UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ፤ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002 OR អ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO : Commission File Number 1-14667 WASHINGTON MUTUAL, INC. (Exact name of registrant as specified in its charter) Washington 91-1653725 (State or Other Jurisdiction of Incorporation (I.R.S. Employer or Organization) Identification Number) 1201 Third Avenue, Seattle, Washington 98101 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (206) 461-2000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common Stock New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: Title of each class Name of each exchange on which registered Ligitation Tracking Warrants↩ NASDAQ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ፤ No អ. Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. អ Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes ፤ No អ. The aggregate market value of voting stock held by non-affiliates of the registrant as of June 30, 2002: Common Stock ± $35,086,844,423(1) (1) Does not include any value attributable to 18 million shares that are held in escrow and not traded. The number of shares outstanding of the issuer's classes of common stock as of February 28, 2003: Common Stock ± 939,456,466(2) (2) Includes 17,775,000 shares held in escrow pending resolution of the Company's asserted right to the return of such shares. Documents Incorporated by Reference Portions of the definitive proxy statement for the Annual Meeting of Shareholders to be held April 15, 2003, are incorporated by reference into Part II and Part III. WASHINGTON MUTUAL, INC. 2002 ANNUAL REPORT ON FORM 10-K TABLE OF CONTENTS Page PART I ......................................................................................................................................................................... 1 Item 1. Business ...................................................................................................................................................... 1 Business Segments........................................................................................................................................... 2 Available Information ..................................................................................................................................... 5 Employees ........................................................................................................................................................ 5 Factors That May Affect Future Results ....................................................................................................... 5 Taxation ............................................................................................................................................................ 7 Environmental Regulation .............................................................................................................................. 7 Regulation and Supervision ............................................................................................................................ 8 Principal Officers............................................................................................................................................. 13 Item 2. Properties.................................................................................................................................................... 15 Item 3. Legal Proceedings ...................................................................................................................................... 16 Item 4. Submission of Matters to a Vote of Security Holders ............................................................................ 16 PART II........................................................................................................................................................................ 16 Item 5. Market for our Common Stock and Related Stockholder Matters ....................................................... 16 Item 6. Selected Financial Data............................................................................................................................. 20 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations............... 17 Controls and Procedures................................................................................................................................. 17 Critical Accounting Policies ............................................................................................................................ 17 Five-Year Summary of Selected Financial Data ........................................................................................... 20 Significant Transactions................................................................................................................................... 20 Ratios and Other Supplemental Data ........................................................................................................... 22 Earnings Performance ..................................................................................................................................... 26 Review of Financial Condition ....................................................................................................................... 33 Off-Balance Sheet Arrangements................................................................................................................... 38 Asset Quality.................................................................................................................................................... 40 Operating Segments ........................................................................................................................................ 47 Liquidity ........................................................................................................................................................... 51 Capital Adequacy ............................................................................................................................................ 54 Market Risk Management .............................................................................................................................. 54 Maturity and Repricing Information.............................................................................................................. 61 Recently Issued Accounting Standards .......................................................................................................... 66 Tax Contingency............................................................................................................................................... 67 Goodwill Litigation.......................................................................................................................................... 68 Item 7A. Quantitative and Qualitative Disclosures about Market Risk............................................................. 54 Item 8. Financial Statements and Supplementary Data....................................................................................... 70 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure .............. 70 PART III ...................................................................................................................................................................... 70 Item 10. Directors and Executive Officers of the Registrant .............................................................................. 70 Item 11. Executive Compensation ......................................................................................................................... 70 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ................................................................................................................................................................. 70 Item 13. Certain Relationships and Related Transactions ................................................................................... 70 Item 14. Controls and Procedures ......................................................................................................................... 17 PART IV....................................................................................................................................................................... 71 Item 15. Exhibits, Financial