Investments in affiliated companies that we do not control, either through majority ownership or otherwise, are accounted for using the equity method. At November 30, 2022, we held noncontrolling investments in the following affiliated companies: Clarkwestern Dietrich Building Systems LLC (“ClarkDietrich”) (25%); Serviacero Planos, S. de R. L. de C.V. (“Serviacero Worthington”) (50%); Taxi Workhorse Holdings, LLC (“Workhorse”) (20%); and Worthington Armstrong Venture (“WAVE”) (50%).

On August 3, 2022, the Company sold its 50% noncontrolling equity interest in ArtiFlex Manufacturing, LLC (“ArtiFlex”) to the unaffiliated joint venture member for approximately $42,086,000, after adjustments for closing debt and final net working capital. Approximately $6,000,000 of the total cash proceeds were attributed to real property in Wooster, Ohio, with a net book value of approximately $6,300,000. This real property was owned by Worthington and leased to ArtiFlex prior to closing of the transaction. The Company recognized a pre-tax loss of approximately $15,759,000 in equity income related to the sale of its 50% noncontrolling equity interest portion of the transaction.

We received distributions from unconsolidated affiliates totaling $129,766,000 during the six months ended November 30, 2022. We have received cumulative distributions from WAVE in excess of our investment balance amounting to $91,643,000, which is shown as a separate liability on our consolidated balance sheet at November 30, 2022. In accordance with the applicable accounting guidance, we have reclassified the negative investment balance to the liabilities section of our consolidated balance sheets. We will continue to record our equity in the net income of WAVE as a debit to the investment account, and if the investment balance becomes positive, it will again be shown as an asset on our consolidated balance sheets. If it becomes probable that any excess distribution may not be returned (upon joint venture liquidation or otherwise), we will recognize any negative investment balance classified as a liability as income immediately.

We use the “cumulative earnings” approach for determining cash flow presentation of distributions from our unconsolidated joint ventures. Distributions received are included in our consolidated statements of cash flows as operating activities, unless the cumulative distributions received, less distributions received in prior periods that were determined to be returns of investment, exceed our portion of the cumulative equity in the net earnings of the joint venture, in which case the excess distributions are deemed to be returns of the investment and are classified as investing activities in our consolidated statements of cash flows.

The following tables summarize combined financial information for our unconsolidated affiliates as of the dates, and for the periods presented:


	November 30,		May 31,
(in thousands)	2022		2022
Cash and cash equivalents	$	41,768	$	68,563
Other current assets		911,881		1,148,029
Noncurrent assets		301,027		369,608
Total assets	$	1,254,676	$	1,586,200

Current liabilities		292,303		345,097
Short-term borrowings		10,000		5,943
Current maturities of long-term debt		36,110		33,054
Long-term debt		304,108		306,814
Other noncurrent liabilities		69,667		76,437
Equity		542,488		818,855
Total liabilities and equity	$	1,254,676	$	1,586,200


	Three Months Ended				Six Months Ended
	November 30,				November 30,
(in thousands)	2022		2021		2022		2021
Net sales	$	711,665	$	858,165	$	1,535,607	$	1,603,160
Gross margin		147,299		226,502		328,704		416,176
Operating income		107,356		184,779		245,183		330,767
Depreciation and amortization		6,864		7,848		15,052		16,075
Interest expense		3,910		2,711		6,590		5,172
Income tax expense		1,262		8,565		3,372		16,461
Net earnings		105,183		173,915		238,421		312,803