Business Context and Reporting Period
This Form 8-K was filed by Evercore Partners Inc. on February 21, 2007. The report addresses a material accounting error discovered in the financial statements of Protego Historical (Protego Asesores, S.A. de C.V. and its subsidiaries), which Evercore acquired. The error pertains to the period ending December 31, 2005, and the interim periods through June 30, 2006.
Key Financial Metrics
The filing does not provide specific numerical values for revenue, profit, cash flow, margins, debt, or liquidity for Evercore Partners Inc. or Protego Historical. Instead, it discloses a qualitative accounting error regarding the improper net recording of repurchase and reverse repurchase agreements by Protego Casa de Bolsa, S.A. de C.V. The filing includes restated financial statements as exhibits but does not summarize the specific adjusted figures within the text of this report.
Material Changes Versus Prior Period
- Accounting Error: Protego Historical previously recorded repurchase and reverse repurchase agreements on a net basis. The correct treatment requires recording separate assets and liabilities or separately recording revenue for interest earned and interest expense as an offset.
- Restatement: Due to this error, the combined and consolidated financial statements for the year ended December 31, 2005, and the interim periods ended March 31, 2006, and June 30, 2006, have been restated and can no longer be relied upon in their original form.
- Pro Forma Adjustments: The company has added required disclosure regarding the pro forma effects of the distribution of pre-offering profits on the Protego Historical balance sheets as of June 30, 2006.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on future outlook, or new risk factors beyond the disclosure of the accounting error. The report explicitly states that it does not update other disclosures set forth in previous SEC filings or reflect events occurring after the original filing of those documents. The primary contingency addressed is the reliability of historical financial data for the acquired entity.
Investor Verification Checklist
- Review the restated combined and consolidated financial statements of Protego Historical (Exhibits 99.1, 99.2, and 99.3) to understand the quantitative impact of the accounting correction.
- Examine the restated unaudited condensed consolidated pro forma financial statements (Exhibits 99.4 and 99.5) for the corrected impact on Evercore's consolidated results.
- Verify the Independent Auditors' Report included in Exhibit 99.1 regarding the restated 2005 financial statements.
- Confirm the specific adjustments made to the balance sheet regarding the distribution of pre-offering profits as noted in the pro forma disclosures.