10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended March 27, 2015

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)

Delaware	93-0549963
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

9191 South Jamaica Street,
Englewood, CO	80112-5946
(Address of principal executive offices)	(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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

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 the definitions of “large accelerated filer”, “accelerated filer”, and “small reporting company” in Rule 12b-2 of the Exchange Act.

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

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

The number of shares outstanding of the registrant’s common stock as of May 1, 2015 was 27,301,257.

CH2M HILL COMPANIES, LTD.

TABLE OF CONTENTS

	PART I. FINANCIAL INFORMATION
Item 1.	FINANCIAL STATEMENTS
	Consolidated Balance Sheets as of March 27, 2015 and December 31, 2014 (unaudited)	3
	Consolidated Statements of Operations for the Three Months Ended March 27, 2015 and March 31, 2014 (unaudited)	4
	Consolidated Statements of Comprehensive Income(Loss) for the Three Months Ended March 27, 2015 and March 31, 2014 (unaudited)	5
	Consolidated Statements of Cash Flows for the Three Months Ended March 27, 2015 and March 31, 2014 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	30
Item 4.	CONTROLS AND PROCEDURES	30
	PART II. OTHER INFORMATION
Item 1.	LEGAL PROCEEDINGS	30
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	31
Item 5.	OTHER INFORMATION	31
Item 6.	EXHIBITS	33
SIGNATURES		34

2

CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

(Dollars in thousands)

	March 27,		December 31,
	2015		2014
ASSETS
Current assets:
Cash and cash equivalents	$	134,339	$	131,477
Receivables, net—
Client accounts		665,277		697,168
Unbilled revenue		635,552		660,227
Other		26,154		22,447
Income tax receivable		9,351		31,369
Deferred income taxes		9,246		5,968
Prepaid expenses and other current assets		73,184		74,413
Total current assets		1,553,103		1,623,069
Investments in unconsolidated affiliates		96,707		94,340
Property, plant and equipment, net		239,687		258,160
Goodwill		514,840		533,975
Intangible assets, net		79,619		91,379
Deferred income taxes		255,480		250,055
Employee benefit plan assets and other		83,685		90,324
Total assets	$	2,823,121	$	2,941,302
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	4,548	$	5,028
Accounts payable and accrued subcontractor costs		483,087		530,822
Billings in excess of revenue		310,932		336,063
Accrued payroll and employee related liabilities		328,728		289,330
Other accrued liabilities		364,870		406,991
Total current liabilities		1,492,165		1,568,234
Long-term employee related liabilities		642,939		671,581
Long-term debt		483,496		508,021
Other long-term liabilities		96,236		105,898
Total liabilities		2,714,836		2,853,734
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, Class A $0.01 par value, 50,000,000 shares authorized; none issued		—		—
Common stock, $0.01 par value, 100,000,000 shares authorized; 27,315,258 and 27,323,570issued and outstanding at March 27, 2015 and December 31, 2014, respectively		273		273
Additional paid-in capital		—		—
Retained earnings		507,287		484,842
Accumulated other comprehensive loss		(284,897)		(272,357)
Total CH2M HILL common stockholders’ equity		222,663		212,758
Noncontrolling interests		(114,378)		(125,190)
Total stockholders' equity		108,285		87,568
Total liabilities and stockholders’ equity	$	2,823,121	$	2,941,302

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

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CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended
	March 27,		March 31,
	2015		2014
Gross revenue	$	1,263,986	$	1,279,449
Equity in earnings of joint ventures and affiliated companies		11,350		19,287
Operating expenses:
Direct cost of services and overhead		(1,002,449)		(1,050,853)
General and administrative		(232,022)		(257,429)
Operating income (loss)		40,865		(9,546)
Other income (expense):
Interest income		41		214
Interest expense		(3,896)		(3,430)
Income (loss) before provision for income taxes		37,010		(12,762)
(Provision) benefit for income taxes		(9,505)		3,885
Net income (loss)		27,505		(8,877)
Less: (Income) loss attributable to noncontrolling interests		(4,007)		2,785
Net income (loss) attributable to CH2M HILL	$	23,498	$	(6,092)
Net income (loss) attributable to CH2M HILL per common share:
Basic	$	0.86	$	(0.21)
Diluted	$	0.86	$	(0.21)
Weighted average number of common shares:
Basic		27,363,496		28,809,022
Diluted		27,385,943		28,809,022

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

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CH2M HILL COMPANIES, LTD.

Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

(Dollars in thousands)

	Three Months Ended
	March 27,		March 31,
	2015		2014
Net income (loss)	$	27,505		(8,877)
Other comprehensive loss:
Foreign currency translation adjustments		(15,180)		(8,181)
Benefit plan adjustments, net of tax		2,640		948
Unrealized gain on available-for-sale securities and other, net of tax		—		96
Other comprehensive loss		(12,540)		(7,137)
Comprehensive income (loss)		14,965		(16,014)
Less: comprehensive income (loss) attributable to noncontrolling interests		4,007		(2,785)
Comprehensive income (loss) attributable to CH2M HILL	$	10,958	$	(13,229)

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

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CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in thousands)

	Three Months Ended
	March 27,		March 31,
	2015		2014
Cash flows from operating activities:
Net income (loss)	$	27,505	$	(8,877)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		19,164		18,922
Stock-based employee compensation		8,982		13,884
(Gain) loss on disposal of property, plant and equipment		(813)		171
Allowance for uncollectible accounts		74		225
Deferred income taxes		(9,390)		4,102
Undistributed earnings from unconsolidated affiliates		(11,350)		(19,287)
Distributions of income from unconsolidated affiliates		9,305		12,017
Contributions to defined benefit pension plans		(8,484)		(9,802)
Change in assets and liabilities:
Receivables and unbilled revenue		38,295		84,388
Prepaid expenses and other		5,993		(5,228)
Accounts payable and accrued subcontractor costs		(43,856)		(72,373)
Billings in excess of revenue		(20,436)		(32,212)
Accrued payroll and employee related liabilities		42,265		(14,935)
Other accrued liabilities		(32,392)		16,952
Current income taxes		21,558		(14,110)
Long-term employee related liabilities and other		(5,436)		4,710
Net cash provided by (used in) operating activities		40,984		(21,453)
Cash flows from investing activities:
Capital expenditures		(6,302)		(21,664)
Investments in unconsolidated affiliates		(7,388)		(2,095)
Distributions of capital from unconsolidated affiliates		4,848		7,073
Proceeds from sale of operating assets		11,839		—
Net cash provided by (used in) investing activities		2,997		(16,686)
Cash flows from financing activities:
Borrowings on long-term debt		591,210		452,925
Payments on long-term debt		(616,149)		(359,306)
Repurchases and retirements of common stock		(13,111)		(44,111)
Excess tax benefits from stock-based compensation		3,075		2,823
Net distributions from (to) noncontrolling interests		6,805		(830)
Net cash (used in) provided by financing activities		(28,170)		51,501
Effect of exchange rate changes on cash		(12,949)		(4,275)
Increase in cash and cash equivalents		2,862		9,087
Cash and cash equivalents, beginning of period		131,477		294,261
Cash and cash equivalents, end of period	$	134,339	$	303,348
Supplemental disclosures:
Cash paid for interest	$	3,894	$	3,774
Cash paid (refunded) for income taxes	$	3,893	$	(2,773)

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

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CH2M HILL COMPANIES, LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 27, 2015

(Unaudited)

(1) Summary of Business and Significant Accounting Policies

Summary of Business

CH2M HILL Companies, Ltd. and subsidiaries (“We”, “Our”, “CH2M HILL” or the “Company”) is a project delivery firm founded in 1946. We are a large employee controlled professional engineering services firm providing engineering, construction, consulting, design, design build, procurement, engineering procurement construction (“EPC”), operations and maintenance, program management and technical services to U.S. federal, state, municipal and local government agencies, national governments, as well as private industry and utilities, around the world. A substantial portion of our professional fees are derived from projects that are funded directly or indirectly by government entities.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and according to instructions to Form 10-Q and the provisions of Article 10 of Regulation S-X that are applicable to interim financial statements. Accordingly, these statements do not include all of the information required by GAAP or the Securities and Exchange Commission (“SEC”) rules and regulations for annual audited financial statements. The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and assumptions have been prepared on the basis of the most current and best available information. Actual results could differ from those estimates.

In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. These unaudited interim consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Change in Fiscal Year End

On March 30, 2015, in order to accommodate our financial accounting systems and the timely gathering and reporting of financial information, we changed our reporting period from a calendar year ending on December 31 of each year to a fiscal year ending on the last Friday of December of each year.  Our fiscal quarters will also end on the last Friday of March, June, and September.  This change has been retroactively applied as if it was adopted as of January 1, 2015.  The change in fiscal year-enddid not have a material effect on the comparability of the periods presented.

Revenue Recognition

We earn revenue from different types of services performed under various types of contracts, including cost-plus, fixed-price and time-and-materials. We evaluate contractual arrangements to determine how to recognize revenue. We primarily perform engineering and construction related services and recognize 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 contract. In making such estimates, judgments are required to evaluate potential variances in schedule, the cost of materials and labor,

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productivity, liability claims, contract disputes, and achievement of contract performance standards. We record the cumulative effect of changes in contract revenue and cost at completion in the period in which the changed estimates are determined to be reliably estimable.

Below is a description of the basic types of contracts from which we may earn revenue:

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, with an additional 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.

Included in the total contract value for cost-plus fee arrangements is the portion of the fee for which receipt is determined to be probable.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 where direct costs incurred to date are compared to total projected direct costs at contract completion. 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.

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 is recognized under the percentage-of-completion method where costs incurred to date are compared to total projected costs at contract completion. Revenue on contracts that is not subject to maximum contract values is 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.

Operations and Maintenance Contracts.  A portion of our contracts are operations and maintenance type contracts.  Revenue is recognized on operations and maintenance contracts on a straight-line basis over the life of the contract once we have an arrangement, service has begun, the price is fixed or determinable and collectability is reasonably assured.

For all contract types noted above, 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 when the change order 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.

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.  A significant portion of our billings in excess balance relates to excess billings

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on design-build projects.  These projects often require us to order significant project materials and equipment in advance, and we request payment in advance from our clients to cover these costs.  As the projects near completion and our suppliers complete the construction of these components and we complete the installation, the billings in excess balance declines.

Fair Value Measurements

Fair value represents the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities are valued based upon observable and non-observable inputs. Valuations using Level 1 inputs are based on unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 inputs utilize significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly; and valuations using Level 3 inputs are based on significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. There were no significant transfers between levels during the quarters ended March 27, 2015 and March 31, 2014.

Restructuring Related Costs

We account for costs associated with restructuring activities in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 420, Exit or Disposal Cost Obligations.  An exit activity includes but is not limited to a restructuring, such as a sale or termination of a line of business, the closure of business activities in a particular location, the relocation of business activities from one location to another, changes in management structure, and a fundamental reorganization that affects the nature and focus of operations.  The Company recognizes a liability and the related expense for restructuring costs when the liability is incurred and can be measured.  Restructuring accruals are based upon management estimates at the time they are recorded and can change depending upon changes in facts and circumstances subsequent to the date the original liability was recorded.  Nonretirement postemployment benefits offered as special termination benefits to employees, such as a voluntary early retirement program, are recognized as a liability and a loss when the employee accepts the offer and the amount can be reasonably estimated in accordance with ASC Topic 712, Compensation-Nonretirement Postemployment Benefits.

Goodwill

Goodwill represents the excess of costs over fair value of the assets of businesses we have acquired.  Goodwill acquired in a purchase business combination is not amortized, but instead, is tested for impairment at least annually in accordance with the provisions of ASC Topic 350, Intangibles-Goodwill and Other (“ASC 350”), as amended under Accounting Standards Update 2011-08 (“ASU 2011-08”).  Upon the occurrence of certain triggering events, we are also required to test for impairment at dates other than the annual impairment testing date.  In performing the impairment test, we evaluate our goodwill at the reporting unit level.  Under the guidance of ASC 350, we have the option to assess either quantitative or qualitative factors to determine whether it is more likely than not that the fair values of our reporting units are less than their carrying amounts.  If after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair values of our reporting units are less than their carrying amounts, then the next step of the impairment test is unnecessary.  If we conclude otherwise, then we are required to test goodwill for impairment under the two-step process. 

The two-step process involves comparing the estimated fair value of each reporting unit to the unit’s carrying value, including goodwill.  If the carrying value of a reporting unit does not exceed its fair value, the goodwill of the reporting unit is not considered impaired; therefore, the second step of the impairment test is unnecessary.  If the carrying amount of a reporting unit exceeds its fair value, we would then perform a second step to measure the amount of goodwill impairment loss to be recorded.  We determine the fair value of our reporting units using a combination of the income approach, the market approach, and the cost approach.  The income approach calculates the present value of future cash flows based on assumptions and estimates derived from a review of our expected revenue growth rates, profit margins, business plans, cost of capital and tax rates for the reporting units.  Our market based valuation method estimates the fair value of our reporting units by the application

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of a multiple to our estimate of a cash flow metric for each business unit.  The cost approach estimates the fair value of a reporting unit as the fair value of its assets net of the fair value of its liabilities.

Intangible Assets

We may acquire other intangible assets in business combinations. Intangible assets are stated at fair value as of the date they are acquired in a business combination. We amortize intangible assets with finite lives on a straight-line basis over their expected useful lives, currently up to ten years.  We test our intangible assets for impairment in the period in which a triggering event or change in circumstance indicates that the carrying amount of the intangible asset may not be recoverable.  If the carrying amount of the intangible asset exceeds the fair value, an impairment loss will be recognized in the amount of the excess.  We determine the fair value of the intangible assets using a discounted cash flow approach.

Derivative Instruments

We primarily enter into derivative financial instruments to mitigate exposures to changing foreign currency exchange rates. We are primarily subject to this risk on long-term projects whereby the currency being paid by our client differs from the currency in which we incurred our costs, as well as intercompany trade balances among entities with differing currencies. We do not enter into derivative transactions for speculative or trading purposes. All derivatives are carried at fair value on the consolidated balance sheets in other receivables or accounts payable and accrued subcontractor costs as applicable. The periodic change in the fair value of the derivative instruments is recognized in earnings within general and administrative expense.

Stockholders’ Equity

The changes in stockholders’ equity for the three months ended March 27, 2015 are as follows (in thousands):

	Shares	Amount
Stockholders’ equity, December 31, 2014	27,324	$	87,568
Net income attributable to CH2M HILL	—		23,498
Shares issued in connection with stock-based compensation and employee benefit plans	287		8,982
Shares purchased and retired	(296)		(10,035)
Other comprehensive loss, net of tax	—		(12,540)
Income attributable to noncontrolling interests	—		4,007
Net contributions from noncontrolling interests	—		6,805
Stockholders’ equity, March 27, 2015	27,315	$	108,285

Retirement and Tax-Deferred Savings Plan

The Retirement and Tax Deferred Savings Plan is a retirement 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 and provides benefits to eligible employees upon retirement. In September 2012, our Board of Directors approved the CH2M HILL Companies, Ltd. Amended and Restated 401(k) Plan which became effective January 1, 2013 (“401(k) Plan”). The 401(k) Plan allows for matching contributions up to 6% of employee’s base compensation, although specific subsidiaries may have different limits on employer matching. The matching contributions may be made in both cash and/or stock.  Expenses related to matching contributions made in common stock for the 401(k) Plan for the three months ended March 27, 2015 and March 31, 2014 were $6.9 million and $12.3 million, respectively.

Recently Adopted Accounting Standards

In April 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-04,  Compensation – Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets.ASU 2015-04 provides a practical expedient for entities with defined benefit plan assets and obligations whose fiscal years and interim periods do not coincide with a month-end. The ASU allows

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these entities to use the month-end that is closest to the entity’s fiscal year-end or interim period-end for measuring the defined benefit plan assets and obligations if the practical expedient is applied consistently to all plans and each year.  However, if a contribution or significant event (such as a plan amendment, settlement, or curtailment that calls for a remeasurement in accordance with existing requirements) occurs between the month-end date used to measure defined benefit plan assets and obligations and an entity’s fiscal year-end or interim period-end, the entity should adjust the measurement of defined benefit plan assets and obligations to reflect the effects of those contributions or significant events. Entities are required to disclose the accounting policy election and the date used to measure the defined benefit plan assets and obligations.  ASU 2015-04 will be effective for financial statements issued for fiscal years beginning after December 15, 2015, with earlier election permitted, and the application of the amendment should be applied prospectively.  CH2M HILL will early elect this ASU for our fiscal year ending December 25, 2015.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides updated consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. This ASU requires that all legal entities be subject to reevaluation under the revised consolidation model. ASU 2015-02 will be effective for annual and interim periods beginning after December 15, 2015.  CH2M HILL is currently evaluating the impact of this ASU on its financial position and results of operations.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  The ASU requires that management evaluate for each annual and interim reporting period whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued.  If there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, additional disclosures are required, even if the substantial doubt is alleviated as a result of consideration of management’s plans.  This ASU is effective for annual and interim periods beginning after December 15, 2016, and early adoption is permitted.  We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This ASU is a comprehensive new revenue recognition model that is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.  The ASU also requires additional quantitative and qualitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The FASB has proposed to defer the effective date of this ASU for reporting periods beginning after December 15, 2017. Companies may use either a full retrospective or a modified retrospective approach to adopt this ASU.  CH2M HILL is currently evaluating the impact of this ASU and the transition alternatives on its financial position and results of operations.

(2) Changes in Project-Related Estimates

During the first quarter of 2015, we experienced additional cost growth on a Transportation fixed-price contract to design and construct roadway improvements on an expressway in the southwestern United States.  The cost growth was primarily caused by vendor and subcontractor quotes that were received in the quarter which were greater than the amounts previously estimated.  As a result of these changes in estimate, a charge to operations was recorded totaling $11.0 million for the three months ended March 27, 2015.  There wasno charge to operations for changes in estimate for the three months ended March 31, 2014.  Management is assessing the recovery of cost overruns and schedule delays caused from client requested design and construction changes; however, at this time it is not possible to estimate these recoveries.  It is reasonably possible that we could incur additional costs and losses if our cost estimation processes identify new costs not previously included in our total estimated loss or if our plans to meet our revised schedule are not achieved resulting in liquidating damages being assessed by the client.  These potential changes in estimates could be materially adverse to the Company’s results of operations.

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Within our Power segment, we are involved in a fixed-price project in Australia through a consolidated 50/50 joint venture partnership with an Australian construction contractor to engineer, procure, construct and start-up a combined cycle power plant that will supply power to a large liquefied natural gas facility in Australia.  As of March 27, 2015, the total contract value of the joint venture project wasapproximately $460 million, and the project wasapproximately 40% complete, with engineering and procurement nearing completion and construction activities ramping up.  Due to a variety of issues related to the joint venture scope of work identified, we recognized changes in estimated contract costs that resulted in charges to operations of $280.0 million during 2014, which represents the total expected loss of the joint venture project at completion.  Our portion of the loss, which was recorded in 2014, totaled $140.0 million.  Noneof these charges to operations occurred in the three months ended March 31, 2014, and no further cost growth has occurred in 2015.  As of March 27, 2015 and December 31, 2014, the reserve for project losses included in other current liabilities for this project was $161.2 million and $183.7 million, respectively.Of the amounts included in the March 27, 2015 and December 31, 2014 balances, $80.6 million and $91.8 million, respectively, relate to accrued project losses attributable to, and payable by, the noncontrolling joint venture partner.  Management believes the project has suffered from substantial client interference related to numerous design changes, delays in providing timely access to site delivery facilities and access to certain construction materials.  These items have resulted in a significant increase in the cost to complete the project as well as a delay in the start of construction activities and possibly the ultimate delivery of the power facility.  While management believes the current estimated cost to complete the project represents the best estimate at this time, there is a significant amount of work that still needs to be performed on the project before achieving substantial completion, and thus there can be no assurance that additional cost growth will not occur.  Management is currently in substantive negotiations with the client and is vigorously pursuing recovery of costs and schedule impacts with the assistance of external legal and commercial claims specialists.  A settlement, if reached, could reduce the joint venture’s total anticipated loss at completion.  Management believes it will gain a better understanding during 2015 of whether a negotiated settlement is possible, and, if so, how the terms of such settlement would impact the joint venture’s estimated costs at completion.  However, if these recovery steps are not successful, we might not be reimbursed by the client for previously incurred or potential future cost overruns, and the joint venture might be assessed potential liquidated damages in excess of amounts already included in the current estimated loss at completion.

During 2014, we experienced significant cost growth on a fixed-price Power contract to design and construct a new power generation facility in the northeastern United States.  These increases in costs resulted from multiple sources including a substantial decline in union labor productivity, poor subcontractor performance and the impacts of schedule delays caused by the above items and severe weather in the northeastern United States.  The effect of these changes in estimates resulted in a charge to operations totaling $52.5 million in the three months ended March 31, 2014.  There were no additional charges to operations in the first quarter of 2015 as the project achieved substantial completion in 2014.  Management is seeking recovery of a portion of the total project loss from the client, including relief from a portion of the liquidated damages assessed by the client through the date of substantial completion due to client interference and other remedies under the terms of the contract. There can be no assurance we will be successful in obtaining such recoveries.

All reserves for project related losses are included in other current liabilities and totaled $206.5 million and $222.4 million as of March 27, 2015 and December 31, 2014, respectively.  Of the amounts included in the March 27, 2015 and December 31, 2014 balances, $80.6 million and $91.8 million, respectively, relate to accrued project losses attributable to, and payable by, the noncontrolling joint venture partner.

(3) Segment Information

During 2014, we implemented certain significant organizational changes, including the manner in which our operations are managed and utilized a matrix organization of business groups, geographic regions and service lines.  In the first quarter of 2015, we refined this structure, and continued to reorganize our internal reporting structure by making changes to better facilitate our continued growth, client-centric service, and operational efficiency.  In connection with this refinement, we continued to reevaluate the manner in which our Chief Operating Decision Maker (“CODM”) reviews operating results and makes key business decisions.  Our CODM is our executive management committee that meets regularly to evaluate operating results and allocate our financial and operational resources.  As part of the reevaluation in 2015, we determined that our CODM primarily reviews financial operating results by business group, and as such,we have identified each of our five business groups as reportable operating segments: Environment and Nuclear; Industrial and Urban Environments (“IUE”); Oil, Gas and

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Chemicals; Transportation; and Water.  Additionally, although the Power group falls within the IUE business group, we have identified Power as a separate reportable operating segment as we are currently in the process of exiting the Power business and as such the results of this group are being monitored apart from the rest of the business group.

Certain financial information relating to the three months ended March 27, 2015 and March 31, 2014 for each segment is provided below.  Costs for corporate general and administrative expenses, restructuring costs and amortization expense related to intangible assets have been allocated based upon the estimated allocation to each segment based on the benefits provided by corporate functions.  This allocation is primarily based upon metrics that reflect the proportionate volume of project-related activity and employee labor costs within each segment.  Prior year amounts have been revised to conform to the current year presentation.

	Three Months Ended March 27, 2015
	Environment		Industrial		Oil, Gas
	and		and Urban		and								Consolidated
($ in thousands)	Nuclear		Environments		Chemicals		Transportation		Water		Power		Balances
Gross revenue	$	359,407	$	118,889	$	213,952	$	235,782	$	300,313	$	35,643	$	1,263,986
Equity in earnings of joint ventures and affiliated companies		6,704		977		26		2,497		1,146		-		11,350
Operating income (loss)		16,547		462		7,604		(4,319)		20,626		(55)		40,865

	Three Months Ended March 31, 2014
	Environment		Industrial		Oil, Gas
	and		and Urban		and								Consolidated
($ in thousands)	Nuclear		Environments		Chemicals		Transportation		Water		Power		Balances
Gross revenue	$	350,540	$	110,470	$	204,669	$	234,908	$	305,337	$	73,525	$	1,279,449
Equity in earnings of joint ventures and affiliated companies		13,101		858		38		4,905		385		-		19,287
Operating income (loss)		17,281		(6,216)		958		10,154		24,188		(55,911)		(9,546)

(4) 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 common 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 common shares and common stock equivalents outstanding during the period. Common stock equivalents are only included in the diluted EPS calculation when their effect is dilutive.

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Reconciliations of basic and diluted EPS (in thousands, except per share amounts):

	Three Months Ended
	March 27,		March 31,
	2015		2014
Numerator:
Net income (loss) attributable to CH2M HILL	$	23,498	$	(6,092)
Denominator:
Basic weighted-average common shares outstanding		27,363		28,809
Dilutive effect of common stock equivalents		23		—
Diluted adjusted weighted-average common shares outstanding, assuming conversion of common stock equivalents		27,386		28,809
Basic net income (loss) per common share	$	0.86	$	(0.21)
Diluted net income (loss) per common share	$	0.86	$	(0.21)

For the three months ended March 27, 2015 and March 31, 2014, options to purchase 1.9 million and 2.2million shares of common stock, respectively, were excluded from the dilutive EPS calculation as they were antidilutive.

(5) Variable Interest Entities and Equity Method Investments

We routinely enter into teaming arrangements, in the form of joint ventures, to perform projects for our clients. Such arrangements are customary in the engineering and construction industry and generally are project specific. The arrangements facilitate the completion of projects that are jointly contracted with our partners. These arrangements are formed to leverage the skills of the respective partners and include consulting, construction, design, design-build, program management and operations and maintenance contracts. The assets of a joint venture are restricted for use only for the particular joint venture and are not available for general operations of the Company.  Our risk of loss on these arrangements is usually shared with our partners. The liability of each partner is usually joint and several, which means that each partner may become liable for the entire risk of loss on the project. Furthermore, on some of our projects, CH2M HILL has granted guarantees which may encumber both our contracting subsidiary company and CH2M HILL for the entire risk of loss on the project.

Our financial statements include the accounts of our joint ventures when the joint ventures are variable interest entities (“VIE”) and we are the primary beneficiary or those joint ventures that are not VIEs yet we have a controlling interest. We perform a qualitative assessment to determine whether our company is the primary beneficiary once an entity is identified as a VIE. A qualitative assessment begins with an understanding of the nature of the risks associated with the entity as well as the nature of the entity’s activities including terms of the contracts entered into by the entity, ownership interests issued by the entity and how they were marketed, and the parties involved in the design of the entity. All of the variable interests held by parties involved with the VIE are identified and a determination is made of which activities are most significant to the economic performance of the entity and which variable interest holder has the power to direct those activities. Most of the VIEs with which our Company is involved have relatively few variable interests and are primarily related to our equity investments, subordinated financial support, and subcontracting arrangements. We consolidate those VIEs in which we have both the power to direct the activities of the VIE that most significantly impact the VIEs economic performance and the obligation to absorb losses or the right to receive the benefits from the VIE that could potentially be significant to the VIE. As of March 27, 2015 and December 31, 2014, total assets of VIEs that were consolidated were $87.5 million and $99.9 million, respectively, and liabilities were $310.8 million and $344.8 million, respectively.  These assets and liabilities consist almost entirely of working capital accounts associated with the performance of a single contract.

In determining whether we have a controlling interest in a joint venture that is not a VIE and the requirement to consolidate the accounts of the entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partnership/members.

We held investments in unconsolidated joint ventures that are not VIEs of $96.7 million and $94.3 million at March 27, 2015 and December 31, 2014, respectively. Our proportionate share of net income or loss is included

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as equity in earnings of joint ventures and affiliated companies in the consolidated statements of operations. In general, the equity investment in our unconsolidated affiliates is equal to our current equity investment plus our portion of the entities’ undistributed earnings. We provide certain services, including engineering, construction management and computer and telecommunications support, to these unconsolidated entities. These services are billed to the joint ventures in accordance with the provisions of the agreements.

As of March 27, 2015 and December 31, 2014, the total assets of VIEs that were not consolidated were $340.0 million and $355.5 million, respectively, and total liabilities were $267.4 million and $282.7 million, respectively.  These assets and liabilities consist almost entirely of working capital accounts associated with the performance of a single contract. The maximum exposure to losses is limited to the funding of any future losses incurred by those entities under their respective contracts with the project company.

(6) Acquisitions

On April 4, 2014, we acquired certain agreed upon assets and liabilities of TERA Environmental Consultants (“TERA”) for consideration of $119.6 million.  TERA is an employee-owned environmental consulting firm headquartered in Canada specializing in environmental assessment, planning, siting, permitting, licensing, and related services for the pipeline, electrical transmission, and oil and gas industries.  For the quarter ended March 27, 2015, approximately $18.9 million of revenue and $2.7 million of operating incomegenerated from TERA’s operations have been reported in the consolidated financial statements within the Environment and Nuclear business group.

(7) Goodwill and Intangible Assets

The following table presents the changes in goodwill:

($ in thousands)	Goodwill
Balance at December 31, 2014	$	533,975
Acquisitions		—
Impairment loss		—
Foreign currency translation		(19,135)
Balance at March 27, 2015	$	514,840

Intangible assets with finite lives consist of the following:

			Accumulated		Net finite-lived
($ in thousands)	Cost		Amortization		intangible assets
March 27, 2015
Contracted backlog	$	87,783	$	(85,138)	$	2,645
Customer relationships		191,236		(114,618)		76,618
Tradename		4,565		(4,209)		356
Total finite-lived intangible assets	$	283,584	$	(203,965)	$	79,619
December 31, 2014
Contracted backlog	$	89,313	$	(84,349)	$	4,964
Customer relationships		197,910		(111,970)		85,940
Tradename		4,791		(4,316)		475
Total finite-lived intangible assets	$	292,014	$	(200,635)	$	91,379

All intangible assets are being amortized over their expected lives of between one year and ten years. The amortization expense reflected in the consolidated statements of operations totaled $7.2 million and $9.1 million for three months ended March 27, 2015 and March 31, 2014.  All intangible assets are expected to be fully amortized in 2024.

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(8) Property, Plant and Equipment

Property, plant and equipment consists of the following:

	March 27,		December 31,
($ in thousands)	2015		2014
Land	$	9,539	$	21,044
Building and land improvements		102,248		98,972
Furniture and fixtures		27,076		27,531
Computer and office equipment		156,230		158,022
Field equipment		141,792		140,542
Leasehold improvements		76,042		80,871
		512,927		526,982
Less: Accumulated depreciation		(273,240)		(268,822)
Net property, plant and equipment	$	239,687	$	258,160

Depreciation expense reflected in the consolidated statements of operations was $11.9 million and $9.8 million for the three months ended March 27, 2015 and March 31, 2014, respectively.

(9) Fair Value of Financial Instruments

Cash and cash equivalents, client accounts receivables, unbilled revenue, accounts payable and accrued subcontractor costs and billings in excess of revenue are carried at cost, which approximates fair value due to their short maturities. The fair value of long-term debt, including the current portion, is estimated based on Level 2 inputs, except the amount outstanding on our revolving credit facility for which the carrying value approximates fair value. Fair value is determined by discounting future cash flows using interest rates available for issues with similar terms and average maturities. The estimated fair values of our financial instruments where carrying values do not approximate fair value are as follows:

	March 27, 2015				December 31, 2014
	Carrying		Fair		Carrying		Fair
($ in thousands)	Amount		Value		Amount		Value
Mortgage notes payable	$	8,217	$	7,669	$	8,682	$	7,925
Equipment financing		10,630		10,056		11,392		10,747

We primarily enter into derivative financial instruments to mitigate exposures to changing foreign currency exchange rates. These currency derivative instruments are carried on the balance sheet at fair value and are based upon Level 2 inputs including third-party quotes. At March 27, 2015, we had forward foreign exchange contracts on major world currencies with varying durations, none of which extend beyond one year. As of March 27, 2015, we had $1.3 million of derivative liabilities, and for the three months ended March 27, 2015, the periodic changes in the fair value of derivatives resulted in a loss of $1.3 million.  As of December 31, 2014, derivative assets and liabilities recorded were insignificant. For the three months ended March 31, 2014, the periodic changes in the fair value of derivatives recorded in earnings were insignificant.

(10) Line of Credit and Long-Term Debt

On March 30, 2015, we entered into the Second Amendment to our Amended and Restated Credit Agreement (“Credit Agreement”).  The Credit Agreement provides for an unsecured revolving Credit Facility of $1.1 billion (“Credit Facility”) which matures on March 28, 2019 and retroactively amended the maximum consolidated leverage ratio effective January 1, 2015.  Under the terms of the Credit Agreement, we may be able to invite existing and new lenders to increase the amount available to be borrowed under the agreement by up to $350.0 million.  The Credit Agreement has a subfacility for the issuance of standby letters of credit in a face amount up to $750.0 million and a subfacility up to $300.0 million for multicurrency borrowings.  Additional terms of our Credit Agreement are as follows:

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· The definition of consolidated adjusted EBITDA allows the add back of cash restructuring charges in 2015 of up to $40 million plus a carryover of $26.7 million for cash restructuring charges incurred in year 2014.

· The maximum consolidated leverage ratio is 3.75xthrough the earlier of the end of the current fiscal year or the achievement of one or more offerings of preferred stock with aggregate proceeds of $200.0 million or more, after which the maximum consolidated leverage ratio returns to 3.25x for the rest of 2015 and 3.00x for 2016 and beyond.

· There is an increased applicable interest rate for loans outstanding under the Credit Agreement during any fiscal period for which the consolidated leverage ratio exceeds 3.25x.

· Certain repurchases by CH2M HILL of its common stock and preferred stock and payment of common stock dividends are subject to the following limits:

o Prior to the completion of one or more preferred equity issuances resulting in gross cash proceeds of not less than $200.0 million, the limit in 2015 is $45.0 million for repurchases of common stock offered for sale on the internal market plus $15.0 million for others subject to a pro forma 3.00x leverage threshold in 2015; notwithstanding the foregoing, legally required restricted payments may be allowed despite exceeding such limits;

o After the completion of one or more preferred equity issuances resulting in gross cash proceeds of not less than $200 million in 2015, the limit is $120.0 million in 2015;

o For 2016 and beyond, there is no limit on repurchases of common stock offered for sale on the internal market, and there is a$100 million limit for other repurchases of common stock, redemption of preferred stock and common dividends, subject to pro forma leverage of 2.75x.

· Up to 50% of the proceeds from asset sales can be utilized to repurchase common or preferred stock, subject to pro forma financial covenant compliance.

The Credit Agreement contains customary representations and warranties and conditions to borrowing including customary affirmative and negative covenants, which include covenants that limit or restrict our ability to incur indebtedness and other obligations, grant liens to secure their obligations, make investments, merge or consolidate, and dispose of assets outside the ordinary course of business, in each case subject to customary exceptions for credit facilities of this size and type.  As of March 27, 2015, we were in compliance with the covenants required by the Credit Agreement.

At March 27, 2015 and December 31, 2014, $468.8 million and $492.6 million in borrowings were outstanding on the Credit Facility, respectively. The average rate of interest charged on that balance was 1.76% as of March 27, 2015. At March 27, 2015 and December 31, 2014, company-wide issued and outstanding letters of credit and bank guarantee facilities were $173.9 million and $199.3 million, respectively.  The remaining unused borrowing capacity under the Credit Facility was $354.0 million as of March 27, 2015.

Our nonrecourse and other long-term debt consist of the following:

	March 27,		December 31,
($ in thousands)	2015		2014
Revolving credit facility, average rate of interest of 1.76%	$	468,791	$	492,551
Mortgage notes payable in monthly installments due December 2015 and June 2020, secured by real estate, rent and leases. These notes bear interest at 5.35% and 6.59%, respectively		8,217		8,682
Equipment financing, due in monthly installments to September 2021, secured by equipment. These notes bear interest ranging from 0% to 8.84%		10,630		11,392
Other notes payable		406		424
Total debt	$	488,044	$	513,049
Less: current portion of debt		4,548		5,028
Total long-term portion of debt	$	483,496	$	508,021

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(11) Income Taxes

After adjusting for the impact of income (loss) attributable to noncontrolling interest, the effective tax rate on income (loss) attributable to CH2M HILL for the three months ended March 27, 2015 was 28.8% compared to 38.9% for the same period in the prior year. This effective tax rate for the first quarter of 2015 was lower than the effective tax rate in the first quarter of 2014 primarily due to the effect of settlement of the 2007 IRS audit in 2015.  Our effective tax rate continues to be negatively impacted by the effect of state income taxes, non-deductible foreign net operating losses, and the disallowed portions of meals and entertainment expenses.

Undistributed earnings of our foreign subsidiaries amounted to approximately $402.4 million and $331.2 million at March 27, 2015 and December 31, 2014, respectively.  These earnings are considered to be permanently reinvested. Accordingly, no provision for U.S. federal and state income taxes or foreign withholding taxes has been made. Determining the tax liability that would arise if these earnings were repatriated is not practical.

As of March 27, 2015 and December 31, 2014, we had $30.9 million and $34.2 million, respectively, recorded as a liability for uncertain tax positions.  We recognize interest and penalties related to unrecognized tax benefits in income tax expense.  Included in the amounts discussed above are approximately $6.6 million and $7.0million of accrued interest and penalties related to uncertain tax positions, as of March 27, 2015 and December 31, 2014, respectively.

We file 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, United Kingdom and Canada. With few exceptions, we are 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 2007.

(12) Restructuring and Related Charges

In September 2014, we commenced certain restructuring activities in order to achieve important business objectives, including reducing overhead costs, enhancing client service, improving efficiency, reducing risk, and creating more opportunity for profitable growth.  These restructuring activities include such items as a voluntary retirement program, workforce reductions, facilities consolidations and evaluation of certain lines of business.

During the three months ended March 27, 2015, we incurred $8.0 million of costs for these restructuring activities which have been included in general and administration expense on the consolidated statements of operations.  Overall, as of March 27, 2015, we have incurred aggregated costs of $78.4 million for restructuring activities, and we expect to incur up to $32.0 million in additional restructuring charges during the remainder of 2015 related to these activities. 

The following table summarizes the restructuring charges during the three months ended March 27, 2015:

	Voluntary Early		Employee Severance
	Retirement		and Termination
($ in thousands)	Program		Benefits		Facilities Cost		Other		Total
Balance at December 31, 2014	$	—	$	1,060	$	15,000	$	420	$	16,480
Provision		—		2,918		1,417		3,616		7,951
Cash Payments		—		(3,978)		(1,333)		(4,036)		(9,347)
Non-cash settlements		—		—		—		—		—
Balance at March 27, 2015	$	—	$	—	$	15,084	$	—	$	15,084

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The accruals for facilities costs will be paid over the remaining term of the leases which we have exited and therefore will extend through 2028.

(13) Commitments and Contingencies

We are party to various legal actions arising in the normal course of business. Because a large portion of our business comes from U.S. federal, state and municipal sources, our procurement and certain other practices at times are subject to review and investigation by various agencies of the U.S. government 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 or alternatively could result in settlement. Damages assessed in connection with and the cost of defending any such actions could be substantial. While the outcomes of pending proceedings and legal actions are often difficult to predict, management believes that proceedings and legal actions currently pending would not result in a material adverse effect on our results of operations or financial condition even if the final outcome is adverse to our company.

Many claims that are currently pending against us are covered by our professional liability insurance. Management estimates that the levels of insurance coverage (after retentions and deductibles) are generally adequate to cover our liabilities, if any, with regard to such claims. Any amounts that are probable of payment are accrued when such amounts are estimable.  As of March 27, 2015 and December 31, 2014, accruals for potential estimated claim liabilities were $18.7 million and $16.3 million, respectively.

In 2010, we were notified that the U.S. Attorney’s Office for the Eastern District of Washington was investigating overtime practices in connection with the U.S. Department of Energy Hanford tank farms management contract that we transitioned to another contractor in 2008. In 2011 and 2012, eight former CH2M HILL Hanford Group (“CH2M HILL Subsidiary”) employees pleaded guilty to felony charges related to time card fraud committed while working on the Hanford Tank Farm Project. As part of its investigation, the U.S. Attorney’s Office raised the possibility of violations of the civil False Claims Act and criminal charges for possible violations of federal criminal statutes arising from CH2M HILL Subsidiary’s overtime practices on the project. In September 2012, the government intervened in a civil False Claims Act case filed in the District Court for the Eastern District of Washington by one of the employees who plead guilty to time card fraud. In March 2013, we entered into a Non-Prosecution Agreement (“NPA”) concluding the criminal investigation so long as we comply with the terms of the NPA. The NPA requires us to comply with ongoing requirements for three years after the effective date. By a separate agreement, we obtained dismissal of the civil False Claims Act case. We paid $18.5 million in total under both agreements. As a result, no criminal charges were brought against CH2M HILL Subsidiary or any CH2M HILL entities, and the civil False Claims Act case was dismissed.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis is intended to assist in providing an understanding of our financial condition, changes in financial condition and results of operations as a whole and for each of our operating segments and should be read in conjunction with our consolidated financial statements and notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2014.

In the following text, the terms, “CH2M HILL,” “the Company,” “we,” “our,” and “us” may refer to CH2M HILL Companies, Ltd.

Certain statements throughout Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this report are forward-looking and thus reflect our current expectations and beliefs with respect to certain current and future events and financial performance. Such forward-looking statements are and will be subject to many risks and uncertainties relating to our operations and business environment that may cause actual results to differ materially from any future results expressed or implied in such forward looking statements. Words such as “believes,” “anticipates,” “expects,” “will,” “plans” and similar expressions are intended to identify forward-looking statements.

Additionally, forward-looking statements include statements that do not relate solely to historical facts, such as statements which identify uncertainties or trends, discuss the possible future effects of current known trends or uncertainties, or which indicate that the future effects of known trends or uncertainties cannot be predicted, guaranteed or assured. All forward-looking statements in this report are based upon information available to us on the date of this report. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, except as required by applicable law.

Our actual results could differ materially from these forward-looking statements due to numerous factors including, without limitation, the following: the continuance of, and funding for certain governmental regulation and enforcement programs which create demand for our services; our ability to attract and perform large, longer-term projects; our ability to insure against or otherwise cover the liability risks inherent in our business including environmental liabilities and professional engineering liabilities; our ability to manage the risks inherent in the government contracting business and the delivery of lump sum projects; our ability to manage the costs associated with our fixed price contracts; our ability to manage the risks inherent in international operations, including operations in war and conflict zones, our ability to identify and successfully integrate acquisitions; our ability to attract a third party investor; our ability to attract and retain professional personnel; changes in global business, economic, political and social conditions; intense competition in the global engineering, procurement and construction industry; civil unrest, security issues and other unforeseeable events in countries in which we do business; our failure to receive anticipated new contract awards; the affects, if any, of U.S. government budget constraints; difficulties or delays incurred in the execution of contracts; and other risks and uncertainties set forth under Item 1A. Risk Factors in the Annual Report on Form 10-K for the year ended December 31, 2014, as well as other risks and uncertainties set forth from time to time in the reports the Company files with the SEC. Consequently, forward-looking statements should not be regarded as representation or warranties by the Company that such matters will be realized.

Business Summary

Founded in 1946, we are a large employee-controlled professional engineering services firm providing engineering, construction, consulting, design, design-build, procurement, operations and maintenance, EPC, program management and technical services around the world. Including craft and hourly employees as well as certain populated joint ventures, we have approximately 25,000 employees worldwide.

We provide services to a diverse customer base including the U.S. federal and foreign governments and governmental authorities, various United States federal government agencies, provincial, state and local municipal governments, major oil and gas companies, refiners and pipeline operators, utilities, metal and mining, automotive, food and beverage and consumer products manufacturers, microelectronics, pharmaceuticals and biotechnology

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companies. We believe we provide our clients with innovative project delivery using cost-effective approaches and advanced technologies.

Our revenue is dependent upon our ability to attract and retain qualified and productive employees, identify business opportunities, allocate our labor resources to profitable markets, secure new contracts, execute existing contracts, and maintain existing client relationships. Moreover, as a professional services company, the quality of the work generated by our employees is integral to our revenue generation.

Restructuring

In September 2014, we commenced certain restructuring activities in order to achieve important business objectives, including reducing overhead costs, enhancing client service, improving efficiency, reducing risk, and creating more opportunity for profitable growth.  These restructuring plans included such items as the evaluation of certain lines of business, voluntary and involuntary employee terminations, the closure of certain facilities and reduction of corporate overhead costs.  These restructuring charges are included within general and administrative costs on our consolidated statements of operations and have been allocated to the business groups for segment reporting purposes.  During the three months ended March 27, 2015, we incurred $8.0 million of these restructuring charges, and we expect to incur up to $32.0 million in additional restructuringcosts during the remainder of 2015 related to these activities.  Overall, as of March 27, 2015, we have incurred aggregated costs of $78.4 million for restructuring activities.  Once all restructuring activities are completed, we expect to benefit from annualized cost savings of greater than $120.0 million.

Acquisitions

We continuously monitor acquisition and investment opportunities that will expand our portfolio of services, provide local resources internationally to serve our customers, add value to the projects undertaken for clients, or enhance our capital strength.  On April 4, 2014, we acquired certain agreed upon assets and liabilities of TERA Environmental Consultants (“TERA”) for consideration of $119.6 million.  TERA is an employee-owned environmental consulting firm headquartered in Canada specializing in providing environmental assessment, planning, siting, permitting, licensing, and related services for the pipeline, electrical transmission, and oil and gas industries.

For the quarter ended March 27, 2015, approximately $18.9 million of revenue and $2.7 million of operating income generated from TERA’s operations have been reported in the consolidated financial statements and are reported in the Environment and Nuclear business group

Summary of Operations

During 2014, we implemented certain significant organizational changes, including the manner in which our operations are managed and utilized a matrix organization of business groups, geographic regions and service lines.  In the first quarter of 2015, we refined this structure, and continued to reorganize our internal reporting structure by making changes to better facilitate our continued growth, client-centric service, and operational efficiency.  In connection with this refinement, we continued to reevaluate the manner in which our Chief Operating Decision Maker (“CODM”) reviews operating results and makes key business decisions.  Our CODM is our executive management committee that meets regularly to evaluate operating results and allocate our financial and operational resources.  As part of the reevaluation in 2015, we determined that our CODM primarily reviews financial operating results by business group, and as such,we have identified each of our five business groups as reportable operating segments: Environment and Nuclear; Industrial and Urban Environments (“IUE”); Oil, Gas and Chemicals; Transportation; and Water.  Additionally, although the Power group falls within the IUE business group, we have identified Power as a separate reportable operating segment as we are currently in the process of exiting the Power business and as such the results of this group are being monitored apart from the rest of the business group.

Costs for corporate general and administrative expenses, restructuring costs and amortization expense related to intangible assets have been allocated based upon the estimated allocation to each segment based on the benefits provided by corporate functions.  This allocation is primarily based upon metrics that reflect the

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proportionate volume of project-related activity and employee labor costs within each segment. Prior year amounts have been revised to conform to the current year presentation.

Results of Operations for the Three Months Ended March 27, 2015 and March 31, 2014

	2015				2014				Change
			Operating				Operating				Operating
	Gross		Income		Gross		Income		Gross		Income
($ in thousands)	Revenue		(Loss)		Revenue		(Loss)		Revenue		(Loss)
Environment and Nuclear	$	359,407	$	16,547	$	350,540	$	17,281	$	8,867	$	(734)
Industrial and Urban Environments		118,889		462		110,470		(6,216)		8,419		6,678
Oil, Gas and Chemicals		213,952		7,604		204,669		958		9,283		6,646
Transportation		235,782		(4,319)		234,908		10,154		874		(14,473)
Water		300,313		20,626		305,337		24,188		(5,024)		(3,562)
Power		35,643		(55)		73,525		(55,911)		(37,882)		55,856
Total	$	1,263,986	$	40,865	$	1,279,449	$	(9,546)	$	(15,463)	$	50,411

On a consolidated basis, our gross revenue decreased by $15.5 million, or 1%, for the quarter ended March 27, 2015 compared to the quarter ended March 31, 2014.  This decline was primarily driven by a decrease of $37.9 million in revenue within our Power segment.  In 2014, we beganshifting our focus away from pursuing and contracting fixed price EPCprojects within the Power business group and decided to exit the Power business with the exception of projects under contract at thattime which we remain committed to complete. As a result, two large scale design-build power projects achieved substantial completion in2014 and were not replaced which caused a decrease in revenue of $48.2 million.  This revenue decline was partially offset by a $14.3 million increase attributable to accelerating construction progress on a fixed price power plant project in Australia during the quarter ended March 27, 2015 as compared to the quarter ended March 31, 2014, during which field construction was just commencing.  Within our IUE segment, revenue for the three months ended March 27, 2015 increased by $8.4 million, or 8%, as compared to the three months ended March 31, 2014.  The increase in revenue was primarily attributable to the addition of several new consulting and project management contracts in Asia, the Middle East, and the United States in 2015.   Oil, Gas and Chemicals also experienced an increase of $9.3 million, or 5%, in revenue for the quarter ended March 27, 2015 as compared to the quarter ended March 31, 2014 primarily due to increased activity in 2015 on domestic oil construction contract in the northwestern United States.  Environment and Nuclear revenue increased $8.9 million, or 3%, primarily due to the additional revenue from the second quarter 2014 acquisition of TERA which contributed $18.9 million in revenues during the first quarter of 2015.  This was offset by a reduction in volume in our military and government facilities related businesses.  Within our Water segment, revenue for the three months ended March 27, 2015 decreased by $5.0 million, or 2%, as compared to three months ended March 31, 2014 as a result of lower volumes within our consulting line of business. Lastly, Transportation revenue increased slightly by $0.9 million in the quarter ended March 27, 2015 as compared to the quarter ended March 31, 2014 due to volume growth in our domestic projects which was partially offset by our foreign currency fluctuation on our international revenue with the strengthening of the U.S dollar.

Our consolidated operating income for the quarter ended March 27, 2015 of $40.9 million was an improvement of $50.4 million from the $9.5 million operating loss for the quarter ended March 31, 2014.  For the quarter ended March 27, 2015, Power had an operating loss of $0.1 million, which was an increase of $55.9 million from the operating loss for the comparable period in 2014.  The decrease in operating loss was primarily caused by the $52.5 million project loss taken during the first quarter of 2014 related to a change in estimate for a fixed-price contract to design and construct a new power generation facility in the northeastern United States. The project experienced significant cost growth from multiple sources including a substantial decline in union labor productivity, poor subcontractor performance and the impacts of schedule delays caused by the above items and severe weather in the northeastern United States.  There were no additional charges to operations in the first quarter of 2015 as the project achieved substantial completion in 2014.Management is seeking recovery of a portion of the total project loss from the client. In addition, we are requesting relief from a portion of the liquidated damages assessed by the client through the date of substantial completion due to client interference and other remedies under the terms of the contract. There can be no assurance we will be successful in obtaining such recoveries.

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Oil, Gas and Chemicals experienced an increase of $6.6 million in operating income for the quarter ended March 27, 2015 as compared to the quarter ended March 31, 2014.  This increase was primarily due to increased activity in domestic oil construction contract in the northwestern United States as well as significant cost savings from reduced facilities and overhead costs as part of our restructuring programs.  Several additional IUE consulting and project management contracts in Asia, the Middle East and the United States contributed to the $6.7 million increase in operating income in the first quarter of 2015 as compared to the same period in 2014, as well as additional cost savings from efficiencies gained in 2015 with the restructuring of the IUE business group.  These increases were partially offset by a $14.5 million decrease in Transportation operating income for the three months ended March 27, 2015 as compared to the three months ended March 31, 2014, which was primarily related to an $11.0 million additional loss provision in 2015 recorded on a fixed price contract to design and construct roadway improvements on an expressway in the southwestern United States.  The cost growth was primarily caused by vendor and subcontractor quotes that were received in the quarter which were greater than the amounts previously estimated.  There was no charge to operations for changes in estimate for this project in the three months ended March 31, 2014.  Management is assessing the recovery of cost overruns and schedule delays caused from client requested design and construction changes; however, at this time it is not possible to estimate these recoveries.  It is reasonably possible that we could incur additional costs and losses if our cost estimation processes identify new costs not previously included in our total estimated loss or if our plans to meet our revised schedule are not achieved resulting in liquidating damages being assessed by the client.  These potential changes in estimates could be materially adverse to the Company’s results of operations.

Furthermore, Water’s operating income decreased by $3.6 million in the first quarter of 2015 as compared to the first quarter of 2014 due to a $3.4 million reserve related to a claim settlement related to legacy projects obtained through a previous acquisition.  Operating income within the Environment and Nuclear business remained fairly stable for the three months ended March 27, 2015 as compared to the three months ended March 31, 2014 as the increase in operating income in 2015 from the TERA Environmental Consultants (“TERA”) acquisition and the reduction of costs from restructuring programs were offset by a reduction in equity in earnings of joint ventures and affiliated companies.

The Company’s overall overhead cost structure has benefited from the restructuring activities described above through the reduction of costs within the corporate overhead functions which are allocated to the business groups to arrive at segment operating profit as well as overhead costs within the business groups themselves.  A portion of these costs savings has been offset by the charges incurred in the quarter ended March 27, 2015 for restructuring efforts totaling $8.0 million.

Australian Design-Build Power Project

Within our Power segment, we are involved in a fixed-price project in Australia through a consolidated 50/50 joint venture partnership with an Australian construction contractor to engineer, procure, construct and start-up a combined cycle power plant that will supply power to a large liquefied natural gas facility in Australia.  As of March 27, 2015, the total contract value of the joint venture project was approximately $460 million, and the project was approximately 40% complete, with engineering and procurement nearing completion and construction activities ramping up.  Due to a variety of issues related to the joint venture scope of work identified, we recognized changes in estimated contract costs that resulted in charges to operations of $280.0 million during 2014, which represents the total expected loss of the joint venture project at completion.  Our portion of the loss, which was recorded in 2014, totaled $140.0 million.  None of these charges to operations occurred in the three months ended March 31, 2014, and no further cost growth has occurred in 2015.  As of March 27, 2015 and December 31, 2014, the reserve for project losses included in other current liabilities for this project was $161.2 million and $183.7 million, respectively.Of the amounts included in the March 27, 2015 and December 31, 2014 balances, $80.6 million and $91.8 million, respectively, relate to accrued project losses attributable to, and payable by, the noncontrolling joint venture partner.  Management believes the project has suffered from substantial client interference related to numerous design changes, delays in providing timely access to site delivery facilities and access to certain construction materials.  These items have resulted in a significant increase in the cost to complete the project as well as a delay in the start of construction activities and possibly the ultimate delivery of the power facility.  While management believes the current estimated cost to complete the project represents the best estimate at this time, there is a significant amount of work that still needs to be performed on the project before achieving substantial completion, and thus there can be no assurance that additional cost growth will not occur.  Management is currently in substantive negotiations with

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the client and is vigorously pursuing recovery of costs and schedule impacts with the assistance of external legal and commercial claims specialists.  A settlement, if reached, could reduce the joint venture’s total anticipated loss at completion.  Management believes it will gain a better understanding during 2015 of whether a negotiated settlement is possible, and, if so, how the terms of such settlement would impact the joint venture’s estimated costs at completion.  However, if these recovery steps are not successful, we might not be reimbursed by the client for previously incurred or potential future cost overruns, and the joint venture might be assessed potential liquidated damages in excess of amounts already included in the current estimated loss at completion.

Income Taxes

The effective tax rate for the three months ended March 27, 2015 was 28.8% compared to 38.9% for the same period in the prior year. This effective tax rate for the first quarter of 2015 was lower than the effective tax rate in the first quarter of 2014 primarily due to the effect of settlement of the 2007 IRS audit in 2015.  Our effective tax rate continues to be negatively impacted by the effect of state income taxes, non-deductible foreign net operating losses, and the disallowed portions of meals and entertainment expenses.

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 working capital, acquisitions, capital expenditures and purchases of stock presented on our internal market. We maintain a domestic cash management system which provides for cash sufficient to satisfy financial obligations as they are submitted for payment and any excess cash in domestic bank accounts is applied against any outstanding swingline debt held under our credit facility described below. We maintain entities to do business in countries around the world and as a result hold cash in international bank accounts to fund the working capital requirements of those operations.  At March 27, 2015 and December 31, 2014, cash totaling $105.6 million and $99.2 million, respectively, was held in wholly-owned subsidiary foreign bank accounts.

In addition, as is common within our industry, we partner with other engineering and construction firms on specific projects to leverage the skills of the respective partners and decrease our risk of loss. Often projects of this nature require significant cash contributions and the joint ventures created may retain cash earned while the project is being completed.  Cash and cash equivalents on our consolidated balance sheets include cash held within these consolidated joint venture entities which is used for operating activities of those joint ventures. As of March 27, 2015 and December 31, 2014, cash and cash equivalents held in our consolidated joint ventures and reflected on the consolidated balance sheets totaled $39.5 million and $45.4 million, respectively.

As of March 27, 2015, our total consolidated cash and cash equivalents balance was $134.3 million, as compared to $131.5 million as of December 31, 2014. This increase of $2.8 million primarily resulted from the improvement in net income and working capital, the reduction in capital expenditures and an increase in proceeds from the sale of operating assets during the quarter ended March 27, 2015 as compared to the quarter ended March 31, 2014.  The increase was partially offset by net borrowings on our long-term debt.

During the three month period ended March 27, 2015, cash provided by operations was $41.0 million compared to cash used in operations of $21.5 million in the same period last year. Cash flows from operations primarily resulted from an increase in earnings on our operations of $36.4 million and positive changes in our working capital of $38.8 million.  Changes in our working capital requirements can vary significantly from period to period based primarily on the mix of our projects underway and the percentage of project work completed during the period.  Within working capital, we benefited primarily from an increase of $42.3 million in accrued payroll and employee related liabilities due to the timing of when the quarter ended and payroll was paid throughout the world.  This trend will reverse in the second quarter of 2015. Receivables and unbilled revenue were reduced in 2015, generating $38.3 million in cash.  This was offset by payments made of $43.9 million on accounts payable and accrued subcontractor costs, as well as payments made on other accrued liabilities of $32.4 million.  In the quarter ended March 31, 2014, our cash flows  from operations were negatively affected by $32.8 million changes in working capital, including accounts payable and accrued subcontractor costs of $72.4 million and decreases in billings in excess of revenue of $32.2 million.  These reductions in cash were partially offset by collections in receivables and unbilled revenue of $84.4 million during the quarter ended March 31, 2014.

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Cash provided by investing activities was $3.0 million for the three months ended March 27, 2015 compared to cash used in investing activities of $16.7 million for the same period in 2014. A significant factor contributing to the increase in cash provided by investing activities relates to the $11.8 million of cash received from the sale of certain fixed assets during 2015 as well as a $15.4 million decrease in capital expenditures in the quarter ended March 27, 2015 as compared to the quarter ended March 31, 2014.  The decrease in capital spending was primarily due to the completion of the implementation of our enterprise resource planning system in 2014.  Additionally, we periodically make working capital advances to certain of our unconsolidated joint ventures and, such advances are repaid to us from the joint ventures in the normal course of the joint venture activities.  During the quarter ended March 27, 2015, we received working capital repayments from our unconsolidated joint ventures of $4.8 million as compared to $7.1 million for the three month period ended March 31, 2014

Cash from financing activities decreased by $79.7 million to net cash used of $28.2 million in the three months ended March 27, 2015 compared to a net cash provided of $51.5 million for the same period in 2014.  The primary factor contributing to the decrease in cash from financing activities was the $118.5 million decline in net borrowings on long-term debt, which was a net payment of $24.9 million for the 2015 period and a net borrowing of $93.6 million in the prior year period.  Additionally, repurchases of stock for the three month period ended March 27, 2015 were $13.1 million, representing a $31.0 million decrease in cash used from financing activities compared to the $44.1 million spent in the prior year period.

We finance our operations, acquisitions and capital expenditures using a variety of capital vehicles including an unsecured revolving credit facility.  On March 30, 2015, we entered into the Second Amendment to our Amended and Restated Credit Agreement (“Credit Agreement”).  The Credit Agreement provides for an unsecured revolving Credit Facility of $1.1 billion (“Credit Facility”) which matures on March 28, 2019 and retroactively amended the maximum consolidated leverage ratio effective January 1, 2015.  Under the terms of the Credit Agreement, we may be able to invite existing and new lenders to increase the amount available to be borrowed under the agreement by up to $350.0 million.  The Credit Agreement has a subfacility for the issuance of standby letters of credit in a face amount up to $750.0 million and a subfacility up to $300.0 million for multicurrency borrowings.Additional terms of our Credit Agreement are as follows:

· The definition of consolidated adjusted EBITDA allows the add back of cash restructuring charges in 2015 of up to $40 million plus a carryover of $26.7 million for cash restructuring charges incurred in year 2014.

· The maximum consolidated leverage ratio is 3.75xthrough the earlier of the end of the current fiscal year or the achievement of one or more offerings of preferred stock with aggregate proceeds of $200.0 million or more, after which the maximum consolidated leverage ratio returns to 3.25x for the rest of 2015 and 3.00x for 2016 and beyond.

· There is an increased applicable interest rate for loans outstanding under the Credit Agreement during any fiscal period for which the consolidated leverage ratio exceeds 3.25x.

· Certain repurchases by CH2M HILL of its common stock and preferred stock and payment of common stock dividends are subject to the following limits:

o Prior to the completion of one or more preferred equity issuances resulting in gross cash proceeds of not less than $200.0 million, the limit in 2015 is $45.0 million for repurchases of common stock offered for sale on the internal market plus $15.0 million for others subject to a pro forma 3.00x leverage threshold in 2015; notwithstanding the foregoing, legally required restricted payments may be allowed despite exceeding such limits;

o After the completion of one or more preferred equity issuances resulting in gross cash proceeds of not less than $200 million in 2015, the limit is $120.0 million in 2015;

o For 2016 and beyond, there is no limit on repurchases of common stock offered for sale on the internal market, and there is a$100 million limit for other repurchases of common stock, redemption of preferred stock and common dividends, subject to pro forma leverage of 2.75x.

· Up to 50% of the proceeds from asset sales can be utilized to repurchase common or preferred stock, subject to pro forma financial covenant compliance.

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As of March 27, 2015, we were in compliance with the covenants required by the Credit Agreement. There can be no assurance that the capacity under this facility will be adequate to fund future operations or future acquisitions that we may pursue from time to time.

At March 27, 2015, we had $468.8 million in outstanding borrowings on the Credit Facility, compared to $492.6 million at December 31, 2014. The average rate of interest charged on that balance was 1.76% as of March 27, 2015. At March 27, 2015, company-wide issued and outstanding letters of credit, and bank guarantee facilities of $173.9 million were outstanding, compared to $199.3 million at December 31, 2014.Our borrowing capacity under the Credit Facility is limited by a maximum consolidated leverage ratio, which is based on a multiple of an adjusted earnings before interest, taxes, depreciation and amortization calculation, and other outstanding obligations of the Company.  As of March 27, 2015, the remaining unused borrowing capacity under the Credit Facility was $354.0 million.

Depending on the applicable terms and conditions on new debt or equity offerings compared to the opportunity cost of using our internally generated cash, we may either choose to finance new opportunities using borrowings under our Credit Facility, other debt or equity financing. In some instances we may use a combination of one or more of these financing mechanisms.  Financing may not always be available to us on acceptable terms or at all.

The sale of additional equity, including preferred equity, could result in additional dilution to our stockholders.  If we raise additional funds by borrowing from third parties or by issuing preferred stock to third parties, the terms of those financing arrangements may include negative covenants  or other restrictions on our business that could impair our operating flexibility and would require us to incur interest and/or dividend expense.

Internal Market Trades 

CH2M HILL’s common stock trades on an internal market approximately four times per year. The next internal market trade date is expected to be in June 2015.  CH2M HILL determines whether to participate in the internal market on a quarterly basis. Prior to each quarterly trade date, we review the outstanding orders and any resulting imbalance between sell orders and buy orders and make a determination whether or not CH2M HILL should participate in the internal market by buying shares in order to balance the number of sell orders and buy orders. In making that determination, CH2M HILL’s management and Board of Directors consider relevant factors in light of prevailing circumstances, including our financial condition and results of operations, our available cash and capital resources, including the limits that CH2M HILL may spend on share repurchases and the borrowing capacity available pursuant to the terms of our existing unsecured revolving line of credit and other sources of liquidity, expected current and future needs for cash to fund our operations, anticipated contingencies and other factors.

CH2M HILL experienced project losses and other adverse operating results in recent periods, which has constrained our cash flow and liquidity.  In addition, CH2M HILL’s principal revolving credit facility includes a limitation on the amount CH2M HILL may spend to repurchase its common stock in connection with its employee stock ownership program and to make legally required repurchases of common stock held in benefit plan accounts in the third and fourth quarters of 2014 and in 2015. CH2M HILL’s management and Board of Directors could determine to limit the amount of money expended by the company to repurchase shares to balance the internal market, or not to participate in the internal market, either of which would result in proration of sell orders that stockholders may place for trades on the next trade date. In addition, CH2M HILL’s Board of Directors could determine to suspend trading on the internal market in order to provide time to evaluate the ability to adequately provide for proration and to conserve the company’s cash reserves and available liquidity.  For the past three trade dates, CH2M HILL limited the amount expended to repurchase shares to balance the internal market.  We expect that the amounts CH2M HILL will be able to spend to clear sell orders for the June 2015 trade date and the subsequent trade dates that are expected to occur in 2015 will continue to be severely restricted. CH2M HILL’s Board of Directors and management anticipate that the internal market will only partially clear, and some sell orders will be only partially filled, on such trade dates.

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For more information of the risks associated with the internal market, please see theriskfactors set forth in the CH2M HILL Annual Report on Form 10-K for the year ended December 31, 2014 under the headings Item 1A. Risk Factors—Risks Related to Our Internal Market and —Risks Related to Our Business.

Off-Balance Sheet Arrangements

We have interests in multiple joint ventures, some of which are unconsolidated variable interest entities, to facilitate the completion of contracts that are jointly performed 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.

There were no substantial changes to other off-balance sheet arrangements or contractual commitments in three months ended March 27, 2015, when compared to the disclosures provided in our Annual Report on Form 10-K for the year ended December 31, 2014.

Aggregate Contractual 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 bid bonds and performance and payment 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.

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 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 on 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.

The accounting policies that we believe are most critical to the understanding of our financial condition and results of operations and require complex management judgment are summarized below. Further detail and information regarding our critical accounting policies and estimates are included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Revenue Recognition

We earn revenue from different types of services performed under various types of contracts, including cost-plus, fixed-price and time-and-materials. We evaluate contractual arrangements to determine how to recognize revenue. We primarily perform engineering and construction related services and recognize 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 contract. In making such estimates, judgments are required to evaluate potential variances in schedule, the cost of materials and labor, productivity, liability claims, contract disputes, and achievement of contract performance standards. We record the cumulative effect of changes in contract revenue and cost at completion in the period in which the changed estimates are determined to be reliably estimable.

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Below is a description of the basic types of contracts from which we may earn revenue:

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, with an additional 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.

Included in the total contract value for cost-plus fee arrangements is the portion of the fee for which receipt is determined to be probable.  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 where direct costs incurred to date are compared to total projected direct costs at contract completion. 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.

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 is recognized under the percentage-of-completion method where costs incurred to date are compared to total projected costs at contract completion. Revenue on contracts that is not subject to maximum contract values is 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.

Operations and Maintenance Contracts.  A portion of our contracts are operations and maintenance type contracts.  Revenue is recognized on operations and maintenance contracts on a straight-line basis over the life of the contract once we have an arrangement, service has begun, the price is fixed or determinable and collectability is reasonably assured.

For all contract types noted above, 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 when the change order 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.

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. 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.

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 ultimate settlement. We record reserves for uncertain tax positions that do not meet this criterion.

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Goodwill

Goodwill represents the excess of costs over fair value of the assets of businesses we have acquired.  Goodwill acquired in a purchase business combination is not amortized, but instead, is tested for impairment at least annually in accordance with the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 350, Intangibles-Goodwill and Other (“ASC 350”), as amended under Accounting Standards Update 2011-08 (“ASU 2011-08”).  Our annual goodwill impairment test is conducted as of October 1st of each year, however, upon the occurrence of certain triggering events, we are also required to test for impairment at dates other than the annual impairment testing date.    In performing the annual impairment test, we evaluate our goodwill at the reporting unit level.  Under the guidance of ASC 350, we have the option to assess either quantitative or qualitative factors to determine whether it is more likely than not that the fair values of our reporting units are less than their carrying amounts.  If after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair values of our reporting units are less than their carrying amounts, then the next step of the impairment test is unnecessary.  If we conclude otherwise, then we are required to test goodwill for impairment under the two-step process.  The two-step process involves comparing the estimated fair value of each reporting unit to the unit’s carrying value, including goodwill.  If the carrying value of a reporting unit does not exceed its fair value, the goodwill of the reporting unit is not considered impaired; therefore, the second step of the impairment test is unnecessary.  If the carrying amount of a reporting unit exceeds its fair value, we would then perform a second step to measure the amount of goodwill impairment loss to be recorded.  We determine the fair value of our reporting units using a combination of the income approach, the market approach, and the cost approach.  The income approach calculates the present value of future cash flows based on assumptions and estimates derived from a review of our expected revenue growth rates, profit margins, business plans, and cost of capital and tax rates for the reporting units.  Our market based valuation method estimates the fair value of our reporting units by the application of a multiple to our estimate of a cash flow metric for each business unit.  The cost approach estimates the fair value of a reporting unit as the net replacement cost using current market quotes.

Pension and Postretirement Employee Benefits

The unfunded or overfunded projected benefit obligation of our defined benefit pension plans and other postretirement benefits are recorded in our consolidated financial statements using actuarial valuations that are based on many assumptions. These assumptions primarily include discount rates, rates of compensation increases for participants, mortality rates, and long term rates of return on plan assets. We use judgment in selecting these assumptions each year because we have to consider not only the current economic environment in each host country, but also future market trends, changes in interest rates and equity market performance. Changes in these assumptions have an immaterial impact on our net periodic pension costs as most of our defined benefit arrangements have been closed to new entrants and ceased future accruals.  Under current accounting guidance, any increase in expense resulting from changes in assumptions is recognized over time.

We also use these assumptions as well as applicable regulatory requirements, tax deductibility, reporting considerations and other factors to determine the appropriate funding levels.

Recently Adopted Accounting Standards

See Note 1 of the Notes to Consolidated Financial Statements.

Commitments and Contingencies

See Note 13 of the Notes to Consolidated Financial Statements.

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Item 3.  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 operate in many countries around the world and as a result, are exposed to foreign currency exchange rate risk on transactions in numerous countries. We are primarily subject to this risk on long-term projects whereby the currency being paid by our client differs from the currency in which we incurred our costs, as well as intercompany trade balances among our entities with differing currencies.  Foreign currency translation adjustments included in our comprehensive loss were$15.1 million and $8.1 million for the quarters ended March 27, 2015 and March 31, 2014, respectively.  The $7.0 million increase to other comprehensive loss was driven by the strengthening of the U.S. Dollar against the Australian dollar, the British Pound, the Canadian Dollar, and the Euro.

In order to mitigate this risk, we enter into derivative financial instruments. We do not enter into derivative transactions for speculative or trading purposes. All derivatives are carried at fair value in the consolidated balance sheets and changes in the fair value of the derivative instruments are recognized in earnings. These currency derivative instruments are carried on the balance sheet at fair value and are based upon Level 2 inputs including third-party quotes. As of March 27, 2015, we had $1.3 million of derivative liabilities on outstanding foreign exchange contracts outstanding.

Interest rates.  Our interest rate exposure is generally limited to our unsecured revolving Credit Facility. As of March 27, 2015, the outstanding balance on the unsecured revolving Credit Facility was $468.8 million. We have assessed the market risk exposure on this financial instrument and determined that any significant changes to the fair value of this instrument 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 Credit Facility, a one percentage point change in the assumed interest rate would change our annual interest expense by approximately $4.7 million.

Item 4.  Controls and Procedures

We carried out an evaluation as of the last day of the period covered by this Quarterly Report on Form 10-Q, 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, as amended (“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 March 27, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Part II. OTHER INFORMATION

Item 1. Legal Proceedings

We are party to various legal actions arising in the normal course of business. Because a large portion of our business comes from U.S. federal, state and municipal sources, our procurement and certain other practices at times are subject to review and investigation by various agencies of the U.S. government 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

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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 or alternatively could result in settlement. Damages assessed in connection with and the cost of defending any such actions could be substantial. While the outcomes of pending proceedings and legal actions are often difficult to predict, management believes that proceedings and legal actions currently pending would not result in a material adverse effect on our results of operations or financial condition even if the final outcome is adverse to our company.

Many claims that are currently pending against us are covered by our professional liability insurance. Management estimates that the levels of insurance coverage (after retentions and deductibles) are generally adequate to cover our liabilities, if any, with regard to such claims. Any amounts that are probable of payment are accrued when such amounts are estimable.

In 2010, we were notified that the U.S. Attorney’s Office for the Eastern District of Washington was investigating overtime practices in connection with the U.S. Department of Energy Hanford tank farms management contract which we transitioned to another contractor in 2008. In 2011 and 2012, eight former CH2M HILL Hanford Group (“CH2M HILL Subsidiary”) employees pleaded guilty to felony charges related to time card fraud committed while working on the Hanford Tank Farm Project. As part of its investigation, the U.S. Attorney’s Office raised the possibility of violations of the civil False Claims Act and criminal charges for possible violations of federal criminal statutes arising from CH2M HILL’s Subsidiary overtime practices on the project. In September 2012, the government intervened in a civil False Claims Act case filed in the District Court for the Eastern District of Washington by one of the employees who plead guilty to time card fraud. In March 2013, we entered into a Non-Prosecution Agreement (“NPA”) concluding the criminal investigation so long as we comply with the terms of the NPA. The NPA requires us to comply with ongoing requirements for three years after the effective date. By a separate agreement, we obtained dismissal of the civil False Claims Act case. We paid $18.5 million in total under both agreements. As a result, no criminal charges were brought against CH2M HILL Subsidiary or any CH2M HILL entities, and the civil False Claims Act case was dismissed.

In the three months ended March 27, 2015, there have been no material developments to other proceedings and legal actions as compared to the legal proceedings disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

The following table covers the purchases of our common shares by our company not previously reported during the three months ended March 27, 2015.

\
				Total Number of Shares	Maximum Number of Shares
	Total Number of	Average Price		Purchased as Part of Publicly	that May Yet Be Purchased
Period	Shares Purchased	Paid per Share		Announced Plans or Programs	Under the Plans or Programs
January (a)	4	$	45.93	-	-
February	-		-	-	-
March (b)	226,279		47.73	-	-
Total	226,283		47.73	-	-

(a) Shares purchased by CH2M HILL from terminated employees.

(b) Shares purchased by CH2M HILL in the Internal Market.

Item 5.  Other Information

Disclosure of Iranian Activities Under Section 13(r) of the Securities Exchange Act of 1934

As previously disclosed, we acquired Halcrow, a U.K. engineering consulting company, in November 2011. Halcrow provides services to clients worldwide and, prior to the acquisition, Halcrow had a small presence in Iran. As a condition of the acquisition, we required Halcrow and its subsidiaries to terminate all activities in Iran.

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Halcrow undertook expedient steps to withdraw all operational activities from Iran. In order to complete the remaining wind-down activities in accordance with applicable laws in the United States and the European Union, Halcrow applied for and received specific licenses from the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury and from Her Majesty’s Treasury (“HMT”) in the United Kingdom.

During the first quarter of 2015, CH2M HILL did not conduct any additional wind-down operations, as the specific licenses covering the wind-down activities in Iran had expired in November 2014.  Accordingly, no net profits were attributable to any wind-down activities in the first quarter of 2015.  Halcrow was informed by the Former Iranian Client, however, that it had retained an amount from a project completed by Halcrow in 2009 and was prepared to remit the balance of the retained amount to Halcrow and release two outstanding bank guarantees issued to the Former Iranian Client by Bank Melli, a Specially Designated National designated under Executive Order 13628.

In order to allow Halcrow to effectuate the transactions necessary to receive the retained amount and discharge the bank guarantees as part of the wind-down activities, Halcrow expects to apply for new specific licenses from OFAC and HMT to provide authorization to finalize the termination of the two guarantees issued for the Former Iranian Client by Bank Melli. Once all remaining wind-down activities are complete in accordance with the authorizations received from OFAC and HMT, Halcrow does not intend to continue such activities.

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Item 6.  Exhibits

Exhibit Index

3.1	Restated Certificate of Incorporation of CH2M HILL Companies, Ltd. (filed as Exhibit 3.1 to CH2M HILL’s Form 8-K on February 19, 2015 (Commission File No. 000-27261), and incorporated herein by reference)
3.2	Amended and Restated Bylaws of CH2M HILL Companies, Ltd. (filed as Exhibit 3.2 to CH2M HILL’s Form 8-K on April 3, 2015 (Commission File No. 000-27261), and incorporated herein by reference)
*10.1	Second Amendment to Credit Agreement, dated as of March 30, 2015, by and among CH2M HILL Companies, Ltd. and certain of its subsidiaries, Wells Fargo Bank, National Association, and other lenders as party thereto
*31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
*32.1	Certification of Chief Executive Officer pursuant to the requirements set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350)
*32.2	Certification of Chief Financial Officer pursuant to the requirements set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350)
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

*Filed herewith

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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 6, 2015	/s/ GARY L. MCARTHUR
	Gary L. McArthur
	Chief Financial Officer

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EX-10.1

Exhibit 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT

This Second Amendment to Credit Agreement (this “Amendment”), dated as of March 30, 2015, is by and among CH2M HILL COMPANIES, LTD., a Delaware corporation (the “Parent”), CH2M HILL, INC., a Florida corporation (“CH2M Inc.”), OPERATIONS MANAGEMENT INTERNATIONAL, INC., a California corporation (“OMI”), CH2M HILL ENGINEERS, INC., a Delaware corporation (“CH2M Engineers”), CH2M HILL GLOBAL, INC., a Delaware corporation (“CH2M Global”), CH2M HILL CONSTRUCTORS, INC., a Delaware corporation (“CH2M Constructors”), and CHVENG, LLC, a Delaware limited liability company (“CHVENG,” and together with the Parent, CH2M Inc., OMI, CH2M Engineers, CH2M Global and CH2M Constructors, each a “Borrower,” and, collectively, the “Borrowers”), the subsidiaries of the Borrowers party hereto (the “Subsidiary Guarantors”), the Lenders (as defined below) party hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION, as administrative agent on behalf of the Lenders under the Credit Agreement (as hereinafter defined) (in such capacity, the “Administrative Agent”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement.

The Borrowers, the Subsidiary Guarantors, certain banks and financial institutions from time to time party thereto (the “Lenders”) and the Administrative Agent are parties to that certain Second Amended and Restated Credit Agreement dated as of March 28, 2014, as amended by a First Amendment to Credit Agreement dated as of September 26, 2014 (as so amended, and as the same may be further amended, modified, extended, restated, replaced, or supplemented from time to time, the “Credit Agreement”);

The Loan Parties have requested that the Required Lenders amend certain provisions of the Credit Agreement; and

The Required Lenders are willing to make such amendments to the Credit Agreement, in accordance with and subject to the terms and conditions set forth herein.

Accordingly, in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are acknowledged, the parties hereto agree as follows:

ARTICLE I
AMENDMENTS TO CREDIT AGREEMENT

1.1New Definitions; Unused Definitions; Inconsistent Terms.  

(a)The following definitions are added to Section 1.01 of the Credit Agreement in the correct alphabetical order:

“Aggregate Commitments” means Aggregate Revolving Credit Commitments.

“FY2015” means the Fiscal Year ending on the last Friday in December 2015.

“Interim Period” means the period from January 1, 2015 through the earlier of (i) achievement of the Target Preferred Equity Offering, and (ii) the end of FY2015.

“Second Amendment Effective Date” means March 30, 2015.

“Target Preferred Equity Offering” means the completion of one or more transactions after the Second Amendment Effective Date and prior to the end of FY2015 resulting in the

issuance of preferred equity of the Parent in exchange for gross cash proceeds to the Parent of not less than $200,000,000, but only so long as no Default or Event of Default is caused thereby.

(b)The following definitions are deleted from Section 1.01 of the Credit Agreement: “Alternative Currency Equivalent”; “Credit Application”; “Enterprise Upgrade”; “Event of Loss”; “FASB ASC”; “First Amendment Effective Date”; “Permitted Receivables Financing Documents”; and “Same Day Funds”.

(c)The term “Aggregate Revolving Commitments” is replaced in Section 2.07 of the Credit Agreement with the term “Aggregate Revolving Credit Commitments”.

(d)The term “Consolidated Fixed Charge Coverage” is replaced in each instance in Section 1.02(i) of the Credit Agreement with the term “Consolidated Fixed Charge Coverage Ratio”.

(e)The term “Eurocurrency Rate Loan” is replaced in each instance in the definition of Eurodollar Rate in Section 1.01 of the Credit Agreement with the term “Eurodollar Rate Loan.”

(f)The term “Eurodollar Base Rate” is replaced in each instance in Sections 3.03 and 3.05 of the Credit Agreement with the term “Eurodollar Rate”.

(g)The term “Eurodollar Loan” is replaced in each instance in the definition of Credit Extension in Section 1.01 of the Credit Agreement with the term “Eurodollar Rate Loan.”

(h)The term “Lender Parties” is replaced in Section 8.03 of the Credit Agreement with the term “Lending Parties”.

(i) The term “Maturity Date” is replaced in each instance in Sections 7.03(i)(B) and 7.03(q) of the Credit Agreement with the term “Revolving Credit Maturity Date”.

(j)The term “Revolving Loans” is replaced in Section 10.01 of the Credit Agreement with the term “Revolving Credit Loans”.

1.2Amendment to Definition of Applicable Rate. The definition of Applicable Rate set forth in Section 1.01 of the Credit Agreement is amended and restated in its entirety to read as follows:

“Applicable Rate” means, (a) at all times during the Interim Period, and as included in the computation of the rate of interest for Eurodollar Rate Loans or Base Rate Loans or in the computation of Revolving Credit Commitment Fees, as the context requires and as otherwise provided in this Agreement, the applicable rate percentage per annum set forth in the grid below, each such percentage being based, subject to Section 2.09(d), upon the corresponding Consolidated Leverage Ratio maintained by the Parent, as determined by Administrative Agent, in its Reasonable Discretion, as of the end of the most recent Fiscal Period for which the Borrowers have furnished a Compliance Certificate to Administrative Agent and the Lenders pursuant to Section 6.01(c):

Pricing Level (Tier)	Consolidated Leverage Ratio	Applicable Rate For Eurodollar Rate Loans	Applicable Rate For Base Rate Loans	Applicable Rate For Revolving Credit Commitment Fees
I	≥3.25	2.375%	0.875%	0.350%
II	≥2.75 but <3.25	1.875%	0.375%	0.350%
III	≥2.25 but <2.75	1.625%	0.125%	0.300%

IV	≥1.75 but <2.25	1.500%	0.000%	0.250%
V	≥1.25 but <1.75	1.375%	0.000%	0.200%
VI	≥0.75 but <1.25	1.250%	0.000%	0.175%
VII	<0.75	1.125%	0.000%	0.150%

; and (b) at all other times, and as included in the computation of the rate of interest for Eurodollar Rate Loans or Base Rate Loans or in the computation of Revolving Credit Commitment Fees, as the context requires and as otherwise provided in this Agreement, the applicable rate percentage per annum set forth in the grid below, each such percentage being based, subject to Section 2.09(d), upon the corresponding Consolidated Leverage Ratio maintained by the Parent, as determined by Administrative Agent, in its Reasonable Discretion, as of the end of the most recent Fiscal Period for which the Borrowers have furnished a Compliance Certificate to Administrative Agent and the Lenders pursuant to Section 6.01(c):

Pricing Level (Tier)	Consolidated Leverage Ratio	Applicable Rate For Eurodollar Rate Loans	Applicable Rate For Base Rate Loans	Applicable Rate For Revolving Credit Commitment Fees
I	≥2.75	1.875%	0.375%	0.350%
II	≥ 2.25 but < 2.75	1.625%	0.125%	0.300%
III	≥1.75 but < 2.25	1.500%	0.000%	0.250%
IV	≥ 1.25 but < 1.75	1.375%	0.000%	0.200%
V	≥ 0.75 but < 1.25	1.250%	0.000%	0.175%
VI	< 0.75	1.125%	0.000%	0.150%

Notwithstanding anything to the contrary contained in this definition, the determination of the Applicable Rate for any period and at any time will be subject to the provisions of Section 2.09(d).

1.3Amendment to Definition of Eligible Assignee. The definition of Eligible Assignee in Section 1.01 of the Credit Agreement is amended and restated in its entirety to read as follows:

“Eligible Assignee” means any of the following: (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund and (d) any other Person (other than a natural person) approved by (i) Administrative Agent, (ii) in the case of an assignment of a Revolving Credit Commitment, Swing Line Lender and L/C Issuer and (iii) unless an Event of Default has occurred and is continuing (in which event the Administrative Borrower’s approval will not be required), the Administrative Borrower (each of which approvals shall not be unreasonably withheld or delayed; provided, however, that the approval of the Administrative Borrower shall be deemed to have been granted unless the Administrative Borrower objects thereto by written notice to Administrative Agent

within five Business Days after having received notice thereof); provided that, notwithstanding the foregoing, “Eligible Assignee” will not include (1) any Loan Party or any Subsidiary or other Affiliate of any Loan Party or (2) any Defaulting Lender.

1.4Amendment to Definition of Permitted Receivables Financing. The definition of Permitted Receivables Financing set forth in Section 1.01 of the Credit Agreement is hereby amended by replacing the word “Default” contained therein with the phrase “Default or Event of Default”.

1.5Amendment to Definition of Eurodollar Rate. The definition of Eurodollar Rate set forth in Section 1.01 of the Credit Agreement is hereby amended to add the following new sentence to the end thereof: “Notwithstanding the foregoing, if the Eurodollar Rate for any Interest Period shall be less than zero, the Eurodollar Rate for such Interest Period shall be deemed to be zero for purposes of this Agreement.”

1.6Amendment to Definitions of Fiscal Period, Fiscal Year and Material Subsidiary. The definitions of “Fiscal Period,” “Fiscal Year” and “Material Subsidiary” in Section 1.01 of the Credit Agreement are amended and restated in their entirety to read as follows:

“Fiscal Period”means, as of any date of determination with respect to the Parent or any Subsidiary thereof, each fiscal quarter of the Parent ending (i) on March 31, June 30, September 30 and December 31 of each applicable Fiscal Year through and including the Fiscal Year ended on December 31, 2014, and (ii) on the last Friday of March, June, September and December of each applicable Fiscal Year thereafter.

“Fiscal Year” means each fiscal year of the Parent ending (i) on December 31 of each calendar year through and including December 31, 2014, and (ii) on the last Friday of December of each calendar year thereafter.

“Material Subsidiary” means, as of any date, each direct or indirect wholly owned Subsidiary of the Parent whose gross revenues for the preceding Fiscal Year, calculated as of the end of such Fiscal Year, were greater than $200,000,000.

1.7Amendment to Section 7.05(i). Section 7.05(i) of the Credit Agreement is amended by replacing the word “Default” contained therein with the phrase “Default or Event of Default”.

1.8Amendment to Section 7.06(b). Section 7.06(b) of the Credit Agreement is amended and restated in its entirety to read as follows:

(b)in the case of the Parent, Parent may declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, in respect of:

(i)repurchases of its common stock offered for sale on the limited market (also known as the internal market) referred to in the “special provisions relative to stock” set forth in the Parent’s bylaws, as those bylaws are in effect as of the Closing Date; provided, that, at the time of making each such Restricted Payment and after giving effect to such Restricted Payment, the aggregate amount of repurchases made in cash pursuant to this clause (b)(i) shall not exceed (A) during the period from July 1, 2014 through December 31, 2014 (the “2014 Payment Period”), an amount equal to (1) $45,000,000 minus (2) the aggregate amount of Legally Required Restricted Payments made in cash during the 2014 Payment Period through such time, and (B) during FY2015, an amount equal to (1) $45,000,000 minus (2) the lesser of (A) the aggregate amount of Legally Required Restricted Payments made in cash during FY2015 through such time, or (B) $45,000,000;

(ii)Legally Required Restricted Payments;

(iii)Restricted Payments made in connection with and strictly for (A) payments on or repurchases of common stock issued by the Parent (including dividends on the Parent’s common stock but excluding Restricted Payments made pursuant to clauses (i) or (ii) above) or (B) redemptions of preferred stock issued by the Parent (excluding any dividends on such preferred stock), in each case so long as, at the time of making each such Restricted Payment and after giving effect to such Restricted Payment, (1) the aggregate amount of all such Restricted Payments in any Fiscal Year pursuant to this clause (iii) does not exceed (a) during FY2015, $15,000,000, minus the first $15,000,000 of Legally Required Restricted Payments made in cash in excess of $45,000,000 during FY2015 through such time, or (b) during any other Fiscal Year, $100,000,000, (2) no Default or Event of Default has occurred and is continuing or would result therefrom, (3) the cash distribution and payment thereof is in compliance with Section 6.07, (4) after giving effect to any such Restricted Payment pursuant to this clause (iii) on a pro forma basis, the Consolidated Leverage Ratio, determined as of the last day of the Fiscal Period most recently ended before such Restricted Payment for which the Parent has delivered financial statements pursuant to Section 6.01(a) or Section 6.01(b), is less than or equal to (y) 3.00:1.00, if the last day of such Fiscal Period is on or before December 31, 2015 and (z) 2.75:1.00, if the last day of such Fiscal Period is after December 31, 2015 and (5) with respect to any such Restricted Payment made pursuant to this clause (iii) at any time on or prior to December 31, 2015, both before and after giving effect to such Restricted Payment, the Borrowers shall demonstrate pro forma compliance with the financial covenants set forth in Section 7.14; provided, that, to the extent the aggregate amount of all Restricted Payments made pursuant to this clause (iii) in any Fiscal Period exceed $5,000,000 (and subsequent to crossing such threshold, each time the aggregate amount of all additional payments in any Fiscal Period exceeds an increment of $5,000,000), the Borrowers shall concurrently provide a certificate executed by a Responsible Officer of the Parent evidencing compliance with the leverage ratio requirements set forth in clause (4) above and, if applicable, compliance with the financial covenant requirement set forth in clause (5) above;

(iv)Restricted Payments made in connection with the repurchase by the Parent of shares of its common stock or preferred stock in an aggregate amount not to exceed an amount equal to 50% of the cash proceeds received in connection with any Asset Disposition net of taxes paid as a result of such Asset Disposition (after taking into account any available tax credit or deductions and any tax sharing arrangements) so long as, after giving effect to any such Restricted Payment pursuant to this clause (iv), (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) the Borrowers shall demonstrate pro forma compliance with the financial covenants set forth in Section 7.14 determined as of the last day of the Fiscal Period most recently ended before such Restricted Payment for which the Parent has delivered financial statements pursuant to Section 6.01(a) or Section 6.01(b);

(v)Restricted Payments consisting of dividends on the Parent’s preferred stock so long as after giving effect to any such Restricted Payment pursuant to this clause (v), (A) no Default or Event of Default has occurred and is continuing or would result therefrom and (B) the Borrowers shall demonstrate pro forma compliance with the financial covenants set forth in Section 7.14 determined as of the last day of the Fiscal Period most recently ended before such Restricted Payment for which the Parent has delivered financial statements pursuant to Section 6.01(a) or Section 6.01(b);

(vi)Restricted Payments made (A) solely in Equity Interests of the Parent or (B) in an aggregate amount equal to the amount of proceeds received by the Parent from the issue of new Equity Interests of the Parent, so long as (1) after giving effect to any such Restricted Payment pursuant to this clause (vi), the Borrowers shall demonstrate pro forma compliance with the financial covenants set forth in Section 7.14 determined as of the last day of the Fiscal Period most recently ended before such Restricted Payment for which the Parent has delivered financial statements pursuant to Section 6.01(a) or Section 6.01(b), and (2) in the case of any Restricted Payment made pursuant to clause (B) of this clause (vi) during FY2015, (a) such Restricted Payment is not made prior to achievement of the Target Preferred Equity Offering, and (b) at the time of making each such Restricted Payment and after giving effect to such Restricted Payment, the aggregate amount of all Restricted Payments made under clauses (i), (ii), (iii) and (vi)(B) of this Section 7.06(b) during FY2015 through such time does not exceed $120,000,000;

(vii)Restricted Payments made pursuant to any shareholder rights plan adopted for the purpose of protecting shareholders from takeover tactics (and solely to the extent that such Restricted Payments are made in furtherance of such purpose) ; provided, that, with respect to any Restricted Payment made pursuant to this clause (vii) at any time on or prior to December 31, 2015, the Borrowers shall demonstrate pro forma compliance with the financial covenants set forth in Section 7.14 determined as of the last day of the Fiscal Period most recently ended before such Restricted Payment for which the Parent has delivered financial statements pursuant to Section 6.01(a) or Section 6.01(b); and

(viii)Restricted Payments made by the Parent in connection with the net exercise by holders of options or warrants or similar securities, or in connection with the withholding or payment of taxes upon the vesting of restricted stock, stock appreciation rights or similar securities of the Parent.

1.9Amendment to Section 7.12. Section 7.12 of the Credit Agreement is amended and restated in its entirety to read as follows:

7.12ACCOUNTING CHANGES.

Make any change in (a) accounting policies or financial reporting practices or (b) the Fiscal Year, in each case except as required by GAAP, as contemplated by the definitions of “Fiscal Period” and “Fiscal Year” or as required to implement any such change.

1.10Amendments to Section 7.14.  Section 7.14 of the Credit Agreement is amended and restated in its entirety to read as follows:

(a)Minimum Consolidated Fixed Charge Coverage Ratio.  Permit the Consolidated Fixed Charge Coverage Ratio, as determined as of the last day of each Fiscal Period, to be less than 1.50:1.00.

(b) Maximum Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio to exceed (i) 3.75:1.00, as determined as of the last day of each Fiscal Period during the Interim Period, (ii) 3.25:1.00, as determined as of the last day of each Fiscal Period (if any) ending after the Interim Period and on or before December 31, 2015, or (iii) 3.00:1.00, as determined as of the last day of each Fiscal Period ending after December 31, 2015; provided that, following the date on which the aggregate amount of all Qualified Acquisitions consummated during the prior twelve month period is equal to or greater than $150,000,000, the Consolidated Leverage Ratio at the end of each of the four (4) Fiscal Periods following such date, shall be no greater than 3.25:1.00.

1.11Amendment to Compliance Certificate. Schedule 1 to Exhibit B of the Credit Agreement is amended and restated to read as set forth in Exhibit A hereto.

ARTICLE II
CONDITIONS TO EFFECTIVENESS

2.1Closing Conditions. The amendments set forth in Article I of this Amendment shall become effective as of the date first set forth above (the “Second Amendment Effective Date”) upon satisfaction of the following conditions (in each case, in form and substance reasonably acceptable to the Administrative Agent):

(a)Executed Amendment. The Administrative Agent shall have received a copy of this Amendment duly executed by each of the Loan Parties, the Required Lenders and the Administrative Agent.

(b)Fees and Expenses.

(i)The Administrative Agent shall have received from the Borrowers, for the account of each Lender that executes and delivers a signature page to the Administrative Agent at or before 5 p.m. (New York City time) on March 30, 2015 (each such Lender, a “Consenting Lender”, and collectively, the “Consenting Lenders”), an amendment fee in an amount equal to 0.15% of the Aggregate Revolving Credit Commitments at 5 p.m. (New York City time) on such date. Such fee shall be deemed fully earned by the Consenting Lenders upon the execution and delivery of this Amendment by the Borrowers and the Required Lenders.

(ii)(A) The Administrative Agent shall have received from the Borrowers such fees and expenses as are payable pursuant to the letter agreement of even date herewith between the Administrative Agent and the Borrowers (which letter agreement shall be deemed a “Fee Letter” for purposes of the Credit Agreement), and (B) Faegre Baker Daniels LLP shall have received from the Borrowers payment of all outstanding fees and expenses incurred in connection with the Loan Documents, including this Second Amendment, in each case to the extent invoiced to the Lender on or prior to Second Amendment Effective Date.

(c)Miscellaneous. All other documents and legal matters in connection with the transactions contemplated by this Amendment shall be reasonably satisfactory in form and substance to the Administrative Agent and its counsel.

ARTICLE III
RELEASE

Each Loan Party hereby waives, releases, relinquishes and forever discharges the Administrative Agent and each Lending Party, and all past and present directors, officers, agents, employees, parents, subsidiaries, affiliates, insurers, attorneys, representatives and assigns of any Lending Party, and each and all thereof (collectively, the “Released Parties”), of and from any and all manner of action or causes of action, suits, claims, demands, judgments, damages, levies, and the execution of whatsoever kind, nature and/or description arising on or before the date hereof, including, without limitation, any claims, losses, costs or damages, including compensatory and punitive damages, in each case whether known or unknown, liquidated or unliquidated, fixed or contingent, direct or indirect, which any Loan Party ever had or now has or may claim to have against any of the Released Parties arising out of or in any way related to the Credit Agreement, the other Loan Documents, any related document or the transactions contemplated by any of the foregoing.

ARTICLE IV
MISCELLANEOUS

4.1Amended Terms. On and after the Second Amendment Effective Date, all references to the Credit Agreement in each of the Loan Documents shall hereafter mean the Credit Agreement as amended by this Amendment. Except as specifically amended by this Amendment or otherwise agreed, the Credit Agreement is ratified and confirmed and shall remain in full force and effect according to its terms.

4.2Representations and Warranties of Loan Parties. Each of the Loan Parties represents and warrants as follows:

(a)It has taken all necessary corporate and other organizational action to authorize the execution, delivery and performance of this Amendment.

(b)This Amendment has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligation, enforceable in accordance with its terms, except as enforcement thereof may be limited by Bankruptcy Laws or other applicable Laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

(c)No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority (other than the filing of a Form 8-K with the SEC after the date hereof) or any other Person is required in connection with the execution, delivery or performance by such Person of this Amendment.

(d)The representations and warranties set forth in Article V of the Credit Agreement are true and correct in all material respects (except that such materiality qualifier will not be applicable to any portion of any representation and warranty that is already qualified or modified by materiality in the text thereof) as of the date hereof, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they will be true and correct in all material respects (except that such materiality qualifier will not be applicable to any portion of any representation and warranty that is already qualified or modified by materiality in the text thereof) as of such earlier date, and except the representations and warranties contained in Section 5.10 of the Credit Agreement will be deemed to refer to the most recent statements furnished pursuant to Section 6.01(a) and (b) of the Credit Agreement.

(e)After giving effect to this Amendment, no event has occurred and is continuing which constitutes a Default or an Event of Default.

(f)Except as amended by this Amendment, the Obligations are not reduced or modified by this Amendment and are not subject to any offsets, defenses or counterclaims.

4.3Reaffirmation of Obligations. Each Loan Party ratifies the Credit Agreement as amended by this Amendment and acknowledges and reaffirms (a) that it is bound by all terms of the Credit Agreement as so amended applicable to it and (b) that it is responsible for the observance and full performance of its respective Obligations.

4.4Loan Document. This Amendment shall constitute a Loan Document under the terms of the Credit Agreement.

4.5Further Assurances. The Loan Parties agree to promptly take such action, upon the request of the Administrative Agent, as is necessary to carry out the intent of this Amendment.

4.6Entirety. This Amendment and the other Loan Documents embody the entire agreement among the parties hereto relating to the subject matter hereof and thereof and supersede all previous documents, agreements and understandings, oral or written, relating to the subject matter hereof and thereof.

4.7Counterparts; Telecopy. This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which when so executed and delivered will constitute an original, but all of which when taken together will constitute a single contract. Delivery of an executed counterpart to this Amendment by telecopy or other electronic means shall be effective as an original and shall constitute a representation that an original will be delivered.

4.8No Actions, Claims, Etc. As of the date hereof, each of the Loan Parties acknowledges and confirms that it has no knowledge of any actions, causes of action, claims, demands, damages and liabilities of whatever kind or nature, in law or in equity, against the Administrative Agent, the Lenders, or the Administrative Agent’s or the Lenders’ respective officers, employees, representatives, agents, counsel or directors arising from any action by such Persons, or failure of such Persons to act under the Credit Agreement on or prior to the date hereof.

4.9GOVERNING LAW. THIS AMENDMENT WILL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW OTHER THAN NEW YORK GENERAL OBLIGATIONS LAW 5-1401 AND 5-1402.

4.10Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

4.11Consent to Jurisdiction; Service of Process; Waiver of Jury Trial. The jurisdiction, service of process and waiver of jury trial provisions set forth in Sections 10.18 and 10.20 of the Credit Agreement are incorporated into this Amendment by reference, mutatis mutandis.

Signature pages follow.

IN WITNESS WHEREOF the parties hereto have caused this Amendment to be duly executed on the date first above written.

Borrowers:

CH2M HILL Companies, Ltd.	CH2M HILL, Inc.
By:  /s/ Steven Mathews____________	By:  /s/ Steven Mathews___________
Name:  Steven Mathews	Name: Steven Mathews
Title: Treasurer and Authorized Signatory	Title: Treasurer and Authorized Signatory
Operations Management International, Inc.	CH2M HILL Engineers, Inc.
By:  /s/s Allan Chow_________________	By:  /s/ Steven Mathews___________
Name:  Allan Chow	Name: Steven Mathews
Title:  Treasurer and Authorized Signatory	Title: Treasurer and Authorized Signatory
CH2M HILL Global, Inc.	CH2M HILL Constructors, Inc.
By:  /s/ Steven Mathews______________	By:  _/s/ Allan Chow_____________
Name:  Steven Mathews	Name:  Allan Chow
Title:  Treasurer and Authorized Signatory	Title:  Treasurer and Authorized Signatory
CHVENG, LLC
By:  /s/ Steven Mathews_______________
Name:  Steven Mathews
Title:  Treasurer and Authorized Signatory

Subsidiary Guarantors:

CH2M HILL International, Ltd

By:  /s/ Steven Mathews____________

Name:  Steven Matthews

Title:  Treasurer and Authorized Signatory

CH2M HILL Alaska, Inc.

By:  _/s/ Steven Mathews___________

Name:  Steven Matthews

Title:  Treasurer and Authorized Signatory

CH2M HILL Plateau Remediation Company

By:  /s/ Steven Mathews____________

Name:  Steven Mathews

Title:  Treasurer and Authorized Signatory

Administrative Agent:

Wells Fargo Bank, National Association,

in its capacity as Administrative Agent and a Lender

By:  /s/ Kristine Netjes_________________

Name:  Kristine Netjes

Title:  Senior Vice President

RBS Citizens, N.A.

By:  /s/ Andre A. Nazareth____________

Name:  Andre A. Nazareth

Title:  Senior Vice President

The Northern Trust Company

By:  /s/ Molly Brennan____________

Name:  Molly Brennan___________

Title:  Senior Vice President_______

HSBC Bank USA, N.A.

By:  /s/ Patrick M. Hanley_________

Name:  _Patrick M. Hanley_________

Title:  Senior Vice President________

U.S. Bank National Association

By:  /s/ Jeff Benedix_______________

Name:  _Jeff Benedix_____________

Title:  _Vice President_____________

Lenders:

BNP Paribas

By: /s/ Jamie Dillon_____________

Name:  Jamie Dillon___________

Title:  Managing Director________

By: /s/ Mary-Ann Wong__________

Name: Mary-Ann Wong_________

Title:  Vice President___________

Bank Of The West

By:  /s/ Terry Switz____________________

Name:  _Terry Switz___________________

Title:  _Vice President__________________

JPMorgan Chase Bank, N.A.

By:  /s/ Laura Woodward__________

Name:  Laura Woodward__________

Title:  ___Officer________________

The Bank of Tokyo-Mitsubishi UFJ, LTD.

By:  /s/ Thomas Danielson________

Name:  _Thomas Danielson_______

Title:  _Authorized Signatory______

Bank of America, N.A.

By:  /s/ Stuart Bonano________________

Name:  Stuart Bonano_______________

Title:  _Director____________________

BMO Harris N.A.

By:  /s/ Shakrokh Shah________________

Name:  Shakrokh Shah_______________

Title:  Managing Director_____________

CH2M HILL, INC.

Amendment to credit agreement

Exhibit A to Second Amendment to Credit Agreement

(amending Schedule 1 to Exhibit B to the Credit Agreement)

SCHEDULE 1 TO COMPLIANCE CERTIFICATE

Dated, 201_
FINANCIAL COVENANTS OF BORROWER

I.Minimum Consolidated Fixed Charge Coverage Ratio (Section 7.14(a)). Not permit the Consolidated Fixed Charge Coverage Ratio, as determined as of the last day of each Fiscal Period, to be less than 1.50:1.00.

a.		Consolidated Adjusted EBITDA (calculated as follows for such period:)
	i.		Consolidated Net Income	$
	ii.		Consolidated Interest Expense	$
	iii.		amounts treated as expenses for such period for depreciation and the amortization of intangibles of any kind	$
	iv.		Federal, state, local and foreign taxes on or measured by income accrued by the Parent and its Consolidated Subsidiaries during such period net of any Federal, state, local and foreign income tax credits of the Parent and its Consolidated Subsidiaries for such period	$
	v.		expenses associated with the non-cash portion of all share-based compensation	$
	vi.		charges related to:
			(A)  restructuring	$
			(B)  asset impairment	$
			(C)  non-cash estimate project losses (including non- extraordinary items)	$
	vii.		other (A) extraordinary expenses	$
			(B) non-recurring expenses actually paid in cash during such period in an aggregate amount not to exceed $10,000,000 in any Fiscal Year	$
	viii.		to the extent included in Line I(a)(vi),cash payments related to:

CH2M HILL, INC.

Amendment to credit agreement

			(A)  restructuring	$
			(B)  asset impairment	$
			(C)  non-cash estimate project losses (including non- extraordinary items)	$
	ix.		to the extent included in calculating Consolidated Net Income, other
			(A) extraordinary gains	$
			(B) non-recurring gains	$
	x.		Consolidated Adjusted EBITDA (the sum of Lines I(a)(i) through I(a)(vii) minus, Lines I(a)(viii) through I(a)(ix))	$
b.		Consolidated Lease Expense		$
c.		Consolidated Adjusted EBITDAR (Line I(a)(x) plus Line I(b))		$
d.		Consolidated Interest Expense (from Line I(a)(ii))		$
e.		Current Portion of Consolidated Long Term Debt		$
f.		cash dividends accrued on preferred stock, to the extent that such preferred stock is treated as equity pursuant toGAAP		$
		Consolidated Fixed Charge Coverage Ratio (Line I(c) divided by the sum of Line I(b), Line I(d), Line I(e) andLine
		I(f)		$
		:1.00

Annex A attached hereto contains all calculations supporting the amounts reported above for the four consecutive Fiscal Periods ending on the date hereof.

II.Maximum Consolidated Leverage Ratio (Section 7.14(b)). Not permit the Consolidated Leverage Ratio to exceed (i) 3.75:1.00, as determined as of the last day of each Fiscal Period during the Interim Period, or (ii) 3.00:1.00, as determined as of the last day of each Fiscal Period thereafter; provided that, following the date on which the aggregate amount of all Qualified Acquisitions consummated during the prior twelve month period is equal to or greater than $150,000,000, the Consolidated Leverage Ratio at the end of each of the four (4) Fiscal Periods following such date, shall be no greater than 3.25:1.00.

CH2M HILL, INC.

Amendment to credit agreement

a.		Numerator in definition of Consolidated Leverage Ratio (calculated as follows for such period):
	i.		outstanding principal amount of all obligations, whether current or long term, for borrowed money (including all Obligations under the Credit Agreement) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments		$
	ii.		direct obligations arising under letters of credit (whether standby or commercial), bankers’ acceptances, bank guaranties and other financial guarantees (to include (A) all issued and outstanding Performance Credits which have a face amount that equals or exceeds $20,000,000 and (B), with respect to each outstanding JV Letter of Credit, only the portion of the JV Letter of Credit Face Amount thereof that is recourse to the Borrowers, determined in accordance with Section 2.04(k) of the Credit Agreement)		$
	iii.		Attributable Debt in respect of all Capitalized Leases		$
	iv.		without duplication, all Guarantees with respect to outstanding Indebtedness of the types specified in Lines II(a)(i) through II(a)(iii)		$
	v.		all obligations in respect of Disqualified Equity Interests which became due during the period ending on the date of this Certificate		$
	vi.		all Indebtedness of the types referred to in Items II(a)(I) through II(a)(v) of any partnership or Joint Venture (other than a Joint Venture that is itself a corporation or limited liability company) in which the Parent or any of its Consolidated Subsidiaries is a general partner or joint venturer, unless such Indebtedness is expressly made nonrecourse to the Parent or such Subsidiaries		$
	vii.		Consolidated Total Funded Debt (the sum of Lines II(a)(i) through II(a)(vi))		$
b.		Denominator in definition of Consolidated Leverage Ratio (calculated as follows for such period):			$
				Consolidated Adjusted EBITDA(from Line I(a)(x))	$
c.		Consolidated Leverage Ratio (Line II(a)(vii) divided by Line II(b)(i))			$

CH2M HILL, INC.

Amendment to credit agreement

Annex B attached hereto contains all calculations supporting the amounts reported above for the four consecutive Fiscal Periods ending on the date hereof.

EX-31.1

Exhibit 31.1

CERTIFICATION

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

I, Jacqueline C. Hinman, certify that:

1.I have reviewed this quarterly report on Form 10-Q 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 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 quarter 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: May 6, 2015

/s/ JACQUELINE C. HINMAN

Jacqueline C. Hinman

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

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

I, Gary L. McArthur, certify that:

1.I have reviewed this quarterly report on Form 10-Q 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 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 quarter 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: May 6, 2015

/s/ GARY L. MCARTHUR

Gary L. McArthur

Chief Financial Officer

EX-32.1

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 Quarterly Report of CH2M HILL Companies, Ltd. (the “Company”) on Form 10-Q for the quarterly period ended March 27, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jacqueline C. Hinman, 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/ JACQUELINE C. HINMAN

Jacqueline C. Hinman

Chief Executive Officer

May 6, 2015

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.

EX-32.2

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 Quarterly Report of CH2M HILL Companies, Ltd. (the “Company”) on Form 10-Q for the quarterly period ended March 27, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gary L. McArthur, 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/ GARY L. MCARTHUR

Gary L. McArthur

Chief Financial Officer

May 6, 2015

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.

XML

Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Mar. 27, 2015	Dec. 31, 2014
Carrying Amount | Mortgage notes payable
Carrying value and estimated fair value of financial instruments
Long-term debt	$ 8,217	$ 8,682
Carrying Amount | Equipment financing
Carrying value and estimated fair value of financial instruments
Long-term debt	10,630	11,392
Fair Value | Level 2 | Mortgage notes payable
Carrying value and estimated fair value of financial instruments
Long-term debt	7,669	7,925
Fair Value | Level 2 | Equipment financing
Carrying value and estimated fair value of financial instruments
Long-term debt	$ 10,056	$ 10,747

XML

Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 27, 2015	Mar. 31, 2014
Numerator:
Net income (loss) attributable to CH2M HILL	$ 23,498	$ (6,092)
Denominator:
Basic weighted-average common shares outstanding	27,363,496	28,809,022
Dilutive effect of common stock equivalents (in shares)	23,000
Diluted adjusted weighted-average common shares outstanding, assuming conversion of common stock equivalents	27,385,943	28,809,022
Basic net income (loss) per common share (in dollars per share)	$ 0.86	$ (0.21)
Diluted net income (loss) per common share (in dollars per share)	$ 0.86	$ (0.21)
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	1,900,000	2,200,000

XML

Property, Plant and Equipment (Tables)

3 Months Ended

Mar. 27, 2015

Property, Plant and Equipment

Schedule of property, plant and equipment

	March 27,		December 31,
($ in thousands)	2015		2014
Land	$	9,539	$	21,044
Building and land improvements		102,248		98,972
Furniture and fixtures		27,076		27,531
Computer and office equipment		156,230		158,022
Field equipment		141,792		140,542
Leasehold improvements		76,042		80,871
		512,927		526,982
Less: Accumulated depreciation		(273,240)		(268,822)
Net property, plant and equipment	$	239,687	$	258,160

XML

Income Taxes (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 27, 2015	Mar. 31, 2014	Dec. 31, 2014
Income taxes
Effective tax rate (as a percent)	28.80%	38.90%
Undistributed earnings of foreign subsidiaries	$ 402.4		$ 331.2
Liability for uncertain tax positions and accrued interest	30.9		34.2
Accrued interest and penalties related to uncertain tax positions	$ 6.6		$ 7.0

XML

Goodwill and Intangible Assets Amortization (Details) (USD $)	3 Months Ended
	Mar. 27, 2015	Mar. 31, 2014	Dec. 31, 2014
Intangible assets with finite lives
Cost	$ 283,584,000		$ 292,014,000
Accumulated Amortization	(203,965,000)		(200,635,000)
Net finite-lived intangible assets	79,619,000		91,379,000
Finite-lived intangible assets
Amortization expense	7,200,000	9,100,000
Minimum
Finite-lived intangible assets
Useful lives of intangible assets	1 year
Maximum
Finite-lived intangible assets
Useful lives of intangible assets	10 years
Contracted backlog
Intangible assets with finite lives
Cost	87,783,000		89,313,000
Accumulated Amortization	(85,138,000)		(84,349,000)
Net finite-lived intangible assets	2,645,000		4,964,000
Customer relationships
Intangible assets with finite lives
Cost	191,236,000		197,910,000
Accumulated Amortization	(114,618,000)		(111,970,000)
Net finite-lived intangible assets	76,618,000		85,940,000
Tradename
Intangible assets with finite lives
Cost	4,565,000		4,791,000
Accumulated Amortization	(4,209,000)		(4,316,000)
Net finite-lived intangible assets	$ 356,000		$ 475,000

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Segment Information

3 Months Ended

Mar. 27, 2015

Segment Information

Segment Information

(3) Segment Information

During 2014, we implemented certain significant organizational changes, including the manner in which our operations are managed and utilized a matrix organization of business groups, geographic regions and service lines.  In the first quarter of 2015, we refined this structure, and continued to reorganize our internal reporting structure by making changes to better facilitate our continued growth, client-centric service, and operational efficiency.  In connection with this refinement, we continued to reevaluate the manner in which our Chief Operating Decision Maker (“CODM”) reviews operating results and makes key business decisions.  Our CODM is our executive management committee that meets regularly to evaluate operating results and allocate our financial and operational resources.  As part of the reevaluation in 2015, we determined that our CODM primarily reviews financial operating results by business group, and as such,we have identified each of our five business groups as reportable operating segments: Environment and Nuclear; Industrial and Urban Environments (“IUE”); Oil, Gas and Chemicals; Transportation; and Water.  Additionally, although the Power group falls within the IUE business group, we have identified Power as a separate reportable operating segment as we are currently in the process of exiting the Power business and as such the results of this group are being monitored apart from the rest of the business group.

Certain financial information relating to the three months ended March 27, 2015 and March 31, 2014 for each segment is provided below.  Costs for corporate general and administrative expenses, restructuring costs and amortization expense related to intangible assets have been allocated based upon the estimated allocation to each segment based on the benefits provided by corporate functions.  This allocation is primarily based upon metrics that reflect the proportionate volume of project-related activity and employee labor costs within each segment.  Prior year amounts have been revised to conform to the current year presentation.

	Three Months Ended March 27, 2015
	Environment		Industrial		Oil, Gas
	and		and Urban		and								Consolidated
($ in thousands)	Nuclear		Environments		Chemicals		Transportation		Water		Power		Balances
Gross revenue	$	359,407	$	118,889	$	213,952	$	235,782	$	300,313	$	35,643	$	1,263,986
Equity in earnings of joint ventures and affiliated companies		6,704		977		26		2,497		1,146		-		11,350
Operating income (loss)		16,547		462		7,604		(4,319)		20,626		(55)		40,865

	Three Months Ended March 31, 2014
	Environment		Industrial		Oil, Gas
	and		and Urban		and								Consolidated
($ in thousands)	Nuclear		Environments		Chemicals		Transportation		Water		Power		Balances
Gross revenue	$	350,540	$	110,470	$	204,669	$	234,908	$	305,337	$	73,525	$	1,279,449
Equity in earnings of joint ventures and affiliated companies		13,101		858		38		4,905		385		-		19,287
Operating income (loss)		17,281		(6,216)		958		10,154		24,188		(55,911)		(9,546)

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Restructuring and Related Charges (Details) (USD $)	3 Months Ended
	Mar. 27, 2015
Restructuring Charges
Pre-tax restructuring charges	$ 78,400,000
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period	16,480,000
Provision	7,951,000
Cash Payments	(9,347,000)
Balance at the end of the period	15,084,000
Maximum
Restructuring Charges
Pre-tax restructuring charges	32,000,000
Employee severance and termination benefits
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period	1,060,000
Provision	2,918,000
Cash Payments	(3,978,000)
Facilities Cost
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period	15,000,000
Provision	1,417,000
Cash Payments	(1,333,000)
Balance at the end of the period	15,084,000
Other Expense
Restructuring Reserve [Roll Forward]
Balance at the beginning of the period	420,000
Provision	3,616,000
Cash Payments	$ (4,036,000)

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Summary of Business and Significant Accounting Policies (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 27, 2015	Mar. 31, 2014
Stockholders Equity
Stockholders' equity, balance at beginning of period (in shares)	27,323,570
Shares issued in connection with stock-based compensation and employee benefit plans (in shares)	287,000
Shares purchased and retired (in shares)	(296,000)
Stockholders' equity, balance at end of period (in shares)	27,315,258
Balance	$ 87,568
Net loss attributable to CH2M HILL	23,498	(6,092)
Shares issued in connection with stock-based compensation and employee benefit plans	8,982
Shares purchased and retired	(10,035)
Other comprehensive loss, net of tax	(12,540)	(7,137)
Income attributable to noncontrolling interests	4,007	(2,785)
Net contributions from noncontrolling interests	6,805
Balance	$ 108,285
Maximum
Intangible Assets
Useful lives of intangible assets	10 years

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Restructuring and Related Charges (Tables)

3 Months Ended

Mar. 27, 2015

Restructuring and Related Charges

Schedule of restructuring charges

	Voluntary Early		Employee Severance
	Retirement		and Termination
($ in thousands)	Program		Benefits		Facilities Cost		Other		Total
Balance at December 31, 2014	$	—	$	1,060	$	15,000	$	420	$	16,480
Provision		—		2,918		1,417		3,616		7,951
Cash Payments		—		(3,978)		(1,333)		(4,036)		(9,347)
Non-cash settlements		—		—		—		—		—
Balance at March 27, 2015	$	—	$	—	$	15,084	$	—	$	15,084

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Commitments and Contingencies Loss Contingencies (Details) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended	12 Months Ended
	Sep. 30, 2012 employee	Mar. 27, 2015	Dec. 31, 2012 employee	Dec. 31, 2011 employee	Dec. 31, 2014
Commitments and Contingencies
Accruals for potential estimated claim liabilities		$ 18.7			$ 16.3
Number of former employees who pleaded guilty in United States District Court			8	8
Number of former employees involved in civil False Claims Act case filed in the District Court for the Eastern District of Washington	1
Term required to comply with ongoing requirements under the Non-Prosecution Agreement		3 years
Legal settlement payment in total under both agreements		18.5
Criminal charges		$ 0

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Summary of Business and Significant Accounting Policies Matching Contributions (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 27, 2015	Mar. 31, 2014
Summary of Business and Significant Accounting Policies
Maximum employer match to the 401(k) Plan after amendment (as a percent)	6.00%
Expenses related to matching contributions and defined contributions made in common stock for the 401(k) Plan	$ 6.9	$ 12.3

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Changes in Project-Related Estimates (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		12 Months Ended
	Mar. 27, 2015	Mar. 31, 2014	Dec. 31, 2014
Changes in project-related estimates
Reserves for project related losses	$ 206.5		$ 222.4
Reserves for project related losses attributable to the noncontrolling interest	80.6		91.8
Fixed Price Contract | Southwestern United States
Changes in project-related estimates
Charge to operations due to changes in cost estimates	11.0	0
Fixed Price Contract | Northeastern United States
Changes in project-related estimates
Charge to operations due to changes in cost estimates	0	52.5
Consortium Contract | Australia
Changes in project-related estimates
Charge to operations due to changes in cost estimates	0	0	280.0
Loss recorded			140.0
Reserves for project related losses	161.2		183.7
Reserves for project related losses attributable to the noncontrolling interest	80.6		91.8
Corporate Joint Venture [Member] | Consortium Contract | Australia
Changes in project-related estimates
Ownership percentage in the joint venture partnership	50.00%
Total contract value of the project allocated to the joint venture	$ 460
Percentage of completion of the project	40.00%

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Changes in Project-Related Estimates

3 Months Ended

Mar. 27, 2015

Changes in Project-Related Estimates

Changes in Project Related Estimates Disclosure

(2) Changes in Project-Related Estimates

During the first quarter of 2015, we experienced additional cost growth on a Transportation fixed-price contract to design and construct roadway improvements on an expressway in the southwestern United States.  The cost growth was primarily caused by vendor and subcontractor quotes that were received in the quarter which were greater than the amounts previously estimated.  As a result of these changes in estimate, a charge to operations was recorded totaling $11.0 million for the three months ended March 27, 2015.  There wasno charge to operations for changes in estimate for the three months ended March 31, 2014.  Management is assessing the recovery of cost overruns and schedule delays caused from client requested design and construction changes; however, at this time it is not possible to estimate these recoveries.  It is reasonably possible that we could incur additional costs and losses if our cost estimation processes identify new costs not previously included in our total estimated loss or if our plans to meet our revised schedule are not achieved resulting in liquidating damages being assessed by the client.  These potential changes in estimates could be materially adverse to the Company’s results of operations.

Within our Power segment, we are involved in a fixed-price project in Australia through a consolidated 50/50 joint venture partnership with an Australian construction contractor to engineer, procure, construct and start-up a combined cycle power plant that will supply power to a large liquefied natural gas facility in Australia.  As of March 27, 2015, the total contract value of the joint venture project wasapproximately $460 million, and the project was approximately 40% complete, with engineering and procurement nearing completion and construction activities ramping up.  Due to a variety of issues related to the joint venture scope of work identified, we recognized changes in estimated contract costs that resulted in charges to operations of $280.0 million during 2014, which represents the total expected loss of the joint venture project at completion.  Our portion of the loss, which was recorded in 2014, totaled $140.0 million.  None of these charges to operations occurred in the three months ended March 31, 2014, and no further cost growth has occurred in 2015.  As of March 27, 2015 and December 31, 2014, the reserve for project losses included in other current liabilities for this project was $161.2 million and $183.7 million, respectively.Of the amounts included in the March 27, 2015 and December 31, 2014 balances, $80.6 million and $91.8 million, respectively, relate to accrued project losses attributable to, and payable by, the noncontrolling joint venture partner.  Management believes the project has suffered from substantial client interference related to numerous design changes, delays in providing timely access to site delivery facilities and access to certain construction materials.  These items have resulted in a significant increase in the cost to complete the project as well as a delay in the start of construction activities and possibly the ultimate delivery of the power facility.  While management believes the current estimated cost to complete the project represents the best estimate at this time, there is a significant amount of work that still needs to be performed on the project before achieving substantial completion, and thus there can be no assurance that additional cost growth will not occur.  Management is currently in substantive negotiations with the client and is vigorously pursuing recovery of costs and schedule impacts with the assistance of external legal and commercial claims specialists.  A settlement, if reached, could reduce the joint venture’s total anticipated loss at completion.  Management believes it will gain a better understanding during 2015 of whether a negotiated settlement is possible, and, if so, how the terms of such settlement would impact the joint venture’s estimated costs at completion.  However, if these recovery steps are not successful, we might not be reimbursed by the client for previously incurred or potential future cost overruns, and the joint venture might be assessed potential liquidated damages in excess of amounts already included in the current estimated loss at completion.

During 2014, we experienced significant cost growth on a fixed-price Power contract to design and construct a new power generation facility in the northeastern United States.  These increases in costs resulted from multiple sources including a substantial decline in union labor productivity, poor subcontractor performance and the impacts of schedule delays caused by the above items and severe weather in the northeastern United States.  The effect of these changes in estimates resulted in a charge to operations totaling $52.5 million in the three months ended March 31, 2014.  There were no additional charges to operations in the first quarter of 2015 as the project achieved substantial completion in 2014.  Management is seeking recovery of a portion of the total project loss from the client, including relief from a portion of the liquidated damages assessed by the client through the date of substantial completion due to client interference and other remedies under the terms of the contract. There can be no assurance we will be successful in obtaining such recoveries.

All reserves for project related losses are included in other current liabilities and totaled $206.5 million and $222.4 million as of March 27, 2015 and December 31, 2014, respectively.  Of the amounts included in the March 27, 2015 and December 31, 2014 balances, $80.6 million and $91.8 million, respectively, relate to accrued project losses attributable to, and payable by, the noncontrolling joint venture partner.

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 27, 2015 segment	Mar. 31, 2014	Dec. 31, 2014
Segment information
Number of reportable operating segments	5
Gross revenue	$ 1,263,986	$ 1,279,449
Equity in earnings of joint ventures and affiliated companies	11,350	19,287
Operating income (loss)	40,865	(9,546)
Total assets	2,823,121		2,941,302
Environmental and Nuclear
Segment information
Gross revenue	359,407	350,540
Equity in earnings of joint ventures and affiliated companies	6,704	13,101
Operating income (loss)	16,547	17,281
Industrial and Urban Environments
Segment information
Gross revenue	118,889	110,470
Equity in earnings of joint ventures and affiliated companies	977	858
Operating income (loss)	462	(6,216)
Oil Gas and Chemicals
Segment information
Gross revenue	213,952	204,669
Equity in earnings of joint ventures and affiliated companies	26	38
Operating income (loss)	7,604	958
Transportation
Segment information
Gross revenue	235,782	234,908
Equity in earnings of joint ventures and affiliated companies	2,497	4,905
Operating income (loss)	(4,319)	10,154
Water
Segment information
Gross revenue	300,313	305,337
Equity in earnings of joint ventures and affiliated companies	1,146	385
Operating income (loss)	20,626	24,188
Power
Segment information
Gross revenue	35,643	73,525
Operating income (loss)	$ (55)	$ (55,911)

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Fair Value of Financial Instruments Foreign Exchange Contracts (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 27, 2015 instrument
Derivative financial instruments
Number of instruments that extend beyond 5 years	0
Derivative Liabilities	$ 1.3
Derivative, Gain (Loss) on Derivative, Net	$ 1.3
Forward foreign exchange contracts | Maximum
Derivative financial instruments
Term of forward foreign exchange contracts	1 year

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 27, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 134,339	$ 131,477
Receivables, net-
Client accounts	665,277	697,168
Unbilled revenue	635,552	660,227
Other	26,154	22,447
Income tax receivable	9,351	31,369
Deferred income taxes	9,246	5,968
Prepaid expenses and other current assets	73,184	74,413
Total current assets	1,553,103	1,623,069
Investments in unconsolidated affiliates	96,707	94,340
Property, plant and equipment, net	239,687	258,160
Goodwill	514,840	533,975
Intangible assets, net	79,619	91,379
Deferred income taxes	255,480	250,055
Employee benefit plan assets and other	83,685	90,324
Total assets	2,823,121	2,941,302
Current liabilities:
Current portion of long-term debt	4,548	5,028
Accounts payable and accrued subcontractor costs	483,087	530,822
Billings in excess of revenue	310,932	336,063
Accrued payroll and employee related liabilities	328,728	289,330
Other accrued liabilities	364,870	406,991
Total current liabilities	1,492,165	1,568,234
Long-term employee related liabilities	642,939	671,581
Long-term debt	483,496	508,021
Other long-term liabilities	96,236	105,898
Total liabilities	2,714,836	2,853,734
Commitments and contingencies (Note 13)
Stockholders' equity:
Preferred stock, Class A $0.01 par value, 50,000,000 shares authorized; none issued
Common stock, $0.01 par value, 100,000,000 shares authorized; 27,315,258 and 27,323,570 issued and outstanding at March 27, 2015 and December 31, 2014, respectively	273	273
Retained earnings	507,287	484,842
Accumulated other comprehensive loss	(284,897)	(272,357)
Total CH2M HILL stockholders' equity	222,663	212,758
Noncontrolling interests	(114,378)	(125,190)
Total stockholders' equity	108,285	87,568
Total liabilities and stockholders' equity	$ 2,823,121	$ 2,941,302

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 27, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net income (loss)	$ 27,505	$ (8,877)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	19,164	18,922
Stock-based employee compensation	8,982	13,884
(Gain) loss on disposal of property, plant and equipment	(813)	171
Allowance for uncollectible accounts	74	225
Deferred income taxes	(9,390)	4,102
Undistributed earnings from unconsolidated affiliates	(11,350)	(19,287)
Distributions of income from unconsolidated affiliates	9,305	12,017
Contributions to defined benefit pension plans	(8,484)	(9,802)
Changes in current assets and liabilities, net of businesses acquired:
Receivables and unbilled revenue	38,295	84,388
Prepaid expenses and other	5,993	(5,228)
Accounts payable and accrued subcontractor costs	(43,856)	(72,373)
Billings in excess of revenue	(20,436)	(32,212)
Accrued payroll and employee related liabilities	42,265	(14,935)
Other accrued liabilities	(32,392)	16,952
Current income taxes	21,558	(14,110)
Long term employee related liabilities and other	(5,436)	4,710
Net cash provided by (used in) operating activities	40,984	(21,453)
Cash flows from investing activities:
Capital expenditures	(6,302)	(21,664)
Investments in unconsolidated affiliates	(7,388)	(2,095)
Distributions of capital from unconsolidated affiliates	4,848	7,073
Proceeds from sale of operating assets	11,839
Net cash provided by (used in) investing activities	2,997	(16,686)
Cash flows from financing activities:
Borrowings on long-term debt	591,210	452,925
Payments on long-term debt	(616,149)	(359,306)
Repurchases and retirements of common stock	(13,111)	(44,111)
Excess tax benefits from stock-based compensation	3,075	2,823
Net distributions from (to) noncontrolling interests	6,805	(830)
Net cash (used in) provided by financing activities	(28,170)	51,501
Effect of exchange rate changes on cash	(12,949)	(4,275)
Increase in cash and cash equivalents	2,862	9,087
Cash and cash equivalents, beginning of year	131,477	294,261
Cash and cash equivalents, end of year	134,339	303,348
Supplemental disclosures:
Cash paid for interest	3,894	3,774
Cash paid (refunded) for income taxes	$ 3,893	$ (2,773)

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Acquisitions (Details) (TERA Environmental Consultants Member, USD $) In Millions, unless otherwise specified	0 Months Ended	3 Months Ended
	Apr. 04, 2014	Mar. 27, 2015
TERA Environmental Consultants Member
Business Combination, Consideration Transferred
Total consideration	$ 119.6
Revenue		18.9
Operating income		$ 2.7

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Segment Information (Tables)

3 Months Ended

Mar. 27, 2015

Segment Information

Schedule of financial information related to segments

	Three Months Ended March 27, 2015
	Environment		Industrial		Oil, Gas
	and		and Urban		and								Consolidated
($ in thousands)	Nuclear		Environments		Chemicals		Transportation		Water		Power		Balances
Gross revenue	$	359,407	$	118,889	$	213,952	$	235,782	$	300,313	$	35,643	$	1,263,986
Equity in earnings of joint ventures and affiliated companies		6,704		977		26		2,497		1,146		-		11,350
Operating income (loss)		16,547		462		7,604		(4,319)		20,626		(55)		40,865

	Three Months Ended March 31, 2014
	Environment		Industrial		Oil, Gas
	and		and Urban		and								Consolidated
($ in thousands)	Nuclear		Environments		Chemicals		Transportation		Water		Power		Balances
Gross revenue	$	350,540	$	110,470	$	204,669	$	234,908	$	305,337	$	73,525	$	1,279,449
Equity in earnings of joint ventures and affiliated companies		13,101		858		38		4,905		385		-		19,287
Operating income (loss)		17,281		(6,216)		958		10,154		24,188		(55,911)		(9,546)

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Goodwill and Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 27, 2015
Changes in goodwill
Balance at December 31, 2014	$ 533,975
Foreign currency translation	(19,135)
Balance at March 27, 2015	$ 514,840

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Goodwill and Intangible Assets (Tables)

3 Months Ended

Mar. 27, 2015

Goodwill and Intangible Assets

Schedule of changes in goodwill

($ in thousands)	Goodwill
Balance at December 31, 2014	$	533,975
Acquisitions		—
Impairment loss		—
Foreign currency translation		(19,135)
Balance at March 27, 2015	$	514,840

Schedule of components of finite-lived intangible assets

			Accumulated		Net finite-lived
($ in thousands)	Cost		Amortization		intangible assets
March 27, 2015
Contracted backlog	$	87,783	$	(85,138)	$	2,645
Customer relationships		191,236		(114,618)		76,618
Tradename		4,565		(4,209)		356
Total finite-lived intangible assets	$	283,584	$	(203,965)	$	79,619
December 31, 2014
Contracted backlog	$	89,313	$	(84,349)	$	4,964
Customer relationships		197,910		(111,970)		85,940
Tradename		4,791		(4,316)		475
Total finite-lived intangible assets	$	292,014	$	(200,635)	$	91,379

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Summary of Business and Significant Accounting Policies

3 Months Ended

Mar. 27, 2015

Summary of Business and Significant Accounting Policies

Summary of Business and Significant Accounting Policies

(1) Summary of Business and Significant Accounting Policies

Summary of Business

CH2M HILL Companies, Ltd. and subsidiaries (“We”, “Our”, “CH2M HILL” or the “Company”) is a project delivery firm founded in 1946. We are a large employee controlled professional engineering services firm providing engineering, construction, consulting, design, design build, procurement, engineering procurement construction (“EPC”), operations and maintenance, program management and technical services to U.S. federal, state, municipal and local government agencies, national governments, as well as private industry and utilities, around the world. A substantial portion of our professional fees are derived from projects that are funded directly or indirectly by government entities.

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and according to instructions to Form 10-Q and the provisions of Article 10 of Regulation S-X that are applicable to interim financial statements. Accordingly, these statements do not include all of the information required by GAAP or the Securities and Exchange Commission (“SEC”) rules and regulations for annual audited financial statements. The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and assumptions have been prepared on the basis of the most current and best available information. Actual results could differ from those estimates.

In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. These unaudited interim consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Change in Fiscal Year End

On March 30, 2015, in order to accommodate our financial accounting systems and the timely gathering and reporting of financial information, we changed our reporting period from a calendar year ending on December 31 of each year to a fiscal year ending on the last Friday of December of each year.  Our fiscal quarters will also end on the last Friday of March, June, and September.  This change has been retroactively applied as if it was adopted as of January 1, 2015.  The change in fiscal year-end did not have a material effect on the comparability of the periods presented.

Revenue Recognition

We earn revenue from different types of services performed under various types of contracts, including cost-plus, fixed-price and time-and-materials. We evaluate contractual arrangements to determine how to recognize revenue. We primarily perform engineering and construction related services and recognize 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 contract. In making such estimates, judgments are required to evaluate potential variances in schedule, the cost of materials and labor, productivity, liability claims, contract disputes, and achievement of contract performance standards. We record the cumulative effect of changes in contract revenue and cost at completion in the period in which the changed estimates are determined to be reliably estimable.

Below is a description of the basic types of contracts from which we may earn revenue:

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, with an additional 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. 

Included in the total contract value for cost-plus fee arrangements is the portion of the fee for which receipt is determined to be probable.  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 where direct costs incurred to date are compared to total projected direct costs at contract completion. 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.

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 is recognized under the percentage-of-completion method where costs incurred to date are compared to total projected costs at contract completion. Revenue on contracts that is not subject to maximum contract values is 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.

Operations and Maintenance Contracts.  A portion of our contracts are operations and maintenance type contracts.  Revenue is recognized on operations and maintenance contracts on a straight-line basis over the life of the contract once we have an arrangement, service has begun, the price is fixed or determinable and collectability is reasonably assured.

For all contract types noted above, 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 when the change order 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.

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.  A significant portion of our billings in excess balance relates to excess billings on design-build projects.  These projects often require us to order significant project materials and equipment in advance, and we request payment in advance from our clients to cover these costs.  As the projects near completion and our suppliers complete the construction of these components and we complete the installation, the billings in excess balance declines.

Fair Value Measurements

Fair value represents the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities are valued based upon observable and non-observable inputs. Valuations using Level 1 inputs are based on unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 inputs utilize significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly; and valuations using Level 3 inputs are based on significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. There were no significant transfers between levels during the quarters ended March 27, 2015 and March 31, 2014.

Restructuring Related Costs

We account for costs associated with restructuring activities in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 420, Exit or Disposal Cost Obligations.  An exit activity includes but is not limited to a restructuring, such as a sale or termination of a line of business, the closure of business activities in a particular location, the relocation of business activities from one location to another, changes in management structure, and a fundamental reorganization that affects the nature and focus of operations.  The Company recognizes a liability and the related expense for restructuring costs when the liability is incurred and can be measured.  Restructuring accruals are based upon management estimates at the time they are recorded and can change depending upon changes in facts and circumstances subsequent to the date the original liability was recorded.  Nonretirement postemployment benefits offered as special termination benefits to employees, such as a voluntary early retirement program, are recognized as a liability and a loss when the employee accepts the offer and the amount can be reasonably estimated in accordance with ASC Topic 712, Compensation-Nonretirement Postemployment Benefits.

Goodwill

Goodwill represents the excess of costs over fair value of the assets of businesses we have acquired.  Goodwill acquired in a purchase business combination is not amortized, but instead, is tested for impairment at least annually in accordance with the provisions of ASC Topic 350, Intangibles-Goodwill and Other (“ASC 350”), as amended under Accounting Standards Update 2011-08 (“ASU 2011-08”).  Upon the occurrence of certain triggering events, we are also required to test for impairment at dates other than the annual impairment testing date.  In performing the impairment test, we evaluate our goodwill at the reporting unit level.  Under the guidance of ASC 350, we have the option to assess either quantitative or qualitative factors to determine whether it is more likely than not that the fair values of our reporting units are less than their carrying amounts.  If after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair values of our reporting units are less than their carrying amounts, then the next step of the impairment test is unnecessary.  If we conclude otherwise, then we are required to test goodwill for impairment under the two-step process. 

The two-step process involves comparing the estimated fair value of each reporting unit to the unit’s carrying value, including goodwill.  If the carrying value of a reporting unit does not exceed its fair value, the goodwill of the reporting unit is not considered impaired; therefore, the second step of the impairment test is unnecessary.  If the carrying amount of a reporting unit exceeds its fair value, we would then perform a second step to measure the amount of goodwill impairment loss to be recorded.  We determine the fair value of our reporting units using a combination of the income approach, the market approach, and the cost approach.  The income approach calculates the present value of future cash flows based on assumptions and estimates derived from a review of our expected revenue growth rates, profit margins, business plans, cost of capital and tax rates for the reporting units.  Our market based valuation method estimates the fair value of our reporting units by the application of a multiple to our estimate of a cash flow metric for each business unit.  The cost approach estimates the fair value of a reporting unit as the fair value of its assets net of the fair value of its liabilities.

Intangible Assets

We may acquire other intangible assets in business combinations. Intangible assets are stated at fair value as of the date they are acquired in a business combination. We amortize intangible assets with finite lives on a straight-line basis over their expected useful lives, currently up to ten years.  We test our intangible assets for impairment in the period in which a triggering event or change in circumstance indicates that the carrying amount of the intangible asset may not be recoverable.  If the carrying amount of the intangible asset exceeds the fair value, an impairment loss will be recognized in the amount of the excess.  We determine the fair value of the intangible assets using a discounted cash flow approach.

Derivative Instruments

We primarily enter into derivative financial instruments to mitigate exposures to changing foreign currency exchange rates. We are primarily subject to this risk on long-term projects whereby the currency being paid by our client differs from the currency in which we incurred our costs, as well as intercompany trade balances among entities with differing currencies. We do not enter into derivative transactions for speculative or trading purposes. All derivatives are carried at fair value on the consolidated balance sheets in other receivables or accounts payable and accrued subcontractor costs as applicable. The periodic change in the fair value of the derivative instruments is recognized in earnings within general and administrative expense.

Stockholders’ Equity

The changes in stockholders’ equity for the three months endedMarch 27, 2015 are as follows (in thousands):

	Shares	Amount
Stockholders’ equity, December 31, 2014	27,324	$	87,568
Net income attributable to CH2M HILL	—		23,498
Shares issued in connection with stock-based compensation and employee benefit plans	287		8,982
Shares purchased and retired	(296)		(10,035)
Other comprehensive loss, net of tax	—		(12,540)
Income attributable to noncontrolling interests	—		4,007
Net contributions from noncontrolling interests	—		6,805
Stockholders’ equity, March 27, 2015	27,315	$	108,285

Retirement and Tax-Deferred Savings Plan

The Retirement and Tax Deferred Savings Plan is a retirement 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 and provides benefits to eligible employees upon retirement. In September 2012, our Board of Directors approved the CH2M HILL Companies, Ltd. Amended and Restated 401(k) Plan which became effective January 1, 2013 (“401(k) Plan”). The 401(k) Plan allows for matching contributions up to 6% of employee’s base compensation, although specific subsidiaries may have different limits on employer matching. The matching contributions may be made in both cash and/or stock.  Expenses related to matching contributions made in common stock for the 401(k) Plan for the three months endedMarch 27, 2015 and March 31, 2014 were $6.9 million and $12.3 million, respectively.

Recently Adopted Accounting Standards

In April 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-04, Compensation – Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets.  ASU 2015-04 provides a practical expedient for entities with defined benefit plan assets and obligations whose fiscal years and interim periods do not coincide with a month-end. The ASU allows these entities to use the month-end that is closest to the entity’s fiscal year-end or interim period-end for measuring the defined benefit plan assets and obligations if the practical expedient is applied consistently to all plans and each year.  However, if a contribution or significant event (such as a plan amendment, settlement, or curtailment that calls for a remeasurement in accordance with existing requirements) occurs between the month-end date used to measure defined benefit plan assets and obligations and an entity’s fiscal year-end or interim period-end, the entity should adjust the measurement of defined benefit plan assets and obligations to reflect the effects of those contributions or significant events. Entities are required to disclose the accounting policy election and the date used to measure the defined benefit plan assets and obligations.  ASU 2015-04 will be effective for financial statements issued for fiscal years beginning after December 15, 2015, with earlier election permitted, and the application of the amendment should be applied prospectively.  CH2M HILL will early elect this ASU for our fiscal year ending December 25, 2015.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides updated consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. This ASU requires that all legal entities be subject to reevaluation under the revised consolidation model. ASU 2015-02 will be effective for annual and interim periods beginning after December 15, 2015.  CH2M HILL is currently evaluating the impact of this ASU on its financial position and results of operations.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  The ASU requires that management evaluate for each annual and interim reporting period whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued.  If there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, additional disclosures are required, even if the substantial doubt is alleviated as a result of consideration of management’s plans.  This ASU is effective for annual and interim periods beginning after December 15, 2016, and early adoption is permitted.  We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This ASU is a comprehensive new revenue recognition model that is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.  The ASU also requires additional quantitative and qualitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The FASB has proposed to defer the effective date of this ASU for reporting periods beginning after December 15, 2017. Companies may use either a full retrospective or a modified retrospective approach to adopt this ASU.  CH2M HILL is currently evaluating the impact of this ASU and the transition alternatives on its financial position and results of operations.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 27, 2015	Dec. 31, 2014
Consolidated Balance Sheets
Preferred stock, Class A par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, Class A shares authorized	50,000,000	50,000,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	27,315,258	27,323,570
Common stock, shares outstanding	27,315,258	27,323,570

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Income Taxes

3 Months Ended

Mar. 27, 2015

Income Taxes

Income Taxes

(11) Income Taxes

After adjusting for the impact of income (loss) attributable to noncontrolling interest, the effective tax rate on income (loss) attributable to CH2M HILL for the three months endedMarch 27, 2015 was 28.8% compared to 38.9% for the same period in the prior year. This effective tax rate for the first quarter of 2015 was lower than the effective tax rate in the first quarter of 2014 primarily due to the effect of settlement of the 2007 IRS audit in 2015.  Our effective tax rate continues to be negatively impacted by the effect of state income taxes, non-deductible foreign net operating losses, and the disallowed portions of meals and entertainment expenses.

Undistributed earnings of our foreign subsidiaries amounted to approximately $402.4 million and $331.2 million at March 27, 2015 and December 31, 2014, respectively.  These earnings are considered to be permanently reinvested. Accordingly, no provision for U.S. federal and state income taxes or foreign withholding taxes has been made. Determining the tax liability that would arise if these earnings were repatriated is not practical.

As of March 27, 2015 and December 31, 2014, we had $30.9 million and $34.2 million, respectively, recorded as a liability for uncertain tax positions.  We recognize interest and penalties related to unrecognized tax benefits in income tax expense.  Included in the amounts discussed above are approximately $6.6 million and $7.0 million of accrued interest and penalties related to uncertain tax positions, as of March 27, 2015 and December 31, 2014, respectively.

We file 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, United Kingdom and Canada. With few exceptions, we are 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 2007.

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Document and Entity Information	3 Months Ended
	Mar. 27, 2015	May 01, 2015
Document and Entity Information
Entity Registrant Name	CH2M HILL COMPANIES LTD
Entity Central Index Key	0000777491
Document Type	10-Q
Document Period End Date	Mar. 27, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-25
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		27,301,257
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

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Restructuring and Related Charges

3 Months Ended

Mar. 27, 2015

[DeprecatedItemsForCurrency]

Restructuring and Related Activities Disclosure [Text Block]

(12) Restructuring and Related Charges

In September 2014, we commenced certain restructuring activities in order to achieve important business objectives, including reducing overhead costs, enhancing client service, improving efficiency, reducing risk, and creating more opportunity for profitable growth.  These restructuring activities include such items as a voluntary retirement program, workforce reductions, facilities consolidations and evaluation of certain lines of business.

During the three months ended March 27, 2015, we incurred $8.0 million of costs for these restructuring activities which have been included in general and administration expense on the consolidated statements of operations.  Overall, as of March 27, 2015, we have incurred aggregated costs of $78.4 million for restructuring activities, and we expect to incur up to $32.0 million in additional restructuring charges during the remainder of 2015 related to these activities. 

The following table summarizes the restructuring charges during the three months ended March 27, 2015:

	Voluntary Early		Employee Severance
	Retirement		and Termination
($ in thousands)	Program		Benefits		Facilities Cost		Other		Total
Balance at December 31, 2014	$	—	$	1,060	$	15,000	$	420	$	16,480
Provision		—		2,918		1,417		3,616		7,951
Cash Payments		—		(3,978)		(1,333)		(4,036)		(9,347)
Non-cash settlements		—		—		—		—		—
Balance at March 27, 2015	$	—	$	—	$	15,084	$	—	$	15,084

The accruals for facilities costs will be paid over the remaining term of the leases which we have exited and therefore will extend through 2028.

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Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 27, 2015	Mar. 31, 2014
Consolidated Statements of Operations
Gross revenue	$ 1,263,986	$ 1,279,449
Equity in earnings of joint ventures and affiliated companies	11,350	19,287
Operating expenses:
Direct cost of services and overhead	(1,002,449)	(1,050,853)
General and administrative	(232,022)	(257,429)
Operating income (loss)	40,865	(9,546)
Other income (expense):
Interest income	41	214
Interest expense	(3,896)	(3,430)
Income (loss) before provision for income taxes	37,010	(12,762)
(Provision) benefit for income taxes	(9,505)	3,885
Net income (loss)	27,505	(8,877)
Less: (Income) loss attributable to noncontrolling interests	(4,007)	2,785
Net income (loss) attributable to CH2M HILL	$ 23,498	$ (6,092)
Net income (loss) attributable to CH2M HILL per common share:
Basic (in dollars per share)	$ 0.86	$ (0.21)
Diluted (in dollars per share)	$ 0.86	$ (0.21)
Weighted average number of common shares:
Basic (in shares)	27,363,496	28,809,022
Diluted (in shares)	27,385,943	28,809,022

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Acquisitions

3 Months Ended

Mar. 27, 2015

Acquisitions

Acquisitions

(6) Acquisitions

On April 4, 2014, we acquired certain agreed upon assets and liabilities of TERA Environmental Consultants (“TERA”) for consideration of $119.6 million.  TERA is an employee-owned environmental consulting firm headquartered in Canada specializing in environmental assessment, planning, siting, permitting, licensing, and related services for the pipeline, electrical transmission, and oil and gas industries.  For the quarter ended March 27, 2015, approximately $18.9 million of revenue and $2.7 million of operating income generated from TERA’s operations have been reported in the consolidated financial statements within the Environment and Nuclear business group.

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Variable Interest Entities and Equity Method Investments

3 Months Ended

Mar. 27, 2015

Variable Interest Entities and Equity Method Investments

Variable Interest Entities and Equity Method Investments

(5) Variable Interest Entities and Equity Method Investments

We routinely enter into teaming arrangements, in the form of joint ventures, to perform projects for our clients. Such arrangements are customary in the engineering and construction industry and generally are project specific. The arrangements facilitate the completion of projects that are jointly contracted with our partners. These arrangements are formed to leverage the skills of the respective partners and include consulting, construction, design, design-build, program management and operations and maintenance contracts. The assets of a joint venture are restricted for use only for the particular joint venture and are not available for general operations of the Company.  Our risk of loss on these arrangements is usually shared with our partners. The liability of each partner is usually joint and several, which means that each partner may become liable for the entire risk of loss on the project. Furthermore, on some of our projects, CH2M HILL has granted guarantees which may encumber both our contracting subsidiary company and CH2M HILL for the entire risk of loss on the project.

Our financial statements include the accounts of our joint ventures when the joint ventures are variable interest entities (“VIE”) and we are the primary beneficiary or those joint ventures that are not VIEs yet we have a controlling interest. We perform a qualitative assessment to determine whether our company is the primary beneficiary once an entity is identified as a VIE. A qualitative assessment begins with an understanding of the nature of the risks associated with the entity as well as the nature of the entity’s activities including terms of the contracts entered into by the entity, ownership interests issued by the entity and how they were marketed, and the parties involved in the design of the entity. All of the variable interests held by parties involved with the VIE are identified and a determination is made of which activities are most significant to the economic performance of the entity and which variable interest holder has the power to direct those activities. Most of the VIEs with which our Company is involved have relatively few variable interests and are primarily related to our equity investments, subordinated financial support, and subcontracting arrangements. We consolidate those VIEs in which we have both the power to direct the activities of the VIE that most significantly impact the VIEs economic performance and the obligation to absorb losses or the right to receive the benefits from the VIE that could potentially be significant to the VIE. As of March 27, 2015 and December 31, 2014, total assets of VIEs that were consolidated were $87.5 million and $99.9 million, respectively, and liabilities were $310.8 million and $344.8 million, respectively.  These assets and liabilities consist almost entirely of working capital accounts associated with the performance of a single contract.

In determining whether we have a controlling interest in a joint venture that is not a VIE and the requirement to consolidate the accounts of the entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partnership/members.

We held investments in unconsolidated joint ventures that are not VIEs of $96.7 million and $94.3 million at March 27, 2015 and December 31, 2014, respectively. Our proportionate share of net income or loss is included as equity in earnings of joint ventures and affiliated companies in the consolidated statements of operations. In general, the equity investment in our unconsolidated affiliates is equal to our current equity investment plus our portion of the entities’ undistributed earnings. We provide certain services, including engineering, construction management and computer and telecommunications support, to these unconsolidated entities. These services are billed to the joint ventures in accordance with the provisions of the agreements.

As of March 27, 2015 and December 31, 2014, the total assets of VIEs that were not consolidated were $340.0 million and $355.5 million, respectively, and total liabilities were $267.4 million and $282.7 million, respectively.  These assets and liabilities consist almost entirely of working capital accounts associated with the performance of a single contract. The maximum exposure to losses is limited to the funding of any future losses incurred by those entities under their respective contracts with the project company.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 27, 2015

Earnings Per Share

Summary of reconciliations of basic and diluted EPS

	Three Months Ended
	March 27,		March 31,
	2015		2014
Numerator:
Net income (loss) attributable to CH2M HILL	$	23,498	$	(6,092)
Denominator:
Basic weighted-average common shares outstanding		27,363		28,809
Dilutive effect of common stock equivalents		23		—
Diluted adjusted weighted-average common shares outstanding, assuming conversion of common stock equivalents		27,386		28,809
Basic net income (loss) per common share	$	0.86	$	(0.21)
Diluted net income (loss) per common share	$	0.86	$	(0.21)

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Commitments and Contingencies

3 Months Ended

Mar. 27, 2015

Commitments and Contingencies

Commitments and Contingencies

(13) Commitments and Contingencies

We are party to various legal actions arising in the normal course of business. Because a large portion of our business comes from U.S. federal, state and municipal sources, our procurement and certain other practices at times are subject to review and investigation by various agencies of the U.S. government 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 or alternatively could result in settlement. Damages assessed in connection with and the cost of defending any such actions could be substantial. While the outcomes of pending proceedings and legal actions are often difficult to predict, management believes that proceedings and legal actions currently pending would not result in a material adverse effect on our results of operations or financial condition even if the final outcome is adverse to our company.

Many claims that are currently pending against us are covered by our professional liability insurance. Management estimates that the levels of insurance coverage (after retentions and deductibles) are generally adequate to cover our liabilities, if any, with regard to such claims. Any amounts that are probable of payment are accrued when such amounts are estimable.  As of March 27, 2015 and December 31, 2014, accruals for potential estimated claim liabilities were $18.7 million and $16.3 million, respectively.

In 2010, we were notified that the U.S. Attorney’s Office for the Eastern District of Washington was investigating overtime practices in connection with the U.S. Department of Energy Hanford tank farms management contract that we transitioned to another contractor in 2008. In 2011 and 2012, eight former CH2M HILL Hanford Group (“CH2M HILL Subsidiary”) employees pleaded guilty to felony charges related to time card fraud committed while working on the Hanford Tank Farm Project. As part of its investigation, the U.S. Attorney’s Office raised the possibility of violations of the civil False Claims Act and criminal charges for possible violations of federal criminal statutes arising from CH2M HILL Subsidiary’s overtime practices on the project. In September 2012, the government intervened in a civil False Claims Act case filed in the District Court for the Eastern District of Washington by one of the employees who plead guilty to time card fraud. In March 2013, we entered into a Non-Prosecution Agreement (“NPA”) concluding the criminal investigation so long as we comply with the terms of the NPA. The NPA requires us to comply with ongoing requirements for three years after the effective date. By a separate agreement, we obtained dismissal of the civil False Claims Act case. We paid $18.5 million in total under both agreements. As a result, no criminal charges were brought against CH2M HILL Subsidiary or any CH2M HILL entities, and the civil False Claims Act case was dismissed.

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Fair Value of Financial Instruments

3 Months Ended

Mar. 27, 2015

Fair Value of Financial Instruments

Fair Value of Financial Instruments

(9) Fair Value of Financial Instruments

Cash and cash equivalents, client accounts receivables, unbilled revenue, accounts payable and accrued subcontractor costs and billings in excess of revenue are carried at cost, which approximates fair value due to their short maturities. The fair value of long-term debt, including the current portion, is estimated based on Level 2 inputs, except the amount outstanding on our revolving credit facility for which the carrying value approximates fair value. Fair value is determined by discounting future cash flows using interest rates available for issues with similar terms and average maturities. The estimated fair values of our financial instruments where carrying values do not approximate fair value are as follows:

	March 27, 2015				December 31, 2014
	Carrying		Fair		Carrying		Fair
($ in thousands)	Amount		Value		Amount		Value
Mortgage notes payable	$	8,217	$	7,669	$	8,682	$	7,925
Equipment financing		10,630		10,056		11,392		10,747

We primarily enter into derivative financial instruments to mitigate exposures to changing foreign currency exchange rates. These currency derivative instruments are carried on the balance sheet at fair value and are based upon Level 2 inputs including third-party quotes. At March 27, 2015, we had forward foreign exchange contracts on major world currencies with varying durations, noneof which extend beyond one year. As of March 27, 2015, we had $1.3 million of derivative liabilities, and for the three months endedMarch 27, 2015, the periodic changes in the fair value of derivatives resulted in a loss of $1.3 million.  As of December 31, 2014, derivative assets and liabilities recorded were insignificant. For the three months ended March 31, 2014, the periodic changes in the fair value of derivatives recorded in earnings were insignificant.

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Goodwill and Intangible Assets

3 Months Ended

Mar. 27, 2015

Goodwill and Intangible Assets

Goodwill and Intangible Assets

(7) Goodwill and Intangible Assets

The following table presents the changes in goodwill:

($ in thousands)	Goodwill
Balance at December 31, 2014	$	533,975
Acquisitions		—
Impairment loss		—
Foreign currency translation		(19,135)
Balance at March 27, 2015	$	514,840

Intangible assets with finite lives consist of the following:

			Accumulated		Net finite-lived
($ in thousands)	Cost		Amortization		intangible assets
March 27, 2015
Contracted backlog	$	87,783	$	(85,138)	$	2,645
Customer relationships		191,236		(114,618)		76,618
Tradename		4,565		(4,209)		356
Total finite-lived intangible assets	$	283,584	$	(203,965)	$	79,619
December 31, 2014
Contracted backlog	$	89,313	$	(84,349)	$	4,964
Customer relationships		197,910		(111,970)		85,940
Tradename		4,791		(4,316)		475
Total finite-lived intangible assets	$	292,014	$	(200,635)	$	91,379

All intangible assets are being amortized over their expected lives of between one year and ten years. The amortization expense reflected in the consolidated statements of operations totaled $7.2 million and $9.1 million for three months endedMarch 27, 2015 and March 31, 2014.  All intangible assets are expected to be fully amortized in 2024.

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Property, Plant and Equipment

3 Months Ended

Mar. 27, 2015

Property, Plant and Equipment

Property, Plant and Equipment

(8) Property, Plant and Equipment

Property, plant and equipment consists of the following:

	March 27,		December 31,
($ in thousands)	2015		2014
Land	$	9,539	$	21,044
Building and land improvements		102,248		98,972
Furniture and fixtures		27,076		27,531
Computer and office equipment		156,230		158,022
Field equipment		141,792		140,542
Leasehold improvements		76,042		80,871
		512,927		526,982
Less: Accumulated depreciation		(273,240)		(268,822)
Net property, plant and equipment	$	239,687	$	258,160

Depreciation expense reflected in the consolidated statements of operations was $11.9 million and $9.8 million for the three months endedMarch 27, 2015 and March 31, 2014, respectively.

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Line of Credit and Long-Term Debt

3 Months Ended

Mar. 27, 2015

Line of Credit and Long-Term Debt

Line of Credit and Long-Term Debt

(10) Line of Credit and Long-Term Debt

On March 30, 2015, we entered into the Second Amendment to our Amended and Restated Credit Agreement (“Credit Agreement”).  The Credit Agreement provides for an unsecured revolving Credit Facility of $1.1 billion (“Credit Facility”) which matures on March 28, 2019 and retroactively amended the maximum consolidated leverage ratio effective January 1, 2015.  Under the terms of the Credit Agreement, we may be able to invite existing and new lenders to increase the amount available to be borrowed under the agreement by up to $350.0 million.  The Credit Agreement has a subfacility for the issuance of standby letters of credit in a face amount up to $750.0 million and a subfacility up to $300.0 million for multicurrency borrowings.  Additional terms of our Credit Agreement are as follows:

· The definition of consolidated adjusted EBITDA allows the add back of cash restructuring charges in 2015 of up to $40 million plus a carryover of $26.7 million for cash restructuring charges incurred in year 2014.

· The maximum consolidated leverage ratio is 3.75xthrough the earlier of the end of the current fiscal year or the achievement of one or more offerings of preferred stock with aggregate proceeds of $200.0 million or more, after which the maximum consolidated leverage ratio returns to 3.25x for the rest of 2015 and 3.00x for 2016 and beyond.

· There is an increased applicable interest rate for loans outstanding under the Credit Agreement during any fiscal period for which the consolidated leverage ratio exceeds 3.25x.

· Certain repurchases by CH2M HILL of its common stock and preferred stock and payment of common stock dividends are subject to the following limits:

o Prior to the completion of one or more preferred equity issuances resulting in gross cash proceeds of not less than $200.0 million, the limit in 2015 is $45.0 million for repurchases of common stock offered for sale on the internal market plus $15.0 million for others subject to a pro forma 3.00x leverage threshold in 2015; notwithstanding the foregoing, legally required restricted payments may be allowed despite exceeding such limits;

o After the completion of one or more preferred equity issuances resulting in gross cash proceeds of not less than $200 million in 2015, the limit is $120.0 million in 2015;

o For 2016 and beyond, there is no limit on repurchases of common stock offered for sale on the internal market, and there is a$100 million limit for other repurchases of common stock, redemption of preferred stock and common dividends, subject to pro forma leverage of 2.75x.

· Up to 50% of the proceeds from asset sales can be utilized to repurchase common or preferred stock, subject to pro forma financial covenant compliance.

The Credit Agreement contains customary representations and warranties and conditions to borrowing including customary affirmative and negative covenants, which include covenants that limit or restrict our ability to incur indebtedness and other obligations, grant liens to secure their obligations, make investments, merge or consolidate, and dispose of assets outside the ordinary course of business, in each case subject to customary exceptions for credit facilities of this size and type.  As of March 27, 2015, we were in compliance with the covenants required by the Credit Agreement.

At March 27, 2015 and December 31, 2014,  $468.8 million and $492.6 million in borrowings were outstanding on the Credit Facility, respectively. The average rate of interest charged on that balance was 1.76% as of March 27, 2015. At March 27, 2015 and December 31, 2014, company-wide issued and outstanding letters of credit and bank guarantee facilities were $173.9 million and $199.3 million, respectively.  The remaining unused borrowing capacity under the Credit Facility was $354.0 million as of March 27, 2015.

Our nonrecourse and other long-term debt consist of the following:

	March 27,		December 31,
($ in thousands)	2015		2014
Revolving credit facility, average rate of interest of 1.76%	$	468,791	$	492,551
Mortgage notes payable in monthly installments due December 2015 and June 2020, secured by real estate, rent and leases. These notes bear interest at 5.35% and 6.59%, respectively		8,217		8,682
Equipment financing, due in monthly installments to September 2021, secured by equipment. These notes bear interest ranging from 0% to 8.84%		10,630		11,392
Other notes payable		406		424
Total debt	$	488,044	$	513,049
Less: current portion of debt		4,548		5,028
Total long-term portion of debt	$	483,496	$	508,021

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Variable Interest Entities and Equity Method Investments (Details) (USD $)	Mar. 27, 2015	Dec. 31, 2014
Variable interest entities
Total assets of VIEs not consolidated	$ 2,823,121,000	$ 2,941,302,000
Total liabilities of VIEs not consolidated	2,714,836,000	2,853,734,000
Consolidated VIEs
Variable interest entities
Total assets of VIEs consolidated	87,500,000	99,900,000
Total liabilities of VIEs consolidated	310,800,000	344,800,000
Unconsolidated VIE's
Variable interest entities
Total assets of VIEs not consolidated	340,000,000	355,500,000
Total liabilities of VIEs not consolidated	$ 267,400,000	$ 282,700,000

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Summary of Business and Significant Accounting Policies (Tables)

3 Months Ended

Mar. 27, 2015

Summary of Business and Significant Accounting Policies

Schedule of changes in stockholders' equity

	Shares	Amount
Stockholders’ equity, December 31, 2014	27,324	$	87,568
Net income attributable to CH2M HILL	—		23,498
Shares issued in connection with stock-based compensation and employee benefit plans	287		8,982
Shares purchased and retired	(296)		(10,035)
Other comprehensive loss, net of tax	—		(12,540)
Income attributable to noncontrolling interests	—		4,007
Net contributions from noncontrolling interests	—		6,805
Stockholders’ equity, March 27, 2015	27,315	$	108,285

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Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 27, 2015

Fair Value of Financial Instruments

Schedule of estimated fair values of financial instruments where carrying values do not approximate fair value

	March 27, 2015				December 31, 2014
	Carrying		Fair		Carrying		Fair
($ in thousands)	Amount		Value		Amount		Value
Mortgage notes payable	$	8,217	$	7,669	$	8,682	$	7,925
Equipment financing		10,630		10,056		11,392		10,747

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Line of Credit and Long-Term Debt (Details) (USD $)	0 Months Ended	3 Months Ended	12 Months Ended
	Mar. 30, 2015	Mar. 27, 2015	Dec. 31, 2014
Line of credit
Maximum consolidated leverage ratio	3.75
Minimum potential proceeds from the completion of offering of preferred stock	$ 200,000,000
Threshold consolidated leverage ratio after which increased interest rate applies	3.25
Threshold amount of repurchases of common stock excess of which reduces the original cap on payment of dividends	45,000,000
Payment that may be made to repurchase common stock in 2015		15,000,000
Required proforma leverage threshold through 2015	3.00
Payment that may be made to repurchase common stock in 2016		100,000,000
Required proforma leverage threshold thereafter	2.75
Long-term debt
Total debt		488,044,000	513,049,000
Less: current portion of debt		4,548,000	5,028,000
Total long-term portion of debt		483,496,000	508,021,000
First Amendment to Credit Agreement
Line of credit
Maximum borrowing capacity		1,100,000,000
Additional borrowing capacity, option to increase		350,000,000
Maximum available for the issuance of standby letters of credit after amendment		750,000,000
Maximum subfacility available for multicurrency borrowings		300,000,000
Restructuring charges allowed in 2014			26,700,000
Average rate of interest (as a percent)		1.76%	1.76%
Amount outstanding under letters of credit, and bank guarantee facilities		173,900,000	199,300,000
Remaining unused borrowing capacity available under the credit facility		354,000,000
Long-term debt
Total debt		468,791,000	492,551,000
First Amendment to Credit Agreement | Subsequent event
Line of credit
Maximum consolidated leverage ratio		3.00
First Amendment to Credit Agreement | Maximum
Line of credit
Restructuing charges allowed in 2015	40,000,000
Maximum consolidated leverage ratio	3.25
Cap on restricted payments including common or preferred stock repurchases and redemptions	120,000,000
Percentage of sale proceeds of assets utilized to repurchase stock	50.00%
Mortgage notes payable
Long-term debt
Total debt		8,217,000	8,682,000
Mortgage Payable Due December 2015 Member
Long-term debt
Interest rate on notes (as a percent)		5.35%
Mortgage Payable Due June 2020 Member
Long-term debt
Interest rate on notes (as a percent)		6.59%
Equipment financing
Long-term debt
Minimum interest rate on notes (as a percent)		0.00%
Maximum interest rate on notes (as a percent)		8.84%
Total debt		10,630,000	11,392,000
Other notes payable
Long-term debt
Total debt		$ 406,000	$ 424,000

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Consolidated Statements of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 27, 2015	Mar. 31, 2014
Consolidated Statements of Comprehensive Income
Net income (loss)	$ 27,505	$ (8,877)
Other comprehensive loss:
Foreign currency translation adjustments	(15,180)	(8,181)
Benefit plan adjustments, net of tax	2,640	948
Unrealized (loss) gain on available-for-sale securities
Unrealized gain on available-for-sale securities and other, net of tax		96
Other comprehensive loss	(12,540)	(7,137)
Comprehensive income (loss)	14,965	(16,014)
Less: comprehensive income (loss) attributable to noncontrolling interests	4,007	(2,785)
Comprehensive income (loss) attributable to CH2M HILL	$ 10,958	$ (13,229)

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Earnings Per Share

3 Months Ended

Mar. 27, 2015

Earnings Per Share

Earnings Per Share

(4) 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 common 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 common shares and common stock equivalents outstanding during the period. Common stock equivalents are only included in the diluted EPS calculation when their effect is dilutive.

Reconciliations of basic and diluted EPS (in thousands, except per share amounts):

	Three Months Ended
	March 27,		March 31,
	2015		2014
Numerator:
Net income (loss) attributable to CH2M HILL	$	23,498	$	(6,092)
Denominator:
Basic weighted-average common shares outstanding		27,363		28,809
Dilutive effect of common stock equivalents		23		—
Diluted adjusted weighted-average common shares outstanding, assuming conversion of common stock equivalents		27,386		28,809
Basic net income (loss) per common share	$	0.86	$	(0.21)
Diluted net income (loss) per common share	$	0.86	$	(0.21)

For the three months ended March 27, 2015 and March 31, 2014, options to purchase 1.9 million and 2.2million shares of common stock, respectively, were excluded from the dilutive EPS calculation as they were antidilutive.

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Line of Credit and Long-Term Debt (Tables)

3 Months Ended

Mar. 27, 2015

Line of Credit and Long-Term Debt

Schedule of nonrecourse and other long-term debt

	March 27,		December 31,
($ in thousands)	2015		2014
Revolving credit facility, average rate of interest of 1.76%	$	468,791	$	492,551
Mortgage notes payable in monthly installments due December 2015 and June 2020, secured by real estate, rent and leases. These notes bear interest at 5.35% and 6.59%, respectively		8,217		8,682
Equipment financing, due in monthly installments to September 2021, secured by equipment. These notes bear interest ranging from 0% to 8.84%		10,630		11,392
Other notes payable		406		424
Total debt	$	488,044	$	513,049
Less: current portion of debt		4,548		5,028
Total long-term portion of debt	$	483,496	$	508,021

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Property, Plant and Equipment (Details) (USD $)	3 Months Ended
	Mar. 27, 2015	Mar. 31, 2014	Dec. 31, 2014
Property, plant and equipment
Depreciation expense	$ 11,900,000	$ 9,800,000
Property, plant and equipment, gross	512,927,000		526,982,000
Less: Accumulated depreciation	(273,240,000)		(268,822,000)
Net property, plant and equipment	239,687,000		258,160,000
Land
Property, plant and equipment
Property, plant and equipment, gross	9,539,000		21,044,000
Building and land improvements
Property, plant and equipment
Property, plant and equipment, gross	102,248,000		98,972,000
Furniture and fixtures
Property, plant and equipment
Property, plant and equipment, gross	27,076,000		27,531,000
Computer and office equipment
Property, plant and equipment
Property, plant and equipment, gross	156,230,000		158,022,000
Field equipment
Property, plant and equipment
Property, plant and equipment, gross	141,792,000		140,542,000
Leasehold improvements
Property, plant and equipment
Property, plant and equipment, gross	$ 76,042,000		$ 80,871,000

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Summary of Business and Significant Accounting Policies (Policies)

3 Months Ended

Mar. 27, 2015

Summary of Business and Significant Accounting Policies

Basis of Presentation

Basis of Presentation

The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and according to instructions to Form 10-Q and the provisions of Article 10 of Regulation S-X that are applicable to interim financial statements. Accordingly, these statements do not include all of the information required by GAAP or the Securities and Exchange Commission (“SEC”) rules and regulations for annual audited financial statements. The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Estimates and assumptions have been prepared on the basis of the most current and best available information. Actual results could differ from those estimates.

In the opinion of management, the accompanying unaudited interim consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. These unaudited interim consolidated financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Change in Fiscal Year End

Change in Fiscal Year End

On March 30, 2015, in order to accommodate our financial accounting systems and the timely gathering and reporting of financial information, we changed our reporting period from a calendar year ending on December 31 of each year to a fiscal year ending on the last Friday of December of each year.  Our fiscal quarters will also end on the last Friday of March, June, and September.  This change has been retroactively applied as if it was adopted as of January 1, 2015.  The change in fiscal year-end did not have a material effect on the comparability of the periods presented.

Revenue Recognition

Revenue Recognition

We earn revenue from different types of services performed under various types of contracts, including cost-plus, fixed-price and time-and-materials. We evaluate contractual arrangements to determine how to recognize revenue. We primarily perform engineering and construction related services and recognize 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 contract. In making such estimates, judgments are required to evaluate potential variances in schedule, the cost of materials and labor, productivity, liability claims, contract disputes, and achievement of contract performance standards. We record the cumulative effect of changes in contract revenue and cost at completion in the period in which the changed estimates are determined to be reliably estimable.

Below is a description of the basic types of contracts from which we may earn revenue:

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, with an additional 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. 

Included in the total contract value for cost-plus fee arrangements is the portion of the fee for which receipt is determined to be probable.  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 where direct costs incurred to date are compared to total projected direct costs at contract completion. 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.

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 is recognized under the percentage-of-completion method where costs incurred to date are compared to total projected costs at contract completion. Revenue on contracts that is not subject to maximum contract values is 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.

Operations and Maintenance Contracts.  A portion of our contracts are operations and maintenance type contracts.  Revenue is recognized on operations and maintenance contracts on a straight-line basis over the life of the contract once we have an arrangement, service has begun, the price is fixed or determinable and collectability is reasonably assured.

For all contract types noted above, 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 when the change order 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.

Unbilled Revenue and Billings in Excess of Revenue

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.  A significant portion of our billings in excess balance relates to excess billings on design-build projects.  These projects often require us to order significant project materials and equipment in advance, and we request payment in advance from our clients to cover these costs.  As the projects near completion and our suppliers complete the construction of these components and we complete the installation, the billings in excess balance declines.

Fair Value Measurements

Fair Value Measurements

Fair value represents the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities are valued based upon observable and non-observable inputs. Valuations using Level 1 inputs are based on unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2 inputs utilize significant other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly; and valuations using Level 3 inputs are based on significant unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. There were no significant transfers between levels during the quarters ended March 27, 2015 and March 31, 2014.

Restructuring and Related Charges

Restructuring Related Costs

We account for costs associated with restructuring activities in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 420, Exit or Disposal Cost Obligations.  An exit activity includes but is not limited to a restructuring, such as a sale or termination of a line of business, the closure of business activities in a particular location, the relocation of business activities from one location to another, changes in management structure, and a fundamental reorganization that affects the nature and focus of operations.  The Company recognizes a liability and the related expense for restructuring costs when the liability is incurred and can be measured.  Restructuring accruals are based upon management estimates at the time they are recorded and can change depending upon changes in facts and circumstances subsequent to the date the original liability was recorded.  Nonretirement postemployment benefits offered as special termination benefits to employees, such as a voluntary early retirement program, are recognized as a liability and a loss when the employee accepts the offer and the amount can be reasonably estimated in accordance with ASC Topic 712, Compensation-Nonretirement Postemployment Benefits.

Goodwill

Goodwill

Goodwill represents the excess of costs over fair value of the assets of businesses we have acquired.  Goodwill acquired in a purchase business combination is not amortized, but instead, is tested for impairment at least annually in accordance with the provisions of ASC Topic 350, Intangibles-Goodwill and Other (“ASC 350”), as amended under Accounting Standards Update 2011-08 (“ASU 2011-08”).  Upon the occurrence of certain triggering events, we are also required to test for impairment at dates other than the annual impairment testing date.  In performing the impairment test, we evaluate our goodwill at the reporting unit level.  Under the guidance of ASC 350, we have the option to assess either quantitative or qualitative factors to determine whether it is more likely than not that the fair values of our reporting units are less than their carrying amounts.  If after assessing the totality of events or circumstances, we determine that it is not more likely than not that the fair values of our reporting units are less than their carrying amounts, then the next step of the impairment test is unnecessary.  If we conclude otherwise, then we are required to test goodwill for impairment under the two-step process. 

The two-step process involves comparing the estimated fair value of each reporting unit to the unit’s carrying value, including goodwill.  If the carrying value of a reporting unit does not exceed its fair value, the goodwill of the reporting unit is not considered impaired; therefore, the second step of the impairment test is unnecessary.  If the carrying amount of a reporting unit exceeds its fair value, we would then perform a second step to measure the amount of goodwill impairment loss to be recorded.  We determine the fair value of our reporting units using a combination of the income approach, the market approach, and the cost approach.  The income approach calculates the present value of future cash flows based on assumptions and estimates derived from a review of our expected revenue growth rates, profit margins, business plans, cost of capital and tax rates for the reporting units.  Our market based valuation method estimates the fair value of our reporting units by the application of a multiple to our estimate of a cash flow metric for each business unit.  The cost approach estimates the fair value of a reporting unit as the fair value of its assets net of the fair value of its liabilities.

Intangible Assets

Intangible Assets

We may acquire other intangible assets in business combinations. Intangible assets are stated at fair value as of the date they are acquired in a business combination. We amortize intangible assets with finite lives on a straight-line basis over their expected useful lives, currently up to ten years.  We test our intangible assets for impairment in the period in which a triggering event or change in circumstance indicates that the carrying amount of the intangible asset may not be recoverable.  If the carrying amount of the intangible asset exceeds the fair value, an impairment loss will be recognized in the amount of the excess.  We determine the fair value of the intangible assets using a discounted cash flow approach.

Derivative instruments

Derivative Instruments

We primarily enter into derivative financial instruments to mitigate exposures to changing foreign currency exchange rates. We are primarily subject to this risk on long-term projects whereby the currency being paid by our client differs from the currency in which we incurred our costs, as well as intercompany trade balances among entities with differing currencies. We do not enter into derivative transactions for speculative or trading purposes. All derivatives are carried at fair value on the consolidated balance sheets in other receivables or accounts payable and accrued subcontractor costs as applicable. The periodic change in the fair value of the derivative instruments is recognized in earnings within general and administrative expense.

Stockholders' Equity

Stockholders’ Equity

The changes in stockholders’ equity for the three months endedMarch 27, 2015 are as follows (in thousands):

	Shares	Amount
Stockholders’ equity, December 31, 2014	27,324	$	87,568
Net income attributable to CH2M HILL	—		23,498
Shares issued in connection with stock-based compensation and employee benefit plans	287		8,982
Shares purchased and retired	(296)		(10,035)
Other comprehensive loss, net of tax	—		(12,540)
Income attributable to noncontrolling interests	—		4,007
Net contributions from noncontrolling interests	—		6,805
Stockholders’ equity, March 27, 2015	27,315	$	108,285

Retirement and Tax-Deferred Savings Plan

Retirement and Tax-Deferred Savings Plan

The Retirement and Tax Deferred Savings Plan is a retirement 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 and provides benefits to eligible employees upon retirement. In September 2012, our Board of Directors approved the CH2M HILL Companies, Ltd. Amended and Restated 401(k) Plan which became effective January 1, 2013 (“401(k) Plan”). The 401(k) Plan allows for matching contributions up to 6% of employee’s base compensation, although specific subsidiaries may have different limits on employer matching. The matching contributions may be made in both cash and/or stock.  Expenses related to matching contributions made in common stock for the 401(k) Plan for the three months endedMarch 27, 2015 and March 31, 2014 were $6.9 million and $12.3 million, respectively.

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

In April 2015, the FASB issued Accounting Standards Update (“ASU”) 2015-04, Compensation – Retirement Benefits (Topic 715): Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets.  ASU 2015-04 provides a practical expedient for entities with defined benefit plan assets and obligations whose fiscal years and interim periods do not coincide with a month-end. The ASU allows these entities to use the month-end that is closest to the entity’s fiscal year-end or interim period-end for measuring the defined benefit plan assets and obligations if the practical expedient is applied consistently to all plans and each year.  However, if a contribution or significant event (such as a plan amendment, settlement, or curtailment that calls for a remeasurement in accordance with existing requirements) occurs between the month-end date used to measure defined benefit plan assets and obligations and an entity’s fiscal year-end or interim period-end, the entity should adjust the measurement of defined benefit plan assets and obligations to reflect the effects of those contributions or significant events. Entities are required to disclose the accounting policy election and the date used to measure the defined benefit plan assets and obligations.  ASU 2015-04 will be effective for financial statements issued for fiscal years beginning after December 15, 2015, with earlier election permitted, and the application of the amendment should be applied prospectively.  CH2M HILL will early elect this ASU for our fiscal year ending December 25, 2015.

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. ASU 2015-02 provides updated consolidation guidance for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. This ASU requires that all legal entities be subject to reevaluation under the revised consolidation model. ASU 2015-02 will be effective for annual and interim periods beginning after December 15, 2015.  CH2M HILL is currently evaluating the impact of this ASU on its financial position and results of operations.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.  The ASU requires that management evaluate for each annual and interim reporting period whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued.  If there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern, additional disclosures are required, even if the substantial doubt is alleviated as a result of consideration of management’s plans.  This ASU is effective for annual and interim periods beginning after December 15, 2016, and early adoption is permitted.  We do not expect the adoption of this standard to have a material impact on our consolidated financial statements.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. This ASU is a comprehensive new revenue recognition model that is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services.  The ASU also requires additional quantitative and qualitative disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The FASB has proposed to defer the effective date of this ASU for reporting periods beginning after December 15, 2017. Companies may use either a full retrospective or a modified retrospective approach to adopt this ASU.  CH2M HILL is currently evaluating the impact of this ASU and the transition alternatives on its financial position and results of operations.