SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

Form 10-Q/A

Amendment No. 1

(Mark One)

[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED March 31, 2001

OR

[  ] 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)
6060 South Willow Drive, Greenwood Village, CO (Address of principal executive offices)	80111-5142 (Zip Code)

(303) 771-0900
(Registrant’s telephone number, including area code)

================================================================================

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes X   No ___

As of May 10, 2001, the registrant had 30,803,710 shares of common stock, $.01 par value per share, issued and outstanding.

This Amendment No. 1 to CH2M HILL Companies, Ltd. Form 10-Q for the period ended March 31, 2001 is being filed for the sole purpose of correcting typographical errors in the Consolidated Condensed Statements of Income and Segment Information which had resulted in the transposition of certain CH2M HILL’s 2001 and 2000 revenue numbers, thus creating a mistaken impression that CH2M HILL’s revenues decreased during the first quarter of 2001 as compared to the same period in 2000, when in reality the revenues increased.

TABLE OF CONTENTS

Part I. Financial Information
Item 1. Consolidated Condensed Financial Statements
	Consolidated Condensed Balance Sheets
	Consolidated Condensed Statements of Income (Unaudited)
	CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited)
	NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K

CH2M HILL COMPANIES, LTD.

March 31, 2001

TABLE OF CONTENTS

Part I.	Financial Information	Page
Item 1.	Consolidated Condensed Financial Statements:
	Balance Sheets as of March 31, 2001 and December 31, 2000	2
	Statements of Income for the Three-Month Period Ended March 31, 2001 and 2000	3
	Statements of Cash Flows for the Three-Month Period Ended March 31, 2001 and
	2000	4
	Notes to Consolidated Condensed Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of     Operations	8
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	13
Part II.	Other Information
Item 6.	Exhibits and Reports on Form 8-K	14

1

CH2M HILL COMPANIES, LTD.

Consolidated Condensed Balance Sheets
(Dollars in thousands)

				March 31, 2001			December 31, 2000
ASSETS				(Unaudited)
CURRENT ASSETS:
	Cash & cash equivalents			$	63,161		$	97,074
	Receivables, net -
		Client accounts			213,859			218,419
		Unbilled revenue			117,334			99,840
		Other			5,286			6,969
	Prepaid expenses & other				8,408			8,305
			Total current assets		408,048			430,607
PROPERTY, PLANT & EQUIPMENT, net					17,731			17,643
OTHER ASSETS, net					78,132			67,165
TOTAL ASSETS				$	503,911		$	515,415
			LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
	Current portion of long-term debt & notes payable to former shareholders			$	4,028		$	3,910
	Accounts payable				66,187			84,629
	Billings in excess of revenues				79,814			76,143
	Accrued incentive compensation				8,236			25,261
	Employee related liabilities				83,230			58,874
	Current taxes payable				16,165			28,180
	Other accrued liabilities				39,069			41,300
	Current deferred income taxes				14,448			11,975
			Total current liabilities		311,177			330,272
OTHER LONG-TERM LIABILITIES					41,433			40,594
LONG-TERM DEBT					9,609			10,557
			Total liabilities		362,219			381,423
COMMITMENTS AND CONTINGENCIES (See Notes)
SHAREHOLDERS’ EQUITY
	Common stock, $.01 par value, 100,000,000 shares authorized;
			30,803,710 and 29,198,698 issued and outstanding at March 31, 2001
			and December 31, 2000, respectively		308			291
	Additional paid-in capital				44,795			41,728
	Retained earnings				100,400			94,305
	Accumulated other comprehensive loss				(3,811	)		(2,332	)
			Total shareholders’ equity		141,692			133,992
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY				$	503,911		$	515,415

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

2

CH2M HILL COMPANIES, LTD.

Consolidated Condensed Statements of Income
(Unaudited)
(Dollars in thousands except per share)

				Three-Month Period Ended
				March 31
				2001			2000
Gross revenue				$	487,401		$	366,515
Equity in earnings of joint ventures and affiliated companies					4,325			5,706
	Total revenues				491,726			372,221
Operating expenses:
	Direct cost of services and overhead				(375,343	)		(279,227	)
	General and administrative				(106,335	)		(83,450	)
Operating income					10,048			9,544
Other income (expense):
		Interest income			1,151			1,044
		Interest expense			(157	)		(217	)
Income before provision for income taxes					11,042			10,371
		Provision for income taxes			(4,946	)		(5,186	)
Net income				$	6,096		$	5,185
Net income per common share:
			Basic	$	0.21		$	0.18
			Diluted	$	0.20		$	0.17
Weighted average number of common shares:
			Basic		29,694,878			29,604,280
			Diluted		30,601,118			30,200,172

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

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CH2M HILL COMPANIES, LTD.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in thousands)

			Three-Month Period Ended
			March 31
			2001			2000
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES			$	(18,960	)	$	18,688
CASH FLOWS FROM INVESTING ACTIVITIES:
	Capital expenditures			(1,715	)		(2,151	)
	Acquisitions			(8,500	)		—
		Net cash used in investing activities		(10,215	)		(2,151	)
CASH FLOWS FROM FINANCING ACTIVITIES:
	Borrowings on line of credit			—			4,900
	Principal payments on notes payable to former shareholders			(801	)		(888	)
	Principal payments on long-term debt			(28	)		(929	)
	Principal payments on line of credit			—			(4,900	)
	Purchases and retirements of stock			(4,367	)		(9,545	)
		Net cash used in financing activities		(5,196	)		(11,362	)
CASH EFFECT OF CUMULATIVE TRANSLATION ADJUSTMENT				458			204
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				(33,913	)		5,379
CASH AND CASH EQUIVALENTS, beginning of period				97,074			12,557
CASH AND CASH EQUIVALENTS, end of period			$	63,161		$	17,936

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

4

CH2M HILL COMPANIES, LTD.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
(Dollars in thousands)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying financial information has been prepared in accordance with the interim reporting rules and regulations of the Securities and Exchange Commission, and therefore does not necessarily include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with generally accepted accounting principles. The preparation of financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period. Estimates have been prepared on the basis of the most current and best available information and actual results could differ from those estimates.

In the opinion of CH2M HILL’s management, the accompanying unaudited consolidated condensed financial statements of the interim period contain all adjustments necessary to present fairly the financial position of CH2M HILL as of March 31, 2001 and the results of operations and cash flows for the periods presented. All such adjustments are of a normal recurring nature. The results of operations for the three-month period ended March 31, 2001 are not necessarily indicative of the results that may be achieved for a full fiscal year and cannot be used to indicate financial performance for the entire year.

Shareholders’ Equity

On November 6, 1998, the Board of Directors approved a new ownership program for CH2M HILL and certain resolutions that were subsequently ratified by a vote of the shareholders on December 18, 1998. Such resolutions were effective January 1, 2000 and included, but were not limited to, adopting amendments to the Restated Bylaws and Articles of Incorporation which provide for the:

• authorization to convert all outstanding Class A preferred stock into shares of common stock on a one-for-one basis,

• increase in the authorized shares of common stock to 100,000,000, par value $.01 per share, and Class A preferred stock to 50,000,000, par value $.02 per share,

• authorization of a ten-for-one stock split on CH2M HILL’s common stock and Class A preferred stock,

• 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.

Common and preferred stock amounts, equivalent share amounts and per share amounts have been adjusted retroactively to give effect to the stock split.

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The significant changes in shareholders’ equity for the three-month period ended March 31, 2001 is as follows:

	Shares	Amount
Shareholders’ Equity, December 31, 2000	29,198,698	$	133,992
Net Income	—		6,096
Shares Issued	1,418,002		7,450
Shares Redeemed	187,010		(4,367	)
Foreign Currency Translation Adjustment	—		(1,479	)
Shareholders’ Equity, March 31, 2001	30,803,710	$	141,692

(2) SEGMENT INFORMATION

Certain financial information relating to the three-month period ended March 31, 2001 and 2000 for each segment is provided below:

										FINANCIAL
Three-month period ended										STATEMENT
March 31, 2001	EE&I		WATER		INDUSTRIAL		OTHER			BALANCES
Revenues from external customers	$	262,283	$	140,543	$	84,575	$	—		$	487,401
Intersegment sales		14,568		6,339		156		(21,063	)		—
Equity in earnings of investees accounted for by the    equity method		3,844		398		83		—			4,325
Segment profit		7,070		3,694		3,238		(2,960	)		11,042

										FINANCIAL
Three-month period ended										STATEMENT
March 31, 2000	EE&I		WATER		INDUSTRIAL		OTHER			BALANCES
Revenues from external customers	$	198,478	$	115,722	$	52,315	$	—		$	366,515
Intersegment sales		9,490		3,409		462		(13,361	)		—
Equity in earnings of investees accounted for by the    equity method		4,846		769		91		—			5,706
Segment profit		7,001		5,187		664		(2,481	)		10,371

(3) COMPREHENSIVE INCOME

Comprehensive income for the three-month period ended March 31, 2001 and 2000 is as follows:

	Three-Month Period Ended
	March 31
	2001			2000
Net income	$	6,096		$	5,185
Foreign currency translation    adjustment		(1,479	)		(659	)
Comprehensive income	$	4,617		$	4,526

(4) EARNINGS PER SHARE

The computation of basic earnings per share is based on the weighted average number of common shares outstanding during the period. Diluted income per share is based on the weighted average number of common shares outstanding during the period and, to the extent dilutive, common stock equivalents

6

consisting of stock options. The difference between the basic and diluted shares at March 31, 2001 and 2000, is attributable to the dilutive effect of stock options outstanding at the end of the period.

(5) INVESTMENTS IN UNCONSOLIDATED AFFILIATES

CH2M HILL has the following investments in affiliated companies that are 50% or less owned, which are accounted for under the equity method:

% of Ownership
Domestic:
	Kaiser-Hill Company, LLC (“Kaiser-Hill”)	50	%
	MK/IDC (PSI)	38	%
Foreign:
	CH2M HILL Canada Limited	49	%
	CH2M HILL/CSA	50	%
	Z2CLLC	33	%
	Sembawang-IDC	25	%
	CH2M HILL BECA, Ltd.	50	%
	TDC International of Israel	50	%
	IDC/CST	50	%
	CAI Investments LLC	25	%

As of March 31, 2001 and December 31, 2000, the total investments in these material unconsolidated affiliates were approximately $11,975 and $9,837, respectively, and are included in other assets in the accompanying consolidated condensed balance sheets.

Summarized financial information for the three-month period ended March 31, 2001 and 2000, for these affiliates is as follows:

	Three-Month Period Ended
	March 31
	2001		2000
RESULTS OF OPERATIONS:
Revenues	$	197,248	$	195,808
Direct costs		183,022		178,842
General and administrative expenses		5,855		6,207
Operating income		8,371		10,759
Other income (expense)		55		(412	)
Net income	$	8,426	$	10,347

(6) CONTINGENCIES

CH2M HILL is party to various legal actions arising in the normal course of its business, some of which may involve claims for substantial sums. Damages assessed in connection with and the cost of defending such actions could be substantial. CH2M HILL’s management believes 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 related to retentions and deductibles are accrued when such amounts are estimable.

7

CH2M HILL COMPANIES, LTD.

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 for CH2M HILL as a whole and each of our operating segments including:

• Factors affecting our business

• Our revenues and profits

• Where our revenues and profits came from

• Why those revenues and profits were different from period to period

• Where our cash came from and how it was used

• How these factors affect our overall financial condition

This report contains “forward-looking statements,” as that term is defined in Federal securities laws, including information related to our anticipated future results of operations, business strategies, financing plans, competitive position, growth opportunities, and potential effects of future regulations. Although CH2M HILL’s management believes that its expectations are based on reasonable assumptions, these assumptions are subject to a wide range of business and technical risks explained in detail in CH2M HILL’s Prospectus that may cause actual results to differ materially from those stated or implied by these forward-looking statements.

As you read this section, you should also refer to our consolidated condensed financial statements and the accompanying notes as well as the note regarding forward-looking information in the CH2M HILL Form 10-K for the year ended December 31, 2000. These consolidated condensed financial statements provide additional information regarding our financial activities and condition.

This analysis may be important to you in making decisions about your investments in CH2M HILL.

Introduction

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, design, construction, operation, 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 for facility operations. These larger, longer contracts require us to have substantially greater financial capital, than has historically been necessary, to remain competitive.

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 capital strength. We believe that we are well positioned geographically, technically and financially to compete worldwide in the markets we have elected to pursue and clients we serve.

Overall

Net income for the three-month period ended March 31, 2001 was $6.1 million compared with $5.2 million in the same period of 2000. Our diluted earnings per share for the first quarter in 2001 was

8

$0.20, compared with $0.17 in 2000. Revenues and pre-tax profit for the three-month period ended March 31, 2001 and 2000 by operating segment were as follows:

Three Month Period Ended March 31
(in millions)

	Revenues						Pre-Tax Profit
	2001			2000			2001			2000
EE&I	$	266.1	54%	$	203.3	55%	$	7.1		$	7.0
Water		140.9	29%		116.5	31%		3.7			5.2
Industrial		84.7	17%		52.4	14%		3.2			0.7
Corporate		—	—		—	—		(3.0	)		(2.5	)
Total	$	491.7	100%	$	372.2	100%	$	11.0		$	10.4

Results of Operations for the Three Month Period Ended March 31, 2001 Compared to the Same Period of 2000

Revenues for the three-month period ended March 31, 2001 were $491.7 million compared to $372.2 million for the same period in 2000. The increase of $119.5 million or 32.1% is comprised of improvements in all of the operating segments. The Environmental, Energy & Infrastructure (“EE&I”) segment reported increased revenues of $62.8 million or 30.9%, the Water segment reported increased revenues of $24.4 million or 20.9%, and the Industrial segment reported increased revenues of $32.3 million or 61.6%.

Pre-tax profit for the three-month period ended March 31, 2001 was $11.0 million compared to $10.4 million in the same period of 2000. The increase of $0.6 million was comprised of increases in the EE&I segment of $0.1 million, and the Industrial segment of $2.5 million, offset by a decrease in the Water segment of $1.5 million. Corporate expenses increased by $0.5 million.

Environmental, Energy and Infrastructure

Revenues in the EE&I segment for the three-month period ended March 31, 2001 were $266.1 million compared to $203.3 million for the same period in 2000. This increase of $62.8 million or 30.9% was due to improvements in all businesses within this segment. The increase in revenues of $41.7 million in the nuclear and energy sectors was attributable to the U. S. Department of Energy’s Hanford River Protection project in Richland, Washington and to the upsurge in the energy business stemming from the energy crisis on the west coast of the United States. Revenues for the first quarter of 2001 from the Hanford River Protection project were higher than the first quarter of 2000 due to the expansion of work scope during the first quarter of 2001 that is not expected to recur. The increase in revenues in the energy sector is a direct result of significant demand for power plant permitting by independent power producers and utilities, as they push for quick implementation of power generation projects.

The remaining increase in revenues of $21.1 million was generated by the environmental, telecommunications, and transportation businesses. The telecommunications business continues to experience growth internationally as clients build or upgrade new infrastructure to keep pace with advances in technology. The transportation business continues to reflect revenue growth from market-driven demand and added delivery capacity. The market demand is primarily the result of the Transportation Equity Act for the 21st Century (TEA-21) which was adopted by Congress in 1998. TEA-21 provides federal funding to the various states for transportation infrastructure improvement projects for highways, highway safety, and transit through 2003.

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Pre-tax profit for the EE&I segment was $7.1 million for the three-month period ended March 31, 2001 compared to $7.0 million in the same period of 2000. Pre-tax profit as a percentage of revenue for the first quarter of 2001 was 2.7% compared to 3.4% for 2000. During the first quarter of 2001 compared to the same period of 2000, the nuclear business reflected a decrease in profit from the Kaiser-Hill joint venture, as the first quarter of 2000 included performance fees earned under the previous contract which was completed in February 2000. This decrease was offset by a settlement reached with the client on a large, energy efficiency modification project for which an adjustment to the carrying value of the receivable had been recorded in the first quarter of 2000.

Water

The Water segment reported revenues of $140.9 million for the three-month period ended March 31, 2001 compared to revenues of $116.5 million in the same period of 2000. This increase of $24.4 million or 20.9% was attributable to growth in the water and wastewater business as well as the operations and maintenance business. Of the $24.4 million increase, $11.2 million was achieved from design build projects as we continue to grow this area of our operations in order to meet market demands. Market conditions domestically and abroad continue to improve as utilities invest in water related facilities, driven by strong population and economic growth in certain regions, capacity shortfalls, and regulatory requirements. Additionally, revenues from operations and maintenance services increased by $6.9 million primarily due to new contracts, scope increases and shorter term consulting services on existing contracts.

The Water segment reported $3.7 million of pre-tax profit for the three-month period ended March 31, 2001 compared to $5.2 million of pre-tax profit for the same period of 2000. Pre-tax profit as a percentage of revenues was 2.7% for the first quarter of 2001 compared to 4.5% in 2000. The Water segment experienced a decline in pre-tax profit due to higher business development costs, higher start-up costs on newly acquired operations and maintenance projects, as well as a charge in the first quarter of 2001 on a global water project where we are experiencing project delivery issues.

Industrial

The Industrial segment reported revenues of $84.7 million for the three-month period ended March 30, 2001, of which $55.0 million was generated from the microelectronics industry. The revenues for the same period of 2000 were $52.4 million, of which $32.6 million was generated from the microelectronics industry. This increase of $32.3 million was comprised of $22.4 million from the microelectronics industry and $9.9 million from other industries, including food, pharmaceuticals, and facility services. The mix of revenues between construction costs versus services for engineering and construction management also changed significantly in 2001 compared to 2000. The construction cost component of revenues increased from $22.7 million in 2000 to $27.9 million in 2001, an increase of $5.2 million due to an increase in construction projects in 2001 over the same period in 2000. As a percentage of total revenues, however, these construction costs decreased from 43.3% in 2000 to 32.9% in 2001 due to the larger increase in revenues from services, which increased from $29.7 million in 2000, to $56.8 million in 2001. The significant increase in services revenue was generated primarily from the microelectronics industry. The microelectronics industry began an economic recovery beginning in second quarter of 2000 that has helped the Industrial segment realize a significant increase in revenues through the first quarter of 2001, however, the industry is currently showing signs of weakness because of soft demand for its products.

The Industrial segment reported $3.2 million of pre-tax profit for the quarter ended March 31, 2001 compared to $0.7 million for the same period in 2000. Profit, as a percentage of revenues for 2001 was 3.8% compared to 1.3% for the same period in 2000. The most significant factor causing this profit increase was the 91.2% increase in volume of services sold during 2001. Direct project costs, as a percentage of revenues, decreased 4.5% in 2001 versus 2000. This decrease is due to a reduction in construction related costs as a percentage of total direct costs. This reduction resulted in higher project margins due to the change in mix of revenues, where the construction revenue component

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decreased considerably over the service revenue component during 2001. Indirect labor costs, which are made up of salaries and benefits of administrative personnel, plus salaries and benefits of technical personnel for hours not working on billable client services, decreased, as a percent of the services portion of gross revenues, to 21.0% in 2001 compared to 23.9% in 2000. This decrease is due to the significant increase in the number and size of projects performed for the microelectronics industry. Other overhead, general and administrative costs decreased, as a percentage of the services portion of revenues, to 18.0% in 2001 compared to 14.0% in 2000, also due to the increase in revenue volume in 2001.

Joint Ventures

We routinely enter into joint ventures to service the needs of our clients. Such arrangements are customary in the engineering and construction industry and generally are project specific. Our largest joint venture is Kaiser-Hill Company, LLC (“Kaiser-Hill”), in which we own a 50% interest. This joint venture is in our EE&I operating segment. The earnings from this joint venture are reported as equity in earnings of investees accounted for under the equity method, along with other joint ventures that are individually insignificant.

For the three-month period ended March 31, 2001, we reported equity in earnings of investees accounted for under the equity method of $4.3 million compared to $5.7 million in the same period of 2000. The earnings from the Kaiser-Hill joint venture for the three-month period ended March 31, 2001 were $3.9 million compared to $4.8 million for the same period in 2000. This decline in earnings is primarily attributable to performance fees earned under the previous contract, which expired on January 31, 2000, for achieving significant contract milestones such as the demolition of a significant building at the Rocky Flats site.

Effective February 1, 2000, the U.S. Department of Energy extended Kaiser-Hill’s Rocky Flats contract. Although the new contract is a closure contract and does not have a defined term, we anticipate closure of the site in 2006. Under the new contract, Kaiser-Hill is compensated through a base fee affected, up or down, by its performance against the agreed site target closure costs. Outside of a negotiated range, for every dollar that the U.S. Department of Energy saves with earlier cleanup, Kaiser-Hill receives a 30 cent increase in fee. At the same time, for every dollar the cleanup is over budget, the fee is reduced by 30 cents down to an agreed minimum. The ultimate fee will also be impacted by the schedule to achieve site closure and the safety of our performance. Until the results of the performance measures become more estimable, earnings are expected to be comparable from quarter to quarter.

Corporate Expenses

Corporate expenses for the three-month period ended March 31, 2001 were $3.0 million compared to $2.5 million for the same period of 2000. The increase quarter over quarter primarily relates to the maintenance of our internal market and increase in general infrastructure to support the growth in our operations. During the first quarter of 2000, we incurred expenses to buy out a supplemental retirement plan associated with the old key employee program and to accrete the value of certain equity instruments related to our compensation plans to the current stock price. 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.

Income Taxes

The income tax provision for the three-month period ended March 31, 2001 was $4.9 million, or an effective tax rate of 44.8%, compared to $5.2 million, or an effective tax rate of 49.9%, for the same period of 2000. The decrease in the effective tax rate is due primarily to certain tax credits that are being recognized currently to the extent such benefits are more likely than not to be realized. Our

11

effective tax rate continues to be higher than the U.S. statutory income tax rate of 35.0% due to the effect of state income taxes, disallowed portions of meals and entertainment expenses and non-deductible foreign net operating losses.

Liquidity and Capital Resources

Cash Flows from Operating Activities

For the three-month period ended March 31, 2001, operations used $19.0 million of cash due primarily to changes in working capital. Accounts receivable increased $13.4 million due to growth in operations in the EE&I and the water operating segments while accounts payable decreased $18.4 million due primarily to the slowdown of operations in the industrial segment. These working capital changes were offset by earnings and deferred income taxes for the period.

During the comparable period of 2000, operations provided $18.7 million of cash due primarily to growth in our operations. Working capital changes included a decrease of $10.2 million in accounts payable as we no longer incurred pass-through costs for two significant construction projects. A comparable decrease in accounts receivable due to the completion of these projects is offset by an increase in accounts receivable and billings in excess of revenues as a result of improved operations, providing a net increase in cash of $5.2 million. The remaining net increase in working capital is due primarily to the increase in employee related and other accrued liabilities due to the improvement in operations and due to the accrual of payroll and related benefit expenses.

Cash Flows from Investing Activities

During the first quarter of 2001, we signed a new five-year contract with the U.S. Department of Energy that extends our current contract at the Hanford River Protection project in Richland, Washington through September 2006, for which we paid Lockheed Martin $5.0 million. We are now committed to specific milestones for the duration of the contract. Fees are earned based on specific negotiated performance incentives.

We also invested $3.5 million in a new entity that was established by a client for the purpose of acquiring, holding, managing and selling investments in telecommunications properties. Subsequent to March 31, 2001, we invested an additional $6.5 million for a total investment of $10.0 million and a 24.5% equity interest. This is a strategic investment to develop our telecommunications business, which we will account for using the equity method.

Cash Flows from Financing Activities

For the first quarter of 2001, we used $5.2 million of cash in financing activities, of which $4.4 million was used to purchase stock presented on the internal market. This compares to $11.4 million of cash used in financing activities for the same period of 2000, of which $9.5 million was used to purchase stock presented on the internal market. These transactions were funded by cash flows from operations. During the first quarter of 2001, we had no borrowings, and for the same period in 2000, our net borrowings were negligible. As of March 31, 2001, there were no amounts outstanding.

Derivatives and Financial Instruments

SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities”, establishes fair value accounting and reporting standards for derivative instruments and hedging activities. CH2M HILL adopted SFAS No. 133 on January 1, 2001. SFAS No. 133 requires all derivative instruments to be recorded in the balance sheet as either an asset or liability measured at its fair value. SFAS No. 133 requires that changes in the derivative’s fair value be recognized currently in earnings unless specific hedge accounting criteria are met. Special accounting for qualifying hedges allows a derivative’s

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gains and losses to offset the related results on the hedged item in the income statement, and requires that a company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting treatment.

CH2M HILL utilizes certain derivative financial instruments to manage its market risk associated with fluctuations in interest rates or foreign currencies. CH2M HILL intends to designate the contracts as hedges and record derivative assets and liabilities on its balance sheet based on the fair value of the contracts. Such amounts are expected to be substantially offset by an amount that will be recorded in “Accumulated other comprehensive income” on CH2M HILL’s consolidated balance sheet. The fair values of derivative instruments will fluctuate over time due to changes in the underlying contract prices.

Quantitative and Qualitative Disclosures About Market Risk

CH2M HILL is exposed to market risk from changes in interest rates and foreign exchange rates. This risk is monitored and managed to limit the effect of interest rate and foreign exchange rate fluctuations on earnings and cash flows. CH2M HILL’s interest rate exposure is generally limited to its unsecured revolving credit agreement and to its notes payable to former shareholders. Historically, we have used short-term variable rate borrowings under the revolving credit agreement on a limited basis. At March 31, 2001, there were no borrowings against the credit facility which has a maturity date of June 17, 2003. The interest rate on the notes payable to former shareholders is variable and fluctuates annually based on the U.S. Federal reserve Discount rate. These notes have varying maturities through 2009. Additionally, in December 2000, we entered into an interest rate collar in order to hedge our inherent interest rate risk. The interest rate collar was settled in March 2001 for a nominal amount. CH2M HILL may use interest rate swap agreements or similar financial instruments for purposes other than trading. CH2M HILL has 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 the financial position of CH2M HILL.

CH2M HILL is exposed to foreign exchange risks in the normal course of its international business operations. Our investments in foreign subsidiaries with a functional currency other than the U.S. dollar are generally considered long-term. Accordingly, we do not hedge these net investments. CH2M HILL may engage in forward foreign exchange contracts to reduce its economic exposure to changes in exchange rates on a limited basis because the associated risk is not considered significant. Generally, any forward contracts are entered into to hedge specific commitments and anticipated transactions but not for speculative or trading purposes. We do not currently have any derivative financial instruments outstanding.

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Part II. OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)	Exhibits
	None
(b)	Reports on Form 8-K
	None

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CH2M HILL Companies, Ltd.
Date: May 10, 2001	/s/ Samuel H. Iapalucci
	Samuel H. Iapalucci Vice President and Chief Financial Officer

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