To our CH2M Alumni family:
Thanks for inviting me to share some perspective on our industry and the distinctions that set CH2M apart in the marketplace, positioning the firm for a very bright future…

When I became CEO in January 2014, we faced significant challenges. My priorities were to strengthen our leadership team and financial position with a refined strategy to improve the firm’s growth and profitability. Our employees demonstrated exceptional loyalty, commitment, and resilience that ultimately enabled CH2M to emerge stronger in 2015 – combining innovative thinking, 21st-century technology, and a distinctive business model to deliver a differentiated value proposition to our clients.

If you’ve followed our shareholder calls, you’ve heard how we refocused around a truly client-centric approach, backed by a more cost-competitive delivery model. We focused our portfolio on loyal clients we can serve with differentiation and distinction, who value CH2M for the difference we stand for – delivering sustainable solutions for triple bottom-line environmental, social, and economic benefits.

Our core values continue to serve as a catalyst for us to deliver on the measures that matter most – the safety of our people and the value we deliver to our clients. As a result, we achieved record safety performance approaching benchmark status in our industry, while also realizing new wins and stronger market share across the entire spectrum of clients, end markets, and geographies we serve…

People often comment on the unique, positive culture that’s clearly apparent at CH2M. Because we believe it stands as a competitive advantage in contrast with our industry, we take great care to nurture and build upon it, as we did when refreshing our brand identity, modernized to highlight the CH2M difference and re-emphasize the principles that guide our work every day.

This powerful and worthwhile investment in our people and company reflects the caring, fun, vibrant, intelligent brand personality embodied in CH2M from the start. As founder Jim Howland wrote in the Little Yellow Book distributed to all employees to celebrate our culture:

“Do good work. Make a profit. Enjoy life.”

We revel in the fact that our firm today stands apart in the industry as a result. Because we do exceptionally good work and make a profit, we have greater freedom to enjoy all that life has to offer. We provide living proof consistent with the conclusions of many studies on corporate culture – that at the heart of every great company, a strong and aligned culture serves as the wellspring for success and value creation.

It’s certainly why we were able to turn around our financial performance within the course of a year, earning $80 million in 2015 net income on $5.4 billion in revenue – a remarkable rebound from our 2014 full-year loss of $182 million!

With all of the measures we’ve taken to strengthen our operating model, our Board of Directors has engaged actively in our turnaround and growth strategy, focused on our culture, business development, risk management, and operational improvements. Throughout, the Board has paid particular attention to best practices in corporate governance and transparency, as reflected in our public filings with the U.S. Securities & Exchange Commission (SEC) and the new CH2M investor website launched earlier this year. These Board-level efforts have contributed greatly to the firm’s improved financial performance and profitable growth prospects.

The Board also has been engaged in considerations surrounding the company’s future capital structure with the aim of strengthening our liquidity and capacity to return more value to shareholders and sustain investments for the firm’s long-term growth.

Understanding that this is of deep, personal interest to you, I’ll provide the same background shared in our financial filings and employee communications. To address liquidity constraints given our shareholder-employee demographics and capital requirements to support growth, the Board took formal action early this year to explore alternatives to our current ownership model. Approximately 80 percent of our stockholders have reached age 50 or greater, while 48 percent are 60 or older. So, while the demographics make clear that capital demands for share buybacks will continue to rise, we also need to ensure we have sufficient cash to fund the company’s future growth investments.

The challenge we face is not unusual; employee-owned firms typically evolve their capital structures over time, particularly as they grow and appreciate in value. As we explore options, we will update shareholders as appropriate, according to SEC rules governing such developments. All shareholders will have the opportunity to vote on any recommendation as provided in our company charter and bylaws.
As we continue to manage through this season of change, a quote from Confucius holds particular relevance for us today: “Our greatest glory is not in never falling, but in rising every time we fall.”
I am so proud of the way our organization stands together as we proceed on this journey, reflecting our heritage with the resolve to improve; rising stronger to embrace the future; and, ultimately, delivering the greater promise of CH2M.

Considering the amazing accomplishments our people have achieved in recent years, standing firmly on the solid foundation that many of you helped to build, I believe our founders would be incredibly proud of CH2M today. I am, and I hope you are too.

We truly appreciate your continued interest and support!
Be well,

Jacqueline C. Hinman
Chairman and CEO