Warren Buffett said a dispute between Kraft Heinz and its auditor prevented Berkshire Hathaway from reflecting the food company’s performance in its first-quarter earnings report.
According to reports, Buffett told a group of reporters ahead of the question-and-answer session Saturday at Berkshire’s annual meeting in Omaha, Neb., that Kraft Heinz Co.’s KHC, -0.52% auditor, PricewaterhouseCoopers, hadn’t signed off on the company’s 10-K filing.
“They have to explain why they haven’t signed off, but they haven’t signed off…There’s something going on,” Buffett said, according to CNBC.
A Kraft Heinz spokesman said the company is “working together with PWC toward filing our 10-K once we complete our internal reviews of our accounting practices and procedures related to the procurement area.”
Berkshire Hathaway BRK.A, +0.20% BRK.B, +0.26% is the largest shareholder in Kraft Heinz, with a 27% stake. Berkshire excluded its share of Kraft earnings from its first-quarter release. Write-downs related to Kraft Heinz investment weighed on Berkshire’s fourth-quarter performance.
Berkshire and private-equity firm 3G Capital worked together to form Kraft Heinz through a merger of H.J. Heinz Co. and Kraft Foods Group in 2015. Buffett previously said he overpaid for Kraft in the deal but had no plans to sell. “We paid a very high price in terms of the Kraft part,” he said during the shareholder meeting.
Berkshire reported first-quarter net profit of $21.66 billion, or $13,209 per class A share equivalent, compared with a loss of $1.14 billion, or $692 a share, a year earlier. Last year’s first-quarter earnings were a loss due to unrealized investment losses.