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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 1934For the fiscal year ended:          December 31, 2008ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to
 Commission File Number: 001-08896
 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
    
    75225(Address of principal executive offices)
    
    (Zip 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
 o þ
 o þ
 þ o
 þ
  o þ o o
 o þ
 At June 30, 2008 the aggregate market value of the voting common stock held by nonaffiliates was
$600,108,010.
 Number of shares of Common Stock outstanding at March 4, 2009 63,134,659
 DOCUMENTS INCORPORATED BY REFERENCE:
 (1)
    
    Portions of the Registrants Annual Report to Stockholders for the year ended December 31,
2008 are incorporated by reference into Parts I, II and IV.(2)
    
    Portions of the Registrants definitive Proxy Statement, issued in connection with the 2009
Annual Meeting of Stockholders of the Registrant, are incorporated by reference into Part III.




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##### 



CAPSTEAD MORTGAGE CORPORATION
2008 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
 PagePART IITEM 1.
    
    Business
    
    
    1ITEM 1A.
    
    Risk Factors
    
    
    2ITEM 1B.
    
    Unresolved Staff Comments
    
    
    2ITEM 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, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    3ITEM 6.
    
    Selected Financial Data
    
    
    3ITEM 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, Executive Officers, and Corporate Governance
    
    
    4ITEM 11.
    
    Executive Compensation
    
    
    4ITEM 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    4ITEM 13.
    
    Certain Relationships, Related Transactions, and Director Independence
    
    
    4ITEM 14.
    
    Principal Accounting Fees and Services
    
    
    4PART IVITEM 15.
    
    Exhibits and Financial Statement Schedules
    
    
    5SIGNATURES
    
    
    8EX-10.06EX-12EX-13EX-21EX-23EX-31.1EX-31.2EX-32




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PART I
 
 ITEM 1. BUSINESS.
   Other Investment Strategies
  Competition
   Regulation and Related Matters
  Employees
  1




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Website Access to Company Reports and Other Company Information
 www.capstead.com
 Forward-looking Statements
  
 ITEM 1A. RISK FACTORS.
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES.
  
 ITEM 3. LEGAL PROCEEDINGS.
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
  2




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PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
  
 ITEM 6. SELECTED FINANCIAL DATA.
  
 ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS.
  
 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
  
 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
  
 ITEM 9A. CONTROLS AND PROCEDURES.
  
 ITEM 9B. OTHER INFORMATION.
  3




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PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE.
  www.capstead.com
 
 ITEM 11. EXECUTIVE COMPENSATION.
  
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
  
 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
  
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
  4




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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
2008 Annual Report to Stockholders, are incorporated herein by reference:
 PageConsolidated Statements of Income Three Years Ended December 31, 2008
    
    
    *Consolidated Balance Sheets  December 31, 2008 and 2007
    
    
    *Consolidated Statements of Stockholders Equity 
    
    
    *Three Years Ended December 31, 2008Consolidated Statements of Cash Flows Three Years Ended December 31, 2008
    
    
    *Notes to Consolidated Financial Statements  December 31, 2008
    
    
    *
 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, 2008, filed herewith as Exhibit 13. 
 5




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3.
    
    Exhibits:
 ExhibitNumber
    
    DESCRIPTION3.1
    
    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.(10)3.3
    
    Articles of Amendment of Articles of Incorporation of the Registrant dated as
of May 29, 2008.(13)10.01
    
    Amended Restated Deferred Compensation Plan.(11)10.02
    
    1997 Flexible Long-Term Incentive Plan.(1)10.03
    
    Amended and Restated 2004 Flexible Long-Term Incentive Plan.(4)10.04
    
    Forms of nonqualified stock option and restricted stock agreements for
non-employee directors.(5)10.05
    
    Forms of nonqualified stock option and stock award agreements for
employees with service conditions.(8)10.06
    
    Form of stock award agreements for employees with performance conditions.*10.07
    
    Nonqualified stock option and stock award agreements for non-employee
directors and named executives.(5)10.08
    
    Purchase Agreement dated September 23, 2005, by and among the Registrant,
the Trust, Merrill Lynch International and Bear, Stearns & Co., Inc.
pertaining to the issuance of Capstead Mortgage Trust I preferred
securities.(6)10.09
    
    Junior Subordinated Indenture dated September 26, 2005, between the
Registrant and Wells Fargo Bank pertaining to the issuance of Capstead
Mortgage Trust I preferred securities.(6)10.10
    
    Amended and Restated Trust Agreement dated September 26, 2005, by and
among the Registrant, Wells Fargo Bank, National Association, Wells Fargo
Delaware Trust Company, the Administrators and the several Holders, as
defined therein, pertaining to the issuance of Capstead Mortgage Trust I
preferred securities.(8)10.11
    
    Placement Agreement dated December 6, 2005, by and among the Registrant,
the Trust, FTN Financial Capital Markets and Keefe, Bruyette & Woods, Inc.
pertaining to the issuance of Capstead Mortgage Trust II preferred
securities.(7)10.12
    
    Indenture dated December 15, 2005, between the Registrant and Wilmington
Trust Company regarding junior subordinated debentures due 2035, including
a form of debenture pertaining to the issuance of Capstead Mortgage Trust
II preferred securities.(8)10.13
    
    Amended and Restated Declaration of Trust dated December 15, 2005, by and
among the Registrant, Wilmington Trust Company and the Administrators
defined therein, including forms of capital security certificates
pertaining to the issuance of Capstead Mortgage Trust II preferred
securities.(8)10.14
    
    Placement Agreement dated September 8, 2006, by and among the Registrant,
the Capstead Mortgage Trust III, FTN Financial Capital Markets and Keefe,
Bruyette & Woods, Inc. pertaining to the issuance of Capstead Mortgage
Trust III preferred securities.(12)10.15
    
    Indenture dated September 11, 2006, between the Registrant and Wilmington
Trust Company regarding junior subordinated debentures due 2036, including
a form of debenture pertaining to the issuance of Capstead Mortgage Trust
III preferred securities.(12)
 6




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ExhibitNumber
    
    DESCRIPTION10.16
    
    Amended and Restated Declaration of Trust dated September 11, 2006, by and
among the Registrant, Wilmington Trust Company and the Administrators defined
therein, including forms of capital security certificates pertaining to the
issuance of Capstead Mortgage Trust III preferred securities.(12)12
    
    Computation of ratio of income from continuing operations to combined fixed
charges and preferred stock dividends.*13
    
    Portions of the Registrants Annual Report to Stockholders for the year ended
December 31, 2008.*21
    
    List of subsidiaries of the Registrant.*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 Registrants Quarterly Report on Form 10-Q for the period ended March 31, 1997.(2)
    
    Incorporated by reference to the Registrants Registration Statement on Form S-3 (No. 333-63358) dated June 19, 2001.(3)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended December 31, 2001.(4)
    
    Incorporated by reference to the Registrants Registration Statement on Form S-8 (No. 333-142861) dated May 9, 2007.(5)
    
    Incorporated by reference to the Registrants Quarterly Report on Form 10-Q for the period ended June 20, 2005.(6)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated September 30, 2005.(7)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated December 12, 2005.(8)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated December 20, 2005.(9)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated January 4, 2006.(10)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated January 31, 2006.(11)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated February 23, 2006.(12)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated September 8, 2006.(13)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated June 3, 2008.*
    
    Filed herewith. 7




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SIGNATURES
  CAPSTEAD MORTGAGE CORPORATIONRegistrantDate: March 4, 2009
    
    By:
    
    /s/ ANDREW F. JACOBSAndrew F. JacobsPresident and Chief Executive OfficerDate: March 4, 2009
    
    By:
    
    /s/ PHILLIP A. REINSCHPhillip A. ReinschExecutive Vice President and Chief FinancialOfficer (Principal Financial and AccountingOfficer)
  /s/ PAUL M. LOW

     (Paul M. Low)
    
    Chairman and Director
    
    March 4, 2009/s/ ANDREW F. JACOBS
     (Andrew F. Jacobs)
    
    President, Chief Executive Officer
and Director
    
    March 4, 2009/s/ JACK BIEGLER
     (Jack Biegler)
    
    Director
    
    March 2, 2009/s/ GARY KEISER
     (Gary Keiser)
    
    Director
    
    March 2, 2009/s/ CHRISTOPHER W. MAHOWALD

     (Christopher W. Mahowald)
    
    Director
    
    March 3, 2009/s/ MICHAEL G. ONEIL

     (Michael G. ONeil)
    
    Director
    
    March 2, 2009/s/ MARK S. WHITING

     (Mark S. Whiting)
    
    Director
    
    March 3, 2009
 8




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INDEX TO EXHIBITS
 EXHIBITNUMBER
    
    DESCRIPTION3.1
    
    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.(10)3.3
    
    Articles of Amendment of Articles of Incorporation of the Registrant dated as
of May 29, 2008.(13)10.01
    
    Amended Restated Deferred Compensation Plan.(11)10.02
    
    1997 Flexible Long-Term Incentive Plan.(1)10.03
    
    Amended and Restated 2004 Flexible Long-Term Incentive Plan.(4)10.04
    
    Forms of nonqualified stock option and restricted stock agreements for
non-employee directors.(5)10.05
    
    Forms of nonqualified stock option and stock award agreements for
employees with service conditions.(8)10.06
    
    Form of stock award agreements for employees with performance conditions.*10.07
    
    Nonqualified stock option and stock award agreements for non-employee
directors and named executives.(5)10.08
    
    Purchase Agreement dated September 23, 2005, by and among the Registrant,
the Trust, Merrill Lynch International and Bear, Stearns & Co., Inc.
pertaining to the issuance of Capstead Mortgage Trust I preferred
securities.(6)10.09
    
    Junior Subordinated Indenture dated September 26, 2005, between the
Registrant and Wells Fargo Bank pertaining to the issuance of Capstead
Mortgage Trust I preferred securities.(6)10.10
    
    Amended and Restated Trust Agreement dated September 26, 2005, by and
among the Registrant, Wells Fargo Bank, National Association, Wells Fargo
Delaware Trust Company, the Administrators and the several Holders, as
defined therein, pertaining to the issuance of Capstead Mortgage Trust I
preferred securities.(8)10.11
    
    Placement Agreement dated December 6, 2005, by and among the Registrant,
the Trust, FTN Financial Capital Markets and Keefe, Bruyette & Woods, Inc.
pertaining to the issuance of Capstead Mortgage Trust II preferred
securities.(7)10.12
    
    Indenture dated December 15, 2005, between the Registrant and Wilmington
Trust Company regarding junior subordinated debentures due 2035, including
a form of debenture pertaining to the issuance of Capstead Mortgage Trust
II preferred securities.(8)10.13
    
    Amended and Restated Declaration of Trust dated December 15, 2005, by and
among the Registrant, Wilmington Trust Company and the Administrators
defined therein, including forms of capital security certificates
pertaining to the issuance of Capstead Mortgage Trust II preferred
securities.(8)10.14
    
    Placement Agreement dated September 8, 2006, by and among the Registrant,
the Capstead Mortgage Trust III, FTN Financial Capital Markets and Keefe,
Bruyette & Woods, Inc. pertaining to the issuance of Capstead Mortgage
Trust III preferred securities.(12)10.15
    
    Indenture dated September 11, 2006, between the Registrant and Wilmington
Trust Company regarding junior subordinated debentures due 2036, including
a form of debenture pertaining to the issuance of Capstead Mortgage Trust
III preferred securities.(12)




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EXHIBITNUMBER
    
    DESCRIPTION10.16
    
    Amended and Restated Declaration of Trust dated September 11, 2006, by and
among the Registrant, Wilmington Trust Company and the Administrators defined
therein, including forms of capital security certificates pertaining to the
issuance of Capstead Mortgage Trust III preferred securities.(12)12
    
    Computation of ratio of income from continuing operations to combined fixed
charges and preferred stock dividends.*13
    
    Portions of the Registrants Annual Report to Stockholders for the year ended
December 31, 2008.*21
    
    List of subsidiaries of the Registrant.*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 Registrants Companys Quarterly Report on Form 10-Q for the period ended March 31, 1997.(2)
    
    Incorporated by reference to the Registrants Registration Statement on Form S-3 (No. 333-63358) dated June 19, 2001.(3)
    
    Incorporated by reference to the Registrants Annual Report on Form 10-K for the year ended December 31, 2001.(4)
    
    Incorporated by reference to the Registrants Registration Statement on Form S-8 (No. 333-142861) dated May 9, 2007.(5)
    
    Incorporated by reference to the Registrants Quarterly Report on Form 10-Q for the period ended June 20, 2005.(6)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated September 30, 2005.(7)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated December 12, 2005.(8)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated December 20, 2005.(9)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated January 4, 2006.(10)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated January 31, 2006.(11)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated February 23, 2006.(12)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated September 8, 2006.(13)
    
    Incorporated by reference to the Registrants Current Report on Form 8-K dated June 3, 2008.*
    
    Filed herewith.