EX-99 2 mm02-0309_8ke99decmor.htm

 

Exhibit 99.1

 

UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE

In re Washington Mutual, Inc. et al

Case No. 08-12229 (MFW)

 

Reporting Period: 12-01-08 to 12-31-08

 

 

MONTHLY OPERATING REPORT

REQUIRED DOCUMENTS

Form No.

Document
Attached

Explanation
Attached

Schedule of Cash Receipts and Disbursements

MOR-1

Yes

 

Bank Reconciliation (or copies of Debtors’ bank reconciliations)

MOR-1a

Refer to attached stmt

 

Schedule of Professional Fees Paid

MOR-1b

Yes

 

Copies of bank statements

MOR-1c

Refer to attached stmt

 

Cash disbursements journals

 

n/a

Refer to MOR 1 for summary of all disbursements.

Statement of Operations

MOR-2

Yes

See attached notes

Balance Sheet

MOR-3

Yes

See attached notes

Status of Postpetition Taxes

MOR-4

Yes

 

Copies of IRS Form 6123 or payment receipt

 

n/a

Payroll services provided by JPM, including remission of taxes.

Copies of tax returns filed during reporting period

 

n/a

See listing of filings

Summary of Unpaid Postpetition Debts

MOR-4

n/a

Detail on face of balance sheet.

Listing of aged accounts payable

MOR-4

Yes

 

Accounts Receivable Reconciliation and Aging

MOR-5

n/a

No trade receivables

Debtor Questionnaire

MOR-5

Yes

 

 

I declare under penalty of perjury (28 U.S.C. Section 1746) that this report and the documents attached are true and correct to the best of my knowledge and belief.

/s/ John Maciel

 

February 2, 2009

Signature of Authorized Individual*

 

Date

 

 

 

 

 

 

John Maciel

 

Chief Financial Officer

Printed Name of Authorized Individual

 

Title of Authorized Individual

 

 

 

*Authorized individual must be an officer, director or shareholder if debtor is a corporation; a partner if debtor is a partnership; a manager or member if debtor is a limited liability company.

 

 

                                                                                                

 


In re Washington Mutual, Inc., et al

Case No. 08-12229 (MFW)

 

 

DISCLAIMER

 

Washington Mutual, Inc. (“WMI”) and WMI Investment Corp. (together, the “Debtors”) caution investors and potential investors in WMI not to place undue reliance upon the information contained in this Monthly Operating Report, which was not prepared for the purpose of providing the basis for an investment decision relating to any of the securities of WMI. The Monthly Operating Report is limited in scope, covers a limited time period, and has been prepared solely for the purpose of complying with the monthly reporting requirements of the Bankruptcy Court and the United States Trustee. The Monthly Operating Report was not audited or reviewed by independent accountants; does not purport to present the financial statements of WMI in accordance with generally accepted accounting principles; does not purport to present the market value of WMI’s assets and liabilities or the recoverability of WMI’s assets; is in a format prescribed by applicable bankruptcy laws; and is subject to future adjustment and reconciliation. There can be no assurance that, from the perspective of an investor or potential investor in WMI’s securities, the Monthly Operating Report is complete. Results set forth in the Monthly Operating Report should not be viewed as indicative of future results. This disclaimer applies to all information contained herein.

 

On September 26, 2008 (the “Petition Date”), the Debtors each commenced voluntary cases under chapter 11 of title 11 of the United States Code with the United States Bankruptcy Court for the District of Delaware. Prior to the Petition Date, on September 25, 2008, the Director of the Office of Thrift Supervision, appointed the Federal Deposit Insurance Corporation (the “FDIC”) as receiver for Washington Mutual Bank (“WMB”) and advised that the receiver was immediately taking possession of WMB. Immediately after its appointment as receiver, the FDIC sold substantially all the assets of WMB, including the stock of Washington Mutual Bank fsb, to JPMorgan Chase Bank, National Association (“JPMorgan”) pursuant to that certain Purchase and Assumption Agreement, Whole Bank, dated as of September 25, 2008 (the “Sale”).

 

Prior to the Petition Date, WMI and WMB jointly maintained their respective financial records. As a result of the Sale, many of the Debtors’ books and records were seized by the FDIC and transferred to the custody of JPMorgan. Accordingly, the Debtors are not in control of certain information relating to their operations and financial affairs, including, but not limited to, certain accounting information. In addition, as of the date of the Sale, substantially all of WMB’s employees became employees of JPMorgan. Accordingly, this Monthly Operating Report was prepared, in large part, based upon the information and work product and/or representations made available to the Debtors and their professionals by representatives of WMB and JPMorgan.

 

Given the Debtors’ limited, and in most cases indirect, access to the information relating to this Monthly Operating Report, the Debtors are still in the process of verifying the accuracy or completeness of all the information, statements and representations of WMB and JPMorgan. WMI is in the process of developing its own accounting and finance processes. WMI’s management has reviewed and made certain adjustments to the information provided by representatives of WMB and JPMorgan. The results set forth in this Monthly Operating Report are, however, being investigated further and may vary from the results listed in this Monthly Operating Report.

 

Results represented in this Monthly Operating Report are consistent with WMI’s accounting practices as of the Petition Date. However, records of prepetition assets and liabilities, including, among other things, liabilities owed by WMI to WMB and its affiliates are likely to be adjusted. The Debtors reserve all rights to amend the results represented in this Monthly Operating Report.

 

 

 

Washington Mutual, Inc., et al

 

Case No. 08-12229 (MFW)

December 2008 Monthly Operating Report -- UNAUDITED

 

 

MOR 1 -- Schedule of Cash Receipts and Disbursements

 

 

 

 

 

 

 

 

Washington Mutual, Inc.

 

WMI Investment Corp.

 

Account

 

Deposit

Deposit

Deposit

Deposit

Deposit

General

 

Deposit

General

Deposit

 

 

Bank

 

WMB/JPM

WMB/JPM

BNY Mellon

WMB/JPM

WMB/JPM

Bank of America

 

WMB/JPM

Bank of America

US Bank

 

 

Bank Account

 

xxx0667

xxx4234

xxxx301

xxx9626

xxx9663

xxx4228

WMI

xxx4704

xxx4231

xxx7001

WMI Inv Corp

Combined

GL Account

 

70/10450/9909

70/10441/9909

70/10383/9778

70/10450/9910

70/10450/9911

70/10305/9347

Total

467/10450/9909

467/10305/9347

467/12510/9347

Total

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Opening Balance - 11/30/2008

 

261,338,652

3,667,943,173

81

4,650

747,799

11,840,685

3,941,875,040

53,493,453

2,964,258

3,237,976

59,695,687

4,001,570,727

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Receipts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest & investment returns

 

78

161,214

 

 

 

1,530,892

1,692,184

 

216,867

1,800,550

2,017,417

3,709,601

Tax Refunds

 

 

 

 

 

 

1,573,600

1,573,600

 

 

 

-

1,573,600

Reimbursements from WMB

 

 

 

 

 

 

 

-

 

 

 

-

-

Reimbursements/distributions from subs

 

 

 

 

 

 

289,350,419

289,350,419

 

 

 

-

289,350,419

Sales of Assets/Securities

 

 

 

 

 

 

 

-

 

 

160,758,330

160,758,330

160,758,330

Miscellaneous Receipts

 

 

 

 

 

 

 

-

 

 

 

-

-

Total Receipts

 

78

161,214

-

-

-

292,454,911

292,616,203

-

216,867

162,558,881

162,775,747

455,391,951

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Transfers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General to Disbursement

 

 

 

 

 

 

-

-

 

 

 

-

-

Loan to subsidiary

 

 

 

 

 

 

(11,930,682)

(11,930,682)

 

 

 

-

(11,930,682)

Sweep to Money Market account

 

 

 

 

 

 

 

-

 

 

(165,796,856)

(165,796,856)

(165,796,856)

General to payroll

 

 

 

 

 

 

 

-

 

 

 

-

-

To new bank account

 

 

 

 

 

 

 

-

 

 

 

-

-

Total Transfers

 

-

-

-

-

-

(11,930,682)

(11,930,682)

-

-

(165,796,856)

(165,796,856)

(177,727,538)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Disbursements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Insurance

 

 

 

 

 

 

 

-

 

 

 

-

-

Travel and other expenses

 

 

 

 

 

 

1,866

1,866

 

 

 

 

1,866

Retainer

 

 

 

 

 

 

30,000

30,000

 

 

 

-

30,000

Professional Fees

 

 

 

 

 

 

1,214,422

1,214,422

 

 

 

-

1,214,422

Bank fees

 

 

 

81

 

 

3,228

3,309

 

352,693

 

352,693

356,001

US Trustee Quarterly Fees

 

 

 

 

 

 

 

-

 

 

 

-

-

Directors fees

 

 

 

 

 

 

160,389

160,389

 

 

 

-

160,389

Miscellaneous Adjustments

 

 

 

 

 

 

-

-

 

 

 

-

-

Total Disbursements

 

-

-

81

-

-

1,409,904

1,409,985

-

352,693

-

352,693

1,762,678

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Cash Flow

 

78

161,214

(81)

-

-

279,114,325

279,275,536

-

(135,826)

(3,237,976)

(3,373,802)

275,901,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash - End of Month

 

261,338,730

3,668,104,387

-

4,650

747,799

290,955,010

4,221,150,576

53,493,453

2,828,432

0

56,321,885

4,277,472,461

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GL Balance

 

261,338,730

3,668,104,387

-

4,650

747,799

290,955,010

4,221,150,576

53,493,453

2,828,432

-

56,321,885

4,277,472,460

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net value - Short-term securities

 

 

 

 

 

 

 

321,194,630

 

 

 

217,011,629

538,206,259

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Cash & Cash Equivalents

 

 

 

 

 

 

 

4,542,345,206

 

 

 

273,333,514

4,815,678,719

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




Washington Mutual, Inc., et al

December 2008 Monthly Operating Report -- UNAUDITED

MOR 1a and MOR 1c -- Cash

Case No. 08-12229 (MFW)

 



Bank Reconciliations

 

The above-captioned debtors (the "Debtors") hereby submit this attestation regarding bank account reconciliations in lieu of providing copies of bank statements and copies of all account reconciliations.

 

I attest that each of the Debtors' bank accounts is reconciled to monthly bank statements. The Debtors' standard practice is to ensure that each bank account is reconciled to monthly bank statements for each calendar month 30 days after the quarter end.

/s/ John Maciel

John Maciel

Chief Financial Officer

Washington Mutual, Inc.

 

 

 

 


Washington Mutual, Inc.

 

Case No. 08-12229 (MFW)

 

 

 

 

 

 

MOR-1B: Schedule of Professional Fees Paid

 

 

 

 

 

 

 

 

Month Ended 12/31/08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Check

 

Amount Paid

 

Amount Paid YTD

Payee

 

Period Covered

 

Number

 

Date

 

Fees

 

Expense

 

Fees

 

Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Akin, Gump, Strauss, Hauer & Feld LLP

 

10/15/08-10/31/08

 

Wire

 

12/30/2008

 

$576,119.20

 

$ 6,954.35

 

$576,119.20

 

$ 6,954.35

Alvarez and Marsal

 

 

 

 

 

 

 

-

 

-

 

1,125,521.50

 

58,540.92

Davis Wright Tremaine LLP

 

9/26/08 - 10/31/08

 

Wire

 

12/23/2008

 

194,230.60

 

352.35

 

194,230.60

 

352.35

Gibson, Dunn & Crutcher LLP

 

9/26/08 - 10/31/08

 

Wire

 

12/29/2008

 

106,303.60

 

136.82

 

106,303.60

 

136.82

Joele Frank, Wilkinson Brimmer Katcher

 

10/1/08 - 11/30/08

 

Wire

 

12/23/2008

 

49,306.25

 

2,778.23

 

49,306.25

 

2,778.23

Kurtzman Carson Consultants LLC

 

9/26/08 - 10/31/08

 

Wire

 

12/24/2008

 

93,483.41

 

-

 

93,483.41

 

-

Pepper Hamilton LLP

 

10/15/08 - 10/31/08

 

Wire

 

12/30/2008

 

124,965.80

 

2,274.11

 

124,965.80

 

2,274.11

Richards, Layton & Finger P.A.

 

9/26/08 - 10/31/08

 

Wire

 

12/24/2008

 

48,233.20

 

9,283.82

 

48,233.20

 

9,283.82

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

$1,192,642.06

 

$ 21,779.68

 

$2,318,163.56

 

$ 80,320.60

 

 

 

Washington Mutual, Inc., et al

Case No. 08-12229 (MFW)

December 2008 Monthly Operating Report -- UNAUDITED

 

MOR 2 Statement of Operations for the month of December

 

 

 

 

 

 

 

 

Washington Mutual, Inc.

 

WMI Investment Corp.

 

 

 

 

Dec. 2008

 

Cumulative to Date

 

Dec. 2008

 

Cumulative to Date

Revenues:

 

 

 

 

 

 

 

 

Interest income:

 

 

 

 

 

 

 

 

 

Cash equivalents

1,662,690

 

3,855,304

 

39,814

 

39,814

 

 

Securities

278,456

 

540,899

 

108,774

 

2,970,191

 

 

Notes receivable - intercompany

377,336

 

584,615

 

-

 

1

 

 

Other

-

 

-

 

-

 

-

 

 

 

Total interest income

2,318,482

 

4,980,818

 

148,588

 

3,010,006

 

Earnings from subsidiaries and other

 

 

 

 

 

 

 

 

 

equity investments

(181,204,821)

 

(191,903,713)

 

(16,334,027)

 

(16,334,027)

 

Gains (losses) from securities / investments

(5,726,925)

 

(5,725,926)

 

(87,413,392)

 

(112,358,710)

 

Other income

211,339

 

477,624

 

-

 

-

 

 

 

Total revenues

(184,401,925)

 

(192,171,197)

 

(103,598,831)

 

(125,682,731)

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

Compensation and benefits

547,254

 

979,464

 

-

 

-

 

Occupancy and equipment

59,915

 

186,978

 

-

 

-

 

Professional fees

159,879

 

1,129,398

 

-

 

-

 

Postage, express mail and courier

-

 

14

 

-

 

-

 

Other outside services

-

 

199

 

-

 

-

 

Loss / (Income) from BOLI/COLI policies

(1,455,032)

 

(3,406,422)

 

-

 

-

 

Management fees / Transition services

1,000,000

 

3,000,000

 

-

 

-

 

Insurance

1,684,475

 

4,805,800

 

-

 

-

 

Other

99,349

 

101,374

 

209,165

 

353,018

 

 

 

Total operating expenses

2,095,840

 

6,796,805

 

209,165

 

353,018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net profit (loss) before other income

 

 

 

 

 

 

 

 

 

 

and expenses

(186,497,765)

 

(198,968,002)

 

(103,807,996)

 

(126,035,749)

 

 

 

 

 

 

 

 

 

 

 

Other income and expenses:

 

 

 

 

 

 

 

 

Interest expense:

 

 

 

 

 

 

 

 

 

Notes payable - intercompany

-

 

-

 

-

 

-

 

 

Borrowings

-

 

-

 

-

 

-

 

 

 

Total interest expense

-

 

-

 

-

 

-

 

Other expense / (income)

-

 

(158,165)

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net profit (loss) before reorganization

 

 

 

 

 

 

 

 

 

 

items

(186,497,765)

 

(198,809,837)

 

(103,807,996)

 

(126,035,749)

 

 

 

 

 

 

 

 

 

 

 

Reorganization items:

 

 

 

 

 

 

 

 

Professional fees

5,495,746

 

15,824,269

 

-

 

-

 

US Trustee quarterly fees

-

 

13,000

 

4,875

 

4,875

 

Gains (losses) from sale of assets

-

 

-

 

-

 

-

 

Other reorganization expenses

-

 

-

 

-

 

-

 

 

 

Total reorganization items

5,495,746

 

15,837,269

 

4,875

 

4,875

 

 

 

Net profit (loss) before income taxes

(191,993,511)

 

(214,647,105)

 

(103,812,871)

 

(126,040,624)

 

 

 

 

 

 

 

 

 

 

 

Income taxes

-

 

-

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

Net profit (loss)

(191,993,511)

 

(214,647,105)

 

(103,812,871)

 

(126,040,624)

 

 

 

 

 

 

 

 

 

 

 

 

 

Washington Mutual, Inc., et al

Case No. 08-12229 (MFW)

December 2008 Monthly Operating Report -- UNAUDITED

 

MOR 3 Balance Sheet as of 12/31/2008 and 9/26/2008

 

 

 

 

 

 

 

 

Washington Mutual, Inc.

 

WMI Investment Corp.

 

 

 

 

12/31/2008

 

9/26/08

 

12/31/2008

 

9/26/08

Assets:

 

 

 

 

 

 

 

 

Unrestricted cash and cash equivalents

4,542,345,206

 

4,018,083,009

 

273,333,514

 

52,974,376

 

Restricted cash and cash equivalents

140,149,745

 

143,805,609

 

-

 

-

 

Investment securities

64,679,399

 

59,688,627

 

-

 

266,444,881

 

Accrued interest receivable

2,619,811

 

413,253

 

37,388

 

4,084,658

 

Accounts receivable

-

 

-

 

-

 

-

 

Income tax receivable

483,465,626

 

742,680,150

 

22,187,560

 

22,187,560

 

Prepaid assets

11,785,710

 

11,311,510

 

-

 

-

 

Cash surrender value of BOLI/COLI

86,522,556

 

84,039,738

 

-

 

-

 

Funded Pension

39,173,922

 

638,870,071

 

-

 

-

 

Other investments

18,548,737

 

25,532,184

 

48,882,412

 

65,952,708

 

Investment in subsidiaries

1,552,531,179

 

1,894,114,445

 

-

 

-

 

Notes receivable - intercompany

2,784,811

 

58,001,133

 

565,844,197

 

565,844,197

 

Other assets

36,883,783

 

23,489,277

 

-

 

-

 

 

 

Total assets

6,981,490,485

 

7,700,029,006

 

910,285,071

 

977,488,380

 

 

 

 

 

 

 

 

 

 

 

Liabilities not subject to compromise (Postpetition):

 

 

 

 

 

 

 

 

Accounts payable

6,814,833

 

-

 

-

 

-

 

Taxes payable

-

 

-

 

-

 

-

 

Wages payable

105,000

 

-

 

-

 

-

 

Other accrued liabilities

11,526,049

 

-

 

4,875

 

-

 

Rent and equipment lease payable

183,788

 

-

 

-

 

-

 

Deferred tax liability / (asset)

-

 

-

 

-

 

-

 

Other Liabilities - Intercompany

-

 

-

 

-

 

-

 

Other post-petition liabilities

-

 

-

 

-

 

-

 

Minority interest

2,000,000

 

2,000,000

 

-

 

-

 

 

Total post-petition liabilities

20,629,669

 

2,000,000

 

4,875

 

-

 

 

 

 

 

 

 

 

 

 

 

Liabilities subject to compromise (Pre-petition):

 

 

 

 

 

 

 

 

Senior debt

4,108,911,139

 

4,108,911,139

 

-

 

-

 

Subordinated debt

2,356,467,965

 

2,356,467,965

 

-

 

-

 

Accrued interest payable

75,907,764

 

75,907,764

 

-

 

-

 

Notes payable - intercompany

684,092,246

 

684,092,246

 

-

 

-

 

Accrued interest payable - intercompany

3,012

 

3,012

 

-

 

-

 

Accounts payable

-

 

-

 

-

 

-

 

Accounts payable - Intercompany

-

 

-

 

-

 

-

 

Taxes payable/deferreds

551,069,842

 

550,080,833

 

-

 

-

 

Payroll and benefit accruals

407,236,707

 

407,215,221

 

-

 

-

 

Other accrued liabilities

93,416,767

 

96,200,465

 

-

 

-

 

Other pre-petition liabilities

223

 

223

 

-

 

-

 

 

Total pre-petition liabilities

8,277,105,665

 

8,278,878,868

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

8,297,735,334

 

8,280,878,868

 

4,875

 

-

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

Preferred stock

3,392,341,954

 

3,392,341,953

 

-

 

-

 

Common stock

12,988,753,556

 

12,988,753,556

 

1,000,000,000

 

1,000,000,000

 

Other comprehensive income

(2,116,416,942)

 

(1,590,151,320)

 

22,187,560

 

(36,644,880)

 

Retained earnings - pre-petition

(15,366,276,312)

 

(15,371,794,051)

 

14,133,260

 

14,133,260

 

Retained earnings - post-petition

(214,647,105)

 

-

 

(126,040,624)

 

-

 

 

 

Total shareholders' equity

(1,316,244,849)

 

(580,849,862)

 

910,280,196

 

977,488,380

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholder's equity

6,981,490,485

 

7,700,029,006

 

910,285,071

 

977,488,380

 

 

 

 

 

 

 

 

 

 

 

 

 
 

In re Washington Mutual, Inc., et al

Case No. 08-12229 (MFW)

 

 

NOTES TO MOR-2 and MOR-3

Note 1: Washington Mutual Preferred Funding

 

On September 25, 2008, the Office of Thrift Supervision concluded that an “Exchange Event” had occurred with respect to the following securities (the “Securities”):

 

 

Washington Mutual Preferred (Cayman) I Ltd. 7.25% Perpetual Non-cumulative Preferred Securities, Series A-1 (to be exchanged into depositary shares representing Series J Perpetual Non-Cumulative Fixed Rate Preferred Stock of Washington Mutual, Inc. (“WMI”));

 

 

Washington Mutual Preferred (Cayman) I Ltd. 7.25% Perpetual Non-cumulative Preferred Securities, Series A-2 (to be exchanged into depositary shares representing Series J Perpetual Non-Cumulative Fixed Rate Preferred Stock of WMI);

 

 

Washington Mutual Preferred Funding Trust I Fixed-to-Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series I Perpetual Non-Cumulative Fixed-to-Floating Rate Preferred Stock of WMI);

 

 

Washington Mutual Preferred Funding Trust II Fixed-to-Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series L Perpetual Non-Cumulative Fixed Rate Preferred Stock of WMI);

 

 

Washington Mutual Preferred Funding Trust III Fixed-to-Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series M Perpetual Non-Cumulative Fixed Rate Preferred Stock of WMI); and

 

 

Washington Mutual Preferred Funding Trust IV Fixed-to-Floating Rate Perpetual Non-cumulative Trust Securities (to be exchanged into depositary shares representing Series N Perpetual Non-Cumulative Fixed-to-Floating Rate Preferred Stock of WMI).

 

In accordance with the terms of the documents governing the Securities, the Conditional Exchange of the Securities occurred on Friday, September 26, 2008 at 8:00 A.M. (New York time). The documentation governing the Securities contemplates that at the time of the Conditional Exchange, each outstanding Security was intended to be exchanged automatically for a like amount of newly issued Fixed Rate Depositary Shares or newly issued Fixed-to-Floating Rate Depositary Shares, as applicable, each representing a 1/1000th interest in one share of the applicable series of preferred stock of WMI. If and until such depositary receipts are delivered or in the event such depositary receipts are not delivered, any certificates previously representing Securities are deemed for all purposes, effective as of 8:00 AM (New York time) on September 26, 2008, to represent Fixed Rate Depositary Shares or Fixed-to-Floating Rate Depositary Shares, as applicable.

 

WMI and its advisors are currently assessing a number of legal, accounting and tax issues related to the Securities and the transactions related to the Conditional Exchange. Because of these unresolved issues, WMI has not yet reflected the Conditional Exchange and/or its attendant transactions on its financial statements, including any possible interests (direct or indirect, contingent or otherwise) in the Securities and the assets, as the case may be, of Washington Mutual Preferred Funding LLC.

 

WMI intends to make a public announcement upon resolution of these issues. The foregoing notwithstanding, assuming that the Conditional Exchange had been completed in accordance with the terms of the relevant documentation, on a pro forma basis WMI’s financial statements as at December 31, 2008 would reflect a credit to shareholders’ equity of approximately $3.9 billion upon issuance of the new classes of preferred stock of WMI that were reserved for issuance upon the occurrence of the Conditional Exchange, as well as a corresponding loss of approximately $3.9 billion upon conversion of the Securities.

 

 

                                                                                                

 


Note 2: Investment in Subsidiaries

 

WMI’s investment in subsidiaries represents the book value of WMI’s subsidiaries, including WMI Investment Corp. (“WMI Investment”). The balance does not represent the market value of these entities.

 

Prior to year end, WMI reorganized its corporate structure resulting in the merger of several of its subsidiaries. Upon reorganization, WMI received cash of $271 million from dividends and the repayment of intercompany loans.

 

In December 2008, WMI recorded significant losses from its subsidiaries. These losses were primarily due to two factors.

 

 

WMI Investment incurred losses from the sale of its remaining investment securities ($87.4 million) and experienced a loss attributable to its investment in its wind-energy joint- venture ($16.3 million).

 

WM Mortgage Reinsurance Company recorded a loss of $79.3 million, principally related to a one-time adjustment to reconcile its estimated provision for losses to the ceded provision for losses reported by the insurance carriers. The ceded provisionfor losses, reported by the mortgage insurance carriers, is a more conservative estimate than recent actuarial estimates and is the basis for the insurance carriers’ requests for additional capital.

Note 3: Funded Pension

 

The funded pension balance was adjusted to reflect the (1) the market value of assets as of December 2, 2008 less (2) the November 2008 actuarial estimated settlement value of September 25, 2008 liabilities. The value does not reflect any recent changes in market values or interest rate assumptions since November 2008 which could materially affect the results.

Note 4: Taxes

 

The tax asset and liability balances are recorded consistent with WMI’s historical accounting practices as of the Petition Date and adjusted for refunds collected. Generally, tax related claims and payables are recorded on WMI’s books and records on a consolidated basis with the other members of the consolidated tax group and have not been adjusted for any potential claims against these assets. The recorded balances do not reflect all expected refunds or payments, which are currently being reviewed. WMI understands that JPMorgan, the purchaser of substantially all of WMB’s assets, may claim all or a portion of expected tax refunds.

 

No provision or benefit from income taxes has been recorded as the NOL’s are sufficient to offset income during the reported period.

 

 


Washington Mutual, Inc. / WMI Investments

Case No.08-12229 (MFW)

December 2008 Monthly Operating Report -- UNAUDITED

 

MOR 4 Status of Postpetition Taxes

 

 

 

 

 

Washington Mutual, Inc.

 

WMI Investment Corp

 

 

 

 

Beginning Tax Liability

Amt approved for pmt

Taxes collected

Taxes remitted

Closting Balance Post Petition

Beginning Tax Liability

Amt approved for pmt

Taxes collected

Taxes remitted

Closting Balance Post Petition

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal

NOTES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Withholding

*

 

 

 

 

 

-

 

 

 

 

-

FICA – Employee

*

 

 

 

 

 

-

 

 

 

 

-

FICA – Employer

*

 

 

 

 

 

-

 

 

 

 

-

Unemployment

*

 

 

 

 

 

-

 

 

 

 

-

Income

**

 

 

 

 

 

-

 

 

 

 

-

Other:

 

 

 

 

 

 

-

 

 

 

 

-

Total Federal

 

 

-

-

-

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

 

 

 

State and Local

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Withholding

*

 

 

 

 

 

-

 

 

 

 

 

Sales

***

 

 

 

 

 

 

 

 

 

 

 

Unemployment

*

 

 

 

 

 

 

 

 

 

 

 

Real Property

n/a

 

 

 

 

 

 

 

 

 

 

 

Personal Property

n/a

 

 

 

 

 

 

 

 

 

 

 

Other

****

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

-

 

 

 

 

 

Total State and Local

 

 

-

-

-

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Taxes

 

 

-

-

-

-

-

-

-

-

-

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTES

*All WMI payroll is being processed through JPM payroll services, including the remission of all related withholding taxes, benefits and employer taxes. WMI

reimburses JPM for all payroll expenses.We have attached a listing of payroll related filings submitted

**WMI has booked no post-petition income tax provision, nor has it made any payments.

*** See signed statement below and attached listing of filings related to business activity.No outstanding liabilities reported as of December 31, 2008.

****Business and Occupation ("B&O") tax returns not filed for Seattle and Washington due to Debtor status, as directed by Department of Revenue

 

I attest that all tax returns have been filed in acordance withfederal / state / county / city requirements for the above period and according to the Company's tax payment schedule.  Any payments remitted have either been incorporated into the Schedule of Cash Receipts and Disbursements at MOR-1 or booked as a payable to JPM as a reimbursement.

/s/ John Maciel

John Maciel

Chief Financial Officer

Washington Mutual, Inc., et al




 

Washington Mutual, Inc. and WMI Investment Corp.

Case No.08-12229 (MFW)

Tax Return Filings

 

 

 

 

For the Period 12/1/2008 through 12/31/2008

 

 

 

 

 

 

 

 

Property Tax Filings:

 

 

 

 

 

 

 

 

No property tax returns were filed during the period 12/1/2008 through 12/31/2008.

 

 

 

 

 

 

 

 

 

 

 

 

Sales and Use Tax Filings:

 

 

 

 

 

 

 

 

No property tax returns were filed during the period 12/1/2008 through 12/31/2008.

 

 

 

 

 

 

 

 

 

 

 

 

Payroll Tax Filings:

 

 

 

 

 

 

 

 

 

Entity

Jurisdiction

Filing Description

Due Date

Date Filed

WMI

IRS (Federal)

Withholding summary of deposits and filings (semi-weekly)

12/5/2008

12/5/2008

WMI

IRS (Federal)

Withholding summary of deposits and filings (semi-weekly)

12/19/2008

12/19/2008

WMI

IRS (Federal)

Withholding summary of deposits and filings (semi-weekly)

12/24/2008

12/24/2008

WMI

IRS (Federal)

Withholding summary of deposits and filings (semi-weekly)

12/29/2008

12/29/2008

WMI

IRS (Federal)

Withholding summary of deposits and filings (semi-weekly)

12/31/2008

12/31/2008

 

 

 

 

 

 

 

 

 

 

Corporate Income Tax/Franchise Tax/Gross Receipts Tax Filings:

 

 

 

 

 

 

 

Entity

Jurisdiction

Filing Description

Due Date

Date Filed

WMI

Washington

Business and occupation tax return

12/26/2008

*

 

 

 

 

 

 

* As part of the process of transitioning the tax reporting functions from JPM, WMI is working with the appropriate

taxing authority to determine its B&O filing requirements.During this transition period, no B&O returns are being filed.

If it is determined that a filing requirement exists, WMI will file the appropriate returns at that time.

 


Washington Mutual, Inc.

 

 

 

 

 

 

MOR-4: Post Petition Accounts Payable Aging by Vendor

 

 

 

 

 

 

As of December 31, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vendor

 

Current

 

1 - 30

 

31 - 60

 

61- 90

 

91 and Over

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Akin, Gump, Strauss, Hauer & Feld LLP

 

$144,029.80

 

$ -

 

$ -

 

$ -

 

$ -

 

$144,029.80

Alvarez & Marsal

 

1,320,854.29

 

-

 

-

 

-

 

-

 

1,320,854.29

Bowne

 

1,577.00

 

-

 

1,601.50

 

-

 

-

 

3,178.50

Brouwer, Curt

 

243.48

 

-

 

-

 

-

 

-

 

243.48

Corporation Service Company

 

1,701.70

 

77.29

 

-

 

-

 

-

 

1,778.99

Davis Wright Tremaine LLP

 

166,116.16

 

-

 

-

 

-

 

-

 

166,116.16

Depository Trust Company

 

3,422.00

 

-

 

-

 

-

 

-

 

3,422.00

FTI Consulting, Inc.

 

683,873.97

 

-

 

-

 

-

 

-

 

683,873.97

Gibson, Dunn & Crutcher LLP

 

57,610.77

 

-

 

-

 

-

 

-

 

57,610.77

Heller Ehrman LLP

 

-

 

198.25

 

-

 

-

 

-

 

198.25

IKON Office Solutions

 

196.20

 

-

 

-

 

-

 

-

 

196.20

Joele Frank, Wilkinson Brimmer Katcher

 

21,494.79

 

-

 

-

 

-

 

-

 

21,494.79

Jones Day

 

-

 

1,875.00

 

-

 

-

 

-

 

1,875.00

Kurtzman Carson Consultants LLC

 

269,108.94

 

-

 

-

 

-

 

-

 

269,108.94

Logan, Doreen

 

2,558.54

 

-

 

-

 

-

 

-

 

2,558.54

Mark Monitor

 

15,605.48

 

-

 

-

 

-

 

-

 

15,605.48

Milliman

 

20,812.50

 

-

 

-

 

-

 

-

 

20,812.50

National Financial Services

 

1,347.07

 

-

 

-

 

-

 

-

 

1,347.07

Pepper Hamilton

 

400,708.31

 

-

 

-

 

-

 

-

 

400,708.31

Richards, Layton & Finger P.A.

 

36,086.30

 

-

 

-

 

-

 

-

 

36,086.30

Schrag, Jan

 

278.00

 

-

 

-

 

-

 

-

 

278.00

Sidley Austin LLP

 

56,506.27

 

-

 

-

 

-

 

-

 

56,506.27

Stroock & Stroock & Lavan

 

2,176.97

 

-

 

-

 

-

 

-

 

2,176.97

Thomson Financial LLC

 

7,978.67

 

-

 

-

 

-

 

-

 

7,978.67

Towers Perrin

 

67,658.20

 

-

 

-

 

-

 

-

 

67,658.20

Weil, Gotshal & Manges LLP

 

3,522,034.96

 

-

 

-

 

-

 

-

 

3,522,034.96

Williams, Robert J.

 

7,100.47

 

-

 

-

 

-

 

-

 

7,100.47

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$ 6,811,080.83

 

$ 2,150.54

 

$ 1,601.50

 

$ -

 

$ -

 

$ 6,814,832.88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NOTES

*Any holdback for professionals pursuant to their respective retention orders are included in “Current.”

** Certain creditors have not been retained through the Bankruptcy Court and WMI is evaluating whether certain of the payments identified herein are the responsibility of its estate.

 

In re Washington Mutual, Inc., et al

Case No. 08-12229 (MFW)

 

 

DEBTOR QUESTIONNAIRE

Must be completed each month

Yes

No

1.  Have any assets been sold or transferred outside the normal course of business
this reporting period? If yes, provide an explanation below.

 

X

2.  Have any funds been disbursed from any account other than a debtor in possession
account this reporting period? If yes, provide an explanation below.

X

 

3.  Have all postpetition tax returns been timely filed? If no, provide an explanation
below.

X

 

4.  Are workers compensation, general liability and other necessary insurance
coverages in effect? If no, provide an explanation below.

X

 

5.  Has any bank account been opened during the reporting period? If yes, provide
documentation identifying the opened account(s). If an investment account has been opened provide the required documentation pursuant to the Delaware Local Rule 4001-3.

X

 

 

 

Explanations

 

2.

Pursuant to an order of the Bankruptcy Court dated October 8, 2008, the Debtors were authorized to continue using existing bank accounts and to open new debtor in possession bank accounts.

 

5.

New accounts opened during the reporting period:

 

Company

BANK

Account Number

Washington Mutual Inc.

Bank of America Money Market Account

XXXXX0658