infrastructure		Industrial			Other			Financial Statement Balances
Revenue from external customers	$	1,149,993	$	1,051,432	$	950,796		$	—		$	3,152,221
Equity in earnings of joint ventures and affiliated companies		104,086		5,664		386			—			110,136
Depreciation and amortization		5,803		5,350		4,757			—			15,910
Operating income (loss)		127,987		30,972		(10,630	)		(14,240	)		134,089
Segment assets		339,809		329,816		434,314			—			1,103,939

        In September and October of 2007, respectively, the Company acquired VECO and Trigon. The results of these operations are recognized in the Industrial segment. During the year ended 2007, revenue and depreciation and amortization reported by the Industrial segment increased substantially due to these acquisitions. During the year ended 2006, the Industrial segment recognized a loss related

F-37

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(15) Segment information (Continued)

to a manufacturing facility project. This project experienced increased costs due to project delivery issues and increased commodity prices. In addition, the clean up efforts required from Hurricane Katrina caused significant shortages in experienced craft laborers in the area and thus materially increased wage rates and reduced overall productivity. After completion of this contract in 2006 CH2M HILL experienced significant operational improvements in 2007.

        CH2M HILL derived approximately 28%, 35% and 37% of its total revenues from contracts with the U.S. federal government and international governments in 2007, 2006 and 2005, respectively.

        Revenue is attributed to the country in which the services are performed. Although CH2M HILL provides services in numerous countries, no single country outside of the U.S. accounted for a significant portion of the total consolidated revenue. Total U.S. and international revenue for the years ended December 31 were as follows:

($ in thousands)		2007		2006		2005
U.S.		$	3,723,507	$	3,435,651	$	2,701,288
International			658,636		571,293		450,933
	Total	$	4,382,143	$	4,006,944	$	3,152,221

        Substantially all of CH2M HILL's $126.7 million of goodwill is allocated to the Industrial operating segment.

(16) Commitments and contingencies

        CH2M HILL maintains a variety of commercial commitments that are generally made available to provide support for various provisions in its engineering and construction contracts. Letters of credit are provided to clients in the ordinary course of the contracting business in lieu of retention or for performance and completion guarantees on engineering and construction contracts. CH2M HILL also posts surety bonds, which are contractual agreements issued by a surety, for the purpose of guaranteeing our performance on contracts. Bid bonds are also issued by a surety to protect owners and are subject to full or partial forfeiture for failure to perform obligations arising from a successful bid.

        Commercial commitments outstanding as of December 31, 2007 are summarized below:

		Amount of Commitment Expiration Per Period
($ in thousands)		Less than 1 Year		1-3 Years		4-5 Years		Over 5 Years		Total Amount Committed
Letters of credit		$	62,956	$	316	$	2,456	$	—	$	65,728
Surety and bid bonds			1,523,236		113,023		—		—		1,636,259
	Total	$	1,586,192	$	113,339	$	2,456	$	—	$	1,701,987

F-38

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(16) Commitments and contingencies (Continued)

        CH2M HILL is party to various contractual guarantees and legal actions arising in the normal course of business. Because a large portion of CH2M HILL's business comes from federal, state and municipal sources, CH2M HILL's procurement practices at times are also subject to review and occasional investigations by U.S. and state attorneys offices. Such state and U.S. government investigations, whether relating to government contracts or conducted for other reasons, could result in administrative, civil or criminal liabilities, including repayments, fines or penalties or could lead to suspension or debarment from future U.S. government contracting. These investigations often take years to complete and many result in no adverse action. Damages assessed in connection with and the cost of defending any such actions could be substantial. While the outcomes of pending proceedings are often difficult to predict, CH2M HILL's management estimates that the levels of insurance coverage (after retentions and deductibles) are generally adequate to cover CH2M HILL's liabilities, if any, with regard to such claims. Any amounts that are probable of payment by CH2M HILL are accrued when such amounts are estimable.

        In January 2006, a subsidiary entered into a Deferred Prosecution Agreement (DPA) with the office of the United States Attorney for the District of Connecticut. The DPA relates to an investigation of a Clean Water Act (CWA) violation at two wastewater treatment facilities in Connecticut. Pursuant to the DPA, the subsidiary contributed $2.0 million to community projects and is taking other agreed upon steps to enhance CH2M HILL's CWA compliance procedures at the two wastewater treatment facilities in Connecticut. Provided CH2M HILL complies with its obligations under the DPA through January 2008, the U.S. District Attorney for the District of Connecticut will recommend dismissal of all actions against the subsidiary in connection with this matter. The violation is related to failure to comply with sampling and reporting requirements of the CWA and there is no evidence the violation resulted in harm to human health or the environment. Although the term of the DPA ended in January 2008 and we believe we have fully complied with the DPA, the DPA will not be released and the criminal charge will not be removed until the U.S. District Attorney for the District of Connecticut is satisfied all conditions have been met. CH2M HILL is currently in discussions with the U.S. District Attorney for the District of Connecticut to achieve this resolution.

        On July 27, 2007, our subsidiary, CH2M Hill Hanford Group ("CH2M Hanford") caused a spill of approximately 85 gallons of radioactive waste, during routine maintenance operations on the Hanford Reservation owned by the United States Department of Energy ("DOE"). No one was injured, and the DOE's accident investigation concluded that "[because] of low concentrations and short duration of the exposure, it is not likely that the spill event caused an overexposure or chronic health impacts". CH2M Hanford took all prompt and appropriate steps to formulate and implement a corrective action plan that has been accepted by the DOE. In connection with the event, the DOE's Office of Health, Safety and Security has conducted an investigation under its Price Anderson Act nuclear safety authority. The DOE has not yet taken any formal action against CH2M Hanford as a result of this investigation. The DOE has broad discretion in setting fines, but it takes into account a contractor's prompt acceptance of responsibility and the formulation of an appropriate corrective action plan, which is what CH2M HILL has done to what we believe to be the DOE's satisfaction. The Washington Department of Ecology has proposed to fine the DOE $500,000 in connection with the spill and, if the fine is levied, CH2M HILL will be financially liable for it under our contract with the DOE. CH2M Hanford is in discussions with the the Washington Department of Ecology about a possible reduction of the proposed fine. Finally, the Environmental Protection Agency ("EPA") proposed to fine both the DOE and CH2M HILL in connection with the spill. CH2M HILL settled that fine for $6,800 and $24,000 in in-kind services to

F-39

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(16) Commitments and contingencies (Continued)

support the local Tri-County emergency response team. CH2M HILL's management does not believe that this event will materially impact CH2M HILL's business or results of operations.

        On September 7, 2007, CH2M HILL acquired VECO and substantially all of its operating businesses. Prior to the acquisition, on May 2, 2007, the founder, then chief executive officer and principal shareholder of VECO, Bill Allen, entered into a plea agreement with the United States Department of Justice pursuant to which he agreed to plead guilty to certain criminal charges involving bribery of public officials, violation of campaign contribution laws, and tax fraud. In connection with the investigation of the allegations against Mr. Allen, the United States Department of Justice, the Internal Revenue Service and certain State of Alaska government agencies commenced investigations of VECO and certain of its other employees. In the process of reviewing VECO's business and operations prior to the acquisition, CH2M HILL engaged in special due diligence designed to address concerns related to the conduct of VECO's past operations and various investigations underway by the Department of Justice, the Internal Revenue Service and certain State of Alaska government agencies. Although CH2M HILL was satisfied with the results of the due diligence review, no assurances can be given that the ongoing investigations will not result in civil or criminal charges against VECO, now a subsidiary of CH2M HILL. Any such charges and related publicity could have an adverse effect on CH2M HILL's reputation in the business community or future business operations.

        In September 2007, CH2M HILL exercised its option to purchase the properties comprising their corporate headquarters and three adjacent buildings located in Englewood, Colorado previously held under three operating lease arrangements for $95.9 million. As a result of exercising its purchase option, CH2M HILL paid a lease termination fee totaling $7.8 million and wrote off previously capitalized lease costs of $1.0 million. These costs are reflected as general and administrative costs in 2007. CH2M HILL contemporaneously sold these buildings to a third party for proceeds of $138.5 million and entered into an operating lease agreement to lease these buildings back from the new owner. The initial term of the lease is ten years, with CH2M HILL's option to extend the term twice for either a ten or five years extended term. The sale resulted in a $42.6 million deferred gain which is being amortized over the 10 year term of the lease as a reduction of rent expense. Rental payments under the lease are approximately $0.8 million per month, or approximately $10.0 million in the first year, escalating over time up to approximately $1.0 million per month, or approximately $11.7 million in the tenth year.

F-40

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(17) Quarterly financial information (unaudited)

        CH2M HILL's quarterly financial information for the years ended December 31, 2007 and 2006 is as follows:

(In thousands except per share amounts)		First Quarter		Second Quarter		Third Quarter		Fourth Quarter		For the Year Ended
2007
Revenue		$	959,091	$	1,000,755	$	1,162,178	$	1,254,214	$	4,376,238
Operating income			12,071		22,505		21,949		22,593		79,118
Net income			8,009		24,685		18,488		14,817		65,999
Net income per common share
	Basic	$	0.25	$	0.75	$	0.56	$	0.45	$	2.01
	Diluted	$	0.24	$	0.74	$	0.55	$	0.44	$	1.97
2006
Revenue		$	984,456	$	1,021,099	$	996,785	$	1,004,604	$	4,006,944
Operating income			5,469		18,597		16,760		22,811		63,637
Net income			3,106		11,139		10,362		14,294		38,901
Net income per common share
	Basic	$	0.10	$	0.34	$	0.32	$	0.44	$	1.20
	Diluted	$	0.09	$	0.33	$	0.31	$	0.43	$	1.18

F-41

Signatures

        Pursuant to the requirements of Section 13 or 15(d) 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, in the City of Englewood, Douglas County, State of Colorado, on the 28 day of February, 2008.

CH2M HILL COMPANIES, LTD.
By:	/s/  SAMUEL H. IAPALUCCI Samuel H. Iapalucci Chief Financial Officer
By:	/s/  JOANN SHEA JoAnn Shea Chief Accounting Officer

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons in the capacities and on the dates stated, through their attorney-in-fact as appointed in the power of attorney of February 8, 2008 included as Exhibit 24.1 filed herewith.

Signature	Title	Date
/s/  RALPH R. PETERSON Ralph R. Peterson	Chairman of the Board and Chief Executive Officer (Principal Executive Officer)	February 28, 2008
/s/  SAMUEL H. IAPALUCCI Samuel H. Iapalucci	Chief Financial Officer (Principal Financial Officer)	February 28, 2008
/s/  JOANN SHEA JoAnn Shea	Chief Accounting Officer (Principal Accounting Officer)	February 28, 2008
* Robert W. Bailey	Director	February 28, 2008
* Robert G. Card	Director	February 28, 2008
* Carolyn Chin	Director	February 28, 2008
* Donald S. Evans	Director	February 28, 2008
* Jerry D. Geist	Director	February 28, 2008
* Garry M. Higdem	Director	February 28, 2008
* Mark A. Lasswell	Director	February 28, 2008

* Joan M. Miller	Director	February 28, 2008
* David B. Price	Director	February 28, 2008
* M. Catherine Santee	Director	February 28, 2008
* Michael A. Szomjassy	Director	February 28, 2008
* Barry L. Williams	Director	February 28, 2008

By:
*/s/  SAMUEL H. IAPALUCCI Samuel H. Iapalucci,
as attorney-in-fact

KAISER-HILL COMPANY, LLC
AND SUBSIDIARY

Consolidated Financial Statements

December 31, 2007 and 2006

Independent Auditors' Report

The Members
Kaiser-Hill Company, LLC:

        We have audited the accompanying consolidated balance sheets of Kaiser-Hill Company, LLC and subsidiary (the Company) as of December 31, 2006, and the related consolidated statements of operations, members' equity, and cash flows for the years ended December 31, 2006 and 2005. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Kaiser-Hill Company, LLC and subsidiary as of December 31, 2006, and the results of their operations and their cash flows for the years ended December 31, 2006 and 2005, in conformity with accounting principles generally accepted in the United States of America.

KPMG LLP

February 15, 2007

KAISER-HILL COMPANY, LLC
AND SUBSIDIARY

Consolidated Balance Sheets

December 31, 2007 (unaudited) and 2006

(Dollars in thousands)

		2007		2006
		(unaudited)
Assets
Cash and cash equivalents		$	3,610	7,898
Unbilled contract receivables			3,695	10,671
Billed contract receivable			—	349
Receivable from Members			17	659
Prepaid expenses and other assets			63	75
	Total assets	$	7,385	19,652
Liabilities and Members' Equity
Accounts payable, payables to subcontractors and accrued liabilities		$	5,593	15,006
Payable to Members			—	92
	Total liabilities		5,593	15,098
Contingencies (note 7)
Members' equity			1,792	4,554
		$	7,385	19,652

See accompanying notes to consolidated financial statements.

2

KAISER-HILL COMPANY, LLC
AND SUBSIDIARY

Consolidated Statements of Operations

Years ended December 31, 2007 (unaudited), 2006, and 2005

(Dollars in thousands)

			2007			2006		2005
			(unaudited)
Gross revenue			$	5,637		88,417		701,693
Subcontractor costs and direct material costs				(5,048	)	(18,086	)	(313,182	)
		Service revenue		589		70,331		388,511
Direct cost of service and overhead				(581	)	(72,094	)	(197,117	)
		Operating income (loss)		8		(1,763	)	191,394
Other income (expense):
	Interest income			230		1,725		309
	Interest expense			—		(28	)	(275	)
		Net income (loss)	$	238		(66	)	191,428

See accompanying notes to consolidated financial statements.

3

KAISER-HILL COMPANY, LLC
AND SUBSIDIARY

Consolidated Statements of Members' Equity

Years ended December 31, 2007 (unaudited), 2006, and 2005

(Dollars in thousands)

	Kaiser KH Holdings, Inc.			CH2M HILL Constructors, Inc.		Total
Members' equity, December 31, 2004	$	35,246		35,246		70,492
Net income		95,714		95,714		191,428
Distributions		(43,650	)	(43,650	)	(87,300	)
Members' equity, December 31, 2005		87,310		87,310		174,620
Net loss		(33	)	(33	)	(66	)
Distributions		(85,000	)	(85,000	)	(170,000	)
Members' equity, December 31, 2006		2,277		2,277		4,554
Net income (unaudited)		119		119		238
Distributions (unaudited)		(1,500	)	(1,500	)	(3,000	)
Members' equity, December 31, 2007 (unaudited)	$	896		896		1,792

See accompanying notes to consolidated financial statements.

4

KAISER-HILL COMPANY, LLC
AND SUBSIDIARY

Consolidated Statements of Cash Flows

Years ended December 31, 2007 (unaudited), 2006, and 2005

(Dollars in thousands)

					2007			2006		2005
					(unaudited)
Cash flows from operating activities:
	Net income (loss)				$	238		(66	)	191,428
	Adjustments to reconcile net income to net cash provided by operating activities:
		Amortization of deferred financing costs				—		—		80
		Changes in assets and liabilities:
			Decrease (increase) in contract receivables			7,325		280,264		(58,189	)
			Decrease in receivable from Members			642		74		750
			Decrease in due from employees			—		—		3
			Decrease in prepaid expenses and other assets			12		383		376
			Decrease in accounts payable, payables to subcontractors and accrued liabilities			(9,413	)	(30,682	)	(37,979	)
			Decrease in accrued employee incentive compensation			—		(68,469	)	(8,696	)
			Decrease in other accrued expenses			—		(4,050	)	(12,297	)
			Decrease in payable to Members			(92	)	(284	)	(2,188	)
				Net cash (used in) provided by operating activities		(1,288	)	177,170		73,288
Cash flows from financing activities:
	Distributions to Members					(3,000	)	(170,000	)	(87,300	)
	Proceeds from credit facility					—		—		201,000
	Payments on credit facility					—		(3,000	)	(198,000	)
				Net cash used in financing activities		(3,000	)	(173,000	)	(84,300	)
				Net (decrease) increase in cash and cash equivalents		(4,288	)	4,170		(11,012	)
Cash and cash equivalents, beginning of year						7,898		3,728		14,740
Cash and cash equivalents, end of year					$	3,610		7,898		3,728
Supplemental cash flow information:
	Cash paid for interest				$	—		28		195

See accompanying notes to consolidated financial statements.

5

KAISER-HILL COMPANY, LLC
AND SUBSIDIARY

Notes to Consolidated Financial Statements

December 31, 2007 and 2006

(The financial statements and notes thereto as of and for the year ended December 31, 2007 are unaudited)

(1) Organization

        Kaiser-Hill Company, LLC and subsidiary (the Company) was formed on October 24, 1994. The principal business of the Company is to procure, execute, deliver, and perform under a contract with the Department of Energy (DOE) to manage the programs and facilities at Rocky Flats Environmental Technology Site (RFETS) in Golden, Colorado. The mission of the RFETS is directed toward cleanup, deactivation, and preparation for decontamination and disposition of these DOE facilities.

        The Company is a limited liability company owned equally by Kaiser KH Holdings, Inc., a wholly owned subsidiary of Kaiser Group Holdings, Inc. (formerly known as Kaiser Group International, Inc.) (Kaiser), and CH2M HILL Constructors, Inc., a wholly owned subsidiary of CH2M HILL Companies, Ltd. (CH2M HILL) (collectively the Members). Net profits and/or losses and distributions thereof are allocated equally to the Members.

        On January 24, 2000, the Company and the DOE entered into a new contract (the Contract) effective February 1, 2000 for the Rocky Flats Closure Project including, disposal of nuclear material, demolition of facilities, environmental remediation, disposal of waste, and completion of infrastructure and other general site operations.

        On October 13, 2005, the Company completed the required work under the contract and issued its formal "declaration of Physical Completion" to the DOE. On December 8, 2005, the DOE issued its formal "acceptance" of the physical work at the project and authorized the Company to invoice all remaining performance fees less a retained amount equaling $5.0 million. On January 11, 2006, the Company received payment for all fees except for the retained amount. In April 2006, the Company invoiced and collected $4.9 million of the $5.0 million previously retained. $100,000 will be retained until satisfactory resolution of all Defense Contractor Auditing Agency audits.

        The Company now operates under the closeout phase of its contract with the DOE, primarily resolving open administrative issues and providing support to the DOE to achieve regulatory closure of the site. The work performed under the closeout phase is performed and invoiced at cost with no markup or fee associated with the costs incurred.

        Effective December 31, 2005, the Company terminated its remaining employees. Staff necessary to complete closeout activities will be subcontracted or provided by affiliates of its parent companies.

(2) Significant Accounting Policies

(a)

Principles of Consolidation

The consolidated financial statements include the Company and its wholly owned subsidiary, Kaiser-Hill Funding Company, LLC. All intercompany accounts and transactions have been eliminated in the consolidated financial statements.

(b)

Revenue Recognition

Under the Contract, revenue is recognized using the percentage-of-completion method whereby revenue is accrued in an amount equal to cost plus management's best estimate of

6

KAISER-HILL COMPANY, LLC
AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

December 31, 2007 and 2006

(The financial statements and notes thereto as of and for the year ended December 31, 2007 are unaudited)

(2) Significant Accounting Policies (Continued)

incentive fees. During 2005, resulting from completion of the project, the Company recognized all remaining performance fees under the contract and has established reserves for certain risks and uncertainties associated with the Contract. In 2007 and 2006, revenue was recognized as costs were incurred. No markup or fee was recognized or associated with the costs incurred.

(c)

Statements of Cash Flows

For purposes of the consolidated statements of cash flows, the Company considers cash and short-term investments with original maturities of three months or less to be cash and cash equivalents.

The Company maintains its cash accounts primarily with banks located in Colorado, New York, and Washington, D.C. Cash balances are insured by the FDIC up to $100,000 per bank, and cash equivalents are not insured by the FDIC. As of December 31, 2007, the majority of the balance was comprised of cash equivalents.

(d)

Income Taxes

No provision for the payment of income taxes has been made in the accompanying consolidated financial statements related to the activities of the Company since the Members each report their share of the Company's taxable income in their respective income tax return.

(e)

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

(3) Related-Party Transactions

        In 2006, the Members were subcontracted by the Company to perform certain tasks under the Contract. The Payable to Members in the accompanying consolidated balance sheets as of December 31, 2006 was $92,200 to CH2M HILL for these subcontracted tasks. These payables are noninterest bearing. There were no payables to members as of December 31, 2007.

        As of December 31, 2007 and 2006, the Company had a receivable due from CH2M HILL for $17,000 and $659,000 respectively. The amounts relate to the final transition of the Rocky Flats Benefits Programs to CH2M HILL Hanford Group and work performed for CH2M HILL—Washington Group Idaho, LLC.

7

KAISER-HILL COMPANY, LLC
AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

December 31, 2007 and 2006

(The financial statements and notes thereto as of and for the year ended December 31, 2007 are unaudited)

(3) Related-Party Transactions (Continued)

        During 2003, CH2M HILL began providing information technology services and general support services to the Company at negotiated rates. Costs incurred related to work performed by CH2M HILL, the majority of which are reimbursable and billed under the Contract and relate to information technology services provided, were approximately $2.9 million in 2007, $8.5 million in 2006, and $9.8 million in 2005.

        In addition, the Company performed approximately $30,000 of services on behalf of CH2M HILL during 2006. No services were performed on behalf of CH2M HILL during 2007.

(4) Contract Receivables

        Contract receivables represent both billed and unbilled receivables due under the Contract. As of December 31, 2006, the Company had $349,000 of billed receivables due from the DOE. No billed amounts were outstanding as of December 31, 2007.

        Unbilled receivables result from revenue and estimated fees that have been earned by the Company but not billed to the DOE as of the end of the period. Unbilled receivables can be invoiced at contractually defined intervals and milestones. Unbilled receivables primarily represent allowable costs incurred by subcontractors that primarily relate to waste disposal activities that have not been submitted to the DOE for payment. These costs cannot be invoiced to the DOE until payment has been made by the Company to the subcontractor. The subcontractor will not invoice the Company until the waste is appropriately disposed of which could take up to one year. The Company has current unbilled receivables of approximately $3.7 million and $10.7 million as of December 31, 2007 and 2006, respectively.

        The Company's Contract receivables result primarily from its long-term Contract with the DOE. As a consequence, management believes that credit risk is minimal.

(5) Employee Incentive Plan

        In connection with the closure Contract with the DOE, the Company implemented a salaried employee incentive plan. There are two components to the plan. The first component represents a cash bonus, which is earned and paid annually. The second component represents the issuance of performance units. These units were allocated to employees on an annual basis. The value of these units ultimately depended on the actual cost incurred under the Contract. Employees remained eligible for these units as long as they are employed by the Company or left in good standing, as defined. Payments made for performance units were paid in cash at the end of the Contract.

        During 2006, the Company paid its remaining obligation under the employee incentive plan due to the DOE's acceptance of physical completion of the Contract. No amounts remain accrued for this liability.

8

KAISER-HILL COMPANY, LLC
AND SUBSIDIARY

Notes to Consolidated Financial Statements (Continued)

December 31, 2007 and 2006

(The financial statements and notes thereto as of and for the year ended December 31, 2007 are unaudited)

(6) Business Loan and Security Agreement

        The Company had a Business Loan and Security Agreement (the Agreement) with a bank that expired on December 31, 2006. The Company, Kaiser, and CH2M HILL granted a first lien security interest to the bank in all of the ownership and equity interest of the Company. As of December 31, 2006, the Company had no amounts outstanding under the Agreement.

(7) Contingencies

        The Company's reimbursable costs are subject to audit in the ordinary course of business by various U.S. government agencies. Management is not presently aware of any significant costs, which have been, or may be, disallowed by any of these agencies.

        The Company is party to a legal action arising in the normal course of business as a result of performance under the Contract. While the outcome of this action is difficult to predict, the Company's management believes any amounts ultimately asserted against the Company for this outstanding claim would be fully reimbursable by the DOE under the Contract.

(8) Employee Benefit Plans

        In accordance with the Contract, the Company participated in several multiple employer benefit plans covering substantially all employees who meet length of service requirements. These plans include two defined benefit pension plan and three defined contribution plans, the latter of which provide for Company matching contributions.

        The Company administered these benefit plans with benefits equivalent to the RFETS contractor benefit plans maintained by the contractor that preceded the Company at RFETS. Under the Contract, the Company recognized the cost of benefit plans when paid and such costs were reimbursed by the DOE. During 2006, at the request of the DOE, the Company transferred sponsorship and administration of these plans to CH2M HILL Hanford Group, an affiliate of CH2M HILL.

        The Company did not make any contributions to the defined contribution plans in 2007 and 2006. During 2006, the Company made combined contributions to the defined benefit pension plans of $59.4 million.

9

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DOCUMENTS INCORPORATED BY REFERENCE
CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES ANNUAL REPORT ON FORM 10-K TABLE OF CONTENTS
PART I

Item 1. Business
Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments
Item 2. Properties
Item 3. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holders

PART II

Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

Price of our Common Stock
Current Price of Our Common Stock
Holders of Our Common Stock
Dividend Policy
Issuer Purchases of Equity Securities

Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Item 9B. Other Information

PART III

Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accountant Fees and Services

PART IV

Item 15. Exhibits and Financial Statement Schedules

Report of Independent Registered Public Accounting Firm
Report of Independent Registered Public Accounting Firm
CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES Consolidated Balance Sheets (Dollars in thousands)
CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES Consolidated Statements of Income (Dollars in thousands except per share amounts)
CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES Consolidated Statements of Shareholders' Equity and Comprehensive Income (Dollars in thousands)
CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Dollars in thousands)
CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES Notes to Consolidated Financial Statements
Signatures
KAISER-HILL COMPANY, LLC AND SUBSIDIARY
Independent Auditors' Report
KAISER-HILL COMPANY, LLC AND SUBSIDIARY Consolidated Balance Sheets December 31, 2007 (unaudited) and 2006 (Dollars in thousands)
KAISER-HILL COMPANY, LLC AND SUBSIDIARY Consolidated Statements of Operations Years ended December 31, 2007 (unaudited), 2006, and 2005 (Dollars in thousands)
KAISER-HILL COMPANY, LLC AND SUBSIDIARY Consolidated Statements of Members' Equity Years ended December 31, 2007 (unaudited), 2006, and 2005 (Dollars in thousands)
KAISER-HILL COMPANY, LLC AND SUBSIDIARY Consolidated Statements of Cash Flows Years ended December 31, 2007 (unaudited), 2006, and 2005 (Dollars in thousands)

EX-3.2

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Exhibit 3.2

        Restated as of February 8, 2008

RESTATED BYLAWS OF CH2M HILL COMPANIES, LTD.

ARTICLE 1—OFFICES

        The principal office of the Corporation shall be 9191 South Jamaica Street, Englewood, Colorado 80112, or such other place as the Board of Directors may designate. The Corporation may have offices in other states.

ARTICLE 2—STOCKHOLDERS

Section 1—Annual Meeting.

        The annual regular meeting of stockholders to elect directors and transact other business shall be held in May of each year at such hour and place as designated by the Board of Directors. The Chairman of the Board may change the time of the annual meeting, provided notice is given to the stockholders in accordance with applicable law.

Section 2—Special Meetings.

        Special meetings of the stockholders may be called by the Chairman of the Board, by the President, by three directors, or by the holders of at least one-tenth (¹/10) of the outstanding stock.

Section 3—Notice of Meeting.

        The Secretary or such person as may be designated by the Chairman of the Board, the President, or persons calling special meetings shall give written notice to all stockholders of any regular or special meeting, stating the location, time and purpose or purposes of the meeting, at least ten (10) days but not more than sixty (60) days prior to such meeting. Such notice shall be deemed delivered when deposited in the United States mail addressed to the stockholder as the address appears in the stock transfer books of the Corporation.

Section 4—Voting Lists.

        The Secretary or such other person as may be designated by the Chairman of the Board, the President, or the Board of Directors shall within two business days after notice is given for each meeting prepare a list of stockholders entitled to vote at such meeting and the number of shares of stock held by each.

Section 5—Quorum.

        A majority of the outstanding stock of the Corporation entitled to vote on a matter, represented in person or by proxy, shall constitute a quorum at any meeting of stockholders with respect to that matter. Stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of stockholders so as to leave less than a quorum.

Section 6—Proxies.

        At all meetings of stockholders, a stockholder may vote by proxy executed in writing by the stockholder or a duly authorized attorney-in-fact. Such proxy shall be filed with the Secretary of the Corporation before or at the time of the meeting. No proxy shall be valid after 11 months from the date of its execution, unless otherwise provided in the proxy.

Section 7—Voting of Shares.

        Except as provided in the Restated Articles of Incorporation, each outstanding share entitled to vote shall be entitled to one vote upon each matter submitted to a vote at a meeting of stockholders.

ARTICLE 3—BOARD OF DIRECTORS

Section 1—General Powers.

        The business and affairs of the Corporation shall be managed by its Board of Directors. Notwithstanding, the Board of Directors may delegate such authority as it deems appropriate.

Section 2—Number and Tenure.

        The number of directors of the Corporation, the qualification of directors and the term of office of the directors shall be as set forth in the Restated Articles of Incorporation.

        Directors shall serve until their successors shall have been elected and qualified. Directors need not be residents of the State of Oregon. Directors may be reelected and there shall be no limit on the number of terms a director may serve.

Section 3—Nomination of Directors.

        The Chairman of the Board, with the concurrence of the Board of Directors, shall appoint a nominating committee for employee positions on the Board of Directors by January 1 of each year, consisting of the two directors, and three stockholders of the Corporation who are not directors. The Chairman of the Board shall be the nonvoting Chairman of the nominating committee. This nominating committee shall review the available candidates for the Board of Directors and propose a nominee for each position to be filled, which shall be submitted to the stockholders no later than the date on which the Corporation gives notice to the stockholders of the annual meeting. Thereafter, a period of thirty (30) days (or until the third business day prior to the meeting date if less than 30 days' prior notice of such date is given by the Corporation) shall be allowed for the additional nomination of candidates by petitions signed by stockholders representing at least ten (10) percent of the shares of Common Stock outstanding. Such petitions shall be submitted to the Secretary of the Corporation. The Secretary shall notify all stockholders s of the names of those additional persons nominated by petition promptly, and in any event not less than one business day prior to the date set for the annual meeting.

        Non-employee director candidates (also known as outside directors) shall be nominated by the Board of Directors. Nomination of additional outside director candidates by petition will not be allowed. The Secretary shall notify all stockholders of the names of the outside director candidates nominated by the Board of Directors no later than the date on which the Corporation gives notice to the stockholders of the annual or special meeting..

        In addition, nominations for the election of directors may be made at the annual meeting by any stockholder entitled to vote in the election of directors generally. However, any such stockholder may nominate one or more persons for election as directors at a meeting only if such stockholder has given timely notice in proper written form of his intent to make such nomination or nominations. To be timely, a stockholder's notice must be delivered to or mailed and received by the Secretary of the Corporation not later than one hundred twenty (120) days prior to the anniversary date of the Corporation's notice of annual meeting provided with respect to the previous year's annual meeting (or the date on which the corporation mails its proxy materials for the current year if during the prior year the corporation did not hold an annual meeting or if the date of the annual meeting was changed more than thirty (30) days from the prior year). To be in proper written form, a stockholder's notice to the Secretary shall set forth: (i) the name and address of the stockholder who intends to make the nomination and of the person or persons to be nominated; (ii) a representation that the stockholder is a holder of record of stock of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the person or persons specified in the notice; (iii) a description of all arrangements or understandings between the stockholder and each nominee and any other person or persons (naming such person or persons) pursuant to which the nomination or nominations are to be made by the stockholder; (iv) such other information regarding each nominee proposed by such stockholder as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission had the nominee been nominated, or intended to be nominated, by the Board of Directors; and (v) the consent of each nominee to serve as

a director of the Corporation if so elected. The chairman of the meeting may refuse to acknowledge the nomination at the annual meeting of any person not made in compliance with the foregoing procedure. Except as provided above, nomination of additional candidates from the floor at the stockholders' meeting will not be accepted.

Section 4—Election of Directors.

        The nominees for directors shall be separated into a slate of employee candidates and a slate of outside director candidates and shall be voted upon by the stockholders. Except as restricted in the Restated Articles of Incorporation, each stockholder shall have the right to vote, in person or by proxy, the number of shares owned for as many nominees as there are directors to be elected on each slate. To be elected, nominees must receive at least the number of votes equal to a majority of the shares entitled to vote and represented at the meeting.

        If, after balloting, one or more directors' posts remain unfilled, the nominee receiving the fewest votes on that slate shall be removed from the list of nominees. Subsequent balloting will be held with each stockholder entitled to vote casting a ballot, in person or by proxy, for as many nominees as there are directors remaining to be elected. Such stockholders shall have the right to vote (one vote per share) for each of the positions to be filled. Such process shall be continued until all directors' positions are filled. If a tie vote between two or more nominees results in an inconclusive election, e.g., two (2) or more nominees receive the same number of votes and all nominees so tied receive sufficient votes for election, but the number of nominees being so tied exceeds the number of directorships to be filled, a separate runoff election will be held between the tied nominees only.

Section 5—Annual and Regular Meetings.

        The regular annual meeting of the Board of Directors shall be held without other notice than these Restated Bylaws immediately after the annual meeting of stockholders. The Board of Directors may provide for other regular meetings to be held elsewhere.

Section 6—Special Meetings.

        A special meeting of the Board of Directors may be called at the request of the Chairman of the Board, the President, or any two directors. The persons authorized to call such meetings of the Board of Directors may fix any place as the place of meeting.

Section 7—Notice.

        Notice of any special meeting shall be given at least two days prior to the meeting by personal delivery, telephone, mail, facsimile transmission or telegram. If mailed, notice shall be deemed to be given on the third business day after deposited in the United States mail addressed to the director at the director's business address, with postage thereon prepaid. If by telegram, notice shall be deemed to be given when the telegram is delivered to the telegraph company. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.

Section 8—Quorum.

        A majority of directors shall constitute a quorum for the transaction of any business. An affirmative vote of not less than a majority of the entire Board of Directors is required for the Board to act for and on behalf of the Corporation, except as may be otherwise specifically provided by statute, by the Restated Articles of Incorporation, or by these Restated Bylaws.

Section 9—Participation by Telephone.

        Members of the Board of Directors may hold a board meeting by conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Participation in such a manner shall constitute presence in person at the meeting.

Section 10—Action Without a Meeting.

        Any action that may be taken by the Board of Directors at a meeting may be taken without a meeting if one or more consents in writing, setting forth the action so to be taken, shall be signed by each of the directors. Such consent, which shall have the same effect as a unanimous vote of the directors, shall be filed with the minutes of the Corporation.

Section 11—Vacancies and Increases.

        Any vacancy created by death, resignation, removal or incapacity of a director may be filled by the affirmative vote of a majority of the remaining directors, though less than a quorum, or by a sole remaining director. A director appointed to fill a vacancy shall serve until the next stockholders' meeting at which directors are elected. Any such vacancy not so filled by the directors shall be filled by election, in accordance with the provisions of the Restated Bylaws entitled "Nomination of Directors" and "Election of Directors," at the next annual meeting of stockholders or at a special meeting of stockholders called for that purpose.

        Any directorship to be filled by reason of an increase in the specified number of directors (e.g., from nine directors to ten directors) shall be filled by election, in accordance with the provisions of the Restated Bylaws entitled "Nomination of Directors" and "Election of Directors," at the next annual meeting of stockholders or at a special meeting of stockholders called for that purpose.

Section 12—Presumption of Assent.

        A director present at a meeting of the Board of Directors shall be presumed to have assented to any action taken unless a dissent be recorded or unless a written dissent is filed with the Secretary. The right to dissent shall not apply to a director who voted in favor of the action.

ARTICLE 4—OFFICERS

Section 1—Number.

        The officers of the Corporation shall be a Chairman of the Board, a President, one or more Vice Presidents, such Senior Vice Presidents, Executive Vice Presidents or Assistant Vice Presidents as determined by the Board of Directors, a Secretary, such Assistant Secretaries as may be determined by the Board of Directors, a Treasurer, such Assistant Treasurers as may be determined by the Board of Directors, and such other officers as may be determined by the Board of Directors.

Section 2—Election and Term of Office.

        The officers of the Corporation shall be elected by a majority of the Board of Directors at its regular annual meeting. If the election of officers shall not then be held, such election shall be held as soon thereafter as convenient. Each officer shall hold office until resignation, death, or removal. The Board of Directors may authorize the Chairman or the President of the Corporation to appoint officers.

        Any officer or agent of the Corporation may be removed by the Board of Directors or the person appointing the officer or agent, whenever the best interests of the Corporation, in the opinion of the Board of Directors or the person appointing the officer or agent, will be served thereby.

Section 3—Chairman of the Board.

        The Chairman of the Board shall be a director of the Corporation and, subject to the policies, duties and goals set by the Board of Directors, shall be responsible for all duties incident to the office of Chairman. The Chairman shall vote the shares of stock of any other corporation that are held by the

Corporation, or appoint proxies for such purposes unless other provisions are made by the Board of Directors.

Section 4—President.

        The President shall be responsible for the general and active management of the business of the Corporation, under the direction of the Board of Directors. The President shall perform all duties incident to the office of the President and will carry out such other duties as the Board of Directors may determine.

Section 5—Chief Executive Officer.

        The Corporation's Chief Executive Officer (CEO) may be the Chairman, the President or another officer as determined by the Board of Directors.

Section 6—Vice Presidents.

        The Vice Presidents shall perform such duties as the Chairman of the Board, the President or the Board of Directors may designate. Any Vice President may sign certificates for shares of stock of the Corporation and other documents requiring a signature of the Chairman or the President. The Senior, Executive, and Assistant Vice Presidents shall have such additional responsibilities as may be designated by the Board of Directors.

Section 7—Secretary.

        The Secretary shall keep the minutes of the Stockholders' and Board of Directors' meetings, provide notices as required, be custodian of the corporate records and of the seal of the Corporation, and perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned. The duties of the Secretary may be delegated to other persons by the Board of Directors except as may be prohibited by this Article.

Section 8—Treasurer.

        The Treasurer shall perform all the duties incident to the office of the Treasurer and such other duties as from time to time may be assigned by the Chairman of the Board, the President, or the Board of Directors.

Section 9—Assistant Secretaries and Assistant Treasurers.

        The Assistant Secretaries and Assistant Treasurers, in general, shall perform such duties as shall be assigned to them by the Secretary or the Treasurer, respectively, or by the Chairman of the Board, the President, or the Board of Directors.

Section 10—Salaries.

        From time to time a Committee of the Board of Directors shall recommend to the Board of Directors and the Board of Directors shall review and approve salaries of the President, Chairman and such other officers as may be decided by the Board of Directors. An officer who is a director may receive a salary.

ARTICLE 5—CONTRACTS, LOANS, CHECKS, AND DEPOSITS

Section 1—Contracts.

        The Board of Directors may authorize any officer or officers, agent or agents, or designated class of employees, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation and such authority may be general or confined to specific instances.

Section 2—Loans.

        Loans and evidence of same shall not be contracted on behalf of the Corporation unless authorized by a resolution of the Board of Directors. Such authority and delegation of authority to bind the Corporation may be general or confined to specific instances.

Section 3—Checks, Drafts, etc.

        All checks, drafts, or other orders for the payment of money, notes, or other evidences of indebtedness issued in the name of the Corporation shall be signed in such manner as shall from time to time be determined by resolution of the Board of Directors.

Section 4—Deposits.

        All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies, or other depositories as the Board of Directors may select.

ARTICLE 6—CERTIFICATES FOR STOCK AND THEIR TRANSFER

Section 1—Certificates for Stock.

        The Board of Directors may authorize the issue of shares without certificates. If certificates representing stock of the Corporation are used, they shall be consecutively numbered and in such form as shall be determined by the Board of Directors or in accordance with these Bylaws. Such certificates shall be signed as the Board of Directors may determine. The name and address of the person to whom the shares represented thereby are issued, with the number of shares and date of issue, shall be entered on the stock transfer books of the Corporation. All certificates surrendered to the Corporation for transfer shall be canceled and no new certificate shall be issued until the former certificate for a like number of shares shall have been surrendered and canceled, except that in case of lost, destroyed, or mutilated certificates a new one may be issued therefore upon such terms and indemnity to the Corporation as the Board of Directors may prescribe.

Section 2—Transfer of Stock.

        Transfer of stock of the Corporation shall be made only on the stock transfer books of the Corporation. Transfers will not be made in violation of these Restated Bylaws, any stockholder agreement, benefit plan, any other Corporation document or policy, or applicable law. The name under which shares stand on the books of the Corporation shall be deemed by the Corporation to be the name of the owner thereof.

ARTICLE 7—SPECIAL PROVISIONS RELATIVE TO STOCK

Section 1—Ownership Policy.

        The purpose of this Article is to define the policy of the Corporation to maintain ownership of its stock by compatible persons actively contributing to its success. This policy is based on the belief that stock ownership by competent, loyal, contributing employees and directors of, and consultants to, the Corporation and its affiliates will be of continuing benefit to the Corporation.

Section 2—Restrictions on Stock.

        A.    Corporation's Right to Repurchase upon Termination of Affiliation.    As used in this Article, "Stock" shall mean the Common Stock and any class or series of Preferred Stock issued or to be issued by the Corporation. All shares of Stock held of record by a person who is an employee or director of, or a consultant to, the Corporation or any of its affiliates shall be subject to the Corporation's right to repurchase all of such shares in the event that such holder's affiliation with the Corporation as an employee, director or consultant is terminated. Such right of repurchase upon termination of affiliation shall also be applicable to all shares of Stock which such person has the right to acquire subsequent to termination of affiliation pursuant to any of the Corporation's employee benefit plans (other than shares distributable to such person under any benefit plan adopted by the Corporation or any of its affiliates which, by law or its terms, prohibits the Corporation's right to repurchase shares issued thereunder upon termination of affiliation) or pursuant to any option or other contractual right to acquire shares of Stock which was outstanding at the date of such termination of affiliation. An authorized leave of absence approved in accordance with the Corporation's policy shall not constitute a

termination of affiliation for purposes of this subparagraph "A'; provided, however, that the issuance of a formal personnel action notice by the Corporation's human resources department advising an employee that the leave of absence is terminated shall constitute a termination of affiliation for purposes of this subparagraph "A." The Corporation's right of repurchase shall be exercised by mailing written notice to such holder at his address of record on the Corporation's stock record books within sixty (60) days following the termination of such affiliation, which notice shall request delivery of certificates representing the shares of Stock, duly endorsed in blank or to the Corporation, free and clear of all liens, claims, charges and encumbrances of any kind whatsoever. If the Corporation repurchases the shares, the price shall be the Formula Price (as hereinafter defined) per share (i) on the date of such termination of affiliation, in the case of shares held of record by such holder at that date and shares issuable to such holder subsequent to that date pursuant to any option or other contractual right to acquire shares of Stock which was outstanding at that date; or (ii) on the date such shares are distributed to such holder, in the case of shares distributable to such holder subsequent to his termination of affiliation pursuant to any of the Corporation's employee benefit plans. The Corporation shall, if it exercises its right to repurchase such shares of Stock as provided in this subparagraph "A," pay for such shares in cash or promissory notes issued within ninety (90) days after (i) the date of such termination of affiliation (such ninety (90)-day period shall commence on such date of termination of affiliation and shall not be extended by accrued vacation, sick days or similar accruals), in the case of shares held of record by such holder at that date and shares issuable to such holder subsequent to that date pursuant to any option or other contractual right to acquire shares of Stock which was outstanding at that date; or (ii) the date such shares are distributed to such holder, in the case of shares distributable to such holder subsequent to his termination of affiliation pursuant to any of the Corporation's employee benefit plans. If the Corporation is unable to make such payment directly to such holder, then the Corporation may satisfy its obligation to make such payment by depositing the purchase price in cash or promissory notes within such ninety (90)-day period in an account for the benefit of such holder and such shares of Stock shall thereby be deemed to have been transferred to the Corporation and no longer outstanding with all rights of such holder with regard to such shares terminated. The Corporation and any holder of Stock may by contract mutually agree to extend the time period of the Corporation's right to repurchase such holder's Stock, and to alter payment terms from those contained in this subparagraph "A."

        B.    Corporation's Right of First Refusal.    If at any time a holder of Stock desires to sell any of such shares (other than through the limited market maintained by the Corporation), such holder shall first give notice to the Secretary of the Corporation containing:

(1)

A statement signed by such holder notifying the Corporation that such holder desires to sell shares of Stock and has received a bona fide offer to purchase such shares.



(2)

A statement signed by the intended purchaser containing:



a)

the intended purchaser's full name, address and taxpayer identification number;



b)

the number of shares to be purchased;



c)

the price per share to be paid;



d)

other terms under which the purchase is intended to be made; and



e)

a representation that the offer, under the terms specified, is bona fide.



(3)

If the purchase price is payable in cash, in whole or in part, a copy of a certified check, cashier's check or money order payable to such holder from the purchaser in the aggregate amount of the purchase price which is to be paid in cash.

The Corporation shall thereupon have an option exercisable within fourteen (14) days of receipt of such notice by the Secretary to purchase all, but not less than all, of the shares specified in the notice at the offer price and upon the same terms as set forth in the notice, accompanied by payment of the purchase price; provided, however, that if the offer price is payable, in whole or in part, other than in cash, the Corporation shall pay

the equivalent value of any noncash consideration as mutually agreed upon between the holder and the Corporation. Such option shall be exercised by the Corporation by mailing written notice to such holder at his address of record on the Corporation's stock record books. In the event the Corporation does not exercise such option, such holder may sell the shares specified in the notice within thirty (30) days thereafter to the person, at the price and upon the terms and conditions set forth therein. The holder may not sell such shares to any other person, or at any different price, or on any different terms without first re-offering such shares to the Corporation. All shares sold pursuant to this subparagraph "B" shall continue to be subject to this Article 7, further transfers of the shares can be made only in accordance with this Article 7 and each purchaser is required to execute an agreement to be bound by the terms of this Article 7.

        C.    Election of Rights by Corporation.    If circumstances shall occur which would ordinarily permit the Corporation to exercise its rights under either subparagraphs "A" or "B" of this Article at a time when the Corporation's rights under the other subparagraph have become and remain exercisable, the Corporation in its sole discretion may elect which of such rights it shall exercise. The Corporation may designate one or more nominees to purchase any shares of Stock which it has the right to purchase pursuant to subparagraphs "A" or "B" of this Article, in lieu of purchasing such shares itself.

        D.    Other Transfers.    Except for sales in the limited market maintained by the Corporation and as provided in subparagraphs "A" or "B" of this Article, no holder of shares of Stock may sell, assign, pledge, transfer or otherwise dispose of or encumber any shares of Stock without the prior written approval of the Corporation, and any attempt to so sell, assign, pledge, transfer or otherwise dispose of or encumber such shares without such prior approval shall be null and void. If any transfer of the Corporation's Stock is (1) not a sale by an employee or director of, or consultant to, the Corporation or (2) by a person who acquired such Stock other than by purchase, directly or indirectly, from an employee or director of, or consultant to the Corporation, then the Corporation is expressly authorized to condition its approval of such transfer upon the transferee's agreement to hold such Stock subject to this Article upon the termination of affiliation of the employee, director, or consultant. All shares transferred with the Corporation's prior written approval pursuant to this subparagraph "D" shall continue to be subject to this Article 7, further transfers of the shares can be made only in accordance with this Article 7, and each transferee is required to execute an agreement to be bound by the terms of this Article 7.

        E.    Definition of Formula Price. As used in this Article, "Formula Price" shall mean the price determined pursuant to the formula adopted by the Board of Directors of the Corporation for the purpose of determining the fair market value of the Corporation's Stock, as such formula may be modified from time to time by the Board of Directors.

        F.     Ownership Limit. No person may own more than three hundred fifty thousand (350,000) shares of Common Stock of the Corporation, excluding the person's beneficial interest in any class or series of stock of the Corporation held by an employee benefit trust.

ARTICLE 8—FISCAL YEAR

        The fiscal year of the Corporation shall begin on the first day of January and end on the 31st day of December in each year or such other period as may be determined by the Board of Directors.

ARTICLE 9—DIVIDENDS

        The Board of Directors may from time to time declare, and the Corporation may pay, dividends on its outstanding stock in the manner and upon the terms and conditions provided by law.

ARTICLE 10—SEAL

        The corporate seal shall be circular and have inscribed thereon the name of the Corporation, the state of incorporation, and the words "Corporate Seal."

ARTICLE 11—WAIVER OF NOTICE

        Any notice required under these Restated Bylaws, by statute, or the Restated Articles of Incorporation may be waived at any time in writing, signed by the person entitled to such notice. Stockholders and directors may take action without meeting if subsequent consent in writing is executed by the stockholders or directors for said action. Attendance at meetings shall be a waiver of notice.

ARTICLE 12—AMENDMENTS

        Subject to the provisions of the Restated Articles of Incorporation and Oregon law, these Restated Bylaws may be altered, amended or repealed or new Bylaws may be adopted by the stockholders or by the Board of Directors, when such power is conferred upon the Board of Directors by the Restated Articles of Incorporation, at any regular meeting of the Board of Directors, at any annual meeting of the stockholders or at any special meeting of the Board of Directors or stockholders duly called for that purpose if notice of such alteration, amendment, repeal or adoption of new Bylaws is contained in the notice of such special meeting.

ARTICLE 13—PARTIAL INVALIDITY—SAVING CLAUSE

        Should any portion, section, paragraph, or part of these Restated Bylaws be held invalid, the remainder of these Restated Bylaws shall remain valid and enforceable.

ARTICLE 14—INDEMNIFICATION

Section 1—Indemnification of Officers and Directors.

        The Corporation shall indemnify to the fullest extent not prohibited by law and hold harmless each person now or hereafter serving as a director or officer of the Corporation, or at the request of the Corporation now or hereafter serving as a director, officer, employee, or agent of any other corporation, partnership, joint venture, trust, or other enterprise of which the Corporation is a stockholder, partner, trustee, owner, or creditor from and against any and all liabilities and counsel fees, costs, and legal and other expenses (including, without limitation, fines, penalties, judgments and amounts paid in settlement) reasonably incurred or imposed in connection with or resulting from (i) any claim, action, suit, or proceeding, whether civil, criminal or investigative, or any appeal therefrom, in which the person may be or become involved or with which the person may be threatened, as a party, or otherwise, by reason of the person now or hereafter being or having heretofore been a director or officer of the Corporation or a director, officer, employee or agent of such other corporation, partnership, joint venture, trust, or other enterprise or by reason of the person's alleged acts or omissions as a director, officer, employee, or agent, as aforesaid, whether or not the person continues to be such at the time such liabilities, fees, costs, or expenses shall have been incurred, and (ii) any action, suit, or proceeding, or any appeal therefrom, brought by the person to recover the indemnity provided for by this Article 14. The Corporation shall pay for or reimburse the reasonable expenses incurred by any such current or former director or officer in any such proceeding in advance of the final disposition of the proceeding if the person sets forth in writing (i) the person's good faith belief that the person is entitled to indemnification under this Article and (ii) the person's agreement to repay all advances if it is ultimately determined that the person is not entitled to indemnification under this Article. No amendment to this Article that limits the Corporation's obligation to indemnify any person shall have any effect on such obligation for any act or omission that occurs prior to the later of the effective date of the amendment or the date notice of the amendment is given to the person.

Section 2—Exclusivity of Rights.

        The right of indemnification provided for by this Article 14 shall not be deemed exclusive of any other rights to which any director or officer may otherwise be entitled, nor shall this Article 14 be

deemed to exclude or limit any power that the Corporation may lawfully exercise to provide any additional or other indemnity or right for any director, officer, or other person.

Section 3—Benefit.

        The indemnification provided by this Article 14 shall inure to the benefit of the heirs, executors, and administrators of any such director or officer.

        As restated by stockholder action on February 9, 1974, and as amended:

February 15, 1975

February 14, 1976

February 12, 1977

February 18, 1978

February 23, 1980

February 21, 1981

February 20, 1982

February 26, 1983

December 15, 1983

February 25, 1984

February 23, 1985

March 8, 1993

September 6, 1994

January 1, 1996

October 23, 1997

January 1, 2000

May 8, 2001

February             , 2008

        WITNESS the signature of the undersigned this                        day of                                    , 2007.

Samuel H. Iapalucci, Secretary

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Exhibit 3.2

RESTATED BYLAWS OF CH2M HILL COMPANIES, LTD.
ARTICLE 1—OFFICES
ARTICLE 2—STOCKHOLDERS
ARTICLE 3—BOARD OF DIRECTORS
ARTICLE 4—OFFICERS
ARTICLE 5—CONTRACTS, LOANS, CHECKS, AND DEPOSITS
ARTICLE 6—CERTIFICATES FOR STOCK AND THEIR TRANSFER
ARTICLE 7—SPECIAL PROVISIONS RELATIVE TO STOCK
ARTICLE 8—FISCAL YEAR
ARTICLE 9—DIVIDENDS
ARTICLE 10—SEAL
ARTICLE 11—WAIVER OF NOTICE
ARTICLE 12—AMENDMENTS
ARTICLE 13—PARTIAL INVALIDITY—SAVING CLAUSE
ARTICLE 14—INDEMNIFICATION

EX-21.1

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Exhibit 21.1

Subsidiaries of CH2M HILL Companies, Ltd.

1.

Operations Management International, a California corporation

2.

CH2M HILL, Inc., a Florida corporation

3.

CH2M HILL Hanford, Inc., a Washington corporation

4.

CH2M HILL Engineers, Inc., a Delaware corporation

5.

CH2M HILL Constructors, Inc., a Delaware corporation

6.

CH2M HILL International, Ltd., a Delaware corporation

7.

CH2M HILL Alaska, Inc., an Alaskan company

8.

CH2M HILL Canada, Inc., a Canadian corporation

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Exhibit 21.1

Subsidiaries of CH2M HILL Companies, Ltd.

EX-23.1

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Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors
CH2M HILL Companies, Ltd.:

        We consent to the incorporation by reference in the registration statement (No. 333-148101) on Form S-4 and in the registration statement (No. 333-113160) on Form S-8 of CH2M HILL Companies, Ltd. and subsidiaries (the Company) of our reports dated February 29, 2008, with respect to the consolidated balance sheets of CH2M HILL Companies, Ltd. and subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of income, shareholders' equity and comprehensive income and cash flows for each of the years in the three-year period ended December 31, 2007, and the effectiveness of internal control over financial reporting as of December 31, 2007, and our report dated February 15, 2007 with respect to the consolidated balance sheet of Kaiser-Hill Company, LLC and subsidiary as of December 31, 2006, and the related consolidated statements of operations, members' equity and cash flows for each of the years ended December 31, 2006 and 2005, which reports appear in the December 31, 2007 annual report on Form 10-K of CH2M HILL Companies, Ltd. and subsidiaries.

        Our report on the consolidated financial statements of CH2M HILL Companies, Ltd. and subsidiaries refers to the Company's adoption of Statement of Financial Accounting Standards (SFAS) No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R) effective December 31, 2007; Financial Accounting Standards Board (FASB) Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes effective January 1, 2007; SFAS No. 123(R), Share-Based Payment effective January 1, 2006; and FIN 46(R), Consolidation of Variable Interest Entities effective January 1, 2005.

Denver, Colorado
February 29, 2008

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Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

EX-24.1

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Exhibit 24.1

POWER OF ATTORNEY

Each person whose signature appears below does hereby make, constitute and appoint each of Samuel H. Iapalucci, Ralph R. Peterson, JoAnn Shea or Margaret B. McLean, as such person's true and lawful attorney-in-fact and agent, with full power of substitution, resubstitution and revocation to execute, deliver and file with the Securities and Exchange Commission, for and on such person's behalf, and in any and all capacities,

1.

A Registration Statement on Form S-8, S-4, S-3 or S-1, any and all amendments (including post-effective amendments) thereto and any abbreviated registration statements in connection with this Registration Statement pursuant to the Securities Act of 1933, with all exhibits thereto and other documents in connection therewith; and

2.

An Annual Report on Form 10-K, any and all amendments (including post-effective amendments) thereto with all exhibits thereto and other documents in connection therewith

granting unto said attorneys-in fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent or such person's substitute or substitutes may lawfully do or cause to be done by virtue hereof.

/S/ RALPH R. PETERSON Ralph R. Peterson	February 8, 2007
/S/ SAMUEL H. IAPALUCCI Samuel H. Iapalucci	February 8, 2007
/S/ ROBERT W. BAILEY Robert W. Bailey	February 8, 2007
/S/ ROBERT G. CARD Robert G. Card	February 8, 2007
/S/ CAROLYN CHIN Carolyn Chin	February 8, 2007
/S/ WILLIAM T. DEHN William T. Dehn	February 8, 2007
/S/ DONALD S. EVANS Donald S. Evans	February 8, 2007
/S/ JERRY D. GEIST Jerry D. Geist	February 8, 2007
/S/ MARK A. LASSWELL Mark A. Lasswell	February 8, 2007

/S/ JOAN M. MILLER Joan M. Miller	February 8, 2007
/S/ DAVID B. PRICE David B. Price	February 8, 2007
/S/ JACQUELINE C. RAST Jacqueline C. Rast	February 8, 2007
/S/ M. CATHERINE SANTEE M. Catherine Santee	February 8, 2007
/S/ MICHAEL A. SZOMJASSY Michael A. Szomjassy	February 8, 2007
/S/ BARRY L. WILLIAMS Barry L. Williams	February 8, 2007

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Exhibit 24.1

POWER OF ATTORNEY

EX-31.1

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Exhibit 31.1

CERTIFICATION

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Ralph R. Peterson, Chief Executive Officer of CH2M HILL Companies, Ltd., certify that:

1.

I have reviewed this annual report on Form 10-K of CH2M HILL Companies, Ltd.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 28, 2008

/s/  RALPH R. PETERSON Ralph R. Peterson
Chief Executive Officer

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Exhibit 31.1

CERTIFICATION

EX-31.2

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Exhibit 31.2

CERTIFICATION

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Samuel H. Iapalucci, Chief Financial Officer of CH2M HILL Companies, Ltd., certify that:

1.

I have reviewed this annual report on Form 10-K of CH2M HILL Companies, Ltd.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: February 28, 2008

/s/  SAMUEL H. IAPALUCCI Samuel H. Iapalucci
Chief Financial Officer

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Exhibit 31.2

CERTIFICATION

EX-32.1

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Exhibit 32.1

CERTIFICATION

PURSUANT TO RULE 13A-14(B) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE (18 U.S.C. SECTION 1350)

        In connection with the Annual Report of CH2M HILL Companies, Ltd. (the "Company") on Form 10-K for the annual period ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Ralph R. Peterson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350 as adopted by Section 906 of the Sarbanes-Oxley Act of 2002 that to the best of my knowledge:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Exchange Act as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Report.

/s/  RALPH R. PETERSON Ralph R. Peterson
Chief Executive Officer

February 28, 2008

        This certification "accompanies" the Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Exhibit 32.1

CERTIFICATION

EX-32.2

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Exhibit 32.2

CERTIFICATION

PURSUANT TO RULE 13A-14(B) OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE (18 U.S.C. SECTION 1350)

        In connection with the Annual Report of CH2M HILL Companies, Ltd. (the "Company") on Form 10-K for the annual period ended December 31, 2007 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Samuel H. Iapalucci, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350 as adopted by Section 906 of the Sarbanes-Oxley Act of 2002 that to the best of my knowledge:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Exchange Act as amended; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Report.

/s/  SAMUEL H. IAPALUCCI Samuel H. Iapalucci
Chief Financial Officer

February 28, 2008

        This certification "accompanies" the Report to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Report), irrespective of any general incorporation language contained in such filing. A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Exhibit 32.2

CERTIFICATION