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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 10K þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended:       December 31, 2004 OR o
    
    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:          1-8896 CAPSTEAD MORTGAGE CORPORATION  Maryland
    
    75-2027937(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)
 8401 North Central Expressway, Suite 800, Dallas, TX
(Address of principal executive offices)
    
    75225
(Zip Code)
 Registrants telephone number, including area code: (214) 874-2323 Securities registered pursuant to Section 12(b) of the Act: Title of Each Class
    
    Name of Exchange on Which RegisteredCommon Stock ($0.01 par value)
    
    New York Stock Exchange$1.60 Cumulative Preferred Stock, Series A ($0.10 par value)
    
    New York Stock Exchange$1.26 Cumulative Convertible Preferred Stock, Series B ($0.10 par value)
    
    New York Stock Exchange
 Indicate by check mark whether the Registrant (1) has filed all documents and reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months, and (2) has been subject to such filing requirements for the past 90 days.      YES þ      NO o Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 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: o Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule
12b-2 of the Act).      YES þ      NO o At June 30, 2004 the aggregate market value of the voting common stock held by nonaffiliates
was $213,872,552. Number of shares of Common Stock outstanding at March 7, 2005: 18,871,016 DOCUMENTS INCORPORATED BY REFERENCE:  (1)
    Portions of the Registrants Annual Report to Stockholders for the year ended December 31,
2004 are incorporated by reference into Parts I, II and IV.  (2)
    Portions of the Registrants definitive Proxy Statement, issued in connection with the 2005
Annual Meeting of Stockholders of the Registrant, are incorporated by reference into Part III.




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CAPSTEAD MORTGAGE CORPORATION
2004 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS PagePART IITEM 1. Business
    
    
    1ITEM 2. Properties
    
    
    2ITEM 3. Legal Proceedings
    
    
    2ITEM 4. Submission of Matters to a Vote of Security Holders
    
    
    2PART IIITEM 5. Market for Registrants Common Equity and Related Stockholder Matters
    
    
    2ITEM 6. Selected Financial Data
    
    
    2ITEM 7. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    3ITEM 7A. Quantitative and Qualitative Disclosures About Market Risks
    
    
    3ITEM 8. Financial Statements and Supplementary Data
    
    
    3ITEM 9. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure
    
    
    3ITEM 9A. Controls and Procedures
    
    
    3ITEM 9B. Other Information
    
    
    3PART IIIITEM 10. Directors and Executive Officers of the Registrant
    
    
    3ITEM 11. Executive Compensation
    
    
    4ITEM 12. Security Ownership of Certain Beneficial Owners and Management
    
    
    4ITEM 13. Certain Relationships and Related Transactions
    
    
    4ITEM 14. Principal Accountant Fees and Services
    
    
    4PART IVITEM 15. Exhibits and Financial Statement Schedules
    
    
    4SIGNATURES
    
    
    6Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Stock DividendsPortions of the Company's Annual Report to StockholdersList of SubsidiariesConsent of Ernst & Young LLPCertification Pursuant to Section 302Certification Pursuant to Section 302Certification Pursuant to Section 906




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PART I 
 ITEM 1. BUSINESS. Capstead Mortgage Corporation (Capstead, the Company or the Registrant) was incorporated on
April 15, 1985 in Maryland and commenced operations in September 1985. Capstead operates as a real
estate investment trust (REIT) earning income from investing in real estate-related assets on a
leveraged basis and other investment strategies. These investments primarily consist of, but are
not limited to, financial assets, specifically residential adjustable-rate mortgage (ARM)
securities issued by government-sponsored entities, either Fannie Mae, Freddie Mac or Ginnie Mae
(Agency Securities). Capstead has also made limited investments in credit-sensitive commercial
mortgage assets including the direct ownership of real estate. Management believes that such
investments, when available at attractive prices and combined with the prudent use of leverage, can
provide attractive risk-adjusted returns over the long term with relatively low sensitivity to
changes in interest rates. For further discussion of the Companys business and financial condition, see the Registrants
Annual Report to Stockholders for the year ended December 31, 2004 on pages 30 through 51, which is
incorporated herein by reference. Risk Factors and Critical Accounting Policies Under the captions Effects of Interest Changes, Risks Associated with Credit-Sensitive
Investments, Risks Associated with Owning Real Estate, Regulatory Matters and Critical
Accounting Policies on pages 42 through 50 of the Registrants Annual Report to Stockholders for
the year ended December 31, 2004 which is incorporated herein by reference, are discussions of risk
factors and critical accounting policies affecting Capsteads financial condition and results of
operations that are an integral part of this discussion and analysis. Readers are strongly urged
to consider the potential impact of these factors and accounting policies on the Company while
reading this document. Other Investment Strategies The Company may enter into other short- or long-term investment strategies as the opportunities
arise. Competition In purchasing real estate-related assets, the Company competes with others in the real estate and
banking industries including REITs, savings banks, commercial banks, mortgage and investment
bankers, conduits, insurance companies, other lenders, other real estate investors and mutual
funds. Regulation and Related Matters Ownership of real estate subjects the Company to various federal, state and local regulatory
requirements including those concerned with environmental matters. For further discussion, see the
Registrants Annual Report to Stockholders for the year ended December 31, 2004 on pages 46 through
49, which is incorporated herein by reference. Employees As of December 31, 2004, the Company had twelve full-time employees and three part-time employees. 1




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Website Access to Company Reports and Other Company Information Capstead makes available on
its website at www.capstead.com, free of charge, its annual report on
Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and press releases,
including amendments to such documents as soon as reasonably practicable after such materials are
electronically filed or furnished to the SEC or otherwise publicly released. The Company also
makes available on its website charters for the committees of its board of directors, its Board of
Directors Guidelines, its Code of Business Conduct and Ethics, its Financial Officer Code of
Conduct and other company information, including amendments to such documents and waivers, if any,
to the Codes. Such information will also be furnished, free of charge, upon written request to
Capstead Mortgage Corporation, Attention: Stockholder Relations, 8401 North Central Expressway,
Suite 800, Dallas, Texas 75225-4410. Forward-looking Statements For information on forward-looking statements made in this report, see the Registrants Annual
Report to Stockholders for the year ended December 31, 2004 on page 50, which is incorporated
herein by reference. 
 ITEM 2. PROPERTIES. The Companys headquarters are located in Dallas, Texas in office space leased by the Company. As
of December 31, 2004 the Company owned six independent senior living facilities located in five
states. For further information, see the Registrants Annual Report to Stockholders for the year
ended December 31, 2004 on pages 17, 19 and 35, which is incorporated herein by reference. 
 ITEM 3. LEGAL PROCEEDINGS. None. 
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. 
 PART II 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. The information required by this item regarding the market price of, dividends on, and number of
holders of the Registrants common shares is included in the Registrants Annual Report to
Stockholders for the year ended December 31, 2004 on page 29 under the caption Note 17  Market
and Dividend Information, and is incorporated herein by reference. See ITEM 12 for information
regarding equity compensation plans. Capstead did not sell any unregistered securities during the
past three fiscal years. 
 ITEM 6. SELECTED FINANCIAL DATA. The information required by this item is included in the Registrants Annual Report to Stockholders
for the five years ended December 31, 2004 on page 30 under the caption Selected Financial Data,
and is incorporated herein by reference. 2




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS. The information required by this item is included in the Registrants Annual Report to Stockholders
for the year ended December 31, 2004 on pages 31 through 51 under the caption Managements
Discussion and Analysis of Financial Condition and Results of Operations, and is incorporated
herein by reference. 
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS. The information required by this item is included in the Registrants Annual Report to Stockholders
for the year ended December 31, 2004 on pages 31 through 51 under the caption Managements
Discussion and Analysis of Financial Condition and Results of Operations, and is incorporated
herein by reference. 
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. The information required by this item is included in the Registrants Annual Report to Stockholders
for the year ended December 31, 2004 on pages 5 through 29, and is incorporated herein by
reference. 
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE. None. 
 ITEM 9A. CONTROLS AND PROCEDURES. The information required by this item is included in the Registrants Annual Report to Stockholders
for the year ended December 31, 2004 on page 3 and 4, and is incorporated herein by reference. 
 ITEM 9B. OTHER INFORMATION. None. 
 PART III 
 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT. The information required by this item is included in the Registrants 2005 definitive Proxy
Statement on pages 4 through 5 under the caption Proposal Number One  Election of Directors, on
pages 6 through 8 under the caption Board of Directors and Committee Membership, on pages 9 and
10 under the caption Stockholder Procedures for Recommending a Candidate for Director, on page 11
under the caption Executive Officers, on pages 19 and 20 under the captions Audit Committee and
Audit Committee Report and on page 22 under the caption Compliance with Section 16(a) of the
Securities Exchange Act of 1934, all of which are incorporated herein by reference. Capstead has adopted its Code of Business Conduct and Ethics that applies to all directors,
officers and employees, and its Financial Officer Code of Conduct that applies to its chief
executive officer, chief financial officer and other officers with a role in the Companys
financial accounting and reporting process. These codes and waivers thereto, if any, are available
on the Companys website at www.capstead.com. 3




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ITEM 11. EXECUTIVE COMPENSATION. The information required by this item is included in the Registrants 2005 definitive Proxy
Statement on pages 12 through 13 under the caption Executive Compensation, which is incorporated
herein by reference. 
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT. The information required by this item is included in the Registrants 2005 definitive Proxy
Statement on page 14 under the caption Equity Compensation Plans and pages 21 and 22 under the
caption Security Ownership of Management and Certain Beneficial Owners, which is incorporated
herein by reference. 
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. None. 
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES. The information required by this item is included in the Registrants 2005 definitive Proxy
Statement on pages 22 and 23 under the caption Proposal Number Two  Ratification of the
Appointment of Ernst & Young LLP as Our Independent Registered Public Accounting Firm, which is
incorporated herein by reference. 
 PART IV 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.  (a)
    Documents filed as part of this report:  1.
    The following consolidated financial statements of the Company, included in the
2004 Annual Report to Stockholders, are incorporated herein by reference: PageConsolidated Statements of Income 
Three Years Ended December 31, 2004
    
    *Consolidated Balance Sheets  December 31, 2004 and 2003
    
    *Consolidated Statements of Stockholders Equity
Three Years Ended December 31, 2004
    
    *Consolidated Statements of Cash Flows 
Three Years Ended December 31, 2004
    
    *Notes to Consolidated Financial Statements  December 31, 2004
    
    *
  2.
    Financial Statement Schedules  All schedules for which provision is made in the
applicable accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable, and therefore have been
omitted.*  Incorporated herein by reference from the Companys Annual Report to Stockholders
for the year ended December 31, 2004, filed herewith as Exhibit 13. 4




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3. Exhibits: ExhibitNumber1.1
    
    Form of First Amendment to Sales Agreement dated December 16, 2003 by and
between Capstead and Brinson Patrick Securities Corporation, for the issuance of up to
875,000 common shares and 1,000,000 Series B preferred shares(5)1.2
    
    Form of Sales Agreement dated February 13, 2004 by and between Capstead and
Brinson Patrick Securities Corporation to sell 1,000,000 common shares, and 100,000
Series B preferred shares(6)1.3
    
    Form of Sales Agreement date June 22, 2004 by and between Capstead and Brinson
Patrick Securities Corporation to sell 1,600,000 common shares, and 100,000 Series B
preferred shares(8)1.4
    
    Form of Sales Agreement dated November 1, 2004 by and between Capstead and
Brinson Patrick Securities Corporation to sell 1,700,000 common shares, and 100,000
Series B preferred shares(9)3.1
    
    Charter, including Articles of Incorporation, Articles Supplementary for each
series of preferred shares and all other amendments to such Articles of
Incorporation(3)3.2
    
    Amended and Restated Bylaws(3)10.01
    
    Deferred Compensation Plan(1)10.02
    
    1997 Flexible Long-Term Incentive Plan(2)10.03
    
    2004 Flexible Long-Term Incentive Plan(7)12
    
    Computation of ratio of earnings to combined fixed charges and preferred
stock dividends*13
    
    Portions of the Companys Annual Report to Stockholders for the year ended
December 31, 2004*21
    
    List of subsidiaries of the Company*23
    
    Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm*31.1
    
    Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002*31.2
    
    Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002*32
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
   (1)
    
    Incorporated by reference to the Companys Annual Report on Form 10-K for the year ended December 31, 1994(2)
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 1997(3)
    
    Incorporated by reference to the Companys Registration Statement on Form S-3 (No. 333-63358) dated June 19, 2001(4)
    
    Incorporated by reference to the Companys Annual Report on Form 10-K for the year ended December 31, 2001(5)
    
    Incorporated by reference to the Companys Post-Effective Amendment No. 1 to the Registration Statement on Form S-3
(No. 333-68424) dated December 17, 2003(6)
    
    Incorporated by reference to the Companys Registration Statement on Form S-3 (No. 333-112900) dated February 17, 2004(7)
    
    Incorporated by reference to the Companys Registration Statement on Form S-8 (No. 333-116738) dated June 22, 2004(8)
    
    Incorporated by reference to the Companys Registration Statement on Form S-3 (No. 333-116741) dated June 22, 2004(9)
    
    Incorporated by reference to the Companys Registration Statement on Form S-3 (No. 333-119193) dated November 2, 2004*
    
    Filed herewith
 5




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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized. CAPSTEAD MORTGAGE CORPORATION
                           RegistrantDate:  March 7, 2005
    By:
    /s/ ANDREW F. JACOBSAndrew F. JacobsPresident and Chief Executive Officer Date:  March 7, 2005
    By:
    /s/ PHILLIP A. REINSCHPhillip A. ReinschSenior Vice President and
Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed
below by the following persons on behalf of the Registrant and in the capacities indicated below
and on the dates indicated. /s/
    
    PAUL M. LOW
    
    Chairman and Director
    
    March 7, 2005(Paul M. Low)/s/
    
    ANDREW F. JACOBS
    
    President, Chief Executive Officer and
    
    March 7, 2005(Andrew F. Jacobs)
    
    Director/s/
    
    GARY KEISER
    
    Director
    
    March 10, 2005(Gary Keiser)/s/
    
    MICHAEL G. ONEIL
    
    Director
    
    March 7, 2005(Michael G. ONeil)/s/
    
    HOWARD RUBIN
    
    Director
    
    March 7, 2005(Howard Rubin)/s/
    
    MARK S. WHITING
    
    Director
    
    March 7, 2005(Mark S. Whiting)
 6




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INDEX TO EXHIBITS EXHIBITNUMBER
    
    DESCRIPTION1.1
    
    Form of First Amendment to Sales Agreement dated December 16, 2003 by and between
Capstead and Brinson Patrick Securities Corporation, for the issuance of up to 875,000
common shares and 1,000,000 Series B preferred shares(5)1.2
    
    Form of Sales Agreement dated February 13, 2004 by and between Capstead and
Brinson Patrick Securities Corporation to sell 1,000,000 common shares, and 100,000
Series B preferred shares(6)1.3
    
    Form of Sales Agreement dated June 22, 2004 by and between Capstead and Brinson
Patrick Securities Corporation to sell 1,600,000 common shares, and 100,000 Series B
preferred shares(8)1.4
    
    Form of Sales Agreement dated November 1, 2004 by and between Capstead and
Brinson Patrick Securities Corporation to sell 1,700,000 common shares, and 100,000
Series B preferred shares(9)3.1
    
    Charter, including Articles of Incorporation, Articles Supplementary for each
series of preferred shares and all other amendments to such Articles of
Incorporation(3)3.2
    
    Amended and Restated Bylaws(3)10.01
    
    Deferred Compensation Plan(1)10.02
    
    1997 Flexible Long-Term Incentive Plan(2)10.03
    
    2004 Flexible Long-Term Incentive Plan(7)12
    
    Computation of ratio of earnings to combined fixed charges and preferred
stock dividends*13
    
    Portions of the Companys Annual Report to Stockholders for the year ended
December 31, 2003*21
    
    List of subsidiaries of the Company*23
    
    Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm*31.1
    
    Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002*31.2
    
    Certification pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002*32
    
    Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
   (1)
    
    Incorporated by reference to the Companys Annual Report on Form 10-K for the year ended December 31, 1994(2)
    
    Incorporated by reference to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 1997(3)
    
    Incorporated by reference to the Companys Registration Statement on Form S-3 (No. 333-63358) dated June 19, 2001(4)
    
    Incorporated by reference to the Companys Annual Report on Form 10-K for the year ended December 31, 2001(5)
    
    Incorporated by reference to the Companys Post-Effective Amendment No. 1 to the Registration Statement on Form S-3
(No. 333-68424) dated December 17, 2003(6)
    
    Incorporated by reference to the Companys Registration Statement on Form S-3 (No. 333-112900) dated February 17, 2004(7)
    
    Incorporated by reference to the Companys Registration Statement on Form S-8 (No. 333-116738) dated June 22, 2004(8)
    
    Incorporated by reference to the Companys Registration Statement on Form S-3 (No. 333-116741) dated June 22, 2004(9)
    
    Incorporated by reference to the Companys Registration Statement on Form S-3 (No. 333-119193) dated November 2, 2004*
    
    Filed herewith
 7