The Art of Vulture Investing: Adventures in Distressed Securities Management

APPENDIX 3

Letter to Washington Group’s Board of Directors

July 17, 2006

Earl Ward, Investor Relations

Washington Group International, Inc.

[e-mail]

George Juetten, CFO

Washington Group International, Inc.

[e-mail]

Mssrs. Ward and Juetten:

Schultze Asset Management LLC, serves as investment advisor to various client accounts (including: Schultze Master Fund Ltd., Arrow Distressed Securities Fund, and Special Situations I Fund among others), which together beneficially own approximately 526,506 shares, or 1.818 percent, of the common stock of Washington Group International, Inc. (“WGII” or the “Company”). We seek to encourage management to promptly devise a more simple publicly-disclosed strategy as to how the Company plans to utilize its excess cash and maximize long-term stockholder value.

Enclosed you will find our firm’s analysis of the methods we perceive would best maximize long-term stockholder value. We view WGII as an undervalued and underleveraged engineering and construction firm. We urge management to close this valuation gap by implementing a more efficient capital structure, which will send a very clear message to the investing community as soon as possible.

WGII has significant sources of cash from its balance sheet and through the capacity for significant additional leverage. We estimate this cash to be approximately $742 million and believe ...