Investments in affiliated companies that we do not control, either through majority ownership or otherwise, are accounted for using the equity method. At February 28, 2023, 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, we sold our 50% noncontrolling equity interest in ArtiFlex Manufacturing, LLC (“ArtiFlex”) to the unaffiliated joint venture member for net proceeds of approximately $41,795,000, 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 us and leased to ArtiFlex prior to closing of the transaction. For the nine months ended February 28, 2023, we recognized a pre-tax loss of $16,059,000 in equity income related to the sale, including a loss of $300,000 for the settlement of final transaction costs related to the sale during the three months ended February 28, 2023.

We received distributions from unconsolidated affiliates totaling $189,910,000 during the nine months ended February 28, 2023. We have received cumulative distributions from WAVE in excess of our investment balance amounting to $116,825,000, which is shown as a separate liability on our consolidated balance sheet at February 28, 2023. 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:


	February 28,		May 31,
(in thousands)	2023		2022
Cash and cash equivalents	$	83,482	$	68,563
Other current assets		820,978		1,148,029
Noncurrent assets		308,512		369,608
Total assets	$	1,212,972	$	1,586,200

Current liabilities		213,496		345,097
Short-term borrowings		10,000		5,943
Current maturities of long-term debt		48,898		33,054
Long-term debt		349,161		306,814
Other noncurrent liabilities		66,538		76,437
Equity		524,879		818,855
Total liabilities and equity	$	1,212,972	$	1,586,200


	Three Months Ended					Nine Months Ended
	February 28,					February 28,
(in thousands)	2023			2022		2023			2022
Net sales	$	626,527		$	789,483	$	2,162,134		$	2,392,643
Gross margin		150,698			187,602		479,402			603,778
Operating income		107,994			144,575		353,177			475,341
Depreciation and amortization		6,774			7,831		21,826			23,907
Interest expense		4,607			2,661		11,197			7,833
Income tax expense (benefit)		(3,782	)		4,478		(410	)		20,938
Net earnings		111,135			136,346		349,556			449,149