Invesco Mortgage Capital Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 10, 2015

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8-K - 8-K - Invesco Mortgage Capital Inc.ivr201508108kmain.htm
EX-99.2 - EXHIBIT 99.2 - Invesco Mortgage Capital Inc.ivr20150810-8kxex992.htm
Exhibit 99.2

The tables below illustrate the estimated impact of the Restatement on the Company's consolidated financial statements, each as compared with the amounts presented in the original Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and the Quarterly Report on Form 10-Q for the period ended March 31, 2015 previously filed with the Securities and Exchange Commission.

In summary, the Company will continue to account for GSE CRTs and Agency MBS IOs in its consolidated balance sheet in the revised line item “Mortgage-backed and credit risk transfer securities, at fair value.”  Changes in the fair value of the debt host contract of GSE CRTs will continue to be recorded as other comprehensive income in stockholders’ equity while changes in fair value of the embedded credit derivative component will be reclassified from other comprehensive income in stockholders’ equity to realized and unrealized gain (loss) on credit derivatives, net in the Company’s consolidated statements of operations.  In addition, interest income associated with the debt host contract of the GSE CRTs will remain in interest income while income associated with the embedded credit derivative will be reclassified from interest income to realized and unrealized gain (loss) on credit derivatives, net. With respect to Agency MBS IOs, changes in fair value of the entire security will be reclassified from other comprehensive income in stockholders’ equity to gain (loss) on investments, net in the Company’s consolidated statements of operations.

Balance Sheet Data
 
March 31, 2015
In thousands
As Reported
 
Adjustment(1)
 
As Restated
Accumulated other comprehensive income (loss)
560,358

 
4,773

 
565,131

Retained earnings (distributions in excess of earnings)
(700,930
)
 
(4,773
)
 
(705,703
)
Total stockholders' equity
2,678,228

 
—

 
2,678,228

(1)
Includes $5.0 million of unrealized loss resulting from GSE CRTs and $0.2 million of unrealized gain resulting from Agency MBS IOs.

 
December 31, 2014
In thousands
As Reported
 
Adjustment(1)
 
As Restated
Accumulated other comprehensive income (loss)
404,559

 
20,033

 
424,592

Retained earnings (distributions in excess of earnings)
(612,821
)
 
(20,033
)
 
(632,854
)
Total stockholders' equity
2,610,315

 
—

 
2,610,315

(1)
Includes $21.0 million of unrealized loss resulting from GSE CRTs and $1.0 million of unrealized gain resulting from Agency MBS IOs as of December 31, 2014.
 
December 31, 2013
In thousands
As Reported
 
Adjustment(1)
 
As Restated
Accumulated other comprehensive income (loss)
(156,993
)
 
(8,628
)
 
(165,621
)
Retained earnings (distributions in excess of earnings)
(155,957
)
 
8,628

 
(147,329
)
Total stockholders' equity
2,376,115

 
—

 
2,376,115

(1)
Includes $8.6 million of unrealized gain resulting from Agency MBS IOs as of December 31, 2013.



1
Exhibit 99.2

Statement of Operations Data
 
Three Months Ended
 
March 31, 2015
In thousands (except per share data)
As Reported
 
Adjustment
 
As Restated
Interest Income:
 
 
 
 
 
Mortgage-backed and credit risk transfer securities
141,018

 
(5,753
)
 
135,265

Other income (loss):
 
 
 
 
 
Gain (loss) on investments, net
2,142

 
30

 
2,172

Realized and unrealized credit derivative income (loss), net
203

 
21,159

 
21,362

Net income (loss)
(27,296
)
 
15,436

 
(11,860
)
Net income (loss) attributable to non-controlling interest
(312
)
 
176

 
(136
)
Net income (loss) attributable to Invesco Mortgage Capital, Inc.
(26,984
)
 
15,260

 
(11,724
)
Net income (loss) attributable to common stockholders
(32,700
)
 
15,260

 
(17,440
)
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
Basic
(0.27
)
 
0.13

 
(0.14
)
Diluted
(0.27
)
 
0.13

 
(0.14
)
 
Year Ended
 
December 31, 2014
In thousands (except per share data)
As Reported
 
Adjustment
 
As Restated
Interest Income:
 
 
 
 
 
Mortgage-backed and credit risk transfer securities
596,357

 
(17,295
)
 
579,062

Other income (loss):
 
 
 
 
 
Gain (loss) on investments, net
(79,430
)
 
(7,738
)
 
(87,168
)
Realized and unrealized credit derivative income (loss), net
1,093

 
(3,959
)
 
(2,866
)
Net income (loss)
(201,746
)
 
(28,992
)
 
(230,738
)
Net income (loss) attributable to non-controlling interest
(2,301
)
 
(331
)
 
(2,632
)
Net income (loss) attributable to Invesco Mortgage Capital, Inc.
(199,445
)
 
(28,661
)
 
(228,106
)
Net income (loss) attributable to common stockholders
(216,823
)
 
(28,661
)
 
(245,484
)
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
Basic
(1.76
)
 
(0.23
)
 
(1.99
)
Diluted
(1.76
)
 
(0.23
)
 
(1.99
)
 
Year Ended
 
December 31, 2013
In thousands (except per share data)
As Reported
 
Adjustment
 
As Restated
Interest Income:
 
 
 
 
 
Mortgage-backed and credit risk transfer securities
646,787

 
—

 
646,787

Other income (loss):
 
 
 
 
 
Gain (loss) on investments, net
(199,449
)
 
16,716

 
(182,733
)
Realized and unrealized credit derivative income (loss), net
1,127

 
—

 
1,127

Net income (loss)
143,106

 
16,716

 
159,822

Net income (loss) attributable to non-controlling interest
1,486

 
181

 
1,667

Net income (loss) attributable to Invesco Mortgage Capital, Inc.
141,620

 
16,535

 
158,155

Net income (loss) attributable to common stockholders
130,769

 
16,535

 
147,304

 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
Basic
0.99

 
0.12

 
1.11

Diluted
0.99

 
0.12

 
1.11


2
Exhibit 99.2

Statement of Comprehensive Income Data
 
Three Months Ended
 
March 31, 2015
In thousands
As Reported
 
Adjustment
 
As Restated
Net income (loss)
(27,296
)
 
15,436

 
(11,860
)
Unrealized gain (loss) on mortgage-backed and credit risk transfer securities
140,598

 
(14,644
)
 
125,954

Reclassification of unrealized (gain) loss on sale of mortgage-backed and credit risk transfer securities to gain (loss) on investments, net
(2,142
)
 
(792
)
 
(2,934
)
Reclassification of amortization of net deferred losses on de-designated interest rate swaps to repurchase agreements interest expense
19,145

 
—

 
19,145

Total Other comprehensive income (loss)
157,601

 
(15,436
)
 
142,165

Comprehensive income (loss)
130,305

 
—

 
130,305

Comprehensive income attributable to non-controlling interest
(1,490
)
 
—

 
(1,490
)
Dividends to preferred stockholders
(5,716
)
 
—

 
(5,716
)
Comprehensive income attributable to common stockholders
123,099

 
—

 
123,099

 
Year Ended
 
December 31, 2014
In thousands
As Reported
 
Adjustment
 
As Restated
Net income (loss)
(201,746
)
 
(28,992
)
 
(230,738
)
Unrealized gain (loss) on mortgage-backed and credit risk transfer securities
403,435

 
27,763

 
431,198

Reclassification of unrealized (gain) loss on sale of mortgage-backed and credit risk transfer securities to gain (loss) on investments, net
79,430

 
1,229

 
80,659

Reclassification of amortization of net deferred losses on de-designated interest rate swaps to repurchase agreements interest expense
85,176

 
—

 
85,176

Total Other comprehensive income (loss)
568,041

 
28,992

 
597,033

Comprehensive income (loss)
366,295

 
—

 
366,295

Comprehensive (income) loss attributable to non-controlling interest
(4,188
)
 
—

 
(4,188
)
Dividends to preferred stockholders
(17,378
)
 
—

 
(17,378
)
Comprehensive income (loss) attributable to common stockholders
344,729

 
—

 
344,729

 
Year Ended
 
December 31, 2013
In thousands
As Reported
 
Adjustment
 
As Restated
Net income (loss)
143,106

 
16,716

 
159,822

Unrealized gain (loss) on mortgage-backed and credit risk transfer securities
(874,545
)
 
(16,716
)
 
(891,261
)
Reclassification of unrealized (gain) loss on sale of mortgage-backed and credit risk transfer securities to gain (loss) on investments, net
199,449

 
—

 
199,449

Unrealized gain (loss) on derivative instruments
263,135

 
—

 
263,135

Reclassification of unrealized loss on derivative instruments to gain (loss) on derivatives, net
166,016

 
—

 
166,016

Total Other comprehensive income (loss)
(245,945
)
 
(16,716
)
 
(262,661
)
Comprehensive income (loss)
(102,839
)
 
—

 
(102,839
)
Comprehensive (income) loss attributable to non-controlling interest
1,029

 
—

 
1,029

Dividends to preferred stockholders
(10,851
)
 
—

 
(10,851
)
Comprehensive income (loss) attributable to common stockholders
(112,661
)
 
—

 
(112,661
)




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