777491--2/27/2006--CH2M_HILL_COMPANIES

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You should carefully consider the following factors and other information contained in this Annual Report on Form 10-K before deciding to invest in our common stock. Risks Related to Our Business Unpredictable economic cycles, uncertain demand for our engineering capabilities and related services, and failure by our major customers to pay our fees, could cause our revenues to fluctuate. Changes and fluctuations in government s spending priorities could adversely affect our revenue expectations. Environmental regulations and related compliance investigations are expensive, may adversely impact our project performance and could expose us to environmental liability. We may not be successful in growing through acquisitions or integrating effectively and efficiently any businesses and operations we may acquire. Inability to secure adequate bonding would impact our ability to win projects. The success of our joint ventures depends on the satisfactory performance by our joint venture partners related to their joint venture obligations. The failure of our joint venture partners to perform their joint venture obligations could impose on us additional financial and performance obligations that could result in reduced profits or, in some cases, significant losses for us with respect to the joint venture. Our dependence on subcontractors and equipment manufacturers could adversely affect us. We face risks associated with our international business. Special risks associated with doing business in highly corrupt environments. Government contracts present risks of termination for convenience, adjustment of payments received, restrictions on ability to compete for government work and funding constraints. Many of our projects are funded under federal, state and local government contracts and if we are found to have violated the terms of the government contracts or applicable statutes and regulations, we are subject to the risk of suspension or debarment from government contracting activities, which could have a material adverse affect on our business and results of operations. Our backlog is subject to unexpected adjustments and cancellations and is, therefore, an uncertain indicator of our future performance. We could sustain losses on contracts that contain fixed price or not to exceed pricing provisions if our costs exceed the fixed or maximum prices. Our industry is highly competitive. Our projects may result in liability for faulty engineering services. Our inability to attract and retain professional personnel could adversely affect our business. A reduction in the scope of environmental regulations or changes in government environmental policies could adversely affect our revenues. Percentage-of-completion accounting used for our engineering and construction contracts can result in overstated or understated profits or losses. Actual results could differ from the estimates and assumptions used to prepare our financial statements. Risks Related to Our Internal Market Absence of a public market may prevent you from selling your stock and cause you to lose all or part of your investment. Transfer restrictions on our common stock could prevent you from selling your common stock and cause you to lose all or part of your investment. Our stock prices are and will continue to be determined by our Board of Directors judgment of fair market value and not by market trading activity. The limited market and transfer restrictions on our common stock will likely have anti-takeover effects.

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777491--2/27/2006--CH2M_HILL_COMPANIES_LTD