CH2M CREDIT NOTES
The best outcome will result from openly airing the issues while pursuing operational improvement and
equitable IOT concurrent with seeking strategic business combination (merger) with one or more existing E&C
concerns (at least one being a public Corporation). A fixed share collar being the preferred structure. Setting us
in this direction, an objective review of past performance is required to weigh value destruction and
management response as recalibrated performance goals and investment expectation may be established and
communicated.
Three fundamental forces drove value destruction, inverted the capital structure and challenged
solvency/liquidity beginning Dec 2011 through Dec 2014.
1. Large pension deficit relating to Nov 2011 Halcrow
acquisition - $375 million increase in liability ($150
realized loss and $225 unrealized loss) and $122
million cash contributions to db plans. The December
2014 unfunded status (deficit) is $532 million/18% of
total assets.
2. A failed venture into power announced April 2012
resulted in $140 million loss.
3. A $491 million cash drain relating to 2012 – 2014
IOT redemptions.
The Company’s current strategy effectively punts $225
million of unrealized pension losses and claims
performance improvement on suspending the associated
loss recognition. Whereas the higher road calls on the
company to:

Quantify, communicate and address the value
destruction head-on
Mounting Capital Challenges
Project Desc
Status
Northeast US Power
Complete
Europeean IUE
Risk
Australian JV
Risk
SW US Transportation
Risk
Western US Power
Complete
Total Project Losses
Restructuring
Total Project and Restructuring
Goodwill Impairment
Total
Total
Charge
64,400
17,800
140,000
92,300
42,900
357,400
87,900
445,300
73,312
518,612
1/2
>>
>>
>>
>>
Total
On-going
0
9,000
140,000
92,300
0
241,300
87,900
329,200
73,312
402,512
Cum Pension
& Power
Cum Stock
Items
Redemption
140,000
140,000

Affirm it’s financial accounts/policies/procedures

Identify any/all available performance improvement
and/or strategic measures

Track the progress toward restoration of lost value

Normalize balance sheet risk associated with pension deficit (bring it back under industry bell curve).
Contributions to db plans (Ca s h)
OACI (Net of ~$70mm ta x Be ne fi t)
Cum stock redemption (Cas h)
Cum DB liability realized (Accrual )
>>
122,782
122,782
225,000 >> 225,000
491,929 >> 491,929
150,000
150,000
1,508,323
1,392,223
140,000
122,782
225,000
491,929
150,000
637,782
491,929
Indeed EBITDA enjoys the appearance of benefit under current program, however unrealized losses of such
size and delayed acknowledgement/address of the underfunded status calls for increased scrutiny of Ch2m as
business partner, potential suitor/merger candidate, or employer of choice.
In this regard, review of public record can be quite revealing, with observations falling into three categories:
Financial health, market value and earnings quality observations
Management Response, Fiduciary and Other General Observations
Contingent and Reputational Risk Issues
These talking points then turn to operating initiatives that can enhance strategic outcome before addressing
indicative value and investment outlook.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
CH2M CREDIT NOTES
Financial health, market value and earnings quality observations

Unfunded pension status of $532mm (18% of total assets at Dec ’14) outweighs that of any peer and
requires significant discount in relative value determination (calculated based on plan buy-out at 10%
increase/1.1x plan liabilities). Total unrealized losses in AOCI(L) (pension plus currency) represent $9 or
16% of current calculated share value of $55.75

A Pension Comparison Worksheet is provided at the end of these discussion points.
Ch2 (discount)/premium on pension alone
Vs
SNC
(650.3)
=
(682.7)
Vs AECOM
(372.0)
=
(682.7)
Vs
WSP
(609.6)
=
(682.7)
Vs
KBR
46.8
=
(682.7)
Vs
JEC
(112.7)
=
(682.7)
Vs
FLR
(463.7)
=
(682.7)
Vs
UGL
(648.1)
=
(682.7)
Pension Position
US Non US
Plan Obligations
$187.5
$0.0
Plan Assets
$138.6
$0.0
Underfunded Status ($48.9)
$0.0
Total Assetts

(32.4)
(310.7)
(73.1)
(729.5)
(570.0)
(219.0)
(34.6)
2010
2011
Total
US
Non US Total
US
Non US
$187.5 $205.8 $926.4 $1,132.1 $245.1 $1,064.0
$138.6 $141.5 $624.0
$765.5 $162.7
$701.3
($48.9) ($64.3) ($302.4) ($366.6) ($82.4) ($362.7)
1,967.1
2,694.9
-2.5%
-13.6%
2012
Total
US
Non US
$1,309.0 $268.5 $1,236.5
$863.9 $196.1
$776.7
($445.1) ($72.4) ($459.8)
3,114.6
-14.3%
2014
Total
$1,505.0
$972.8
($532.2)
2,941.3
-18.1%
Declining asset efficiency highlights revenue vs asset impairment. A $73 million impairment came on
weakened 2014 revenue. The combined sales growth/impairment necessary to charge to maintain ~2x TTM
ratio is shown.
Sales Increase

less
less
less
less
less
less
less
Asset Impairment
Asset Impairment
Asset Efficency
$0
$50
$100
$150
$200
$250
$300
$350
$0
1.83
1.85
1.87
1.89
1.90
1.92
1.94
1.96
$50
1.87
1.88
1.90
1.92
1.94
1.95
1.97
1.99
$100
1.90
1.92
$150
1.93
1.95
1.94
1.95
1.97
1.97
1.99
2.01
1.99
2.01
2.03
2.03
2.04
2.06
$200
1.97
1.99
2.01
2.03
2.04
2.06
2.08
2.10
$250
2.01
2.03
2.05
2.06
2.08
2.10
2.12
2.14
$300
2.05
2.07
2.09
2.10
2.12
2.14
2.16
2.18
$350
2.09
2.11
2.13
2.15
2.17
2.18
2.20
2.22
$400
2.13
2.15
2.17
2.19
2.21
2.23
2.25
2.27
A remarkable revenue shift is demonstrated in growing unbilled accrual (on track to exceed client accounts),
this challenges both revenue and asset quality.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 2 of 38
CH2M CREDIT NOTES
Management Response, Fiduciary and Other General Observations

It is not unreasonable for parties to construe that the Halcrow deal and related due diligence was a hurried
bid to secure a late role on infrastructure 2012 Summer Games program (2010 bid for Scott Wilson PLC
was lost to URS)

A formal report/opinion on the Halcrow Pension Scheme had not been delivered since 2008. It is
understood that Ch2 was not in agreement with Halcrow Pension Trustees re the assumptions on which plan
obligations should be calculated. And following the transaction, a former Halcrow executive joined
valuation consultant EFCG.

An unsupported shift in cost basis identified in consolidated reporting underscores the pension dilemma.
Noticeable correction in direct expenses occurs in conjunction with Jacque Hinman’s defense of Halcrow
acquisition published April 2013 and again with lending group’s consultant’s inspection and continuing
presence following the March 2014 amendment.

Annual segmented, estimated 2014 and Ex-Power financial data (2010 – 2019) offered in the February 2015
Investor Presentation (IP) provides further insight:
o A reconciliation request for the company; actual consolidated 2012 revenue of $6,160.6mm vs ex power
historical consolidated of $5,534.8mm vs segmented revenue of $4,951.3mm reveals a $583.5mm
variance. This methodology flows through the Income statement to reveal: $390mm Direct cost var,
193.9mm gross profit var, 464.1mm SG&A var and ($272.1)mm EBIT var for 2012.
o $77mm unidentified charge in estimated 2014 approximates the restructuring and transportation losses
reported in first and second quarter 2015. This would have effectively eliminated equity at Dec 2014. It
seems the second
Variance
Statutory Consolidated less Power less Segments
Common Size
2010
2011
2012
2013
2014
2010
2011
2012
2013
2014
quarter 2015
Consolidated Revenue
$177.2
$125.5 $583.5
$13.8
$15.0
3.3%
2.3%
9.5%
0.2%
0.3%
transportation loss
Consolidated Income From JVs
$0.0
($0.1)
$0.5
$0.2
$0.0
0.0%
0.0%
0.0%
0.0%
0.0%
Consolidated Direct Costs
$121.9
$83.2
$390.1
$8.4
$1.9
2.2%
1.5%
6.3%
0.1%
0.0%
was contemplated
Consolidated Gross Profit
$55.3
$42.2
$193.9
$5.6
$13.1
1.0%
0.8%
3.1%
0.1%
0.2%
prior to the 2014 10k
Consolidated SG&A
$291.9
$322.1
$464.1
$282.9
$340.6
5.4%
5.8%
7.5%
4.8%
6.3%
filing and fourth
Consolidated EBIT
($239.1) ($284.0) ($272.1) ($278.6) ($327.5)
-4.4%
-5.1%
-4.4%
-4.7%
-6.0%
NCI
$0.1
$0.0
$0.0
$0.0
$0.0
0.0%
0.0%
0.0%
0.0%
0.0%
quarter 2015
Air Ball - Losses and Restructuring
($40.6)
$1.8
$13.4
($5.8) ($338.3)
-0.7%
0.0%
0.2%
-0.1%
-6.2%
shareholder call.
EBITDA
($279.8)
($282.2)
($258.7)
($284.4)
($665.8)
-5.2%
-5.1%
-4.2%
-4.8%
Project
$0.0
$0.0
$0.0
$0.0
$204.4
0.0%
0.0%
0.0%
0.0%
3.8%
Impairment
$0.0
$0.0
$0.0
$0.0
$73.3
0.0%
0.0%
0.0%
0.0%
1.4%
Restructuring
$0.0
$0.0
$0.0
$0.0
$70.4
0.0%
0.0%
0.0%
0.0%
1.3%
Air Ball- Further Impairment weighed?
$0.0
$0.0
$0.0
$0.0
0.0%
0.0%
0.0%
0.0%
-1.4%
-5.2%
-5.1%
-4.2%
-4.8%
-4.4%
Adj EBITDA - Corp Overhead rr
($77.0)
($279.8)
($282.2)
($258.7)
($284.4)
($240.7)
As % of Statutory Revenue
-5.2%
-5.1%
-4.2%
-4.8%
-4.4%
As % of Segments Revenue
-5.6%
-5.4%
-5.2%
-5.3%
-4.6%
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
-12.3%
(917) 882-2880
Page 3 of 38
CH2M CREDIT NOTES
o Consolidated gross profit margin in segment data is distorted by IP revenue variance in in year over year
comparison and requires adjustment (yellow highlights).
Segment
Direct Costs (Gross Profit Less EBITDA)
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Water
74.9%
72.3%
72.6%
73.9%
73.7%
75.0%
75.0%
75.0%
75.1%
75.1%
Environment & Nuclear
88.5%
86.7%
82.0%
81.2%
82.3%
83.1%
82.0%
82.0%
81.9%
81.9%
Transportation
73.3%
73.9%
78.7%
73.7%
78.6%
74.8%
72.1%
72.1%
71.9%
71.8%
Oil, Gas & Chemicals
83.8%
86.5%
86.6%
79.6%
78.2%
80.2%
78.6%
78.4%
78.8%
78.7%
Indust, Urban Environ
80.8%
77.5%
78.1%
78.5%
85.7%
77.5%
79.2%
79.3%
79.4%
80.8%
Direct Basis Segment
81.9%
80.7%
79.7%
77.5%
79.5%
78.5%
77.6%
77.5%
77.6%
77.8%
Direct Cost Segment
4,092.6
4,207.0
3,944.7
4,136.2
4,116.9
4,267.2
4,398.0
4,653.1
4,954.4
5,286.4
81.4%
80.4%
78.3%
77.5%
79.3%
78.5%
77.6%
77.5%
77.6%
77.8%
Direct Cost Basis Xpower
Direct Cost Xpower
$4,214.50 $4,290.20 $4,334.80 $4,144.60 $4,118.80 $4,267.17 $4,397.98 $4,653.03 $4,954.40 $5,286.40
Unknown Direct Component
$121.9
$83.2
$390.1
$8.4
$1.9
($0.0)
($0.0)
($0.1)
($0.0)
($0.0)
Direct Cost Change in Margin
$0.0
($65.0)
($24.8)
($104.0)
$105.2
($39.6)
($46.2)
($2.3)
$3.2
$10.6
Unknown Plus Change in Mar
$121.9
$18.2
$365.3
($95.6)
$107.1
($39.7)
($46.2)
($2.4)
$3.2
$10.6
Unknown Plus as % of Xpower
0.34%
6.60%
-1.79%
2.06%
-0.73%
-0.81%
-0.04%
0.05%
0.16%
Core Direct Cost Basis
80.0%
71.7%
79.2%
77.2%
79.2%
78.4%
77.6%
77.5%
77.6%
$161.2
$196.8
($184.2)
($154.6)
$242.6
$231.3
$331.8
$384.1
$413.1
5,338
5,535
5,351
5,196
5,439
5,670
6,002
6,386
6,799
change in revenue
Ex-Power Revenue
5,177

Ex-Power Direct Cost less Direct Cost on Segments identifies an unknown direct cost component.

Add change in margin component (as calculated with segment overhead) to derive Unknown plus
Change as % of Ex-Power and Core Direct Cost Basis that further support aforementioned 2013
Direct cost loading (and reversal).

Prior to the direct cost correction occurring at the time of the Halcrow purchase defence (April
2013), approx $50 million direct cost reduction on year over year revenue declined is replaced by
regognition of DB pension losses.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 4 of 38
CH2M CREDIT NOTES
o Transportation, Oil & Gas and IUE segments appear to bear relatively heavier overhead and non-cash
burden than Water and Environment & Nuclear segments. Below are the carry contributions and reduction
targets identified. Aggressive reduction pursuits (the possibility the efficiency of Water and Environment
and Nuclear segments may be matched) would essentially double the target figures below. Is this
achievable? Or do energy and water segments somehow benefit?
o
Total segment overhead, segment overhead resulting from margin shift, segment overhead on new revenue
and core segment overhead are shown. Segment overhead resulting from margin shift (border highlight) is
the estimated management response ($ accrual) to mounting Halcrow DB deficit. Notice the margin
decline/correction shifts the year peak overhead appears from 2013 in total overhead to 2014 in core
overhead. This shift is consistent with appearance of consolidated direct margin loading and correction
identified in consolidated direct expense above.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 5 of 38
CH2M CREDIT NOTES
Contingent and Reputational Risk Issues

Government audit

Continuing government investigations

~$75mm cost surrounding LMI/Steadfast Insurance/Ch2m IUE cleanup row (current litigation investigating knowledge of sight condition)

Zurich (parent of Steadfast Insurance), who issues the surety behind a complex ($1.6 billion) Panama Canal
contract dispute between GUPC (Grupo Unidos por el Canal) and the Canal Authority, is again probing
Ch2m’s knowledge of site condition and at one point threatened to pull its bond had Ch2m assumed the
work at the center of this dispute. Ch2m acts as project consultant to the Canal Administration and ran the
RFP that included disputed representations.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 6 of 38
CH2M CREDIT NOTES
Improvement Strategies
Project Discipline; the best approach to sharpening discipline is through talent management and effectively
leading in this direction requires the company identify and equip staff who demonstrate the strongest ability to
excel within the changing culture. Strong change leaders are particularly important due to breadth of services
and geography.
Staff Delivery Mix; process and quality improvement are best achieved together with positive change in the
workplace environment that leaves resources feeling effectively utilized performing at or above their pay grade.
Staff utilization and activity based costing (time entry) records can help identify which groups of resources are
performing at what levels so we understand how or where to employ uplifting strategy.
Shape/Style/Habit; Avoid characteristics associated with hourglass and diamond shaped organizations and
make every attempt to stick to pyramid shaped units/teams/organization. Hands-on management has
advantages, but delivery units cannot lose sight of the importance and economies in leveraging and
developing staff. And in this spirit, senior delivery personnel may be coached to avoid reaching too far down
the work stack so capture economies of mix in leveraging staff.
Seniors - BD and Backlog; Business development efforts and backlog are areas where seniors might welcome an
invitation to participate. These activities are the future of the enterprise as well as the birthplace of the project
life cycle and require particular client facing and administrative discipline to properly report and make the
appropriate accounting determination (expense vs. capitalization).
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 7 of 38
CH2M CREDIT NOTES
Cash Flow, Capital Structure and Value Indication
TTM EBITDA of $324mm includes $403mm of extra ordinary items, with the risk of further project losses.
Other quality considerations include:

Earnings and asset quality (most notably relating to revenue, receivables, goodwill and deferred tax assets).

Inverted capital structure and solvency underscored by deferral of $73mm charges identified in the IP
(presumably representative of 1st and 2nd quarter transportation and restructuring charges). Certainly the
company remains in the zone of insolvency as determined by balance sheet test incorporating fair value.
Litigation and reputational risks are raised in part because clients could require bank LCs over other sureties to
escape risk of future litigation.
Contingent Obligations Reported Dec 2014
Contingent obligations reported
1 Year
1‑3 Years
4‑5 Years
Over 5 Years Committed
Dec. 2014 are shown. As of June Letters of credit
$71.8
$20.4
$35.1
$35.1
$162.4
2015 there is ~$1.7 billion
Bank guarantees
$32.8
$2.5
$0.6
$1.0
$36.9
$5.0
$6.4
$498.8
$2.8
$513.0
unsecured between funded bank Long-term debt
Interest payments
$9.0
$17.4
$16.9
$0.1
$43.4
debt, LT employee related,
Operating lease obligations
$95.2
$144.0
$83.6
$124.8
$447.6
payables and billings in
Surety and bid bonds
$783.5
$527.6
$22.3
$0.1
$1,333.5
excess. Accrued Payroll and ST Total
$997.3
$718.3
$657.3
$163.9
$2,536.8
employee related push this figure
to ~$2.1 billion
In light of all, a ($100)mm – ($125)mm EBITDA adjustment is applied. This is consistent with maintaining
asset efficiency of ~2x, well below the ratio anticipated on Ch2m-Halcrow combination yielding revenues of $7
billion. Further impairment may be recommended based on continuing evaluation of the $583mm 2012 revenue
variance.
At 7.6 times multiple (per Jan 2015 NYU Stern study based on 56 global E&C business) and backing out a
$682mm buy-out, $532 on-going deficit and $425mm competitive pay-down we arrive at a range following
range $840mm –$1,082 (average) mm - $1,285mm. (A $25mm increment increase/decrease in EBITDA
translates to +/- $190mm of value.)
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
200.0
225.0
250.0
275.0
300.0
325.0
350.0
Competitive Pay-down
6.7
7
7.3
$ 915.0 $ 975.0 $ 1,035.0
$ 1,082.5 $ 1,150.0 $ 1,217.5
$ 1,250.0 $ 1,325.0 $ 1,400.0
$ 1,417.5 $ 1,500.0 $ 1,582.5
$ 1,585.0 $ 1,675.0 $ 1,765.0
$ 1,752.5 $ 1,850.0 $ 1,947.5
$ 1,920.0 $ 2,025.0 $ 2,130.0
7.6
$ 1,095.0
$ 1,285.0
$ 1,475.0
$ 1,665.0
$ 1,855.0
$ 2,045.0
$ 2,235.0
7.9
$ 1,155.0
$ 1,352.5
$ 1,550.0
$ 1,747.5
$ 1,945.0
$ 2,142.5
$ 2,340.0
8.2
$ 1,215.0
$ 1,420.0
$ 1,625.0
$ 1,830.0
$ 2,035.0
$ 2,240.0
$ 2,445.0
8.5
$ 1,275.0
$ 1,487.5
$ 1,700.0
$ 1,912.5
$ 2,125.0
$ 2,337.5
$ 2,550.0
200.0
225.0
250.0
275.0
300.0
325.0
350.0
On-going Deficit adj
6.7
7
$ 807.8 $ 867.8
$ 975.3 $ 1,042.8
$ 1,142.8 $ 1,217.8
$ 1,310.3 $ 1,392.8
$ 1,477.8 $ 1,567.8
$ 1,645.3 $ 1,742.8
$ 1,812.8 $ 1,917.8
7.3
$ 927.8
$ 1,110.3
$ 1,292.8
$ 1,475.3
$ 1,657.8
$ 1,840.3
$ 2,022.8
7.6
$ 987.8
$ 1,177.8
$ 1,367.8
$ 1,557.8
$ 1,747.8
$ 1,937.8
$ 2,127.8
7.9
$ 1,047.8
$ 1,245.3
$ 1,442.8
$ 1,640.3
$ 1,837.8
$ 2,035.3
$ 2,232.8
8.2
$ 1,107.8
$ 1,312.8
$ 1,517.8
$ 1,722.8
$ 1,927.8
$ 2,132.8
$ 2,337.8
8.5
$ 1,167.8
$ 1,380.3
$ 1,592.8
$ 1,805.3
$ 2,017.8
$ 2,230.3
$ 2,442.8
200.0
225.0
250.0
275.0
300.0
325.0
350.0
Buyout Adjusted
6.7
7
$ 657.3 $ 717.3
$ 824.8 $ 892.3
$ 992.3 $ 1,067.3
$ 1,159.8 $ 1,242.3
$ 1,327.3 $ 1,417.3
$ 1,494.8 $ 1,592.3
$ 1,662.3 $ 1,767.3
7.3
$ 777.3
$ 959.8
$ 1,142.3
$ 1,324.8
$ 1,507.3
$ 1,689.8
$ 1,872.3
7.6
$ 837.3
$ 1,027.3
$ 1,217.3
$ 1,407.3
$ 1,597.3
$ 1,787.3
$ 1,977.3
7.9
$ 897.3
$ 1,094.8
$ 1,292.3
$ 1,489.8
$ 1,687.3
$ 1,884.8
$ 2,082.3
8.2
$ 957.3
$ 1,162.3
$ 1,367.3
$ 1,572.3
$ 1,777.3
$ 1,982.3
$ 2,187.3
8.5
$ 1,017.3
$ 1,229.8
$ 1,442.3
$ 1,654.8
$ 1,867.3
$ 2,079.8
$ 2,292.3
Richard J. Reilly
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
200.0
225.0
250.0
275.0
300.0
325.0
350.0
Competitive Pay-down
6.7
7
$ 29.3 $ 31.2 $
$ 34.6 $ 36.8 $
$ 40.0 $ 42.4 $
$ 45.3 $ 48.0 $
$ 50.7 $ 53.6 $
$ 56.0 $ 59.2 $
$ 61.4 $ 64.8 $
7.3
33.1
38.9
44.8
50.6
56.4
62.3
68.1
$
$
$
$
$
$
$
7.6
35.0
41.1
47.2
53.2
59.3
65.4
71.5
$
$
$
$
$
$
$
7.9
36.9
43.3
49.6
55.9
62.2
68.5
74.8
$
$
$
$
$
$
$
8.2
38.9
45.4
52.0
58.5
65.1
71.6
78.2
$
$
$
$
$
$
$
8.5
40.8
47.6
54.4
61.2
68.0
74.8
81.5
200.0
225.0
250.0
275.0
300.0
325.0
350.0
On-going Deficit adj
6.7
7
$ 25.8 $ 27.8
$ 31.2 $ 33.3
$ 36.5 $ 38.9
$ 41.9 $ 44.5
$ 47.3 $ 50.1
$ 52.6 $ 55.7
$ 58.0 $ 61.3
$
$
$
$
$
$
$
7.3
29.7
35.5
41.3
47.2
53.0
58.9
64.7
$
$
$
$
$
$
$
7.6
31.6
37.7
43.7
49.8
55.9
62.0
68.0
$
$
$
$
$
$
$
7.9
33.5
39.8
46.1
52.5
58.8
65.1
71.4
$
$
$
$
$
$
$
8.2
35.4
42.0
48.5
55.1
61.7
68.2
74.8
$
$
$
$
$
$
$
8.5
37.3
44.1
50.9
57.7
64.5
71.3
78.1
200.0
225.0
250.0
275.0
300.0
325.0
350.0
Buyout Adjusted
6.7
7
$ 21.0 $ 22.9
$ 26.4 $ 28.5
$ 31.7 $ 34.1
$ 37.1 $ 39.7
$ 42.4 $ 45.3
$ 47.8 $ 50.9
$ 53.2 $ 56.5
$
$
$
$
$
$
$
7.3
24.9
30.7
36.5
42.4
48.2
54.0
59.9
$
$
$
$
$
$
$
7.6
26.8
32.9
38.9
45.0
51.1
57.2
63.2
$
$
$
$
$
$
$
7.9
28.7
35.0
41.3
47.6
54.0
60.3
66.6
$
$
$
$
$
$
$
8.2
30.6
37.2
43.7
50.3
56.8
63.4
69.9
$
$
$
$
$
$
$
8.5
32.5
39.3
46.1
52.9
59.7
66.5
73.3
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 8 of 38
CH2M CREDIT NOTES
Investment Outlook
Indicative values can be compared to the cv Pfd investment; $300mm for approximate 23% equity future
stake/valuation implies $1,300mm - less premium you assign to $600 liquidation preference and significant
control.
Investment return, reinvestment opportunity and related economies appear most attractive in the near term.



Analysis of cv Pfd IRR suggests investor may be inclined to consider a near-term business combination and
perhaps weigh a haircut on its preference claim to retain skin in the game on a larger trade that is
immediately accretive, tackling the
Combined cv Pfd Investment
pension deficit and capital structure Yr
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
55.0%
.
$ 240.0 $ 250.0 $ 260.0 $ 270.0 $ 280.0 $ 290.0 $ 300.0 $ 310.0
challenges.
The medium term horizon for cv Pfd
performance is challenged by
earnings and asset quality issues
raised as well as the risks of further
project losses, actuarial/market
influence on pension deficit and
plan delivery (revenue side and
aggressive cost goals).
2
$ 408.0
3
$ 489.6
4
$ 587.5
5
$ 705.0
Traunch 1
$ 200.0
20.0%
1
$ 240.0
2
$ 288.0
3
$ 345.6
4
$ 414.7
5
$ 497.7
Traunch 2 (one year)
$ 100.0
20.0%
2
120.0
3
144.0
4
172.8
5
207.4
$
$
$
$
437.5
546.9
683.6
854.5
$ 468.0
$ 608.4
$ 790.9
$ 1,028.2
$
$
$
$
$
25.0%
250.0
312.5
390.6
488.3
610.4
$
$
$
$
$
30.0%
260.0
338.0
439.4
571.2
742.6
$ 499.5
$ 674.3
$ 910.3
$ 1,229.0
$
$
$
$
$
35.0%
270.0
364.5
492.1
664.3
896.8
$ 532.0 $ 565.5 $ 600.0 $ 635.5
$ 744.8 $ 820.0 $ 900.0 $ 985.0
$ 1,042.7 $ 1,189.0 $ 1,350.0 $ 1,526.8
$ 1,459.8 $ 1,724.0 $ 2,025.0 $ 2,366.5
40.0%
$ 280.0
$ 392.0
$ 548.8
$ 768.3
$ 1,075.6
45.0%
$ 290.0
$ 420.5
$ 609.7
$ 884.1
$ 1,281.9
50.0%
55.0%
$ 300.0 $ 310.0
$ 450.0 $ 480.5
$ 675.0 $ 744.8
$ 1,012.5 $ 1,154.4
$ 1,518.8 $ 1,789.3
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
55.0%
Acknowledgement of such exists in
125.0
130.0
135.0
140.0
145.0
150.0
155.0
form of cv price reset features that
156.3
169.0
182.3
196.0
210.3
225.0
240.3
195.3
219.7
246.0
274.4
304.9
337.5
372.4
may become effective after year 5
244.1
285.6
332.2
384.2
442.1
506.3
577.2
and significantly reduce cv
premium; though the consolidating move and competitive landscape may already be established before this
time.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 9 of 38
CH2M CREDIT NOTES
Updates:
October 1, 2015; KBR, Inc. secures new revolver. It reads as if the company is also being encouraged to
boost/raise additional equity. KBR’s current pension deficit is 12% of total assets (vs ch2m at 18%). This new
facility requires 3.5:1 debt to EBITDA on foundation of 1.2 bn equity (3.25 debt to equity). Ch2m effectively
requires an additional $600 million in equity with $175 million of it paying down pension deficit to 12% to get
to get to the same position KBR.
The KBR Credit Agreement contains customary covenants similar to the Prior Credit Agreement which include financial
covenants requiring maintenance of a ratio of consolidated debt to consolidated EBITDA of 3.5 to 1 and a minimum consolidated
net worth of $1.2 billion plus 50% of consolidated net income for each quarter ending on or after September 30, 2015, and 100%
of any increase in shareholders equity attributable to the sale of equity securities. The net worth covenant excludes the effects of
changes in foreign currency translation adjustments from Shareholders' Equity (as defined in the Credit Agreement) for periods
after January 1, 2015
November 3, 2015; Ch2m September 30, 2015 earnings release. Share price calculation has increases to $67.88
with 85% of “P” (TTM Income) being extraordinary with quality of remaining in question. Clearly
management is trying to manage shareholder sentiment as it continues to face limitation on IOT/share
redemption and wrestle solvency. The leverage ratio covenant returns to 3.0 x EBITDA at year
end. Accounting liberties continue - expect KPMG to experience some heartburn facing this audit. The current
tact is the reduction of liability (billings in excess) more rapidly than accrued revenue decline. Deferred tax
asset continues to grow and has been added to chart (below) - related valuation allowance will be important
piece of earnings/balance sheet quality determination in coming audit. Bank debt has been reduced
disproportionately vs other unsecured creditors (payables and pension). This is significant change in cash
management policy and may put others at odds with lenders (lender liability or preference claim). Expect the
$100mm will be deployed here. Can argue increasing asset impairment estimate to $230 million from $150
million. Client Accounts, Unbilled, Goodwill and Deferred Tax Asset in question as are earnings. Solvency is
still questionable on fair values.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 10 of 38
CH2M CREDIT NOTES
Deferred Tax Asset and Receivables have also been appended to the Asset Efficiency graphic to compliment the
benchmark analysis. Collective review of total revenue, the accrual component, receivables/receivables turn
and deferred tax asset in these charts highlight the accounts and earnings quality concern as the relationship
with efficiency ratio is examined.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 11 of 38
CH2M CREDIT NOTES
December 17, 2015; Texas Authority declares Ch2m in default of loss transportation contract. Zurich NA is
also the surety provider on this contract, the same project I infer is related to $77mm unidentified charge in IP
estimated 2014 financials from investor presentation that would seemingly demonstrate second quarter 2015
transportation loss was contemplated prior to the 2014 10k filing and fourth quarter 2015 shareholder call.
Technical insolvency continues.
January 15, 2016; January 8, 2016 dated opinion re Halcrow’s December 31, 2014 accounts carrying going
concern doubt is filed with UK Gov’s Companies House.
Variance Analysis appearing on page 3 has been refined. The possibility $65 million 2014 cost (implied in the
segment and power carve analysis) were deferred remains in question; a material issue in light of $87.6 million
net equity reported fiscal 2014 and solvency test. $9.6 million allowed restructuring carryover (q1 ’15) plus $11
million and $42.6 million transportation losses (Q1 and Q2 ’15) represent $63.2 or 97.2% of this implied cost
identified in management prepared financials.
Variance
Statutory Consolidated less Power less Segments
2010
Consolidated Revenue
Consolidated Income From JVs
Consolidated Direct Costs
Consolidated Gross Profit
$177.2
2011
$125.5
2012
$583.5
2013
$13.8
2014
$15.0
Common Size
2010
2011
2012
2013
2014
3.3%
2.3%
9.5%
0.2%
0.3%
$0.0
($0.1)
$0.5
$0.2
$0.0
0.0%
0.0%
0.0%
0.0%
0.0%
$121.9
$83.2
$390.1
$8.4
$1.9
2.2%
1.5%
6.3%
0.1%
0.0%
0.2%
$55.3
$42.2
$193.9
$5.6
$13.1
1.0%
0.8%
3.1%
0.1%
Consolidated SG&A
$291.9
$322.1
$464.1
$282.9
$340.6
5.4%
5.8%
7.5%
4.8%
6.3%
Consolidated EBIT
($239.1)
($284.0)
($272.1)
($278.6)
($327.5)
-4.4%
-5.1%
-4.4%
-4.7%
-6.0%
NCI
$0.1
$0.0
$0.0
$0.0
$0.0
0.0%
0.0%
0.0%
0.0%
0.0%
($40.6)
($32.2)
$16.4
$13.2
($64.8)
-0.7%
-0.6%
0.3%
0.2%
-1.2%
EBITDA
($279.8)
($316.2)
($255.7)
($265.4)
($392.3)
-5.2%
-5.7%
-4.2%
-4.5%
-7.2%
Project
$0.0
$0.0
$0.0
$0.0
$204.4
0.0%
0.0%
0.0%
0.0%
3.8%
Impairment
$0.0
$0.0
$0.0
$0.0
$73.3
0.0%
0.0%
0.0%
0.0%
1.4%
Restructuring
$0.0
$0.0
$0.0
$0.0
$70.4
0.0%
0.0%
0.0%
0.0%
1.3%
Project Impairment rec.
$0.0
$0.0
$0.0
$0.0
0.0%
0.0%
0.0%
0.0%
3.8%
($279.8)
($316.2)
($255.7)
($265.4)
($248.6)
-5.2%
-5.7%
-4.2%
-4.5%
-4.6%
As % of Statutory Revenue
-5.2%
-5.7%
-4.2%
-4.5%
-4.6%
As % of Segments Revenue
-5.6%
-6.1%
-5.2%
-5.0%
-4.8%
As % of Supported Revenue
-5.3%
-5.8%
-4.6%
-4.5%
-4.6%
0.0%
0.0%
0.0%
0.0%
0.0%
Air Ball - Losses and Restructuring
Adj EBITDA - Corp Overhead rr
Richard J. Reilly
$204.4
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 12 of 38
CH2M CREDIT NOTES
February 26, 2016; Ch2m announces intention to pursue capital structure alternatives.
Credit perspective turns to analysis of cash / non-cash impact on Changes in assets and liabilities.
Company comment absent, the observation is that the $583.5 million 2012 revenue gap represents the
approximate sum of i. $317.2 non-cash increase in long term employee related and other, ii. $22.0 addition to
AOCI (both occurring between Sep and Dec 2011) and iii. $244.2 2011 EBBT (per IP).
A non-cash gap is identified when comparing change in receivables and unbilled accounts reported per balance
sheet vs cash flow (inverted for comparative purposes). Allowance for uncollectable accounts per cash flow
also appears. This is the provision charged to expense; additional components of allowance include accounts
written off and “other”.
Similar gap analysis is performed on asset and liabilities accounts affecting cash from Operations. Direct and
SG&A as percentage of gross revenue also appear.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 13 of 38
CH2M CREDIT NOTES
A representation of change in OACI and LT employee related balance sheet accounts appears atop the non-cash
gap in P&L and cash flow for comparative purposes.
March 24, 2016; Evercore Partners identified as Ch2m’s restructuring advisor.
April 22, 2016; financing and litigation update; April 11 closing of PE investment tranuch 2. Also, Ch2m’s
response to LMI crossclaim resulting from allegations in second amended Steadfast (Zurich) complaint is due
before May 17. LMI asserts contractual and equitable grounds for seeking indemnification relating to liability
which may potentially result from amended complaint citing acts, errors, or omissions, faulty performance and
negligence.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 14 of 38
CH2M CREDIT NOTES
May 5, 2016; the subjective nature of C&E financial accounting/reporting and working capital position top the
list for this update.
C&E accounting and the difficulty of restructuring programs in the industry are notorious. And in the case of
Ch2m, one must weigh the subjective aspects of accounting/reporting (with consideration to timing and
valuation) of pension obligations, deferred tax assets, and goodwill, and, as is pointed out in this document,
their impact in weighing solvency and value. Safe harbor provisions, the push for a Delaware Chancery forum
for any future dispute, speculative grade securities issuance and, most recently, renewed D&O indemnification
all call for prudence in financial review and weighing the quality of business judgement and decision making.
While client accounts days sales have declined, unbilled revenue remains considerably off-side to the tune of
approx. $200 million. Quality remains in question.
Payables remains $100 million off-side and billings in excess may reflect weariness of clients to provide credit
support.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 15 of 38
CH2M CREDIT NOTES
Offside working capital is shown in perspective with leverage. And the consolidated view previously shown (a
trend line added to the payables series.
May 12, 2016; On May 6 we learned of an attempted cram-down restructuring of Halcrow pension scheme that
was defeated (individual consent required by UK pensions legislation) in Dec 2015. The ruling represents a
£600m deficit benchmark ($869 at 1.45 GBP:USD) vs 12/32/15 reported Non US underfunded status of $423m.
This would suggest significant balance sheet ramifications across goodwill, liability and equity accounts.
A third attempt to establish meaningful dialogue with independent leadership at the company was extended
May 8. Previous efforts were April 2015 and February 2016; this report was shared with PE and the company
at the time of the latter.
May 14, 2016; Fiduciary background study shared with independent director and member of Audit Committee.
June 1, 2016;
Notwithstanding the financial, materiality, disclosure and executive independence matters raised, the
apparent flight of confidence in management and stakeholder dissent from incumbent policy grows
alarmingly. Even published remarks of outside counsel re Halcrow financial condition and acquisition
due diligence can be construed as being pointed.
As it seemingly escaped him in responding to the above, Independent counsel to Audit Committee was
reminded that materiality was the topic that led a Feb 2016 review this financial analysis when clarification re
$800 million revenue gap identified between 2010-12 was specifically sought. And my own reconciliation of
$580 million was declined. The company/committee have been afforded opportunity to investigate/rebut
evidence of apparent cost loading/earnings management occurring in key interims, elasticity that is apparent in
receivables accounting through the 2014 liquidity crisis and my questioning the growth of goodwill and
deferred tax assets basis through these periods (vs fair value assumptions) and, most recently, background
evidence that highlight unique personal relationships that exist between current and former executives/executive
directors and a nuclear watchdog that display remarkable correlation to key events from significant chapters of
ch2m’s 2005 - present history including executive turn, Panama Canal win and the Halcrow acquisition.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 16 of 38
CH2M CREDIT NOTES
August 1, 2016;
Accounting quality and materiality issues were issues raised with Audit Committee Counsel, Chief Ethics
Officer, Internal Audit and General Counsel in February 2016 review of this credit critique. In particular, the
following issues were specifically raised:
 $886 million unsupported revenue Gap in 2010 – 2012 statutory financials ($177m in 2010, $126M
2011 and $583M 2012) (see pages 3 and 13).
 Asset quality concerns highlighting apparent weakness in accounts receivable, deferred tax asset and
goodwill accounts.
More recently, following end late May 2016 rehashing of these issues with the audit committee defense counsel
and immediately prior to June 6 form 8-k disclosure re additional charges, Ch2m and its audit professional took
keen interest this analysis.
And now, with continued warnings contained in second quarter 2016 financials, it is recommended prudent
stakeholders ought to consider the benefit of pursuing 291 Administration in Delaware Chancery as a means of
enforcing greater oversight/accountability. It is noted that this would likely precipitate a Chapter 11 petition,
now more so just an eventuality in the company’s quest to recapitalize.
Solvency and accounting concerns
I maintain current and predecessor ch2m management has been papering over difficulty and disappointing
financial performance via merger and cookie jar reserve accounting for some time. And as a result of such
shenanigans in having overstating profitability, the company now is left wrestling solvency both on fair value as
well as its ability to meet future obligations as they come due.
Revenue overstatement aside, several of the balance sheet and liquidity concerns that exist today are
Highlighted below.
Note that available cash on hand at June 24 2016 was lower than in 2014 when the Company experienced
technical default and was forced to seek external financing. Credit availability of $85.2 million is, by the current
3 times consolidated leverage ratio, supported by just $28.4 million cash flow (where TTM D&A and
restructuring fees are ~ 3x this amount alone). An opaque $105 million increase to Deferred Tax was booked in
the most recent calendar quarter. The company continues to carry, at least, $280 million of goodwill associated
with Halcrow, whose 2014 and 2015 accounts carry a going concern qualification. All of the $200 million
capital infused in 2015 and $100 million in 2016 has been expended and the net working capital position is
weakening and approaches 2014 crisis levels.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 17 of 38
CH2M CREDIT NOTES
Accounts receivable gap:
$247.1 net use of cash appears on statement of cash
flows (Mar 2012 through Dec 2015).
o
$260.2 million use - Receivables and
unbilled
o
$13.1 million source - Receivables
allowance
$189.6 million use is demonstrated in net balance
sheet account increase (client and unbilled accounts).
$57.4 is attributed to receivables reserve accounting
Mar 2012 through Dec 2015. ($52.2 million Mar
2012 to date)
Note the gap is particularly apparent Mar 2014 – June 15 interim at the height of the liquidity crisis
Deferred tax asset gap:
$(10), – $18 and $(12) variances occur in the 4th
quarter of 2012 – 2014, respectively.
Account turn
Sharp increases in client accounts, unbilled
revenue and billings in excess DSO are
worrisome when compared to historic
impact of revenue decline and, together,
suggest deteriorating quality of revenue
mix where, again, client accounts and
unbilled each account for roughly ½ total
revenue.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 18 of 38
CH2M CREDIT NOTES
Net Working Capital
The NWC position remains inverted
and has worsened in the first 2
quarters of
2016. Underperformance/weakness
of current assets quality is the
highlight.
Asset Efficiency:
Erosion of total asset efficiency is also
driven by remarkable increase in deferred
tax asset.
Depression of the ratio is also attributed
to low quality/high carrying value of
goodwill. Note that despite going
concern opinions on Halcrow, Ch2m has
booked only $74 million intangible
impairment (Sep 2014) since booking
$376 million goodwill on the 2011
acquisition.
NOL/deferred tax asset, related valuation
allowance and goodwill accounts deserve
particular scrutiny.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 19 of 38
CH2M CREDIT NOTES
August 15, 2016; Today, this report was submitted to UK pension restructuring consultant and former the head
of insolvency and Restructuring with the UK Pension Protection Fund, currently working for with Ch2m and
the Halcrow Pension Trustees toward an effective cram down that seeks to reduce, or effectively expunge, a
portion of the pensioners’ claim through the rarely used and controversial RAA statute that is without
transparency. And within an hour of sending the url to access, barristers/counselors from both Sackers and
Hogan Lovells were also reading. Such urgency: 1) increases confidence in this analysis and 2) presented a
good opportunity to also seek clarification from Hogan re whether it continues to represent JKC Australia LNG
as well as Ch2m. Thus, this question was presented to the C&E and Project Finance partner who was identified
as leading the JKC engagement in 2012. If yes, perhaps conflict counsel will be identified. JKC is the joint
venture between JGC Corporation, KBR and Chiyoda Corporation associated with the US $34 billion Ichthys
LNG Project on which Ch2m realized an approx. $300 loss interest.
December 13, 2016; Ch2m is congratulated for granting retirees proxy access and announcing potential
financial restatement in which it is hoped wider acknowledgement of value erosion resulting from the Halcrow
pension deficit and related charges that existed in 2012 – current operating expense and G&A will be addressed.
The potential shift of transportation cost growth from 4th quarter 2015 to earlier periods that was disclosed
would effectively increase TTM “P” for the Sep 2016 price fix where $18mm pretax vs. $10mm tax-adjusted
cost shift would represent approximately $5.00 vs. $2.75 in share price. Comparatively, consider $230mm
Halcrow associated goodwill that remains where a $165 - $230mm charge against SE would result in $5 to $7
loss in calculated share value (pre-tax
Pretax
Assumed Tax Tax Adjusted Assumed 3Q 2016 Rec
basis). Without any such potential
$
43,000 $
$
43,000 Net Income
adjustment(s), or under the assumption
$
52,300 $
13,075 $
39,225 Power losses
they offset, an approximate $33 formula
$
$
$
Goodwill Impairmwent
share price is estimated. Note the 3rd Q
$
35,000 $
11,550 $
23,450 Restructuring
$ (221,250) $
(46,250) $
(175,000) (Gain) on sale/Restructuring of business
2015 net income to operating income
$
18,000
$
$
18,000 D&A
reconciliation assumes $35m/$23.5m
$
10,700 $
$
10,700 Interest & Other
pre-tax and post- tax restructuring
$
$
$
(21,625) Tax
charge, respectively.
$
(62,250) $
(21,625) $
(62,250) 3Q 2016 Operating Income Guidance
EffectiveDate
PricePer
$
M(1)
P(2)
SE(3)
CS(4)
Multiplier
Change in P
Price Calc
Board Valuation
ttm Net Income
TTM (Income) loss attributable to noncontrolling interests
TTM less P
Var
Power losses (after Tax)
Goodwill Impairmwent (after tax)
Restructuring (After Tax)
(Gain) on sale/Restructuring of business
D&A (after Tax)
Noted Exclusions from "P" Total
Richard J. Reilly
8/3/2015
55.75 $
1.20
110,060
713,723
31,270
7.8
$
8,746
$
55.77
$ 1,743,884.60
-278,744
131,625
-257,179
$
(179)
$
107,000
$
61,000
$
59,000
11/2/2015
67.87 $
1.20
153,652
728,232
31,918
7.8
$
43,592
$
67.87
$ 2,166,414.72
-14,736
40,070
-128,318
$
682
$
43,000
$
$
62,000
2/22/2016
62.89 $
1.20
139,622
686,890
31,702
7.8
$
(14,030)
$
62.89
$ 1,993,751.92
92,117
-11,714
-59,219
$
(219)
$
(1,000)
$
$
40,000
5/2/2016
60.91 $
1.20
131,724
684,531
31,482
7.8
$
(7,898)
$
60.91
$ 1,917,467.64
88,336
-6,852
-50,240
$
760
$
(2,000)
8/1/2016
52.23
1.20
110,648
693,619
33,111
7.8
$
(21,076)
$
52.23
$ 1,729,284.28
-81,488
84,652
-107,484
$
(484)
$
63,000
$
35,000 $
$
$
30,000 $
257,000 $
24,000 $
129,000 $
20,000 $
59,000 $
18,000 $
51,000 $
$
67.12%
87,900 $
66.60%
93,100 $
66.01%
60,600 $
68.63%
51,000 $
DueDilly, LLC d/b/a Responsible Strategic Management
11/16/2016
$
$
1.20
54,650
736,619
33,111
7.8
(55,998) $
37.70
$
11/16/2016
1.20
31,200
736,619
33,111
7.8
(79,448) $
31.07 $
1.20
900
736,619
33,111
7.8
(109,748)
22.50
$ 1,248,143.00 $ 1,028,651.00 $ 745,043.00
-88,759
-88,759
-88,759
146,012
146,012
146,012
2,603
26,053
56,353
$
3 $
3 $
3
$
107,500 $
107,500 $
53,750
28,000 $
$
16,000 $
107,000 $
64.97%
43,100
11/16/2016
46,900
(175,000)
18,000
(2,600)
100%
TTM Power
$70M
TTM Restrng
Adjustment
$
$
$
$
23,450
(175,000)
18,000
(26,050)
100%
TTM Power
$35M
TTM Restrng
Adjustment
$
$
$
$
46,900
(175,000)
18,000
(56,350)
50%
TTM Power
$70M
TTM Restrng
Adjustment
(917) 882-2880
Page 20 of 38
CH2M CREDIT NOTES
$33 BOD share price fix estimate reflects earnings quality concern and provides some consideration for
sensitivity surrounding adjustment for restructuring and project loss in so much as their recurring may, perhaps,
be testimony to core margin weakness resulting from how projects were bid and predisposition to rely on
claims/change order revenue on day 2 of the project lifecycle. Remarkable weakness in project performance
across the broad portfolio confirmed in
2015
Adjusted 2015
Ch2m’s 2016 project management summit Pension Position
Non US
Total
US
Non US
Total
also supports this contention and thus the
Plan
Obligations
$1,174.6
$1,423.5
$248.9
$953.4
$1,202.3
7.6x industry multiple approach has also
Plan Assets
$751.9
$939.2
$187.3
$751.9
$939.2
been revisited. $383mm buy-out, $263
on-going deficit and $160mm competitive Underfunded Status ($422.7) ($484.4) ($61.6) ($201.5) ($263.1)
Total Assetts
2,861.3
2,861.3
pay-down adjustments are derived from
-16.9%
-9.2%
2015 pension disclosure adjusted for
Halcrow pension restructuring. A $250 million deleveraging new equity component is also assumed. $205 $220 Cash flow is consistent with earlier analysis as well as average 2 and 3 year rolling 4 quarter TTM
adjusted EBITDA. Core margin and earnings quality concerns warn of downside or extended term to work
through existing core weakness.
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
160.0
175.0
190.0
205.0
220.0
235.0
250.0
Sep 2016 Competitive Pay-down + $250 New Equity (on NT guidance)
6.7
7
7.3
7.6
7.9
8.2
8.5
$ 661.9 $ 709.9 $ 757.9 $ 805.9 $ 853.9 $ 901.9 $ 949.9
$ 762.4 $ 814.9 $ 867.4 $ 919.9 $ 972.4 $ 1,024.9 $ 1,077.4
$ 862.9 $ 919.9 $ 976.9 $ 1,033.9 $ 1,090.9 $ 1,147.9 $ 1,204.9
$ 963.4 $ 1,024.9 $ 1,086.4 $ 1,147.9 $ 1,209.4 $ 1,270.9 $ 1,332.4
$ 1,063.9 $ 1,129.9 $ 1,195.9 $ 1,261.9 $ 1,327.9 $ 1,393.9 $ 1,459.9
$ 1,164.4 $ 1,234.9 $ 1,305.4 $ 1,375.9 $ 1,446.4 $ 1,516.9 $ 1,587.4
$ 1,264.9 $ 1,339.9 $ 1,414.9 $ 1,489.9 $ 1,564.9 $ 1,639.9 $ 1,714.9
160.0
175.0
190.0
205.0
220.0
235.0
250.0
Sep 2016 On-going Deficit adj + $250 New Equity (on NT guidance)
6.7
7
7.3
7.6
7.9
8.2
8.5
$ 558.9 $ 606.9 $ 654.9 $ 702.9 $ 750.9 $ 798.9 $ 846.9
$ 659.4 $ 711.9 $ 764.4 $ 816.9 $ 869.4 $ 921.9 $ 974.4
$ 759.9 $ 816.9 $ 873.9 $ 930.9 $ 987.9 $ 1,044.9 $ 1,101.9
$ 860.4 $ 921.9 $ 983.4 $ 1,044.9 $ 1,106.4 $ 1,167.9 $ 1,229.4
$ 960.9 $ 1,026.9 $ 1,092.9 $ 1,158.9 $ 1,224.9 $ 1,290.9 $ 1,356.9
$ 1,061.4 $ 1,131.9 $ 1,202.4 $ 1,272.9 $ 1,343.4 $ 1,413.9 $ 1,484.4
$ 1,161.9 $ 1,236.9 $ 1,311.9 $ 1,386.9 $ 1,461.9 $ 1,536.9 $ 1,611.9
160.0
175.0
190.0
205.0
220.0
235.0
250.0
Sep 2016 Buyout Adjusted + $250 New Equity (on NT guidance)
6.7
7
7.3
7.6
7.9
8.2
$ 438.7 $ 486.7 $ 534.7 $ 582.7 $ 630.7 $ 678.7
$ 539.2 $ 591.7 $ 644.2 $ 696.7 $ 749.2 $ 801.7
$ 639.7 $ 696.7 $ 753.7 $ 810.7 $ 867.7 $ 924.7
$ 740.2 $ 801.7 $ 863.2 $ 924.7 $ 986.2 $ 1,047.7
$ 840.7 $ 906.7 $ 972.7 $ 1,038.7 $ 1,104.7 $ 1,170.7
$ 941.2 $ 1,011.7 $ 1,082.2 $ 1,152.7 $ 1,223.2 $ 1,293.7
$ 1,041.7 $ 1,116.7 $ 1,191.7 $ 1,266.7 $ 1,341.7 $ 1,416.7
8.5
$ 726.7
$ 854.2
$ 981.7
$ 1,109.2
$ 1,236.7
$ 1,364.2
$ 1,491.7
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
160.0
175.0
190.0
205.0
220.0
235.0
250.0
Sep 2016 Competitive Pay-down + $250 New Equity (on NT guidance)
6.7
7
7.3
7.6
7.9
8.2
8.5
$ 21.2 $ 22.7 $ 24.2 $ 25.8 $ 27.3 $ 28.8 $ 30.4
$ 24.4 $ 26.1 $ 27.7 $ 29.4 $ 31.1 $ 32.8 $ 34.5
$ 27.6 $ 29.4 $ 31.2 $ 33.1 $ 34.9 $ 36.7 $ 38.5
$ 30.8 $ 32.8 $ 34.7 $ 36.7 $ 38.7 $ 40.6 $ 42.6
$ 34.0 $ 36.1 $ 38.2 $ 40.4 $ 42.5 $ 44.6 $ 46.7
$ 37.2 $ 39.5 $ 41.7 $ 44.0 $ 46.3 $ 48.5 $ 50.8
$ 40.5 $ 42.8 $ 45.2 $ 47.6 $ 50.0 $ 52.4 $ 54.8
160.0
175.0
190.0
205.0
220.0
235.0
250.0
Sep 2016 On-going Deficit adj + $250 New Equity (on NT guidance)
6.7
7
7.3
7.6
7.9
8.2
$ 17.9 $ 19.4 $ 20.9 $ 22.5 $ 24.0 $ 25.5 $
$ 21.1 $ 22.8 $ 24.4 $ 26.1 $ 27.8 $ 29.5 $
$ 24.3 $ 26.1 $ 27.9 $ 29.8 $ 31.6 $ 33.4 $
$ 27.5 $ 29.5 $ 31.4 $ 33.4 $ 35.4 $ 37.3 $
$ 30.7 $ 32.8 $ 35.0 $ 37.1 $ 39.2 $ 41.3 $
$ 33.9 $ 36.2 $ 38.5 $ 40.7 $ 43.0 $ 45.2 $
$ 37.2 $ 39.6 $ 42.0 $ 44.4 $ 46.8 $ 49.1 $
8.5
27.1
31.2
35.2
39.3
43.4
47.5
51.5
160.0
175.0
190.0
205.0
220.0
235.0
250.0
Sep 2016 Buyout Adjusted + $250 New Equity (on NT guidance)
6.7
7
7.3
7.6
7.9
8.2
$ 14.0 $ 15.6 $ 17.1 $ 18.6 $ 20.2 $ 21.7 $
$ 17.2 $ 18.9 $ 20.6 $ 22.3 $ 24.0 $ 25.6 $
$ 20.5 $ 22.3 $ 24.1 $ 25.9 $ 27.7 $ 29.6 $
$ 23.7 $ 25.6 $ 27.6 $ 29.6 $ 31.5 $ 33.5 $
$ 26.9 $ 29.0 $ 31.1 $ 33.2 $ 35.3 $ 37.4 $
$ 30.1 $ 32.4 $ 34.6 $ 36.9 $ 39.1 $ 41.4 $
$ 33.3 $ 35.7 $ 38.1 $ 40.5 $ 42.9 $ 45.3 $
8.5
23.2
27.3
31.4
35.5
39.5
43.6
47.7
Discussion points shared recently include; The suggestion that a leadership committee may serve as a
mechanism to immediately deliver a path of confidence as well as provide a forum that can aid the search and
selection process. Concerns re earnings quality remain (level of unbilled revenue & client receivables,
accounting for change claims and insurance proceeds (sustainable operating revenue vs. unsustainable gains)
and weakness in goodwill & deferred taxes accounts remain are the key issues). The hope that Ch2m will soon
mend fences shared with the surety community. And anticipation that Apollo will seek a purchase price reset
under contract indemnity provisions in connection with restatement and continuing losses (presumably
historical stock price and trades would also require adjustment).
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 21 of 38
CH2M CREDIT NOTES
Most recently it was suggested that fiduciaries may find a strategic path to enhance shareholder liquidity/equity
participation and provide choice in the identification of strategic alternatives available to the company through a
courtship capital raising contest.
Proposed mechanism:
 issue transferable/assignable equity or straight pfd subscription rights whereby shareholders may elect to
deliver rights to any party making an expression of goodwill and interest that can accumulate >5%
pledge (or another suitable threshold).
 rights program to require BOD to launch succession plan, installing disinterested interim leadership
(committee suggested), and appoint an independent professional plan trustee to act on behalf
beneficiaries who neglect to exercise/reserve rights under such an offering.
 uncommitted rights program, to not force cv pfd conversion, that allows up to $300 - $550mm to be
written (~27% and ~47% ownership interest having representative board participation), with proceeds
over $300 or $350mm available to redeem cv pfd or repurchase shares. The first $250 - $300mm shall
be utilized to deleverage and satisfy bank and trade creditors.
 new 5% holders may participate in quarterly trade but agree not to trigger 382 change of control
threshold
 after some prescribed interim time period 5% holder(s) may tender for control of the Ch2m brand
without defense or penalty (offering cash and/or stock election).
Benefits of proposed:
 avoids expensive court process and/or equitable challenge
 provides strategic interests who court Ch2m opportunity to actively develop competitive advantage and
efficient acquisition plan(s)
 the BOD embarks on path toward earning blanket release
 bank and unsecured trade creditors would benefit
 Ch2m shareholders would be provided opportunity to participate in the process of identifying and
choosing the future ownership and direction for the enterprise.
 stimulates a competitive environment that focuses on strategic benefit and unlocking intrinsic value
 is consistent with transactional rights/alternatives under Apollo agreement
December 26, 2016; Reflecting on the possibilities of restatement and Apollo seeking price adjustment brings
us to the question of whether Apollo might have benefitted from discussions with or services provided by
former Ch2m executives/directors. Antione Munfakh acknowledged that Apollo held some level of dialogue
with Robert Card during his tenure with SNC-Lavalin, and it has been suggested that Apollo might also have
retained the services of Lucki advisors in connection with their cv Pfd investment. The existence of such
relationships may, in fact, be significant insomuch as associated communications and deliverables might
become discoverable were a dispute between Apollo and the company and/or its stakeholders to arise. Also,
there is reason to believe that the board has sought the services of Russell Reynolds, whose previous
cooperation with the lead director is noted. Services offering include; leadership assessment, board
effectiveness and executive/board search & succession.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 22 of 38
CH2M CREDIT NOTES
January 18, 2017 (AM);
If specific guidance with respect to timing of September 10-Q filing is not available as part of scheduled
January 20 SEC filing update to shareholders, the probability material error or “Big R” restatement is increased.
In this circumstance, it is noteworthy that shareholders would be presented the opportunity to seek greater
control in governance and presenting their own proposals for solicitation in so much as all Delaware companies,
under Section 211 of the Delaware General Corporation Law, are requires to hold an annual meeting
independent of whether it they are able to distribute current financials to shareholders, as management must
prior to any solicitation under 17 CFR 240.14a-3. Professional investors would not hesitate to capitalize on such
an opportunity, neither should ch2 shareholders.
The accounting, actuarial and ratings communities, including organizations such National Association of
Corporate Directors and the Financial Reporting Council, generally agree that, particularly in a time of crisis,
when the chairman and CEO are one and the same person, the Lead Director becomes an important part of the
governance structure where their responsibility would include;
 calling, setting the agenda for and chairing executive sessions of independent directors
 acting as an intermediary between the independent directors and the chairman/ CEO in discussing issues
 ensuring the appropriate and timely flow of information between company management and the
independent directors
 if necessary, intervening in order to maintain board and company stability and/or act a spokesperson or
interim CEO if management is involved in the problem.
 ensure the process of orderly succession
The independent members of this board must acknowledge evidence of chronic management disconnect and
growing call for intervention. The list includes;
 broad portfolio weakness; 2016 project management summit that closed with only general conjecture
outlining about $100-$150 million in core portfolio improvement.
 delayed realization and insufficient response to loss projects; lack of action/accountability across
leadership.
 Vague and unsupported reporting of recovery claims/change orders on loss projects in shareholder calls
which are unsupported in financials and disputed by clients (and others).
 July 21 CTMRA letter to Ch2m that communicates gross inept
 inability to formulate and stick to business structure/plan that has rendered management incredible;
constant business/leadership reorg convolutes segmented financial disclosures and calls for scrutiny
 Demonstration of incompetence or contempt toward independent directors and/or employees and
shareholders in failing to acknowledge material accounting and financial issues associated with Halcrow
purchase (pension deficit, hidden cost, going concern doubt and goodwill impairment) after having sat
on its board.
 premature and unsupported statements re 2015 return to profitability following 2014 restructuring
 further inaccurate guidance re early January filing of September quarterly and a January trade date
January 18, 2017 (PM - post filing);
The Big “R” restatement is not a surprise nor is the new reference to “potential inquiry by the United States
Securities and Exchange Commission with respect to the proposed restatements or CH2M’s accounting
practices” in the Cautionary Note Regarding Forward Looking Statements. Foley and Larder’s recent interest in
this report is suspected to be associated with the latter.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 23 of 38
CH2M CREDIT NOTES
January 24, 2017; Observations re Q3 2016 and related filings
In addition to a $46mm tax benefit resulting from pension restructuring, there is a $32.4mm tax benefit in Q3
2016, which, through the price formula, represents $315 million or $9.30 per share. If this benefit were driven
by losses, how much might be attributed to power and should the same be excluded from “P” but included in SE
as are power losses? (TTM Transport and Power charges, net of transport restatement above, amount to $296
million and are split 50/50). Also, a $15mm gain/$31mm goodwill resulting from the acquiring of a controlling
interest in one joint venture for $2.1mm (net) are based on fair value re-measurement of the original equity
method. Through the price formula, this would represent $140mm or $4.40 per share. Together this amounts to
$47.4mm of “P” / $13.61 per share price that should be considered when weighing the quality of core
operations/project portfolio performance. This highlights the significance of accounting quality for shareholders
and underscores why, due to the latitude that exists in establishing fair value and deferred tax asset value,
shareholders might seek enhanced disclosure in these areas.
In reconciling the Q3 ’16 the share price an $8mm accounting discrepancy in 2015 between 10-K/A restated
and Q3 2015 financials is identified. The net variance in share price is attributed to a combination of tax benefit
and gains outlined above.
EffectiveDate
PricePer
11/16/2016
M(1)
P(2)
SE(3)
CS(4)
Multiplier
Change in P
Price Calc
Board Valuation
ttm Net Income
TTM (Income) loss attributable to noncontrolling interests
TTM less P
Var
Power losses (after Tax)
Goodwill Impairmwent (after tax)
Restructuring (After Tax)
(Gain) on sale/Restructuring of business
D&A (after Tax)
Noted Exclusions from "P" Total
$
1.20
54,650
736,619
33,111
7.8
(55,998) $
$
37.70 $
TTM (Income) loss attributable to noncontrolling interests
Reconciliation $37.1 - $46.83
P
SE
Net P
1.20
88,288
701,279
32,622
7.8
(22,360)
54,650
736,619
-27,067
-8,270
TTM Power
Remark
33,638
$15.9 actual vs $43 Net Income Guidance
Accounting Discrepancy; Cash Flows 10-KA vs 10-Q
-32,438 Non Pension Tax Benefit
-1,200 Other (gain?)
46.83
$ 1,248,143.00 $ 1,527,654.68
-88,759
-151,114
-62,355
146,012
143,294
-2,718
2,603
-96,108
$
3 $
(108) $
111
$
107,500 $
102,000 $ (5,500)
$
$
46,900 $
25,000 $ (21,900)
$
(175,000) $
(46,000) $ 129,000
$
18,000 $
15,000 $ (3,000)
$
(2,600) $
96,000
100%
ttm Net Income
11/16/2016
Restated
Actual
$
Largely attributed to Mopac cost growth ($66 vs $25)
Non-controling var
TTM Power Losses var
Restructuring Var
Pension Restructure - opposite approaches
Non-cash var
88,288 $ 701,279 $
-
3
-
$70M
TTM Restrng
Adjustment
Unbilled revenue remains at peak levels and has overtaken client accounts which has returned to an acceptable
activity level. Net working capital position improved as a result but the pattern suggests the influence of bank
intervention. Asset Efficiency highlights continuing weakness in goodwill and deferred tax accounts.
Re the Third Amendment to Credit Agreement; the collateral grab is worrisome and indicative of bank
sentiment.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 24 of 38
CH2M CREDIT NOTES
48
Offside Working Capital; Unbilled Revenue
300000
200000
38
100000
28
0
18
-100000
Sum of Unbilled revenue Days Revenue
Sum of NWC Fix Bar
Sum of NWC Unbilled revenue Days Revenue
Sum of NWC
Unbilled revenue Days Revenue (Var)
Offside Working Capital; Payables
45
150
40
50
100
Net Working Capital
$300
35
50
-50
30
25
-150
Sum of Payables days outstanding (on direct cost)
Sum of NWC Fix Bar
Sum of NWC Payables days outstanding (on direct cost)
Sum of NWC
Payables days outstanding (on direct cost) (Var)
1,800
1,600
$(200)
Sum of Debt (Current + LT)
Sum of NWC Fix Bar
Sum of NWC Inversion Assets Less Liab
Sum of NWC Working Capital Inversuion Liability side
Revenue, Receivables and Debt
Halcrow
Acquisi tion
1,400
Austral ian
Power
Announced
Halcrow
Defended
Bank
Consultant
Benchmark
Most
Recent
Quarter
1,200
0
60.0
50.0
40.0
1,000
30.0
800
600
20.0
400
10.0
200
0
0.0
Gross Revenue
Client accounts
Unbilled revenue
Billin gs in excess of revenue
Other
Debt (Current + LTD)
Payables days outstanding (on direct cost)
Client accounts Days Revenue
Unbilled revenue Days Revenue
Other Days Revenue
Billin gs in Excess days Revenue
Deferred Income Tax Days revenue
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 25 of 38
CH2M CREDIT NOTES
February 7, 2017; A quick study of comparative
share value is worthwhile in light of merger
Asset Efficency
0.9
speculation. Below, Atkins’ recent share price
2.5
0.8
£14.68 is evaluated on its own TTM financials
0.7
2
under the Ch2 price formula with an “M” factor of
0.6
1.5
0.5
1.21 identified (includes a £18.5 adjustment to “P”
0.4
relating to 2017 goodwill impairment, less gains of
1
0.3
£1.5 on pension curtailment and £6.4 on disposal of
0.2
0.5
property). Utilizing the same 1.21 in the most recent
0.1
Ch2m calculation, excluding both the $15m gain on
0
0
fair value adjustment and $16.2 tax benefit
attributed to Power losses from “P”, a $37.99 share
Goodwill
Sum of CS | Deferred Tax (Current + LT)
Sales/Total Assets
Client accounts
price results. A 0.2 reduction in “M”, 16.7% of 1.2
Unbilled revenue
TTM Sales/Total Assets
board discretionary and comparative factors, lends
consideration to Atkins’ stronger performance/condition; in this context, a $35.25 share price is determined.
And in light of questions surrounding Goodwill, Deferred Tax and Pension position the $33 estimate holds.
Talk is not a surprise; a deal is needed.
3
1
Atkins
Feb-17
M(1)
P(2)
SE(3)
CS(4)
Multiplier
Price Calc
£
£
£
Ch2m
Sep-16
1.21
135,600
185,600
99,687
7.8
14.68
1.20
88,288
701,279
32,622
7.8
$
46.83
Equitable
Adj
Like
Performance Performance
Comparison
Discount
Adjusted
0.01
(31,200)
1.21
57,088
701,279
32,622
7.8
$
37.99
-0.20
1.01
57,088
701,279
32,622
7.8
$
35.26
Market
February 20, 2017; Return On Shareholder Equity
ROE = net profit margin * asset turnover * equity multiplier
Declining Asset Efficency
Increasing leverage
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 26 of 38
CH2M CREDIT NOTES
ROE = tax burden * interest burden * operating margin * asset efficiency * leverage ratio * return on assets
Flat EBIT/Sales highlights historic low
margins
Tax burden (Net income/Pretax or EBT)
highlights importance of exploring tax
considerations.
Mar ’13 Tax and operating expense anomaly
is consistent with Halcrow pension cost
concealment discussed earlier. $50mm is
again calculated;
EBT/sales drop & recovery of 0.23 (0.034 to
0.010 to 0.032) across Q1 and Q2 ’13 on
average revenue of $1.48bn is $34.5mm
ROE = pretax margin * asset efficiency * return on assets * (1-tax rate)
An additional $15.1 results from reduced
effective tax rate over same period.
Tax Gap (EBT/Sales vs. Net Income/Sales)
Deferred Tax Asset declined from 10.3% to
7.3% of total assets on the Halcrow
acquisition and again from 7.9% to 5.8%
between Jun ’13 and June ’14. It has since
risen to 14.6% of total assets.
The shift in the asset base where current
assets move further from cash (growth of
unbilled) and toward the long term (deferred
tax and goodwill) is alarming.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 27 of 38
CH2M CREDIT NOTES
February 25, 2017; Comparison of July 2015 and Feb 2017 Forms 13-D shows Apollo’s holding has increased
by 306,871 shares despite the subscription agreement providing that, prior to the 5th anniversary, the
cumulative dividend is not to be paid in cash or kind but added to the liquidation preference. It is noteworthy to
mention that including an additional 306,871 shares in the second closing (4/11/16) would reduce the price of
this traunch from $62.22 to $52.24, the August 1, 2016 calculated share price (whereas the May 2, 2016 share
price effective at the time was $60.91). A $22.15 million cum dividend to date is calculated which by 306,871
shares is $72.16 per. The origin of the additional shares is not clear. Perhaps Apollo has participated in the
quarterly trade or, alternatively, might this be a purchase price adjustment associated with the 2016 restatement?
Investment
Apollo Shares Held
Investment/shares held
% ownership
share float
$
$
Quarterly trade Participation
7/27/2015
2/24/2017
Total Investment
200,000,000 $
300,000,000 $ 300,000,000 $
3,214,400.0
5,128,471.0
4,821,600.0
62.22 $
58.50 $
62.22 $
10.5%
17.0%
16.0%
30,613,333
30,167,476
30,167,476
Form 13-D
Reported
Investment
Apollo Shares Held
Investment/shares held
% ownership
share float
5/25/2015 Second Closing
7/27/2015
2/24/2017
$
200,000,000 $
300,000,000 $
3,214,400
5,128,471
$
62.22 $
58.50 $
10.5%
17.0%
30,613,333
30,167,476
Form 13-D
Reported
5%
start
end
days 360
Yrs
Investment
Annual compounding
Richard J. Reilly
Form 13-D
Reported
Form 13-D
Reported
Var
14,370,769
306,871.0
46.83
1.0%
30,167,476
Potential
Quarterly Trade
Participation
Variance
100,000,000
1,914,071
52.24
Aug 1/2015
Share Price?
Compounded Cum Dividend
Traunch 1
Traunch 2
Cum Dividend
5/27/2015
4/11/2016
2/26/2017
2/26/2017
629
315
1.75
0.88
$
200,000,000 $
100,000,000
$
17,845,833 $
4,343,750 $
22,189,583
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 28 of 38
CH2M CREDIT NOTES
March 1, 2017;
This critique lead with the premise that a strategic business combination with one or more existing E&C
concerns presented the strongest prospect for Ch2’s future and recovery. And April 2015 Playbook highlighted
the issue of valuation presenting a fiduciary dilemma for its BOD; while it may serve shareholder desires, an
inflated share price limits strategic alternatives available as common shares are not a desirable currency and
access and capital is impaired, carrying the additional cost of priority. So one has to weigh, at what price might
share liquidity, access to capital and available strategic alternatives generate superior accretive growth
opportunity? Also, what is the value of choice and liquidity for former and current employee shareholders?
Speculation re Atkins has been noted previously, but an alternative prospect would be the possibility
CIMIC/Hochtief pushed the Ichthys contract termination to gain leverage and put themselves, perhaps together
with SNC-Lavalin and/or others, into a position to negotiate a global Ichthys settlement and target Ch2m in that
process.
A deal is needed… And Moelis & Co (London) is most recent to join the list of professionals who find
interested in this critique.
As the importance of tax considerations grow evident, a closer look is deserved. Tax Gap represents cash paid
for income taxes less the P&L provision and Deferred Tax Asset Gap represents the change in deferred tax asset
on balance vs statement of cash flows. The cumulative Tax Gap since either Jan 2010 or Jun 14 bank
intervention has grown to $175mm (cum cash paid exceeds provision) and the Deferred Tax Asset Gap reveals
net use in Dec 10, Dec 13 and Dec 15 and net source in Dec 12, Dec 14 and Sep 16. The Cum DTA Gap area
represents net use above and net source below the horizontal axis, a $20mm swing.
A core DTA component that is significant in size, less volatile and on a growth trajectory is identified by netting
the Cum Tax Gap from the Deferred Tax Asset and it
is suggested an accounting for this core is warranted
as it consists of temporary differences that grow in
age. In Nov 2016 a conservative $70mm at risk
Deferred Tax Asset Component was identified and
communicated; the above affirms the same
identifying weakness consisting of $50 - $75 million
core and $20mm swing.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 29 of 38
CH2M CREDIT NOTES
March 11, 2017; Sticking to the points.
Goodwill;
Approximately $230 million of goodwill related to Halcrow acquisition can be questioned, the facts/business
judgement sentiment surrounding the Halcrow investment warrant inquiry re the qualitative and quantitative
considerations Ch2m management relies upon in its goodwill impairment reviews.

2012 annual SEC filings last listed CH2M HILL Europe Limited - UK as a subsidiary (replaced by CHIHB,
LP – Bermuda).

Companies House filings indicate that in November 2013 Ch2m Hill Global Holdings S.à.r.l. disposed of its
interest in CH2M HILL Europe Limited to CHIHB, LP – Bermuda and that in 2014 CH2M HILL Europe
Limited took a full £123 impairment charge, eliminating all value associated with its Halcrow investment.

Hinman served as director of CH2M HILL Europe Limited between Jun 2010 and Feb 2014. And recent
turmoil/turnover on CH2M HILL Europe Limited board.
Pension Restructuring/Remaining Deficit;
While the RRA was successful in reducing benefit obligation, the creation of and transfer to HPS2 was less
exciting/successful, effectively transforming $65 million deficit contingency into a contingent guarantee as
opposed to a reduction of total deficit or an outside transfer of risk. In the deficit account or as a guarantee, the
banks’ fundamental view is the same when they evaluate credit worthiness/borrowing ability.
Financial/strategic capital would view this similarly as should shareholders.
The adjusted 2015 view (page 19) is affirmed and the buy-out, on-going deficit and competitive pay-down
scenarios in enterprise value calculations are fundamentally unchanged.
Pension Position
Plan Obligations
Plan Assets
Underfunded Status
Total Assetts
Risk Transformation
Underfunded Status
Total Assetts
Richard J. Reilly
2015
Non US
Total
$1,174.6 $1,423.5
$751.9
$939.2
($422.7) ($484.4)
2,861.3
-16.9%
US
$262.6
$194.6
($68.0)
($68.0)
2016
Non US
Total
$909.4 $1,171.9
$786.5
$981.1
($122.9) ($190.9)
2,670.5
-7.1%
($65.0)
($187.9)
Adjusted 2015
US
Non US
Total
$248.9
$953.4 $1,202.3
$187.3
$751.9
$939.2
($61.6) ($201.5) ($263.1)
2,861.3
-9.2%
($255.9)
2,670.5
-9.6%
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 30 of 38
CH2M CREDIT NOTES
Deferred Tax; The tax multiplier in the ROE analysis demonstrates to what extent tax accounting is driving “P”,
since June 14 and the Tax Gap has grown the tax gap has grown to $174 and $191 million cash out (paid for
taxes vs recognized in P&L accrual accounting) through Sep and Dec 2016, respectively.
Volatility in the DTA Gap has increased the frequency of swing; $18.5mm from source to use in the Dec 2016
quarter.
Though Core DTA appears to have returned normalized levels, it is driven by the net of $223mm reduction in
DTA Valuation Allowance ($59mm and $163mm in fiscal 2015 and 2016, respectively) and Cum Tax Gap of
$138mm cash out ($4mm cash in and $142mm out in fiscal 2015 and 2016, respectively) in the same interim.
The net $85 mm less $18 mm swing from source to use in the last quarter represents the $68 fall in Core DTA.
This is fundamentally the same $70 million weakness as is identified in the March 1 update and, whether
identified as having been transferred to earnings or remaining on the balance sheet, this weakness still exists.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 31 of 38
CH2M CREDIT NOTES
On common sized and activity basis core DTA offers the appearance of a return to levels still slightly
heightened in comparison to immediate post-Halcrow levels and the valuation allowance on aging core DTA
has served to support borrowing capacity by allowing the company to maintain a compliant consolidated
leverage ratio (total funded debt/adjusted EBITDA). Just $107mm unused availability at 12/31/16 is supported
by only 30 - $35 million of EBITDA assuming 3.5 and 3.0 leverage ratios, respectively. Less fiscal 2016
depreciation and amortization of $63.5mm, we begin to gain perspective on the importance of, goodwill
impairment review, valuation allowance, management’s business judgement and the quality of earnings.
Adjusted
unused Leverage
EBITDA
availability ratio
Support
$ 107.0 $ 3.5 $
30.6
$ 3.0 $
35.7
Richard J. Reilly
While asset impairment/improved asset efficiency, is healthy
TTM Earnings for business soundness, shareholder ROE and improved
D&A Support earnings quality, it would trigger a default event. This should
$ 63.5 $ (33.0) also highlight the insufficient capitalization and solvency
$ (27.9) issues that remain. The 250 million new equity assumption in
enterprise value calculations on page 20 is affirmed.
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 32 of 38
CH2M CREDIT NOTES
Working capital;
Net working capital inversion of at least $100mm continues. Payables remain stretched highlighting liquidity
constraint and improved receivables activity demonstrates move back toward cash (decline in unbilled) and
improved client account turn.
Apollo buy-out model;
Investment outlook on page 9 supports a $1.1bn average enterprise value estimate comparing Apollo’s cv Pfd
investment of $300mm for approximate 23% equity future stake/valuation (before recent adjustment) implying
$1,300mm - less premium you assign to $600 liquidation preference and significant control.
In comparison and in support the post-pension restructuring valuation, goodwill impairment, core DTA
weakness, average pension deficit adjustment and the Apollo purchase price adjustment total $588mm or $98%
of Apollo’s $600 liquidation preference. Addressing the same issues is what is required to restore confidence,
discover bonafide sustainable growth opportunity and restore access to capital.
Goodwill Impairmnt
DTA Weakness
Pension Deficit
Purchase price adjustment
Total
Percentage of Preference claim
Comp Paydown
$ 230.00
70.0
$
160.0
$
19.7
$
479.7
On-going
deficit
$ 230.00
70.0
$
263.0
$
19.7
$
582.7
Preference
Buy-out
Average
claim
$ 230.00
70.0
$
383.0
$
19.7
$
702.7 $
588.4 $
600.0
98.1%
Familiar figures;
If $582.7 or $588.4 seem familiar, they might…. Recall the early 2016 reconciliation request to company
representatives including General Counsel, Audit Committee Counsel, Chief Ethics Officer and head of Internal
Audit concerning the $583.5mm variance identified in the analysis of the Feb 2015 Investor Presentation (pages
3, 8, 13 and 17).
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 33 of 38
CH2M CREDIT NOTES
March 31, 2017;
Analysis of potential earnings management through merger accounting, reserves and deferred tax asset
valuation allowance.
AR Reserves and Earning Management Potential is
derived from cash vs accrued receivables gap
identified previously. The accounts demonstrate a
distinct change of characteristic following the
Halcrow acquisition that could be consistent with
the creation of reserves and/or masking of chargeoffs through M&A accounting. The cumulative
potential smoothing identified amounts to $82mm
(Dec 2011 to date).
Presumable motivation would be to manage or
dampen the impact of pension deficit, cost creep
and charges relating to impairment, restructuring,
power and transportation reported in P&L and
OACI (SE) and maintain solvency ratios. Note the
$60mm increase in Foreign Currency Translation
across 2015-2016 interim relating to permanent
investment in foreign subsidiaries in OACI (vs a
$15 million 2016 P&L gain on equity re-valuation)
Net Deferred Tax Assets (represented by the dashed
VA line in the stacked presentation) and Valuation
Allowance (area between valuation allowance and
accrued employee benefits line above) are included
to complete the perspective. The release of VA is
remarkable in so much as it results in material direct non-cash, non-recurring increase in earnings (tax benefits)
that are discretionary and generally carry little value with investors.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 34 of 38
CH2M CREDIT NOTES
Not only do accounting literature and academics highlight the discretion businesses have over the DTA
valuation allowance account because of there being no well-established accounting standard or clear guidelines,
but analytical convention also supports both that an increasing DTA is correlated with declining credit quality
and that the VA account has features that recommend it as a place to investigate potential earnings management.
For these reasons, the following analysis utilizes benchmarking and is based on a Risk Weighted Valuation
Allowance factor, the product of the following multipliers (all associated with major points in this critique).
 Benefit Plan (component) as a percentage of total OACI – isolates the Pension risk in OACI
 Valuation Allowance as a percentage of Total Deferred Tax Assets – isolates valuation allowance before
netting of Tax Liabilities
 Valuation Allowance as a percentage of the Underfunded Pension Status – captures correlation between
pension restructuring and Valuation Allowance and is adjusted to include $65mm guarantee (off-balance
sheet risk transformation) as bank covenants do.
 Valuation Allowance as % of Total Assets; Captures impact of Valuation Allowance in asset efficiency
measure
Pension Position
Plan Obligations
Plan Assets
Underfunded Status
Total Assetts
Risk Transformation
Underfunded Status
Total Assetts
Risk Adjusted Valuation Allowance
2010 - 2013 Weighted VA Risk Factor
2010 - 2011 Weighted VA Risk Factor
Weighted VA Risk Factor
BP Balance at end of year
Total OACI
OACI-BP/Total OACI
Valuation allowance
Total DTA
Underfunded Status
Total Assetts
VA/Total DTA
VA/Underfunded Status
VA/Total Assets
Historic average two-year
(2010 - 2011) and three-year
(2010 – 2013) risk-weighted
factors serve as benchmarks
from which it is determined
($65.0)
($68.0) ($187.9) ($255.9)
that the allowance has
2,670.5
-9.6%
weakened (declined) between
$57 and $63million. An
2010 2010 2011 Avg 2012 Avg
additional $5 million is also
($62.7)
($57.1)
included to adjust for the net
2.0393%
1.1143%
0.0203% 0.2280% 0.2672%
(255.5)
(225.7)
(133.2) (133.2) (133.2)
$45 million equity re(273.6)
(274.7)
(209.4) (209.4) (209.4)
93.37%
82.15%
63.62% 63.62% 63.62%
valuation in OACI and P&L
(269.2)
(210.4)
(46.0) (103.2) (108.8)
570.5
495.4
448.4
448.4
448.4
noted above using a 9.36
(532.2)
(484.4)
(255.9) (255.9) (255.9)
2,941.3
2,861.3
2,670.5 2,670.5 2,670.5
multiple (consistent with 7.8
-47.19%
-42.47%
-10.27% -23.01% -24.26%
50.58%
43.44%
18.00% 40.32% 42.51%
and 1.2 factors in the share
-9.15%
-7.35%
-1.72% -3.86% -4.07%
price fix formula). This
amounts to $63-$70 million and affirms previous analysis, suggesting the
quality of this quantity of earnings resulting from tax benefit might be
questioned. And together with the amount of ”P” supporting the Dec 2016
$107 million liquidity position outlined on page 32, these amounts might
highlight the possibility of potential of earnings management motivated by
solvency concern. The $70 mm risk-adjusted VA is represented by dotted
lines in Weighted-Average Risk chart.
2010
2011
2012
2013
2014
Total
Total
Total
Total
Total
$187.5 $1,132.1 $1,309.0 $1,368.4 $1,505.0
$138.6
$765.5
$863.9
$923.1
$972.8
($48.9) ($366.6) ($445.1) ($445.3) ($532.2)
1,967.1 2,694.9 3,114.6 3,056.4 2,941.3
-2.5%
-13.6% -14.3% -14.6% -18.1%
0.1720%
(33.2)
(18.8)
177.10%
(27.7)
227.9
(48.9)
1,967.1
-12.16%
56.67%
-1.41%
0.2672%
0.2280%
0.2840% 0.3456% 2.0586%
(60.1) (143.2) (146.2)
(60.9) (132.4) (137.7)
98.77% 108.15% 106.21%
(99.3) (117.0) (227.0)
344.7
361.5
443.2
(366.6) (445.1) (445.3)
2,694.9 3,114.6 3,056.4
-28.81% -32.37% -51.21%
27.08% 26.28% 50.97%
-3.68% -3.76% -7.43%
2015
US
Non US
Total
$248.9 $1,174.6 $1,423.5
$187.3
$751.9
$939.2
($61.6) ($422.7) ($484.4)
2,861.3
-16.9%
2016
US
Non US
Total
$262.6
$909.4 $1,171.9
$194.6
$786.5
$981.1
($68.0) ($122.9) ($190.9)
2,670.5
-7.1%
Adjusted 2015
US
Non US
Total
$248.9
$953.4 $1,202.3
$187.3
$751.9
$939.2
($61.6) ($201.5) ($263.1)
2,861.3
-9.2%
Unachieved combined revenue expectation of $7bn set on the Halcrow acquisition, cancellation of restricted
stock grant incentive comp, performance against the 2014 restructuring and 2015 investment plans and
anticipated lower profitability from equity investments in foreign affiliates identified in 2015/2016 OACI all
demonstrate the challenge in the pursuit restored sustainable profitability/growth and, thus, highlight the need
for comparison of 2011 post-acquisition forecast vs. 2015 investment solicitation forecast vs. current forecasts
to weigh the quality of the VA, prospects for DTA recovery, earnings quality and business judgment
demonstrated in establishing the same.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 35 of 38
CH2M CREDIT NOTES
April 13, 2017;
Examining Lavalin’s £20.8 expression of interest valuing Atkins at £2.08bn, sticking with a 7.6 multiple…
Based on yr. ended Mar 2016 financials £20.8 per share (100.11 mm shares outstanding) breaks down as
Price Component
Multiple
Per Share
follows:
ATK Fiscal 2016 Underlying EBITDA
ATK March 2016 Cash on hand
Assumed Overhead Cost Reduction of 50%
Total
£13.2 EBITDA enterprise value
£4.2 cash on hand
£3.2 50% reduction in overhead calculated at 4.5% of 2016 revenue
£
173.8
7.6
£
41.9
7.6
£ 1,320.9 £
419.3 £
£ 318.4 £
£
13.2
4.2
3.2
20.6
Lavalin’s reserving the right to bring a lower bid is attributed to the Atkins pension deficit, however, and as
identified previously, its balance sheet provides a credit advantage in absorbing pension deficit of a target(s)…
Pension Econommies
SNC.TO
ATK.L
SNC-ATK
SNC-ATK
Beginning with a £215mm Atkins
Total Assetts
CAD 9,298.3 £
1,387.3 CAD 11,601.2 £
6,988.7
competitive paydown (£2.15 per share)
Unfunded Pension Liability
CAD
100.8 £
265.3 CAD
541.2 £
326.0
Unfunded Pension Liability as % of Total Assets
1.1%
19.1%
4.7%
4.7%
divided by 7.6 multiple produces an
Competitive Paydown
CAD (233.98) £
215.4 CAD
123.5 £
74.4
EBITDA equivalent of £28.3mm (vs 2016
GBP : CAD
1.66
contributions of £32.8mm. Increasing this
by 2.5% annually between 2019-2025, as per the recent pension agreement, and using a discount rate of 5%, the
same as ch2m’s cost of CV Preferred capital, drives a PV of £221mm. The same cash flows under a 12%
assumed ROE as discount rate drives a £164mm present value. The net benefit of £55.6mm or £0.56 per share.
Provided combined Lavalin-Atkins
Deficit Capital Analysis
operating performance is sustainable and
Competitive
Agreed
ROE exceeds the cost of deficit capital,
Pay-down Multiple
year
Cash Flows
r
PV
year Cash Flows
r
PV
215
7.6
2017
£
28.3
0.05
£ 215.9
2017
£
34.5
0.05
£ 263.3
this benefit might be viewed as a reduction
2018
£
28.3
0.12
£ 160.3
2018
£
34.5
0.12
£ 195.5
in the effective purchase price or reducing
2019
£
29.0
2019
£
35.4
2020
£
29.7
£ 55.6
2020
£
36.2
£ 67.8
the deficit premium calculated on
2021
£
30.5
2021
£
37.2
competitive pay-down to £1.59 (£2.15 less
2022
£
31.2
2022
£
38.1
£0.56). By the same token, a Ch2 – Atkins
2023
£
32.0
2023
£
39.0
2024
£
32.8
2024
£
40.0
combination would be challenged to
2025
£
33.6
2025
£
41.0
achieve the same economies and scale.
All in all, at 7.6 x on Atkins year ended 2016 performance,
Lavalin’s £20.8 bid indication appears rich, leaving much on the
table, including £3.2 per share of cost reduction premium and
£1.59 per share deficit premium. The combined entity might also
enjoy a boost to profitability/cash flow after 2025 assuming
sustainable pension schemes result from Atkins’ recent actuarial
settlement. A £0.7 per share PV is based on 2016 deficit funding
of £32.8mm and 12% discount rate and this benefit would drop
to £.18 if ROE were to double to 24%, however; quite acceptable
based on the horizon and potential purchase premium identified.
Sustainable Pension Beyond 2025
Agreed
Cash
Flows
year
r
PV
2017
£ 0.05
£ 175.6
2018
£ 0.12
£ 70.2
2019
£ 2020
£ 2021
£ 2022
£ 2023
£ 2024
£ 2025
£ 2026
£ 32.8
2027
£ 32.8
2028
£ 32.8
2029
£ 32.8
2030
£ 32.8
2031
£ 32.8
2032
£ 32.8
2033
£ 32.8
2034
£ 32.8
2035
£ 32.8
2036
£ 32.8
Though Lavalin is the best strategic fit for ch2, leadership of
these organizations may not share or appreciate this view.
Perhaps Ch2 might benefit from the display of humility
considering that SNC-ATK combination would effectively strip
it of its best and, perhaps, its management’s alternative of choice, however.
Richard J. Reilly
DueDilly, LLC d/b/a Responsible Strategic Management
year
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
Agreed
Cash
Flows
£ £ £ £ £ £ £ £ £ £ 32.8
£ 32.8
£ 32.8
£ 32.8
£ 32.8
£ 32.8
£ 32.8
£ 32.8
£ 32.8
£ 32.8
£ 32.8
r
0.05
0.24
PV
£ 175.6
£ 17.9
(917) 882-2880
Page 36 of 38
CH2M CREDIT NOTES
Trade update raises acute liquidity concern:
Though no trading will be based on TTM ended Q1, its impact on already thin liquidity position is emphasized
and the possibility that exploration of refinancing alternatives includes debtor in possession financing and
priming the bank group (borrowing funds secured by a lien equal or senior to the existing) to
ensure adequate funding for future operations is distinct.
Stressing its own inability to determine whether it is in possession already (because it’s Q1 books are not yet
closed) or may become aware of material non-public information before April 28 raises the question of Ch2m’s
concern re financial covenant calculations that have yet to be delivered to the lender. Also, the statement that, if
a refinancing occurs, that there is the possibility that obtaining consent from current lenders under the amended
credit agreement and Series A Preferred Stockholders might involve substantial cost (as opposed to customary
fees and expenses being substantial) raises questions re the cost of bankruptcy administration and whether the
bank group would consent to or extend Potential DIP financing agreement vs, in the case of a 3rd party DIP
provider, ch2 having to convince a bankruptcy judge that existing bank liens would be "adequately protected".
Recall the April 2016 Ch2m Playbook suggests the possibility of earnings management supporting the argument
for substantive consolidation and that sum-of-parts offering(s) (asset sale(s)) would likely require free and clear
exchange under 363 process. The possibility of chapter 11 is now greater than ever before.
April 17, 2017; Brownstein Hyatt Farber Schreck LLP, a leading lobbyist and Denver based corporate law
firm, is the latest to join the list of paid professionals who find interest in this critique.
April 19, 2017; The Tri-city herald reports that a DOE Office of Inspector General audit revealed improper use
of a management reserve to conceal $18 million cost over-run at Ch2m Hill Plateau Remediation Company,
expressing concern that project performance would be over stated.
April 21, 2017; It is clear that the ch2m, its management and its board all struggle, with perhaps a consensus
opinion, that the risen leadership contingent may not be receptive to independent directors, forming. Direct
feedback and inclination that all potential conflicts have yet to be fully vetted would support the same. The
consensus among those polled within the industry and advisory communities suggests that independent
directors placed too much confidence in management, perhaps partially because of being distracted by duties
elsewhere, and today, when a fully functional independent body is most needed, this concern has been reborn
considering the continuing investigation and Italian proceedings concerning the OPL 245 oil block. Also,
examination of the independence of the valuation consultants (relationships, revenue concentrations, etc.) and a
review of IOT methodologies are worthwhile considering both the broad gap between Bank group’s sentiment
and the stock valuation and EFCG’s own assertions that methodologies require updating from time to time. And
because the current methodology does not do well to capture a credit variable, the board and retirement plan
trustees ought to pursue the identification of parties/or institutions willing advance against pledges ch2m
company stock at current levels.
Lavalin and Atkins are both
congratulated on a very good deal
with a sound financing package. On
reported cost synergies and 2016
fiscal EBITDA and yr end cash
balance, the deal makes good sense.
Richard J. Reilly
Price Component
ATK Fiscal 2016 Underlying EBITDA
ATK March 2016 Cash on hand
Assumed Overhead Cost Reduction of 50%
Total
£
173.8
Multiple
7.6
£
69.4
7.6
£
£
£
£
1,320.9
419.3
527.4
2,267.6
Per Share
£
13.2
£
4.2
£
5.3
£
22.7
Less Calculated Deficit premium
£
1.59
Effective Indicative Atkins Bid Price (Net of Deficit Capital Financing Efficency)
£
21.06
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 37 of 38
Richard J. Reilly
2014
1,820
1,783
(37.0)
8,194.4
4,970.6
3,223.8
-0.5%
2014
1,692
1,292
(400.8)
8,453.6
3,948.0
4,505.6
-4.7%
2014
1,505
Benefi t obli ga ti on
973
Pl a n a s sets
(532.2)
Underfunded sta tus
TA/Gross Rev/Sa l es :Ass ets
2,941.3
2,853.7
Tota l Li a bi li ti es
SE
87.6
Defici t:TA/As s et Shock/Shock:TA -18.1%
>>
Competitive Pension Paydown
(425.0)
Paydown
(107.2)
Deficit after Paydown
-3.6%
Deficit/Total Assets
(595.1)
-3.3%
Term
1,862
1,292
(570.0)
1.50
3,935.6
-1.5%
Term
2,002
1,783
(219.0)
2.63
3,004.8
-2.2%
(97.3)
JEC
-10%
1,692
1,162
(529.9)
12,695.2
(129.2)
FLR
-10%
1,820
1,605
(215.3)
21,531.6
(178.3)
(350.0)
(182.2)
-6.2%
Term
1,656
973
(682.7)
1.84
Ch2
-10%
1,505
876
(629.5)
5,413.5
1,859
1,441
(418.6)
12,494.9
6,387.9
6,107.0
-3.4%
2014
2014
167
149
(17.8)
4,041.4
2,439.9
1,601.5
-0.4%
2014
179
124
(55.2)
3,773.4
2,132.9
1,640.5
-1.5%
2014
234
225
(9.0)
7,642.2
5,110.4
2,531.8
-0.1%
5,502.5
5,963.0
(144.1)
-1.2%
2,045
1,441
(604.6)
1.21
Term
1,566.9
-0.4%
Term
184
149
(34.6)
0.61
1,701.3
-0.3%
Term
197
124
(73.1)
0.59
2,499.5
-0.3%
Term
257
225
(32.4)
0.82
1,859
1,297
(562.7)
15,153.7
-10%
JEC & UGL
(14.9)
UGL
-10%
167
134
(32.8)
2,458.5
(12.4)
WSP
-10%
179
111
(67.6)
2,215.6
(22.5)
SNC
-10%
234
202
(31.5)
6,289.2
2014
3,730
2,691
(1,039.2)
7,140.3
3,264.0
1,022.6
-14.6%
2014
2,225
1,718
(507.0)
4,199.0
3,264.0
935.0
-12.1%
2014
894
672
(221.3)
6,123.4
3,850.9
2,272.5
-3.6%
(269.1)
Ch2 & KBR
-10%
3,730
2,422
(1,308.3)
11,779.5
(171.8)
KBR
-10%
2,225
1,546
(678.8)
6,366.0
(67.2)
AECOM
-10%
894
605
(288.5)
15,804.3
(103.9)
-3.8%
Term
4,103
2,691
(1,412.2)
1.65
(50.7)
-4.1%
Term
2,448
1,718
(729.5)
1.52
(22.1)
-1.1%
Term
983
672
(310.7)
2.58
2014
3,325
2,756
(569.2)
11,135.7
7,824.3
3,311.4
-5.1%
2014
3,197
2,264
(933.0)
11,394.9
6,801.7
4,593.2
-8.2%
(275.6)
Ch2 & FLR
-10%
3,325
2,481
(844.8)
26,945.1
(226.4)
Ch2 & JEC
-10%
3,197
2,038
(1,159.4)
18,108.7
(119.8)
2,409.7
-2.5%
Term
3,658
2,756
(901.7)
2.42
3,340.4
-2.0%
Term
3,517
2,264
(1,252.7)
1.59
-1.1%
1,904.4
Ch2 & SNC
-10%
Term
1,739
1,913
1,078
1,198
(661.0) (715.1)
11,702.6 1.11
2014
1,672
1,122
(550.0)
6,982.7
5,293.6
1,689.1
-7.9%
2014
1,684
1,097
(587.4)
6,714.7
4,986.6
1,728.0
-8.7%
2014
2,399
1,645
(753.5)
9,065
6,704.6
2,360
-8.3%
Ch2 (discount)/premium on pension alone
Vs
SNC
(650.3)
=
(682.7)
Vs AECOM
(372.0)
=
(682.7)
Vs
WSP
(609.6)
=
(682.7)
Vs
KBR
46.8
=
(682.7)
Vs
JEC
(112.7)
=
(682.7)
Vs
FLR
(463.7)
=
(682.7)
Vs
UGL
(648.1)
=
(682.7)
>>
>>
>>
>>
>>
2014
1,739
1,198
(541.2)
10,583.5
7,964.1
2,619.4
-5.1%
1,366.7
-1.8%
less
less
less
less
less
less
less
(112.2)
Ch2 & UGL
-10%
1,672
1,010
(662.3)
7,872.0
(109.7)
(32.4)
(310.7)
(73.1)
(729.5)
(570.0)
(219.0)
(34.6)
971.8
-1.6%
Term
1,839
1,122
(717.3)
1.13
972.2
-1.6%
Ch2 & WSP
-10%
Term
1,684
1,852
987
1,097
(697.1)
(755.8)
7,629.0
1.14
(164.5)
Ch2 & AECOM
-10%
Term
2,399
2,638
1,481
1,645
(918.0)
(993.4)
21,217.8 2.34
CH2M CREDIT NOTES
DueDilly, LLC d/b/a Responsible Strategic Management
(917) 882-2880
Page 38 of 38