Revision of Previously Issued Financial Statements

6 Months Ended

Jun. 30, 2016

Accounting Changes and Error Corrections [Abstract]

Revision of Previously Issued Financial Statements

Revision of Previously Issued Financial Statements

During the second quarter of 2016, the Company corrected errors in its accounting for premiums and discounts associated with non-Agency RMBS not of high credit quality. Premiums and discounts are amortized and recorded as interest income in the Company's financial statements based on estimated future cash flows. The Company determined that the future cash flow assumptions used to develop its estimated premium amortization and discount accretion did not support its reported interest income. The Company revised its future cash flow estimates and also corrected its financial statements to account for the difference between actual and expected future cash flows as an adjustment to the amortized cost of the security and a prospective adjustment to the security's yield. The Company concluded that the errors are immaterial to each of the annual and interim consolidated financial statements which were included in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 and its interim report on Form 10-Q for the quarter ended March 31, 2016. The Company has also concluded that the cumulative adjustment necessary to correct the errors would be material to the quarter ended June 30, 2016.  The Company has revised its consolidated financial statements as of December 31, 2015 and for the three and six months ended June 30, 2015 presented in this Report on Form 10-Q and will revise its previously issued financial statements to correct these errors when the financial statements are presented in future periodic filings.

The following changes have been made to the Company's Consolidated Balance Sheet as of December 31, 2015:

$ in thousands	December 31, 2015
	As Reported		Adjustment		As Revised
Accumulated other comprehensive income	303,110		15,514		318,624
Retained earnings (distributions in excess of earnings)	(755,799	)	(15,514	)	(771,313	)

The following changes have been made to the Company's Unaudited Consolidated Statements of Operations for the three and six months ended June 30, 2015:

$ in thousands	Three Months Ended June 30, 2015
	As Reported	Adjustment	As Revised
Interest Income
Mortgage-backed and credit risk transfer securities	126,098	2,393	128,491
Other Income
Gain (loss) on investments, net	10,876	20	10,896
Net income	147,326	2,413	149,739
Net income attributable to non-controlling interest	1,685	27	1,712
Net income attributable to Invesco Mortgage Capital Inc.	145,641	2,386	148,027
Net income attributable to common stockholders	139,925	2,386	142,311
Earnings per share:
Net income attributable to common stockholders
Basic	1.14	0.02	1.16
Diluted	1.04	0.02	1.06

$ in thousands	Six Months Ended June 30, 2015
	As Reported	Adjustment		As Revised
Interest Income
Mortgage-backed and credit risk transfer securities	261,363	6,176		267,539
Other Income (loss)
Gain (loss) on investments, net	13,048	(62	)	12,986
Net income	135,466	6,114		141,580
Net income attributable to non-controlling interest	1,549	69		1,618
Net income attributable to Invesco Mortgage Capital Inc.	133,917	6,045		139,962
Net income attributable to common stockholders	122,485	6,045		128,530
Earnings per share:
Net income attributable to common stockholders
Basic	0.99	0.05		1.04
Diluted	0.96	0.04		1.00

The following changes have been made to the Company's Unaudited Consolidated Statement of Comprehensive Income for the three and six months ended June 30, 2015:

$ in thousands	Three Months Ended June 30, 2015
	As Reported		Adjustment		As Revised
Net income	147,326		2,413		149,739
Total other comprehensive income (loss)	(178,678	)	(2,413	)	(181,091	)

$ in thousands	Six Months Ended June 30, 2015
	As Reported		Adjustment		As Revised
Net income	135,466		6,114		141,580
Total other comprehensive income (loss)	(36,513	)	(6,114	)	(42,627	)

The following changes have been made to the Company's Unaudited Consolidated Statement of Cash Flows for the six months ended June 30, 2015:

$ in thousands	Six Months Ended June 30, 2015
	As Reported		Adjustment		As Revised
Cash Flows from Operating Activities
Net income	135,466		6,114		141,580
Amortization of mortgage-backed and credit risk transfer securities premiums and (discounts), net	65,251		(6,176	)	59,075
(Gain) loss on investments, net	(13,048	)	62		(12,986	)
Non-cash Investing and Financing Activities Information
Net change in unrealized gain on mortgage-backed and credit risk transfer securities	(71,971	)	(6,114	)	(78,085	)