News Releases

(TSX: CUQ)

<<
Q4 2008 Highlights
-------------------

- Fourth quarter revenue of $204.4 million, increased 7% year-over-year
- Contract income margin was a record 14.2%
- EBITDA was $17.2 million, a 32% improvement over 2007
- Quarterly net earnings increased 37% to $11.2 million, EPS $0.62 per
share
- 304,900 common shares purchased at an average of $6.38 per share
under the Corporation's share repurchase program

2008 Annual Highlights
-----------------------

- Record 2008 revenue of $846.8 million
- Contract income exceeded $100.0 million for the first time in the
Corporation's history
- EBITDA increased 64% to $57.6 million
- Annual net earnings of $36.4 million; record EPS of $2.03
>>

EDMONTON, March 16 /CNW/ - The Churchill Corporation today reported
fourth quarter contract revenue of $204.4 million, net earnings of $11.2
million, and earnings per share ("EPS") of $0.62. These results compare to
contract revenue of $191.5 million, net earnings of $8.2 million, and EPS of
$0.46 in Q4 2007.
For 2008, Churchill posted revenue of $846.8 million, net earnings of
$36.4 million, and earnings per share of $2.03. This compares to the prior
year's results of $736.1 million, net earnings of $21.1 million and EPS of
$1.19.
"The Corporation delivered a very solid fourth quarter with contract
income establishing a new record of $29.1 million and 14.2% on a contract
income margin basis," said Jim Houck, President and Chief Executive Officer,
The Churchill Corporation. "These are exceptional results given that our
overall construction volume was impeded by delays in engineering, tendering of
work packages and winter weather. Stuart Olson produced record margin during
the period of 14.1% on the strength of project execution in Northern Alberta
and British Columbia. Strong performance across all divisions of Insulation
Holdings and Laird Electric enabled these companies to post record earnings
for the year. Triton experienced project execution challenges in the fourth
quarter, and measures are underway to make this business more productive and
cost competitive."
"The economy and industry are recalibrating to the new baseline from
which growth will resume. Our consolidated backlog at December 31, 2008 was in
excess of $1.4 billion, which positions the Corporation favourably to adjust
to a more competitive business environment, particularly in the industrial
construction and maintenance environment. Additionally, our balance sheet is
in excellent condition with $100.8 million of cash and cash equivalents, $78.3
million of working capital, and access to a $60.0 million credit facility,
giving us significant financial flexibility."

<<
Consolidated Financial Highlights
-------------------------------------------------------------------------
Three months ended
December 31
----------------------------------
$ %
($ millions, except per share amounts) 2008 2007 Change Change
-------------------------------------------------------------------------
Contract Revenue $204.4 $191.5 $12.9 7%
Contract Income 29.1 22.4 6.7 30%
EBITDA(1) 17.2 13.0 4.2 32%
Earnings before income taxes 15.8 11.7 4.1 35%
Net Earnings 11.2 8.2 3.0 37%
EPS - basic $0.62 $0.46 $0.16 35%
Work-in-hand(2) 591.5 713.8 -122.3 -17%
Backlog(3) $1,436.1 $1,384.1 $52.0 4%
-------------------------------------------------------------------------

-------------------------------------------------------------------------
Twelve months ended
December 31
----------------------------------
$ %
($ millions, except per share amounts) 2008 2007 Change Change
-------------------------------------------------------------------------
Contract Revenue $846.8 $736.1 $110.7 15%
Contract Income 100.2 69.6 30.6 44%
EBITDA(1) 57.6 35.1 22.5 64%
Earnings before income taxes 52.3 30.8 21.5 70%
Net Earnings 36.4 21.1 15.3 73%
EPS - basic $2.03 $1.19 $0.84 71%
Work-in-hand(2) 591.5 713.8 -122.3 -17%
Backlog(3) $1,436.1 $1,384.1 $52.0 4%
-------------------------------------------------------------------------
(1)(2)(3) Refer to the "Terminology" section for further details.
>>

FOURTH QUARTER RESULTS

For the fourth quarter of 2008, consolidated contract revenue was $204.4
million, which was $12.9 million or 7% higher than the same period in 2007.
This higher level of revenue on a year-over-year basis was a result of
continued strength in our building construction segment and increased volume
from all of the industrial businesses.
Contract income increased from $22.4 million in the fourth quarter of
2007 to $29.1 million in the fourth quarter of 2008 as a mix of greater
revenue and stronger margins in our building construction, industrial
insulation and industrial electrical segments improved overall performance.
Indirect and administrative expenses amounted to $12.6 million in the
quarter, compared to $11.0 million in the comparable period of 2007,
reflecting increased work volume, expenses associated with recruiting fees,
salaries, director expenses and stock based compensation.
Earnings before interest, taxes, depreciation and amortization in the
quarter were $17.2 million, compared to $13.0 million in the fourth quarter of
2007. Earnings before tax in Q4 2008 increased 35% to $15.8 million, compared
to $11.7 million reported in Q4 2007. The Corporation's consolidated net
earnings for the three months ended December 31, 2008 were $11.2 million
compared to net earnings of $8.2 million in 2007.
New contract awards of $210.0 million were booked in the current quarter,
which compares with $170.9 million in Q4 2007. Total new contract awards of
$724.5 million were recorded in 2008, compared to $956.1 million in 2007.
Stuart Olson's revenue for the three months ended December 31, 2008, was
$134.2 million, a decrease of 6% compared to $142.6 million for the same
period in 2007. The cumulative effects from delays in awarding tender packages
earlier in 2008 resulted in this decrease. Contract income in the fourth
quarter increased to $19.0 million compared to $14.2 million in the prior
year. Earnings before tax increased 38% to $13.7 million in the fourth quarter
of 2008 from $9.9 million in the corresponding quarter of 2007. The increase
in earnings before tax was primarily the result of strong project execution in
Northern Alberta and British Columbia, higher margin on self-performed work
and containment of indirect expenses.
Triton's revenue for the fourth quarter of 2008 was $18.9 million, $5.8
million greater than in the same quarter of 2007. The quarter saw the
commencement of work for TCPL Woodenhouse and Statoil, which resulted in
revenue growth. Contract income decreased 42% to $1.1 million from $1.9
million year-over-year, as project execution challenges within the
construction division impacted results. Triton's loss before tax during the
quarter was $0.5 million compared to earnings before tax of $0.5 million in
2007.
Combined revenue from our insulation companies, Fuller Austin and
Northern Industrial, was $20.7 million or $6.9 million greater than the fourth
quarter of 2007. The revenue increase was from higher insulation contracting
activity in all of the company's geographic markets. Q4 2008 contract income
margin was 17.4% compared to 16.3% in the prior year. The increase in volume
and contract income margin percentage during the quarter resulted in a
year-over-year increase in earnings before tax, from $1.1 million in Q4 2007
to $2.1 million.
Laird generated $30.5 million of revenue in the quarter, which compares
favourably to the $22.0 million of contract revenue delivered in Q4 2007. The
fourth quarter of 2008 was impacted by the acceleration of work schedules on
certain of Laird's projects in the Fort McMurray oil sands region. Contract
income was $5.3 million in the fourth quarter of 2008, compared to $3.9
million in Q4 2007. As a result of higher revenue and margins Laird reported
earnings before tax of $3.0 million in Q4 2008 as compared to earnings before
tax of $1.8 million in Q4 2007.

CONSOLIDATED ANNUAL RESULTS OF OPERATIONS

For the year ended December 31, 2008, Churchill generated consolidated
contract revenue of $846.8 million, compared to consolidated contract revenues
of $736.1 million for 2007, an increase of $110.7 million (15%). This $110.7
million increase was the result of a $44.3 million increase in Stuart Olson
revenue, a $43.7 million increase in Triton revenue, a $21.5 million increase
in Insulation Holdings Inc. revenue and a $1.2 million increase in Laird
revenue.
The contract income increased 44% from $69.6 million in 2007 to $100.2
million in 2008. This $30.6 million increase resulted from greater overall
volumes and improved execution at Stuart Olson, Insulation Holdings Inc. and
Laird. Consolidated contract income margin percentage was 11.8% in 2008 as
compared to 9.5% in 2007.
Indirect and administrative expenses of $45.6 million were incurred
during 2008, compared to $38.1 million in 2007. The increase of $7.5 million
was primarily attributable to increased project management and compensation
expenses related to the increased activity levels.
EBITDA increased by $22.5 million (64%) to $57.6 million during 2008, as
compared to $35.1 million for the year ended December 31, 2007. Churchill
achieved consolidated net earnings of $36.4 million ($2.03 basic earnings per
common share) during 2008 as compared to $21.1 million of net earnings ($1.19
basic earnings per common share) in 2007.
Work-in-hand at December 31, 2008, was $591.5 million, $122.3 million
lower than the balance at December 31, 2007. On a segmented basis, there was a
decrease in the buildings segment of $108.4 million, a decrease in the
industrial general contracting segment of $18.8 million, an increase in the
insulation contracting segment of $27.3 million and a decrease in the
electrical contracting segment of $22.4 million.
Churchill's total backlog including work-in-hand at December 31, 2008
increased by 4% to $1.44 billion from $1.38 billion in the prior year.
Year-over-year backlog in our buildings segment increased by $64.2 million,
the insulation contracting segment backlog increased by $35.6 million, the
industrial general contracting segment backlog decreased by $26.9 million and
the industrial electrical contracting backlog decreased by $21.0 million. The
Corporation's backlog consists of work-in-hand of $591.5 million, $814.3
million of active backlog and delayed backlog of $30.3 million. Delayed
backlog represents new disclosure on the part of the Corporation. Delayed
backlog corresponds to contracts, binding and non-binding letters of intent
for which the Corporation has received verbal or written notification from its
client that the work is delayed. Since the delayed component represents only
2% of Churchill's total backlog, at this time management is of the view that
the majority of the Corporation's backlog will be realized as revenue in
future reporting periods.

<<
Buildings
----------
>>
For the year ended December 31, 2008, Stuart Olson's revenue increased by
$44.3 million to $569.0 million, compared to $524.7 million in the prior year.
This increase in revenue was due to higher levels of activity in all branches.
Stuart Olson was active during the year on projects ranging from educational
and healthcare facilities, to civic infrastructure and commercial buildings.
Contract income in 2008 increased 51% to $60.7 million from $40.3 million
in 2007. The contract income margin percentage increased to 10.7% in 2008 as
compared to 7.7% in 2007. This margin increase was driven by the strength of
the Stuart Olson's markets, strong project execution and the ability to
effectively manage construction costs.
Earnings before tax from the buildings segment were $40.8 million in
2008, compared to $24.4 million in 2007. This 67% improvement in earnings was
a result of the increase in overall contract volume, strong project execution
particularly in the Northern Alberta and British Columbia branches, and
controlled spending growth in indirect and administrative expenses.
Stuart Olson finished the year with $472.8 million of work-in-hand, after
entering the year with work-in-hand of $581.2 million. During 2008 the company
secured a further $460.6 million of contracts, and executed and took into
revenue $569.0 million. At December 31, 2008, Stuart Olson's backlog amounted
to $1.3 billion, compared to $1.2 billion at the end of the prior year. The
company's backlog grew in 2008 as a result of new contracts to build
institutional buildings, educational and healthcare infrastructure, and civic
recreational facilities in Alberta and British Columbia. Subsequent to
December 31, 2008, Stuart Olson received verbal notification from a client
that construction under a previously awarded construction contract would be
delayed until 2010. The impact of this delay on Stuart Olson's fiscal 2009
results will be the deferral of $7.4 million of contract revenue.
As a result of the impact of the global economic crisis on the western
Canadian economy, Stuart Olson is experiencing increased competition in its
markets. However, Stuart Olson continues to pursue new project opportunities
which fit within their strategy, execution expertise and price for value
proposition. The company is part of two P3 teams which have been selected as
the short listed proponents on the Prince George Cancer Centre and Fort St.
John Hospital projects in British Columbia.

<<
Industrial General Contracting
-------------------------------
>>
Triton's revenue for the year ended December 31, 2008, was $85.9 million,
increasing 104% from $42.1 million for the year ended December 31, 2007.
Revenues from all divisions were higher during 2008 than in the prior year.
However, contract income margin for 2008 was 6.5%, down from the 13.8%
generated in 2007. This margin erosion was disappointing given the efforts
made by Triton management to improve project execution. Triton's contract
margin challenges are a result of having to aggressively bid projects in an
effort to re-establish customer relationships, difficulty in attracting
project managers to the organization and having to utilize high cost labour to
execute certain fabrication and construction jobs.
Triton reported earnings before tax of $0.1 million in 2008 compared to a
loss before tax of $0.1 million for the year ended December 31, 2007. Despite
the aforementioned operational challenges, Triton's market image continues to
show signs of improvement in the construction as well as fabrication
divisions.
Triton entered the year with $45.1 million of work-in-hand. For the year
ended December 31, 2008, the company secured a further $67.1 million of
contracts, and executed $85.9 million of contractual work. As a result, the
company has $26.3 million of work-in-hand to carry over into 2009. At December
31, 2008, Triton's backlog amounted to $45.8 million compared to $72.7 million
at the conclusion of 2007.
The market slowdown in Q4 2008 has significantly impacted incoming bid
requests. Largely due to the slowdown of activities in the oil sands, Triton
management is taking steps to improve the productivity of its operations and
right size the organization in light of reduced industrial activity levels
expected during 2009. In addition, Triton's management is refocusing its
business development to emphasize maintenance activities rather than new
project construction.

<<
Industrial Insulation Contracting
----------------------------------
>>
Industrial Insulation Contracting operates under three business units -
Fuller Austin, Northern Industrial Insulation and Lakehead Insulation - all
providing insulation related contracting services for capital projects and
maintenance work. Lakehead is a wholly-owned subsidiary of Fuller Austin.
Revenue for the year ended December 31, 2008, increased 41% to $73.7
million, compared to $52.3 million for the year ended December 31, 2007. This
year's revenue increase was the result of greater insulation and siding
activity in all of the company's markets, particularly in Saskatchewan, where
activity levels were up 152%.
2008 contract income increased to $14.1 million from $9.7 million for the
comparable period in 2007. Contract income margins were higher, 19.1% in 2008
versus 18.5% in 2007, mainly due to strong project execution resulting in
projects yielding better margins than estimated.
Earnings before tax increased by $3.6 million (73%) to $8.5 million for
the year ended December 31, 2008, compared to earnings before tax of $4.9
million for 2007. The primary reason for the increase in earnings was the
greater volume of work performed, strong project execution and control over
indirect costs. Insulation Holdings ability to increase its pre-tax profit
margin from 9.4% to 11.5% demonstrates its strong operating efficiency.
Industrial Insulation Contracting began 2008 with work-in-hand of $35.9
million and ended 2008 with work-in-hand of $63.1 million. For the year ended
December 31, 2008, they secured a further $101.0 million of contracts, and
executed $73.7 million of contracts. Notably, the insulation segment secured
38% more work in 2008 than it obtained in 2007. Backlog at December 31, 2008
was $78.3 million compared to $42.7 million at December 31, 2007.
The current price of oil and tight credit markets will provide
insufficient cash flow to fund the expansion and maintenance strategies of
several of Insulation Holdings' oil sands and petrochemical clients. This has
resulted in the deferral of two jobs, cumulatively valued at $5.3 million and
the cancellation of four jobs totaling $3.6 million in aggregate. There are
opportunities to replace this lost volume of work, however, pricing will be
very competitive due to the abundance of competitors.

<<
Industrial Electrical Contracting
----------------------------------
>>
Laird generated record revenue and earnings in 2008. Laird's revenue
increased to $118.2 million, compared to $117.1 million reported for 2007.
Laird's strategy to diversify its customer base has been very important to its
recent success. By focusing on the needs of its key clients, Laird has been
able to demonstrate its value as a reliable, efficient and quality electrical
and instrumentation contractor. As a direct result of its strong operational
performance, Laird has been awarded additional project scope on many of the
projects it has undertaken.
Contract income increased from $13.2 million in 2007 to $19.0 million in
2008, due to strong project execution and operational improvements. The 2008
contract income margin percentage of 16.1% is significantly higher than the
11.3% achieved in 2007.
Laird achieved earnings before tax of $10.5 million for the year ended
December 31, 2008, compared to earnings before tax of $6.6 million in 2007.
The increase in earnings is a result of higher contract income, over and above
the additional administrative expenses required to manage this increased level
of activity.
Laird ended 2008 with work-in-hand of $29.3 million, compared to $51.7
million at the end of 2007. New contract awards of $95.8 million were secured
in the current year compared to $125.2 million in 2007, and executed $118.2
million of contracts. Laird's backlog at the end of 2008 was $30.7 million,
compared to $51.7 million as at December 31, 2007.
Oil sands industry project cancellations will impact Laird's 2009
activity levels and profitability. Laird has initiated a reorganization and
value creation initiative. The organization is undergoing some right sizing to
match its activity level and reduced revenue forecast. Laird will be
relocating its senior management and accounts receivable functions from Fort
McMurray to Edmonton, as part of its focus on having greater access to
clients, improving productivity and lowering controllable expenses.

Corporate and Other

In 2008, the Corporate and Other segment incurred a loss before tax of
$7.6 million compared to a loss before tax of $4.9 in 2007. The net increase
of $2.7 million consisted of a $1.8 million increase in indirect and
administrative expenses associated primarily with public company functions,
salaries, and an additional $0.9 million increase in stock based compensation
expense.

CAPITAL RESOURCES AND LIQUIDITY

Cash and cash equivalents at December 31, 2008, totaled $100.8 million,
which compares with $108.1 million at the end of 2007. Of the $100.8 million
of cash and cash equivalents, $17.5 million was subject to deemed trust
conditions under the British Columbia Builders Lien Act, compared to $25.3
million at December 31, 2007. As such, this cash is restricted to the payment
of direct costs related to specific construction projects.
Cash flow provided from operating activities was $3.9 million, compared
to $73.7 million provided from operations during 2007. This was primarily due
to an increase of $15.6 million in accounts receivable and a $21.2 million
reduction in current liabilities at year end 2008. The Corporation expects to
increase its cash and cash equivalents as accounts receivable is collected
from various industrial clients.
The Corporation's liquidity typically decreases in the second and third
quarters of a fiscal year as maintenance activities on industrial projects
ramp up and the amount of manpower utilized by the Corporation increases. This
decrease usually reverses itself in the fourth quarter due to lower activity
levels and fewer working days during this time frame.
Investing activities resulted in a use of cash of $7.6 million during
2008, which compares with cash used of $2.4 million in 2007. The cash was
invested in the acquisition of construction equipment for long term projects
under contract.
During 2008 cash used in financing activities amounted to $3.7 million,
compared to cash used in financing of $13.6 million in 2007. Net repayments
applied to the Corporation's line of credit in 2008 amounted to $nil, compared
to net repayments of $12.0 million in 2007. During 2008, the Corporation
repaid $2.0 million of long-term debt and in 2007 repaid $2.2 million in
aggregate of long-term debt and demand term loan. These payments were in
accordance with the repayment schedules and the contractual obligations as
described in previous quarters and the Corporation's 2007 Annual Report. Stock
options exercised by directors and officers of the Corporation contributed
$0.3 million to the cash generated from financing compared to $0.7 million in
2007.
Effective, December 19, 2008, the Corporation renegotiated its existing
$21.0 million operating line and term loan facility, replacing these with a
$60.0 million revolving line of credit. The term of the new credit facility is
three years and it will mature in October 2011. Borrowings under the credit
facility will bear interest at a floating rate ranging from prime to prime
plus 0.50%. In addition, the Corporation also has a leasing facility with a
borrowing limit of $3.0 million to facilitate the purchase of capital assets.
At December 31, 2008, the current portion of long-term debt and long-term debt
amounted to $9.0 million, compared to $10.7 million at December 31, 2007.
As at December 31, 2008, Churchill had working capital of $78.3 million,
which compares favourably to the working capital position of $47.9 million at
the end of 2007.

<<
Contractual Obligations(1)
--------------------------
($ millions)
December 31, 2008

Current 2-3 4-5 After 5
Total Year years years years
--------------------------------------------
Mortgage payable $1.1 $1.1 $0.0 $0.0 $0.0
Finance contracts and capital
lease obligations 2.6 1.1 1.4 0.1 0.0
--------------------------------------------
Total Contractual Obligations $3.7 $2.2 $1.4 $0.1 $0.0
--------------------------------------------
(1) The above table represents scheduled repayments.
>>

Scheduled debt repayments for 2009 are $2.2 million. The mortgage
payable, finance contracts and lease obligations are more fully described in
Note 9 of the notes to the Consolidated Financial Statements.
During 2009, the Corporation anticipates that it will utilize up to $8.5
million to fund its capital expenditure plans. These expenditures will largely
be made in the areas of information systems ($3.0 million), construction
equipment ($2.3 million), vehicles ($2.0 million) and land and buildings ($1.8
million). However, market conditions will dictate which expenditures are
undertaken so the Corporation can maintain a robust balance sheet. The
expected source of the funds to meet these expenditures is the Corporation's
cash and cash equivalents in conjunction with finance contracts and capital
leases.
Management believes that the Corporation has the capital resources and
liquidity necessary to meet its commitments, support its operations and
finance its growth strategies. In addition to the Corporation's cash and cash
equivalents, ability to generate cash from operations, and its $60.0 million
credit facility, the Corporation is also able to issue additional common
shares to provide for capital spending and sustain its property and equipment.
The Corporation remains a partner in two joint ventures. In each instance
the Corporation has provided a joint and several guarantee, increasing the
maximum potential exposure to the full value of the work remaining under the
contract. In aggregate the Corporation's exposure is not significant relative
to its operations.
Shareholders' equity was $105.6 million at December 31, 2008, as compared
to $69.7 million at December 31, 2007. Retained earnings increased from $47.5
million at December 31, 2007 to $83.1 million at the end of 2008, reflecting
the addition of net earnings of $36.4 million for the year, and less $0.8
million relating to shares repurchased and cancelled under the Normal Course
Issuer Bid ("NCIB").

Share Data

On October 15, 2008, the Corporation commenced a NCIB, under which it is
entitled to purchase up to 1,391,000 common shares in a 12 month period. As at
December 31, 2008, the Corporation had repurchased 304,900 common shares at an
average of $6.38 per share. Of the shares repurchased 159,900 were cancelled
during the reporting period. The funding for the NCIB is from the
Corporation's cash and cash equivalents balance.
As at March 12, 2009, the Corporation had 17,692,191 common share issued
and outstanding and 658,634 options convertible into common shares upon
exercise (December 31, 2007 - 17,886,991 common shares and 317,500 options).
The Corporation has an Employee Share Purchase Plan (the "ESPP")
available to all full-time employees. At December 31, 2008, 74% of eligible
employees were participants in the ESPP. At December 31, 2008, the Plan held
857,421 common shares for employees. Under the ESPP, common shares are
acquired in the open market.

OUTLOOK

The outlook for Churchill remains positive, although uncertainty in
global economic conditions makes it more difficult to predict demand for our
services. Given this uncertainty, our fundamental business strategies will
need to be more focused than ever. The Corporation's financial position has
never been stronger with over $100.0 million in cash, $50.0 million in
unutilized credit and $1.4 billion in high margin backlog. We are optimistic
that public sector infrastructure spending will remain strong as a result of
the 2009 Federal Budget, and other federal and provincial infrastructure
programs. These programs aimed at stabilizing the economy should provide new
opportunities for projects in Stuart Olson's public infrastructure markets.
The impact of an uncertain global economic environment on oil prices, has
lead to major reductions in capital spending in Alberta which we believe will
last throughout 2009. These reductions will make the competitive environment
for our industrial businesses more challenging, as competitors reduce margins
to stay in business and retain key employees. Notwithstanding the ability of
Churchill's industrial businesses to generate approximately 30% of their oil
and gas industry related revenue from maintenance and sustaining small capital
projects, this will be insufficient to offset the decline in new capital
spending.
In this more competitive environment where firms will be competing for
smaller capital projects resulting from reduced capital spending, Churchill
management will be focusing on cost reductions and productivity improvements,
some of which will be passed on to our customers to enhance their operational
efficiency, while a portion will be retained by Churchill. These productivity
improvements will result in right sizing our industrial segments to improve
our organizational capabilities to deliver more cost effective services to our
clients.
Whatever the future brings, Churchill will be ready and prepared to
capitalize on the opportunities which present themselves. Management of the
Corporation believes that in the medium to long-term, growth will resume and
that Churchill is well positioned to deliver sustained shareholder value.

<<
CONSOLIDATED STATEMENTS OF EARNINGS,
COMPREHENSIVE INCOME AND RETAINED EARNINGS

Year Ended
($ thousands, except per share amounts) December 31
----------------------------------------------------------- -------------
2008 2007
----------------------------------------------------------- -------------
Contract revenue $ 846,817 $ 736,141
Contract costs 746,665 666,562
----------------------------------------------------------- -------------
Contract income 100,152 69,579

Interest income 2,669 2,777
Sundry income 429 887
Indirect and administrative expenses (45,634) (38,146)
Depreciation and amortization (4,778) (3,522)
Interest expense (567) (749)
----------------------------------------------------------- -------------
Earnings before income taxes 52,271 30,826
----------------------------------------------------------- -------------
Income tax (expense) recovery
Current income tax (14,077) (14,292)
Future income tax (1,751) 4,592
----------------------------------------------------------- -------------
(15,828) (9,700)
----------------------------------------------------------- -------------
Net earnings and comprehensive income 36,443 21,126

Retained earnings, beginning of year 47,528 26,402
Adjustment arising from shares purchased
under a normal course issuer bid (839) -
----------------------------------------------------------- -------------
Retained earnings, end of year $ 83,132 $ 47,528
----------------------------------------------------------- -------------
----------------------------------------------------------- -------------

Net earnings per common share:
Basic $ 2.03 $ 1.19
----------------------------------------------------------- -------------
Diluted $ 2.01 $ 1.17
----------------------------------------------------------- -------------
----------------------------------------------------------- -------------

Weighted average common shares:
Basic 17,928,037 17,730,644
----------------------------------------------------------- -------------
Diluted 18,109,979 17,995,235
----------------------------------------------------------- -------------
----------------------------------------------------------- -------------

CONSOLIDATED BALANCE SHEETS

($ thousands)
----------------------------------------------------------- -------------
December 31, December 31,
2008 2007
----------------------------------------------------------- -------------
ASSETS
Current Assets
Cash and cash equivalents $ 100,768 $ 108,105
Accounts receivable 139,508 123,906
Inventories and prepaid expenses 1,493 859
Costs in excess of billings 21,238 21,877
Income taxes recoverable 3,669 -
Future income tax assets 1,850 4,504
----------------------------------------------------------- -------------
268,526 259,251

Future income tax assets 905 788
Property and equipment 26,054 22,832
Goodwill and intangible assets 7,336 7,420
----------------------------------------------------------- -------------
$ 302,821 $ 290,291
----------------------------------------------------------- -------------
----------------------------------------------------------- -------------
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $ 140,806 $ 149,057
Contract advances and unearned income 41,525 46,488
Income taxes payable 2,462 10,148
Future income tax liabilities 3,179 3,745
Current portion of long-term debt 2,251 1,963
----------------------------------------------------------- -------------
190,223 211,401

Long-term debt 6,787 8,755
Future income tax liabilities 238 457
----------------------------------------------------------- -------------
197,248 220,613

SHAREHOLDERS' EQUITY
Share capital 16,663 16,414
Shares repurchased under a normal course
issuer bid, not cancelled (956) -
Contributed surplus 6,734 5,736
Retained earnings 83,132 47,528
----------------------------------------------------------- -------------
105,573 69,678
----------------------------------------------------------- -------------
$ 302,821 $ 290,291
----------------------------------------------------------- -------------
----------------------------------------------------------- -------------

CONSOLIDATED STATEMENTS OF CASH FLOW

Year Ended
($ thousands) December 31
----------------------------------------------------------- -------------
2008 2007
----------------------------------------------------------- -------------
OPERATING ACTIVITIES
Net earnings and comprehensive income $ 36,443 $ 21,126
Depreciation and amortization 4,778 3,522
Gain on disposal of equipment (34) (224)
Share-based compensation 1,109 194
Future income taxes 1,751 (4,592)
----------------------------------------------------------- -------------
44,047 20,026

Change in non-cash balances relating to
operations (40,165) 53,696
----------------------------------------------------------- -------------
3,882 73,722
----------------------------------------------------------- -------------
INVESTING ACTIVITIES
Long-term cash and equivalents - 4,000
Proceeds on disposal of equipment 235 369
Additions to property and equipment (7,803) (6,806)
----------------------------------------------------------- -------------
(7,568) (2,437)
----------------------------------------------------------- -------------
FINANCING ACTIVITIES
Proceeds under operating line of credit 9,000 5,000
Repayments under operating line of credit (9,000) (17,000)
Repayment of long-term debt (1,994) (1,781)
Repayment of demand term loan - (455)
Share purchase under a normal course issuer bid (1,944) -
Issuance of common shares 287 669
----------------------------------------------------------- -------------
(3,651) (13,567)
----------------------------------------------------------- -------------

Increase (decrease) in cash (7,337) 57,718
Cash and cash equivalents, beginning of year 108,105 50,387
----------------------------------------------------------- -------------
Cash and cash equivalents, end of year $ 100,768 $ 108,105
----------------------------------------------------------- -------------
----------------------------------------------------------- -------------

SUPPLEMENTAL CASH FLOW INFORMATION
----------------------------------------------------------- -------------
Cash received (paid) during the year for:
Interest $ 2,240 $ 1,890
Income taxes $ (25,432) $ 8,471
----------------------------------------------------------- -------------

SELECTED FINANCIAL STATEMENT DISCLOSURE

Industrial Industrial
December 31, 2008 Buildings General Insulation
-------------------------------------------------------------------------
Revenues $ 568,958 $ 85,864 $ 73,748
-------------------------------------------------------------------------
-------------------------------------------------------------------------
EBITDA(1) 42,827 593 8,711
Depreciation and amortization 1,998 415 231
Interest expense 65 77 1
-------------------------------------------------------------------------
Earnings (loss) before tax $ 40,764 $ 101 $ 8,479

Income taxes

Net earnings

Goodwill and intangible assets $ - $ - $ -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Assets $ 183,539 $ 33,034 $ 26,707
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital Expenditures $ 3,301 $ 328 $ 376
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Industrial Corporate
December 31, 2008 Electric and Other Total
-------------------------------------------------------------------------
Revenues $ 118,247 $ - $ 846,817
-------------------------------------------------------------------------
-------------------------------------------------------------------------
EBITDA(1) 11,595 (6,110) 57,616
Depreciation and amortization 1,044 1,090 4,778
Interest expense 64 360 567
-------------------------------------------------------------------------
Earnings (loss) before tax $ 10,487 $ (7,560) $ 52,271
-----------
Income taxes (15,828)
-----------
Net earnings $ 36,443
-----------
-----------
Goodwill and intangible assets $ 7,315 $ 21 $ 7,336
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Assets $ 36,348 $ 23,193 $ 302,821
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital Expenditures $ 2,535 $ 1,577 $ 8,117
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Industrial Industrial
December 31, 2007 Buildings General Insulation
-------------------------------------------------------------------------
Revenues $ 524,669 $ 42,120 $ 52,272
-------------------------------------------------------------------------
-------------------------------------------------------------------------
EBITDA(1) 25,785 414 5,111
Depreciation and amortization 1,356 438 237
Interest expense Interest expense 65 84 1
-------------------------------------------------------------------------
Earnings (loss) before tax $ 24,364 $ (108) $ 4,873

Income taxes Income taxes

Net earnings Net earnings

Goodwill and intangible assets $ - $ - $ -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Assets $ 184,423 $ 21,070 $ 16,781
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital Expenditures $ 5,112 $ 557 $ 232
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Industrial Corporate
December 31, 2007 Electric and Other Total
-------------------------------------------------------------------------
Revenues $ 117,080 $ - $ 736,141
-------------------------------------------------------------------------
-------------------------------------------------------------------------
EBITDA(1) 7,596 (3,809) 35,097
Depreciation and amortization 937 554 3,522
Interest expense Interest expense 67 532 749
-------------------------------------------------------------------------
Earnings (loss) before tax $ 6,592 $ (4,895) $ 30,826
-----------
Income taxes Income taxes (9,700)
-----------
Net earnings Net earnings $ 21,126
-----------
-----------
Goodwill and intangible assets $ 7,315 $ 105 $ 7,420
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Assets $ 37,088 $ 30,929 $ 290,291
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital Expenditures $ 1,861 $ 837 $ 8,599
-------------------------------------------------------------------------
-------------------------------------------------------------------------
>>

The Churchill Corporation provides building construction, industrial
construction and maintenance services throughout Western Canada. Churchill
common shares are listed on The Toronto Stock Exchange under the symbol "CUQ".

TERMINOLOGY

Throughout this Press Release, and other documents referred to,
management refers to certain terms when explaining its financial results that
do not have any standardized meaning under Canadian GAAP as set out in the
CICA Handbook. Specifically, the terms "Contract income margin percentage",
"Work-in-hand", "Backlog", "Delayed Backlog", "Working capital", "EBITDA" and
"Book value per share" have been defined as:

Contract income margin percentage is the percentage derived by dividing
contract income by contract revenue. Contract income is calculated by
deducting all associated direct and indirect costs from contract revenue in
the period.

Work-in-hand is the unexecuted portion of work that has been
contractually awarded for construction to the Corporation. It includes an
estimate of the revenue to be generated from contracts during the shorter of
(a) twelve months, or (b) the remaining life of the contract.

Backlog means the total value of work, including work-in-hand that has
not yet been completed that; (a) is assessed by the Corporation as having high
certainty of being performed by the Corporation or its subsidiaries by either
the existence of a contract or work order specifying job scope, value and
timing; or (b) has been awarded to the Corporation or its subsidiaries, as
evidenced by an executed binding or non-binding letter of intent or agreement,
describing the general job scope, value and timing of such work, and with the
finalization of a formal contract respecting such work currently assessed by
the Corporation as being reasonably assured. All projects within backlog are
classified as active unless the Company has received written or verbal
notification from the client that a job/project/contract has been delayed, at
which point the backlog is classified as Delayed Backlog. This is the first
reporting period in which the Corporation is disclosing delayed backlog to
further assist investors in understanding the certainty of the Backlog
reported. The Corporation provides no assurance that additional clients will
not choose to defer or cancel their projects in the future. There can be no
assurance that the client will resume the project or that the delayed backlog
will not be retendered. Jobs or projects subsequently retendered and not
awarded to the Corporation or its subsidiaries would at that time be removed
from the Corporation's backlog.

<<
As at December 31, 2008
($ millions)

Work-in-hand Active Backlog Delayed Backlog Total Backlog
-------------------------------------------------------------------------
$591.5 $814.3 $30.3 $1,436.1
-------------------------------------------------------------------------

Working capital is current assets less current liabilities excluding that
portion relating to any demand term loan which is scheduled to be repaid
beyond one year, applicable in 2007 only. Our calculation of working capital
is provided in the table below:

-------------------------------------------------------------------------
As at December 31, December 31,
($ millions) 2008 2007
-------------------------------------------------------------------------

Current assets $ 268.5 $ 259.3
Less:
Current liabilities 190.2 211.4

-------------------------------------------------------------------------
-------------------------------------------------------------------------
Working Capital $ 78.3 $ 47.9
-------------------------------------------------------------------------
>>

EBITDA is a common financial measure widely used by investors to
facilitate an "enterprise level" valuation of an entity. The Corporation
follows the standardized definition of EBITDA. Standardized EBITDA represents
an indication of the Corporation's capacity to generate income from operations
before taking into account management's financing decisions and costs of
consuming tangible and intangible capital assets, which vary according to
their vintage, technological currency, and management's estimate of their
useful life. Accordingly standardized EBITDA comprises revenues less operating
cost before interest expense, capital asset amortization and impairment
charges, and income taxes. This measure as reported by the Corporation may not
be comparable to similar measures presented by other reporting issuers. The
following is a reconciliation of net earnings to EBITDA for each of the
periods presented in this MD&A in accordance with GAAP.

<<
-------------------------------------------------------------------------
Three months ended Twelve months ended
($ millions) December 31, December 31,
--------------------------- ---------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
Net Earnings $ 11.2 $ 8.2 $ 36.4 $ 21.1
Add:
Income Taxes 4.6 3.5 15.8 9.7
Depreciation &
Amortization 1.3 1.1 4.8 3.5
Interest expense 0.1 0.2 0.6 0.8
-------------------------------------------------------------------------

EBITDA $ 17.2 $ 13.0 $ 57.6 $ 35.1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
>>

Book value per share is the value of shareholders' equity less value of
preferred stock divided by basic shares outstanding at the end of the period.

FORWARD LOOKING STATEMENTS

Certain statements in this Fourth Quarter Press Release may constitute
"forward-looking statements". Forward-looking statements include, without
limitation, statements regarding the future financial position, business
strategy, budgets, litigation, projected costs, capital expenditures,
financial results, taxes, plans and objectives of the Corporation. Many of
these statements can be identified by looking for words such as "believes,"
"expects," "may," "will," "intends," "anticipates," "estimates," "continues,"
or the negative thereof, or other variations thereon. Although management of
Churchill believes its expectations regarding future performance of the
Corporation are based on reasonable assumptions and currently available
competitive, financial and economic data, market conditions and operating
plans, it can give no assurance its expectations will be achieved. The
Corporation cautions that, by their nature, forward-looking statements,
involve risks, and uncertainties and that its actual actions, and/or results
could differ materially from those expressed or implied in such
forward-looking statements, and that the aforementioned risks, uncertainties
and actions could affect the extent to which a particular projection
materializes. The Corporation assumes no obligation to update the
forward-looking statements should circumstances or the Corporation's
management's estimates or opinions change.