10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

(Mark One)

☑ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended May 31, 2018

or

☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  _______  to  _______

Commission File Number 1-8399

WORTHINGTON INDUSTRIES, INC.

(Exact Name of Registrant as Specified in its Charter)

Ohio	31-1189815
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
200 Old Wilson Bridge Road, Columbus, Ohio	43085
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code:            (614) 438-3210       

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of Each Exchange on Which Registered
Common Shares, Without Par Value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:           None        

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.     Yes ☑     No ☐

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes ☐     No ☑

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes ☑     No ☐

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).   Yes ☑      No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ☐ 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑		Accelerated filer	☐
Non-accelerated filer	☐	(Do not check if a smaller reporting company)	Smaller reporting company	☐
			Emerging growth company	☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.     ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐    No ☑

The aggregate market value of the Common Shares (the only common equity of the Registrant) held by non-affiliates computed by reference to the closing price on the New York Stock Exchange on November 30, 2017, the last business day of the Registrant’s most recently completed second fiscal quarter, was $1,781,949,312.  For this purpose, executive officers and directors of the Registrant are considered affiliates.

Indicate the number of shares outstanding of each of the Registrant’s classes of common stock, as of the latest practicable date.  On July 24, 2018, the number of Common Shares issued and outstanding was 59,839,778.

DOCUMENT INCORPORATED BY REFERENCE:

Selected portions of the Registrant’s definitive Proxy Statement to be furnished to shareholders of the Registrant in connection with the Annual Meeting of Shareholders to be held on September 26, 2018, are incorporated by reference into Part III of this Annual Report on Form 10-K to the extent provided herein.

TABLE OF CONTENTS

SAFE HARBOR STATEMENT		ii
PART I
Item 1.	Business	1
Item 1A.	Risk Factors	9
Item 1B.	Unresolved Staff Comments	19
Item 2.	Properties	19
Item 3.	Legal Proceedings	21
Item 4.	Mine Safety Disclosures	21
Supplemental Item.	Executive Officers of the Registrant	21
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	23
Item 6.	Selected Financial Data	26
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 8.	Financial Statements and Supplementary Data	50
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	95
Item 9A.	Controls and Procedures	95
Item 9B.	Other Information	99
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	100
Item 11.	Executive Compensation	101
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	102
Item 13.	Certain Relationships and Related Transactions, and Director Independence	102
Item 14.	Principal Accountant Fees and Services	102
PART IV
Item 15.	Exhibits and Financial Statement Schedules	103
Item 16.	Form 10-K Summary	115
Signatures		116

i

SAFE HARBOR STATEMENT

Selected statements contained in this Annual Report on Form 10-K, including, without limitation, in “PART I – Item 1. – Business” and “PART II – Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations,” constitute “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995 (the “Act”).  Forward-looking statements reflect our current expectations, estimates or projections concerning future results or events.  These statements are often identified by the use of forward-looking words or phrases such as “believe,” “expect,” “anticipate,” “may,” “could,” “intend,” “estimate,” “plan,” “foresee,” “likely,” “will,” “should,” or other similar words or phrases.  These forward-looking statements include, without limitation, statements relating to:

• outlook, strategy or business plans;

• future or expected growth, growth potential, forward momentum, performance, competitive position, sales, volumes, cash flows, earnings, balance sheet strengths, debt, financial condition or other financial measures;

• pricing trends for raw materials and finished goods and the impact of pricing changes;

• demand trends for us or our markets;

• additions to product lines and opportunities to participate in new markets;

• expected benefits from Transformation and innovation efforts and the ability to improve performance and competitive position at our operations;

• anticipated working capital needs, capital expenditures and asset sales;

• anticipated improvements and efficiencies in costs, operations, sales, inventory management, sourcing and the supply chain and the results thereof;

• projected profitability potential;

• the ability to successfully integrate AMTROL and the expected benefits, costs and results from the acquisition of AMTROL;

• the ability to make acquisitions and the projected timing, results, benefits, costs, charges and expenditures related to acquisitions, newly-created joint ventures, headcount reductions and facility dispositions, shutdowns and consolidations;

• the expected sale of the WAVE international business;

• projected capacity and the alignment of operations with demand;

• the ability to operate profitably and generate cash in down markets;

• the ability to maintain margins and capture and maintain market share and to develop or take advantage of future opportunities, customer initiatives, new businesses, new products and new markets;

• expectations for Company and customer inventories, jobs and orders;

• expectations for the economy and markets or improvements therein;

• expectations for generating improving and sustainable earnings, earnings potential, margins or shareholder value;

• the expected impact of the provisions of the Tax Cuts and Jobs Act (the “TCJA”) on the Company;

ii

• effects of judicial rulings; and

• other non-historical matters.

Because they are based on beliefs, estimates and assumptions, forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from those projected.  Any number of factors could affect actual results, including, without limitation, those that follow:

• the effect of national, regional and global economic conditions generally and within major product markets, including a recurrent slowing economy;

• the effect of conditions in national and worldwide financial markets;

• the impact of tariffs, the adoption of trade restrictions affecting our products or suppliers, a United States withdrawal from or significant renegotiation of trade agreements, the occurrence of trade wars, and other changes in trade regulations;

• lower oil prices as a factor in demand for products;

• product demand and pricing;

• changes in product mix, product substitution and market acceptance of our products;

• fluctuations in the pricing, quality or availability of raw materials (particularly steel), supplies, transportation, utilities and other items required by operations;

• effects of facility closures and the consolidation of operations;

• the effect of financial difficulties, consolidation and other changes within the steel, automotive, construction, oil and gas, and other industries in which we participate;

• failure to maintain appropriate levels of inventories;

• financial difficulties (including bankruptcy filings) of original equipment manufacturers, end-users and customers, suppliers, joint venture partners and others with whom we do business;

• the ability to realize targeted expense reductions from headcount reductions, facility closures and other cost reduction efforts;

• the ability to realize cost savings and operational, sales and sourcing improvements and efficiencies, and other expected benefits from Transformation initiatives, on a timely basis;

• the overall success of, and the ability to integrate, newly-acquired businesses and joint ventures, maintain and develop their customers, and achieve synergies and other expected benefits and cost savings therefrom;

• capacity levels and efficiencies, within facilities, within major product markets and within the industries as a whole;

• the effect of disruption in the business of suppliers, customers, facilities and shipping operations due to adverse weather, casualty events, equipment breakdowns, civil unrest, international conflicts, terrorist activities or other causes;

• changes in customer demand, inventories, spending patterns, product choices, and supplier choices;

• risks associated with doing business internationally, including economic, political and social instability, foreign currency exchange rate exposure and the acceptance of our products in global markets;

iii

• the ability to improve and maintain processes and business practices to keep pace with the economic, competitive and technological environment;

• the outcome of adverse claims experience with respect to workers’ compensation, product recalls or product liability, casualty events or other matters;

• deviation of actual results from estimates and/or assumptions used by us in the application of our significant accounting policies;

• level of imports and import prices in our markets;

• the impact of judicial rulings and governmental regulations, both in the United States and abroad, including those adopted by the United States Securities and Exchange Commission and other governmental agencies as contemplated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010;

• the effect of healthcare laws in the United States and potential changes for such laws which may increase our healthcare and other costs and negatively impact our operations and financial results;

• the actual impact on our business of the TCJA differing materially from our estimates;

• cyber security risks;

• the effects of privacy and information security laws and standards; and

• other risks described from time to time in the filings of Worthington Industries, Inc. with the United States Securities and Exchange Commission, including those described in “PART I – Item 1A. – Risk Factors” of this Annual Report on Form 10-K.

We note these factors for investors as contemplated by the Act.  It is impossible to predict or identify all potential risk factors.  Consequently, you should not consider the foregoing list to be a complete set of all potential risks and uncertainties.  Any forward-looking statements in this Annual Report on Form 10-K are based on current information as of the date of this Annual Report on Form 10-K, and we assume no obligation to correct or update any such statements in the future, except as required by applicable law.

iv

PART I

Item 1. — Business

General Overview

Worthington Industries, Inc. is a corporation formed under the laws of the State of Ohio (individually, the “Registrant” or “Worthington Industries” or, collectively with the subsidiaries of Worthington Industries, Inc., “we,” “our,” “Worthington” or the “Company”).  Founded in 1955, Worthington is primarily a diversified metals manufacturing company, focused on value-added steel processing and manufactured metal products.  Our manufactured metal products include: pressure cylinders for liquefied petroleum gas (“LPG”), compressed natural gas (“CNG”), oxygen, refrigerant and other industrial gas storage; water well tanks for commercial and residential uses; hand torches and filled hand torch cylinders; propane-filled camping cylinders; helium-filled balloon kits; steel and fiberglass tanks and processing equipment primarily for the oil and gas industry; cryogenic pressure vessels for liquefied natural gas (“LNG”) and other gas storage applications; engineered cabs and operator stations and cab components; and, through our joint ventures, complete ceiling grid solutions; laser welded blanks; light gauge steel framing for commercial and residential construction; and current and past model automotive service stampings.

Worthington is headquartered at 200 Old Wilson Bridge Road, Columbus, Ohio 43085, telephone (614) 438-3210.  The common shares of Worthington Industries are traded on the New York Stock Exchange under the symbol WOR.

Worthington Industries maintains an Internet web site at www.worthingtonindustries.com.  This uniform resource locator, or URL, is an inactive textual reference only and is not intended to incorporate Worthington Industries’ web site into this Annual Report on Form 10-K.  Worthington Industries’ Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports, filed or furnished pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as Worthington Industries’ definitive annual meeting proxy materials filed pursuant to Section 14 of the Exchange Act, are available free of charge, on or through the Worthington Industries web site, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission (the “SEC”).

Segments

As of May 31, 2018, we, together with our unconsolidated affiliates, operated 85 manufacturing facilities in 25 states and 11 countries.  Thirty-six of these facilities are operated by wholly-owned and consolidated subsidiaries of the Company.  The remaining facilities are operated by our consolidated and unconsolidated joint ventures.  

Our operations are managed principally on a products and services basis and are comprised of three primary operating segments which correspond with our reportable business segments: Steel Processing; Pressure Cylinders; and Engineered Cabs. The Steel Processing operating segment consists of the Worthington Steel business unit (“Worthington Steel”) which operates eight manufacturing facilities (seven of which we own); and three consolidated joint ventures: Spartan Steel Coating, LLC (“Spartan”), which operates a cold-rolled, hot-dipped galvanizing line in Monroe, Michigan; TWB Company, L.L.C. (“TWB”), which operates 10 laser welded blank facilities and is headquartered in Monroe, Michigan; and Worthington Specialty Processing (“WSP”), which processes wide-sheet steel for the auto industry and operates three facilities in Michigan.  The Pressure Cylinders operating segment consists of the Worthington Cylinders business unit (“Worthington Cylinders”), which includes recently-acquired New AMTROL Holdings, Inc. and its subsidiaries (collectively “AMTROL”), and operates 24 manufacturing facilities. The Engineered Cabs operating segment consists of the Worthington Industries Engineered Cabs business unit (“Engineered Cabs”), which operates four manufacturing facilities.

Effective June 1, 2017, Worthington Steelpac Systems, LLC (“Packaging Solutions”), which designs and manufactures recyclable steel packaging solutions for the movement of products and operates one manufacturing facility, was realigned under the Engineered Cabs operating segment, moving from the Steel Processing operating segment. See the Recent Developments section below.

On June 2, 2017, we acquired AMTROL, which operates as part of the Pressure Cylinders operating segment.  See the Recent Developments section below.

1

We hold equity positions in 9 joint ventures, which are further discussed in the Joint Ventures section below.  Of these, Spartan, TWB and WSP are consolidated with their operating results reported within our Steel Processing operating segment.

During the fiscal year ended May 31, 2018 (“fiscal 2018”), the Steel Processing, Pressure Cylinders and Engineered Cabs operating segments served approximately 800, 4,500, and 65 customers, respectively, located primarily in the United States.  International operations accounted for approximately 9% of our consolidated net sales during fiscal 2018 and were comprised primarily of sales to customers in Europe.  No single customer accounted for over 10% of our consolidated net sales in fiscal 2018.

Refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note N – Segment Data” of this Annual Report on Form 10-K for a full description of our reportable business segments.

Recent Developments

Effective June 1, 2017, we made certain organizational changes impacting the internal reporting and management structure of Packaging Solutions.  As a result of these organizational changes, management responsibilities and internal reporting were realigned, moving Packaging Solutions from the Steel Processing reportable segment to the Engineered Cabs reportable segment, where we expect to achieve synergies in design engineering and manufacturing development.

On June 2, 2017, we acquired AMTROL, a leading manufacturer of pressure cylinders and water system tanks, which is part of our Pressure Cylinders reportable segment.  AMTROL has manufacturing facilities in Rhode Island, Kentucky and Maryland which also produce refrigerant gas cylinders and ASME code products for industrial and commercial applications.  Its Portuguese subsidiary, AMTROL-ALFA, is a leading European producer of LPG, refrigerant, industrial and specialty gas cylinders.  The aggregate merger consideration for AMTROL was approximately $291.9 million after closing adjustments.   A portion of the merger consideration was used to pay off certain indebtedness and other liabilities of AMTROL.

On November 20, 2017, we announced that our joint venture Worthington Armstrong Venture (“WAVE”) has agreed to sell its business and operations in Europe and Asia, to the Knauf Group, a family-owned manufacturer of building materials headquartered in Germany.  The WAVE businesses and operations in the Americas are not part of this transaction.  The transaction is subject to regulatory approvals and other customary closing conditions and is anticipated to close before the end of calendar 2018.

On March 31, 2018, we sold a 65% stake in Worthington Energy Innovations, LLC (“WEI”) to its founder, Tom Kiser, who already owned 20% of the business. We now hold a 10% equity interest and will have a passive role in the business.

On May 23, 2018, we acquired the remaining 25% ownership interest in Turkey-based Worthington Arıtaş Basınçlı Kaplar Sanayi (“Worthington Aritas”), a manufacturer of cryogenic pressure vessels for LNG and other gas storage applications.  Management committed to a plan to sell this business in a non-cash transaction.  The net assets of Worthington Aritas are now classified as assets held for sale in our consolidated balance sheets.

Steel Processing

Our Steel Processing reportable segment consists of the Worthington Steel business unit, our consolidated joint ventures, Spartan, TWB and, beginning with the last quarter of fiscal 2016, WSP.  It also included Packaging Solutions through May 31, 2017.  For fiscal 2018, fiscal 2017 and fiscal 2016, the percentage of our consolidated net sales generated by the Steel Processing operating segment was approximately 63%, 69% and 65%, respectively.

Worthington Steel is one of the largest independent intermediate processors of flat-rolled steel in the United States.  It occupies a niche in the steel industry by focusing on products requiring exact specifications.  These products cannot typically be supplied as efficiently by steel mills to the end-users of these products.

2

As of May 31, 2018, the Steel Processing reportable segment, including Spartan, TWB, and WSP, operated 22 manufacturing facilities located in Ohio (5), Michigan (5), Mexico (5), Tennessee (2), Indiana (1), Alabama (1), Kentucky (1), New York (1), and Canada (1).  

Our Steel Processing reportable segment serves approximately 800 customers, principally in the automotive, aerospace, agricultural, appliance, construction, container, hardware, HVAC, lawn and garden, leisure and recreation, office furniture and office equipment markets.  The automotive industry is one of the largest consumers of flat-rolled steel, and thus the largest end market for our Steel Processing operating segment.  For fiscal 2018, Steel Processing’s top three customers represented approximately 32% of the operating segment’s total net sales.

Our Steel Processing reportable segment buys coils of steel from integrated steel mills and mini-mills and processes them to the precise type, thickness, length, width, shape and surface quality required by customer specifications.  Computer-aided processing capabilities include, among others:

• cold reducing, which achieves close tolerances of thickness;

• configured blanking, which mechanically stamps steel into specific shapes;

• coil fed laser blanking, which uses lasers to cut coils of steel, aluminum and other metals into specific shapes;

• cutting-to-length, which cuts coils into sheets of exact length;

• dry-lube, the process of coating steel with a dry, soap-based lubricant;

• hot-dipped galvanizing, which coats steel with zinc and zinc alloys through a hot-dip process;

• hydrogen annealing, a thermal process that changes the hardness and certain metallurgical characteristics of steel;

• laser welding, which joins steel or aluminum blanks and coils with different thicknesses, coatings or material strength;

• pickling, a chemical process using an acidic solution to remove surface oxide which develops on hot-rolled steel;

• slitting, which cuts steel coils or steel sheets to specific widths;

• oscillate slitting, a slitting process that spools together several narrow coils welded end-to-end into one larger coil;

• temper rolling, which is the process of light cold-rolling steel;

• tension leveling, a method of applying pressure to achieve precise flatness tolerances; and

• non-metallic coating, including  acrylic and paint coating.

Our Steel Processing reportable segment also toll processes steel for steel mills, large end-users, service centers and other processors.  Toll processing is different from typical steel processing in that the mill, end-user or other party retains title to the steel and has the responsibility for selling the end product.  Toll processing enhances Worthington Steel’s participation in the market for wide sheet steel and large standard orders, a market generally served by steel mills rather than by intermediate steel processors.

3

The steel processing industry is fragmented and highly competitive.  There are many competitors, including other independent intermediate processors.  Competition is primarily on the basis of price, product quality and the ability to meet delivery requirements.  Technical service and support for material testing and customer-specific applications enhance the quality of products (see the Technical Services section below).  However, the extent to which technical service capability has improved Worthington Steel’s competitive position has not been quantified.  Worthington Steel’s ability to meet tight delivery schedules is, in part, based on the proximity of our facilities to customers, suppliers and one another.  The extent to which plant location has impacted Worthington Steel’s competitive position has not been quantified.  Processed steel products are priced competitively, primarily based on market factors, including, among other things, market pricing, the cost and availability of raw materials, transportation and shipping costs, and overall economic conditions in the United States and abroad.

Effective in the first quarter of fiscal 2018, the operations of Packaging Solutions were realigned, moving from the Steel Processing reportable segment to the Engineered Cabs reportable segment.

Pressure Cylinders

The Pressure Cylinders reportable segment consists of the Worthington Cylinders business unit and Worthington Aritas.  Worthington Aritas is a manufacturer of cryogenic pressure vessels for LNG and other gas storage applications.  The percentage of our consolidated net sales generated by Pressure Cylinders was approximately 34%, 28% and 30% in fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  We acquired AMTROL on June 2, 2017, which has been included in the Pressure Cylinders reportable segment since that date, and accounted for approximately 7%of the Company’s consolidated net sales in fiscal 2018.

Our Pressure Cylinders reportable segment manufactures and sells filled and unfilled pressure cylinders, tanks, hand torches, well water and expansion tanks, and oil and gas equipment along with various accessories and related products for diversified end-use market applications.  The following is a description of these markets: 

• Industrial Products: This market sector includes high pressure and acetylene cylinders for industrial gases, refrigerant and certain propane gas cylinders, cryogenic equipment and systems and services for handling liquid gases, and other specialty products. Cylinders in this market sector are generally sold to gas producers, cylinder exchangers and industrial distributors. Industrial cylinders hold fuel for uses such as cutting, brazing and soldering, semiconductor production, and beverage delivery. Refrigerant gas cylinders are used to hold refrigerant gases for commercial, residential and automotive air conditioning and refrigeration systems.  LPG cylinders hold fuel for barbeque grills, recreational vehicle equipment, residential and light commercial heating systems, industrial forklifts and commercial/residential cooking (the latter, generally outside North America). Cryogenic equipment and systems include LNG systems for marine and mining applications, liquid nitrogen storage freezers and shipping containers for organic specimens in healthcare markets, and tanks, trailers, and regasification plants for liquefied nitrogen, oxygen, argon, hydrogen, and natural gas. Specialty products include a variety of fire suppression and chemical tanks. 

• Consumer Products: This market sector includes propane-filled cylinders for torches, camping stoves and other applications, hand held torches and accessories such as solder and brazing rods, Balloon Time® helium-filled balloon kits, well water tanks and expansion tanks. These products are sold primarily to mass merchandisers and distributors.

• Alternative Fuels: This market sector includes composite and steel cylinders used to hold CNG and hydrogen for automobiles, buses, and light-duty trucks, and to hold propane/autogas for automobiles and light- and medium-duty trucks, as well as CNG fuel systems for heavy duty, refuse and other trucks.

• Oil & Gas Equipment:  This market sector includes steel and fiberglass storage tanks, separation equipment, controls and other products primarily used in the energy markets, including oil and gas and nuclear. This market sector also includes hoists and other marine products which are used principally in shipyard lift systems. It also leverages its manufacturing competencies to produce pressure vessels, atmospheric tanks, controls and various custom machined components for other industrial and agricultural end markets.

4

While a large percentage of Pressure Cylinders sales are made to major accounts, this operating segment served approximately 4,500 customers during fiscal 2018.  No single customer represented greater than 10% of net sales for the Pressure Cylinders operating segment during fiscal 2018.  

The Pressure Cylinders reportable segment, operates 24 manufacturing facilities located in Alabama, California, Kansas (2), Kentucky, Maryland, North Carolina, North Dakota, Ohio (6), Oklahoma, Rhode Island, Utah, Wisconsin, Austria, Poland (2), Portugal (2) and Turkey.  

For sales in the United States and Canada, high-pressure and low-pressure cylinders are primarily manufactured in accordance with United States Department of Transportation and Transport Canada specifications.  Outside the United States and Canada, cylinders are manufactured according to European norm specifications, as well as various other international standards.  Other products are produced to applicable industry standards including, as applicable, those standards issued by the American Petroleum Institute, ASME and UL.

Worthington Cylinders has one principal domestic competitor in the low-pressure LPG cylinder market, and there are a number of foreign competitors in the LPG cylinder market and in the non-refillable refrigerant market.  We believe that Worthington Cylinders has the largest market share in its domestic low-pressure cylinder markets.  In the other cylinder markets, there are several competitors.  Worthington Cylinders is a leading supplier to the European markets for both the high-pressure cylinders and the low-pressure non-refillable cylinders.  Worthington Cylinders generally has a strong competitive position for its industrial, energy, retail and specialty products, but competition varies on a product-by-product basis, and geographically for energy products.  As with our other operating segments, competition is based upon price, service and quality.

The Pressure Cylinders reportable segment uses the trade names “Worthington Cylinders”, “AMTROL” and “Alfa” to conduct business.

The Company uses the registered trademark “Balloon Time®” to market helium-filled balloon kits; the registered trademark “BERNZOMATIC®” to market certain fuel cylinders and hand held torches; the trademark “WORTHINGTON PRO-GRADE” to market certain LPG cylinders, hand torches and camping fuel cylinders; and the registered trademarks “MAP-PRO®” and “Pro-Max®” to market certain hand torch cylinders; “Therm-X-Trol®” and “Extrol®” to market thermal expansion tanks; “Well X Trol®”, “Champion®”, and “Wel-Flo and Design®” to market well tanks; and “Hydromax®” and “Boilermate®” to market indirect fired water heaters.

Engineered Cabs

The Engineered Cabs reportable segment consists of the Worthington Industries Engineered Cabs business unit and, effective June 1, 2017, our Packaging Solutions business.  For fiscal 2018, fiscal 2017 and fiscal 2016, the percentage of our consolidated net sales generated by the Engineered Cabs operating segment was approximately 3%, 3%, and 4%, respectively.

Engineered Cabs is headquartered in Columbus, Ohio and operates four manufacturing facilities, one each in Indiana, Ohio, South Dakota and Tennessee, which are located near key assembly locations of original equipment manufacturers.

Engineered Cabs is a non-captive designer and manufacturer of high-quality, custom-engineered open and enclosed cabs and operator stations and custom fabrications and packaging for heavy mobile equipment used primarily in the agricultural, construction, forestry, military and mining industries.  Engineered Cabs’ product design, engineering support and broad manufacturing capabilities enable it to produce custom cabs and structures used in products ranging from small utility equipment to the large earthmovers.  Packaging Solutions designs and manufactures reusable custom steel platforms, racks and pallets for supporting, protecting and handling products throughout the shipping process.

In addition to its engineered cab products, this operating segment has the capability to provide a full suite of complementary products such as machined structural components, complex and painted weldments, and engine doors.  Engineered Cabs has the manufacturing capability for steel laser cutting, steel bending and forming, roll-form tube curving and bending, machining, welding – robotic and manual, automated steel product cleaning and E-coating, top coat painting and assembly.

5

Engineered Cabs produces products for approximately 100 different equipment platforms for approximately 65 customers. For fiscal 2018, Engineered Cabs’ top three customers represented approximately 55% of the operating segment’s total net sales.  Its production levels can range from small and medium production volumes through high volume productions.

Engineered Cabs competes with a limited number of non-captive producers of engineered cabs in the United States, although there are numerous other suppliers who can perform various functions supplied by the Company.  Some customers can also produce operator cabs in-house.  The Company’s competitive strengths include design and engineering capabilities as well as broad manufacturing capabilities, often providing a fully-integrated complete cab at a more effective cost than customers can produce in-house.  Competitive drivers are related to innovation, quality, delivery and service. 

Key supplies for this operating segment include steel sheet and plate, stampings, steel tubing, hardware, controls, wiper systems, glazing materials (glass, polycarbonate), perishables (paint, urethane, caulk), electrical materials, HVAC systems and aesthetic materials (acoustical trim, plastics, foam), which are available from a variety of sources. 

As noted above, effective June 1, 2017, the operations of Packaging Solutions were realigned, moving from the Steel Processing reportable segment to the Engineered Cabs reportable segment.  Packaging Solutions operates one facility in Indiana.

Segment Financial Data

Financial information for the reportable business segments is provided in “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note N – Segment Data”.  

Financial Information About Geographic Areas

For fiscal 2018, our international operations represented 9% of our consolidated net sales, 6% of our net earnings attributable to controlling interest and 14% of our consolidated net assets.  During fiscal 2018, fiscal 2017 and fiscal 2016, we had consolidated operations in Austria, Canada, Mexico, Poland, Portugal, Turkey and the United States.  During these same three fiscal years, our unconsolidated joint ventures had operations in China, France, Mexico, the United Kingdom and the United States.  As noted in the Recent Developmentssection above, our joint venture WAVE has agreed to sell its business and operations in Europe and Asia.  The transaction is subject to regulatory approvals and other customary closing conditions and is anticipated to close before the end of calendar 2018.  Summary information about our foreign operations, including net sales and fixed assets by geographic region, is provided in “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note A – Summary of Significant Accounting Policies – Risks and Uncertainties” and “Note N – Segment Data” of this Annual Report on Form 10-K.

Suppliers

The primary raw material purchased by Worthington is steel.  We purchase steel in large quantities at regular intervals from major primary producers of steel, both domestic and foreign.  The amount purchased from any particular supplier varies from year to year depending on a number of factors including market conditions, then current relationships and prices and terms offered.  In nearly all market conditions, steel is available from a number of suppliers and generally any supplier relationship or contract can and has been replaced with little or no significant interruption to our business.  During fiscal 2018, we purchased approximately 2.7 million tons of steel (73% hot-rolled, 12% cold-rolled and 15% galvanized) on a consolidated basis. 

In the Steel Processing operating segment, steel is primarily purchased and processed based on specific customer orders.  The Pressure Cylinders and Engineering Cabs operating segments purchase steel to meet production schedules.  For certain raw materials, there are more limited suppliers -- for example, helium and zinc, which are generally purchased at market prices.  Since there are a limited number of suppliers in the helium and zinc markets, if delivery from a major supplier is disrupted due to a force majeure type occurrence, it may be difficult to obtain an alternative supply.  Raw materials are generally purchased in the open market on a negotiated spot-market basis at prevailing market prices.  Supply contracts are also entered into, some of which have fixed pricing and some of which are indexed (monthly or quarterly).  During fiscal 2018, we purchased steel from the following major

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suppliers, in alphabetical order: AK Steel Holding Corporation; ArcelorMittal; NLMK USA; North Star BlueScope Steel, LLC; Nucor Corporation; Steel Dynamics, Inc.; and United States Steel Corporation (“U.S. Steel”).  Major suppliers of aluminum to the Pressure Cylinders operating segment in fiscal 2018 were, in alphabetical order:  Arconic Inc.; DK Resources Limited; Geumsan Tech; Meyer Aluminum; Sapa Group and Shanghai Everskill.  Major suppliers of zinc to the Steel Processing operating segment in fiscal 2018 were, in alphabetical order: Considar Metal Marketing Inc. (a/k/a HudBay); Glencore Ltd; and Teck Resources Limited.  Approximately 29.1 million pounds of zinc and 4.9 million pounds of aluminum were purchased in fiscal 2018.  We believe our supplier relationships are good.

Technical Services

We employ a staff of engineers and other technical personnel, and we maintain fully equipped laboratories to support operations.  These facilities enable verification, analysis and documentation of the physical, chemical, metallurgical and mechanical properties of raw materials and products.  Technical Service personnel also work in conjunction with the sales force to specify components and materials required to fulfill customer needs.  Engineers at Engineered Cabs design cabs and cab manufacturing processes according to applicable industry standards. To provide these services, we maintain a continuing program of developmental engineering with respect to product characteristics and product performance under applicable operating conditions.  Laboratory facilities also perform metallurgical and chemical testing as dictated by the regulations of the United States Department of Transportation, Transport Canada, and other associated agencies, along with International Organization for Standardization (ISO), ASTM International, and other customer and industry specific requirements.  An IASI (International Accreditations Service, Incorporated) accredited product material testing laboratory supports some of these efforts.

Seasonality and Backlog

Sales are generally strongest in the fourth quarter of our fiscal year as our operating segments are generally operating at seasonal peaks.  Historically, sales have generally been weaker in the third quarter of our fiscal year, primarily due to reduced activity in the building and construction industry as a result of inclement weather, as well as customer plant shutdowns, particularly in the automotive industry, due to holidays.  We do not believe backlog is a significant indicator of our business.

Employees

As of May 31, 2018, we had approximately 12,000 employees, including those employed by our unconsolidated joint ventures.  Approximately 9% of our consolidated labor force is represented by collective bargaining units.  Worthington believes it has good relationships with its employees, including those covered by collective bargaining units.

Joint Ventures

As part of our strategy to selectively develop new products, markets and technological capabilities and to expand our international presence, while mitigating the risks and costs associated with those activities, as of May 31, 2018, we participated in three consolidated and six unconsolidated joint ventures.

Consolidated

The results of the following three consolidated joint ventures have been consolidated with the financial results of the Company since the respective dates on which the Company acquired majority ownership or effective control.  The equity owned by the minority members is shown as noncontrolling interests on our consolidated balance sheets and their portions of net earnings are included as net earnings attributable to noncontrolling interests in our consolidated statements of earnings.  The financial results of all of our consolidated joint ventures are consolidated within the Steel Processing operating segment.

• Spartan is a 52%-owned consolidated joint venture with AK Steel Corporation, located in Monroe, Michigan. It operates a cold-rolled, hot-dipped galvanizing line for toll processing steel coils into galvanized and galvannealed products intended primarily for the automotive industry.

• TWB Company, L.L.C. is a 55%-owned consolidated joint venture with a subsidiary of Baoshan Iron & Steel Co., Ltd. (“Bao”). It is a leading North American supplier of laser welded blanks, tailor welded aluminum blanks, laser welded coils and other laser welded products for use primarily in the automotive industry for products such as inner-door panels, body sides, rails and pillars.  TWB operates facilities in Monroe, Michigan; Glasgow, Kentucky; Antioch and Smyrna, Tennessee; Puebla, Ramos Arizpe (Saltillo), Escobedo (Monterrey), Hermosillo and Silao, Mexico; and Cambridge, Ontario, Canada.

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• WSP, a 51%-owned joint venture with a subsidiary of U.S. Steel, operates three steel processing facilities located in Canton, Jackson and Taylor, Michigan, which are managed by Steel Processing. WSP serves primarily as a toll processor for U.S. Steel and others. WSP’s services include slitting, blanking, cutting-to-length, laser blanking, laser welding, tension leveling and warehousing.

Unconsolidated

• ArtiFlex Manufacturing, LLC (“ArtiFlex”), a 50%-owned joint venture with ITS-H Holdings, LLC, provides an integrated solution for engineering, tooling, stamping, assembly and other services to customers primarily in the automotive industry. ArtiFlex operates six manufacturing facilities: three in Michigan, two in Ohio and one in Kentucky.

• Clarkwestern Dietrich Building Systems LLC (“ClarkDietrich”), a 25%-owned joint venture with CWBS-MISA, Inc., is the industry leader in the manufacture and supply of light gauge steel framing products in the United States.  ClarkDietrich manufactures a full line of drywall studs and accessories, structural studs and joists, metal lath and accessories, shaft wall studs and track, vinyl and finishing products used primarily in residential and commercial construction.  This joint venture operates 14 manufacturing facilities, one each in Connecticut, Georgia, Hawaii, Illinois, Maryland and Missouri and two each in California, Ohio, Florida and Texas.

• Samuel Steel Pickling Company (“Samuel”), a 31.25%-owned joint venture with Samuel Manu-Tech Pickling Inc., operates one steel pickling facility in Twinsburg, Ohio, and another in Cleveland, Ohio.

• Serviacero Planos, S. de R.L. de C.V. (“Serviacero Worthington”), a 50%-owned joint venture with Inverzer, S.A. de C.V., operates three facilities in Mexico, one each in Leon, Queretaro and Monterrey. Serviacero Worthington provides steel processing services, such as pickling, blanking, slitting, multi-blanking and cutting-to-length, to customers in a variety of industries including automotive, appliance and heavy equipment.

• WAVE, a 50%-owned joint venture with Armstrong Ventures, Inc., a subsidiary of Armstrong World Industries, Inc., is one of the two largest global manufacturers of ceiling suspension systems for concealed and lay-in panel ceilings used in commercial and residential ceiling markets.  It competes with the one other global manufacturer and numerous regional manufacturers.  WAVE operates nine facilities in five countries: Santa Fe Springs, California; Alpharetta, Georgia; Aberdeen, Maryland; Benton Harbor, Michigan; North Las Vegas, Nevada; Qingpu, Shanghai, China; Team Valley, United Kingdom; Prouvy, France; and Marval, Pune, India.  As noted in the Recent Developmentssection above, our joint venture WAVE entered into an agreement to sell its business and operations in Europe and Asia.  The transaction is subject to regulatory approvals and other customary closing conditions and is anticipated to close before the end of calendar 2018.  

• Zhejiang Nisshin Worthington Precision Specialty Steel Co., Ltd., a 10%-owned unconsolidated joint venture with Nisshin Steel Co., Ltd. and Marubeni-Itochu Steel Inc., operates one steel processing facility in Pinghu City, Zhejiang, China.

See “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note B – Investments in Unconsolidated Affiliates” of this Annual Report on Form 10-K for additional information about our unconsolidated joint ventures.

Environmental Regulation

Our manufacturing facilities, generally in common with those of similar industries making similar products, are subject to many federal, state, local and foreign laws and regulations relating to the protection of the environment.  We examine ways to reduce emissions and waste and to decrease costs related to environmental compliance.  The cost of compliance or capital expenditures for environmental control facilities required to meet environmental requirements are not anticipated to be material when compared with overall costs and capital expenditures and, accordingly, are not anticipated to have a material effect on our financial position, results of operations or cash flows, or on the competitive position of Worthington or any particular business segment.

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Item 1A.  — Risk Factors  

Future results and the market price for Worthington Industries’ common shares are subject to numerous risks, many of which are driven by factors that cannot be controlled or predicted.  The following discussion, as well as other sections of this Annual Report on Form 10-K, including “PART II—Item 7. — Management's Discussion and Analysis of Financial Condition and Results of Operations,” describe certain business risks.  Consideration should be given to the risk factors described below as well as those in the Safe Harbor Statement at the beginning of this Annual Report on Form 10-K, in conjunction with reviewing the forward-looking statements and other information contained in this Annual Report on Form 10-K.  The risks described below are not the only risks we face.  Our business operations could also be affected by additional factors that are not presently known to us or that we currently consider to be immaterial in our operations.

Risks Related to Our Business

General Economic or Industry Downturns and Weakness

Our industries are cyclical and weakness or downturns in the general economy or certain industries could have an adverse effect on our business.  If the domestic or global economies, or certain industry sectors of those economies that are key to our sales, deteriorate, it could result in a corresponding decrease in demand for our products and negatively impact our results of operations and financial condition.  

The automotive and construction industries account for a significant portion of our net sales, and reduced demand from these industries could adversely affect our business.  An overall downturn in the general economy, a disruption in capital and credit markets, high unemployment, reduced consumer confidence or other factors could cause reductions in demand from our end markets in general and, in particular, the automotive and construction end markets.  If demand for the products we sell to the automotive, construction or other end markets which we supply were to be reduced, our sales, financial results and cash flows could be negatively affected.

We face intense competition which may cause decreased demand, decreased market share and/or reduced prices for our products and services.Our businesses operate in industries that are highly competitive and have been subject to increasing consolidation of customers. Because of the range of the products and services we sell and the variety of markets we serve, we encounter a wide variety of competitors.   Our failure to compete effectively and/or pricing pressures resulting from competition may adversely impact our businesses and financial results.

Financial difficulties and bankruptcy filings by our customers could have an adverse impact on our businesses.  In past years, some customers have experienced and some continue to experience challenging financial conditions. The financial difficulties of certain customers and/or their failure to obtain credit or otherwise improve their overall financial condition could result in changes within the markets we serve, including plant closings, decreased production, reduced demand, changes in product mix, unfavorable changes in the prices, terms or conditions we are able to obtain and other changes that may result in decreased purchases from us and otherwise negatively impact our businesses. These conditions also increase the risk that our customers may delay or default on their payment obligations to us.  If the general economy or any of our markets decline, the risk of bankruptcy filings by and financial difficulties of our customers may increase.  While we have taken and will continue to take steps intended to mitigate the impact of financial difficulties and potential bankruptcy filings by our customers, these matters could have a negative impact on our businesses.

Volatility in the prices of natural gas and/or oil may adversely affect the demand for products in our oil and gas equipment business.  Volatility or weakness in oil prices or natural gas prices, or the perception of future price weakness, affects the spending patterns of our customers within the oil and gas equipment business and the demand for our products.  This has resulted and may continue to result in the drilling of fewer wells and lower production spending on existing wells, lowering demand for our oil and gas equipment products and negatively impacting our results of operations and financial condition.  Likewise, recent downturns in the oil industry have limited, and may continue to limit, the number of vehicles changing from gasoline as a fuel to CNG, propane or alternative fuels which could negatively impact demand for our alternative fuel cylinders and systems.

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Volatility in the United States and worldwide capital and credit markets could impact our end markets and result in negative impacts on demand, increased credit and collection risks and other adverse effects on our businesses.  The domestic and worldwide capital and credit markets have experienced significant volatility, disruptions and dislocations with respect to price and credit availability. These factors caused diminished availability of credit and other capital in our end markets, and for participants in, and the customers of, those markets.  Although domestic credit markets have largely stabilized from the height of the financial crisis, the effects of the financial crisis continue to present additional risks to us, our customers and suppliers. In particular, there is no guarantee that the credit markets or liquidity will not once again be restricted. Additionally, stricter lending standards may make it more difficult and costly for some firms to access the credit markets. Further, uncertainties in Europe regarding the financial sector and sovereign debt and the potential impact on banks in other regions of the world will continue to weigh on global and domestic growth. Although we believe we have adequate access to several sources of contractually committed borrowings and other available credit facilities, these risks could temporarily restrict our ability to borrow money on acceptable terms in the credit markets and potentially could affect our ability to draw on our credit facilities. In addition, restricted access to the credit markets could make it difficult, or in some cases, impossible for customers to borrow money to fund their operations. Lack of, or limited access to, capital would adversely affect our customers’ ability to purchase our products or, in some cases, to pay for our products on a timely basis.

Raw Material Pricing and Availability  

Our operating results may be adversely affected by declining steel prices.  If steel prices or other raw material prices decrease, competitive conditions may impact how quickly we must reduce our prices to our customers, and we could be forced to use higher-priced raw materials then on hand to complete orders for which the selling prices have decreased. Decreasing steel prices could also require us to write-down the value of our inventory to reflect current market pricing.

Our operating results may be affected by fluctuations in raw material prices and our ability to pass on increases in raw material costs to our customers.  Our principal raw material is flat-rolled steel, which we purchase from multiple primary steel producers. The steel industry as a whole has been cyclical, and at times availability and pricing can be volatile due to a number of factors beyond our control. These factors include general economic conditions, domestic and worldwide supply and demand, the influence of hedge funds and other investment funds participating in commodity markets, curtailed production from major suppliers due to factors such as the closing or idling of facilities, accidents or equipment breakdowns, repairs or catastrophic events, labor costs or problems, competition, new laws and regulations, import duties, tariffs, energy costs, availability and cost of steel inputs (e.g., ore, scrap, coke and energy), currency exchange rates and other factors described in the immediately following paragraph. This volatility, as well as any increases in raw material costs, could significantly affect our steel costs and adversely impact our financial results. If our suppliers increase the prices of our critical raw materials, we may not have alternative sources of supply. In addition, in an environment of increasing prices for steel and other raw materials, competitive conditions may impact how much of the price increases we can pass on to our customers. To the extent we are unable to pass on future price increases in our raw materials to our customers, our financial results could be adversely affected.

The costs of manufacturing our products and our ability to meet our customers’ demands could be negatively impacted if we experience interruptions in deliveries of needed raw materials or supplies.  If, for any reason, our supply of flat-rolled steel or other key raw materials, such as aluminum, zinc or helium, or other supplies is curtailed or we are otherwise unable to obtain the quantities we need at competitive prices, our business could suffer and our financial results could be adversely affected. Such interruptions could result from a number of factors, including a shortage of capacity in the supplier base of raw materials, energy or the inputs needed to make steel or other supplies, a failure of suppliers to fulfill their supply or delivery obligations, financial difficulties of suppliers resulting in the closing or idling of supplier facilities, other significant events affecting supplier facilities, significant weather events, those factors listed in the immediately preceding paragraph or other factors beyond our control. Further, the number of suppliers has decreased in recent years due to industry consolidation and the financial difficulties of certain suppliers, and this consolidation may continue.

An increase in the spread between the price of steel and steel scrap prices can have a negative impact on our margins.  No matter how efficient, our operations which use steel as a raw material, create some amount of scrap.  The expected price of scrap compared to the price of the steel raw material is generally factored into pricing.  Generally, as the price of steel increases, the price of scrap increases by a similar amount.  Recently, increases in scrap prices have not kept pace with the increases in the price of the steel raw material and when this occurs, it can have a negative impact on our margins.

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Inventories

Our businesses could be harmed if we fail to maintain proper inventory levels. We are required to maintain sufficient inventories to accommodate the needs of our customers including, in many cases, short lead times and just-in-time delivery requirements. Although we typically have customer orders in hand prior to placement of our raw material orders for our Steel Processing operating segment, we anticipate and forecast customer demand for each of our operating segments. We purchase raw materials on a regular basis in an effort to maintain our inventory at levels that we believe are sufficient to satisfy the anticipated needs of our customers based upon orders, customer volume expectations, historic buying practices and market conditions. Inventory levels in excess of customer demand may result in the use of higher-priced inventory to fill orders reflecting lower selling prices, if raw material prices have significantly decreased. For example, if steel prices decrease, we could be forced to use higher-priced steel then on hand to complete orders for which the selling price has decreased. These events could adversely affect our financial results. Conversely, if we underestimate demand for our products or if our suppliers fail to supply quality products in a timely manner, we may experience inventory shortages. Inventory shortages could result in unfilled orders, negatively impacting our customer relationships and resulting in lost revenues, which could harm our businesses and adversely affect our financial results.

Suppliers and Customers

The loss of significant volume from our key customers could adversely affect us. A significant loss of, or decrease in, business from any of our key customers could have an adverse effect on our sales and financial results if we cannot obtain replacement business. Also, due to consolidation in the industries we serve, including the construction, automotive and retail industries, our sales may be increasingly sensitive to deterioration in the financial condition of, or other adverse developments with respect to, one or more of our top customers. In addition, certain of our top customers may be able to exert pricing and other influences on us, requiring us to market, deliver and promote our products in a manner that may be more costly to us. We generally do not have long-term contracts with our customers. As a result, although our customers periodically provide notice of their future product needs and purchases, they generally purchase our products on an order-by-order basis, and the relationship, as well as particular orders, can be terminated at any time.

Many of our key industries, such as automotive, oil and gas, construction and heavy mobile equipment, are cyclical in nature. Many of our key industries, such as automotive, oil and gas, construction and heavy mobile equipment, are cyclical and can be impacted by both market demand and raw material supply, particularly with respect to steel. The demand for our products is directly related to, and quickly impacted by, customer demand in our industries, which can change as the result of changes in the general United States or worldwide economies and other factors beyond our control. Adverse changes in demand or pricing can have a negative effect on our businesses.

Significant reductions in sales to any of the Detroit Three automakers, or to our automotive-related customers in general, could have a negative impact on our business. More than half of the net sales of our Steel Processing operating segment and a significant amount of the net sales of certain joint ventures are to automotive-related customers. Although we do sell to the domestic operations of foreign automakers and their suppliers, a significant portion of our automotive sales are to Ford, General Motors, and FCA US (the “Detroit Three automakers”) and their suppliers. A reduction in sales for any of the Detroit Three automakers could negatively impact our business. Since 2011, automobile producers have been taking steps toward complying with new Corporate Average Fuel Economy mileage requirements for new cars and light trucks that they produce. As automobile producers work to produce vehicles in compliance with these standards, they may reduce the amount of steel or begin utilizing alternative materials in cars and trucks to improve fuel economy, thereby reducing demand for steel and resulting in further over-supply of steel in North America.  Certain automakers have begun using greater amounts of aluminum and smaller proportions of steel in some new models.

A significant reduction in sales to any of our large heavy mobile equipment customers could have a negative impact on our business.  Substantially all of the sales of our Engineered Cabs operating segment are to customers who manufacture heavy mobile equipment. A reduction in sales to any of our major customers in this market could negatively impact our business. A reduction in demand could result from numerous causes including a reduction in overall market demand for heavy mobile equipment, in-sourcing of engineered cabs by our customers, or increased competition.

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The closing or relocation of customer facilities could adversely affect us. Our ability to meet delivery requirements and the overall cost of our products as delivered to customer facilities are important competitive factors. If customers close or move their production facilities further away from our manufacturing facilities which can supply them, it could have an adverse effect on our ability to meet competitive conditions, which could result in the loss of sales. Likewise, if customers move their production facilities outside the United States, it could result in the loss of potential sales for us.

Sales conflicts with our customers and/or suppliers may adversely impact us. In some instances, we may compete with one or more of our customers and/or suppliers in pursuing the same business. In addition, in the Engineered Cabs business, our customers often have the option of producing certain cabs in-house instead of having them supplied by us or our competition and to the extent they elect to produce such cabs in-house, it could adversely affect our sales. Such conflicts may strain our relationships with the parties involved, which could adversely affect our future business with them.

The closing or idling of steel manufacturing facilities could have a negative impact on us. As steel makers have reduced their production capacities by closing or idling production lines, the number of facilities from which we can purchase steel, in particular certain specialty steels, has decreased. Accordingly, if delivery from a supplier is disrupted, particularly with respect to certain types of specialty steel, it may be more difficult to obtain an alternate supply than in the past. These closures and disruptions could also have an adverse effect on our suppliers’ on-time delivery performance, which could have an adverse effect on our ability to meet our own delivery commitments and may have other adverse effects on our businesses.

The loss of key supplier relationships could adversely affect us. Over the years, our various manufacturing operations have developed relationships with certain steel and other suppliers which have been beneficial to us by providing more assured delivery and a more favorable all-in cost, which includes price and shipping costs. If any of those relationships were disrupted, it could have an adverse effect on delivery times and the overall cost and quality of our raw materials, which could have a negative impact on our businesses.  In addition, we do not have long-term contracts with any of our suppliers. If, in the future, we are unable to obtain sufficient amounts of steel and other products at competitive prices and on a timely basis from our traditional suppliers, we may be unable to obtain these products from alternative sources at competitive prices to meet our delivery schedules, which could have a material adverse impact on our results of operations.

Competition

Our businesses are highly competitive, and increased competition could negatively impact our financial results.  Generally, the markets in which we conduct business are highly competitive. Our competitors include a variety of both domestic and foreign companies in all major markets. Competition for most of our products is primarily on the basis of price, product quality and our ability to meet delivery requirements. Depending on a variety of factors, including raw material, energy, labor and capital costs, government control of currency exchange rates and government subsidies of foreign steel producers or competitors, our businesses may be materially adversely affected by competitive forces.  Competition may also increase if suppliers to or customers of our industries begin to more directly compete with our businesses through new facilities, acquisitions or otherwise. As noted above, we can have conflicts with our customers or suppliers who, in some cases, supply the same products and services as we do. Increased competition could cause us to lose market share, increase expenditures, lower our margins or offer additional services at a higher cost to us, which could adversely impact our financial results.

Material Substitution

If steel prices increase compared to certain substitute materials, the demand for our products could be negatively impacted, which could have an adverse effect on our financial results.  In certain applications, steel competes with other materials, such as aluminum (particularly in the automobile industry), cement and wood (particularly in the construction industry), composites, glass and plastic. Prices of all of these materials fluctuate widely, and differences between the prices of these materials and the price of steel may adversely affect demand for our products and/or encourage material substitution, which could adversely affect the prices of and demand for steel products. The higher cost of steel relative to certain other materials may make material substitution more attractive for certain uses.

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If increased government mileage standards for automobiles result in the substitution of other materials for steel, demand for our products could be negatively impacted, which could have an adverse effect on our financial results.  Due to government requirements that manufacturers increase the fuel efficiency of automobiles, the automobile industry is exploring alternative materials to steel to decrease weight. The substitution of lighter weight material for steel in automobiles could adversely affect prices of and demand for our steel products.

Freight and Energy

Increasing freight and energy costs could increase our operating costs, which could have an adverse effect on our financial results.  The availability and cost of freight and energy, such as electricity, natural gas and diesel fuel, are important in the manufacture and transport of our products. Our operations consume substantial amounts of energy, and our operating costs generally increase when energy costs rise. Factors that may affect our energy costs include significant increases in fuel, oil or natural gas prices, unavailability of electrical power or other energy sources due to droughts, hurricanes or other natural causes or due to shortages resulting from insufficient supplies to serve customers, or interruptions in energy supplies due to equipment failure or other causes. During periods of increasing energy and freight costs, we may be unable to fully recover our operating cost increases through price increases without reducing demand for our products. Our financial results could be adversely affected if we are unable to pass all of the increases on to our customers or if we are unable to obtain the necessary freight and energy. Also, increasing energy costs could put a strain on the transportation of our materials and products if the increased costs force certain transporters to close.

We depend on third parties for freight services, and increases in costs or the lack of availability of freight services can adversely affect our operations.  We rely primarily on third parties for transportation of our products as well as delivery of our raw materials, primarily by truck.  If, due to a lack of freight services, raw materials are not delivered to us in a timely manner, we may be unable to manufacture and deliver our products to meet customer demand.  Likewise, if due to a lack of freight service, we cannot deliver our products in a timely manner, it could harm our reputation, negatively affect our customer relationships and have a material adverse effect on our results of operations. In addition, any increase in the cost of the transportation of raw materials or our products, as a result of increases in fuel or labor costs, higher demand for logistics services or otherwise, may adversely affect our results of operations as we may not be able to pass such cost increases on to our customers.

Information Systems

We are subject to information system security risks and systems integration issues that could disrupt our internal operations. We are dependent upon information technology and networks in connection with a variety of business activities including the distribution of information internally and to our customers and suppliers. This information technology is subject to potential damage or interruption from a variety of sources, including, without limitation, computer viruses, security breaches, and natural disasters.  We could also be adversely affected by system or network disruptions if new or upgraded business management systems are defective, not installed properly or not properly integrated into operations. In addition, security breaches of our information systems could result in unauthorized disclosure or destruction of confidential or proprietary information and/or loss of the functionality of our systems. Various measures have been implemented to manage our risks related to information system and network disruptions and to prevent attempts to gain unauthorized access to our information systems. While we undertake mitigating activities to counter these risks, a system failure could negatively impact our operations and financial results and cyber attacks could threaten the integrity of our trade secrets and sensitive intellectual property.

Business Disruptions

Disruptions to our business or the business of our customers or suppliers could adversely impact our operations and financial results.  Business disruptions, including increased costs for, or interruptions in, the supply of energy or raw materials, resulting from shortages of supply or transportation, severe weather events (such as hurricanes, tsunamis, earthquakes, tornados, floods and blizzards), casualty events (such as explosions, fires or material equipment breakdown), acts of terrorism, pandemic disease, labor disruptions, the idling of facilities due to reduced demand (resulting from a downturn in economic activity or otherwise) or other events (such as required maintenance shutdowns), could cause interruptions to our businesses as well as the operations of our customers and suppliers. While we maintain insurance coverage that can offset some losses relating to certain types of these events, losses from business disruptions could have an adverse effect on our operations and financial results and we could be adversely impacted to the extent any such losses are not covered by insurance or cause some other adverse impact to us.

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Foreign Operations

Economic, political and other risks associated with foreign operations could adversely affect our international financial results.  Although the substantial majority of our business activity takes place in the United States, we derive a portion of our revenues and earnings from operations in foreign countries, and we are subject to risks associated with doing business internationally. We have wholly-owned facilities in Austria, Poland, Portugal and Turkey and joint venture facilities in Canada, China, France, India, Mexico and the United Kingdom, and are active in exploring other foreign opportunities. The risks of doing business in foreign countries include, among other factors: the potential for adverse changes in the local political climate, in diplomatic relations between foreign countries and the United States or in government policies, laws or regulations; terrorist activity that may cause social disruption; logistical and communications challenges; costs of complying with a variety of laws and regulations; difficulty in staffing and managing geographically diverse operations; deterioration of foreign economic conditions; inflation and fluctuations in interest rates; foreign currency exchange rate fluctuations; foreign exchange restrictions; differing local business practices and cultural considerations; restrictions on imports and exports or sources of supply, including energy and raw materials; changes in duties, quotas, tariffs, taxes or other protectionist measures; and potential issues related to matters covered by the Foreign Corrupt Practices Act, regulations related to import/export controls, the Office of Foreign Assets Control sanctions program, anti-boycott provisions or similar laws. We believe that our business activities outside of the United States involve a higher degree of risk than our domestic activities, and any one or more of these factors could adversely affect our operating results and financial condition. In addition, global and regional economic conditions and the volatility of worldwide capital and credit markets have significantly impacted and may continue to significantly impact our foreign customers and markets. These factors may result in decreased demand in our foreign operations and have had significant negative impacts on our business. Refer to the General Economic or Industry Downturns and Weaknessrisk factors herein for additional information concerning the impact of the global economic conditions and the volatility of capital and credit markets on our business.

Joint Ventures

A change in the relationship between the members of any of our joint ventures may have an adverse effect on that joint venture. We have been successful in the development and operation of various joint ventures, and our equity in net income from our joint ventures, particularly WAVE, has been important to our financial results. We believe an important element in the success of any joint venture is a solid relationship between the members of that joint venture. If there is a change in ownership, a change of control, a change in management or management philosophy, a change in business strategy or another event with respect to a member of a joint venture that adversely impacts the relationship between the joint venture members, it could adversely impact that joint venture. The other members in our joint ventures may also, as a result of financial or other reasons, be unable or unwilling to fulfill their obligations in the respective joint ventures. In addition, joint ventures necessarily involve special risks. Whether or not we hold a majority interest or maintain operational control in a joint venture, the other members in our joint ventures may have economic or business interests or goals that are inconsistent with our interests or goals. For example, the other members in our joint ventures may exercise veto rights to block actions that we believe to be in our best interests, may take action contrary to our policies or objectives with respect to our investments, or may be unable or unwilling to fulfill their obligations or commitments to the joint venture.

Acquisitions

We may be unable to successfully consummate, manage or integrate our acquisitions or our acquisitions may not meet our expectations. A portion of our growth has occurred through acquisitions.  We may from time to time continue to seek attractive opportunities to acquire businesses, enter into joint ventures and make other investments that are complementary to our existing strengths. There are no assurances, however, that any acquisition opportunities will arise or, if they do, that they will be consummated, or that any needed additional financing for such opportunities will be available on satisfactory terms when required. In addition, acquisitions involve risks that the businesses acquired will not perform in accordance with expectations, that business judgments concerning the value, strengths and weaknesses of businesses acquired will prove incorrect, that we may assume unknown liabilities from the seller, that the acquired businesses may not be integrated successfully and that the acquisitions may strain our management resources or divert management’s attention from other business concerns. International acquisitions may present unique challenges and increase our exposure to the risks associated with foreign operations and countries. Also, failure to successfully integrate any of our acquisitions may cause significant operating inefficiencies and could adversely affect our operations and financial condition.

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Capital Expenditures

Our business requires capital investment and maintenance expenditures, and our capital resources may not be adequate to provide for all of our cash requirements.  Many of our operations are capital intensive. For the five-year period ended May 31, 2018, our total capital expenditures, including acquisitions and investment activity, were approximately $857.1 million. Additionally, as of May 31, 2018, we were obligated to make aggregate lease payments of $43.4 million under operating lease agreements. Our businesses also require expenditures for maintenance of our facilities. We currently believe that we have adequate resources (including cash and cash equivalents, cash provided by operating activities, availability under existing credit facilities and unused lines of credit) to meet our cash needs for normal operating costs, capital expenditures, debt repayments, dividend payments, future acquisitions and working capital for our existing businesses. However, given the potential for challenges, uncertainty and volatility in the domestic and global economies and financial markets, there can be no assurance that our capital resources will be adequate to provide for all of our cash requirements.

Litigation

We may be subject to legal proceedings or investigations, the resolution of which could negatively affect our results of operations and liquidity in a particular period.  Our results of operations or liquidity in a particular period could be affected by an adverse ruling in any legal proceedings or investigations which may be pending against us or filed against us in the future. We are also subject to a variety of legal and compliance risks, including, without limitation, potential claims relating to product liability, product recall, privacy and information security, health and safety, environmental matters, intellectual property rights, taxes and compliance with U.S. and foreign export laws, anti-bribery laws, competition laws and sales and trading practices. While we believe that we have adopted appropriate risk management and compliance programs to address and reduce these risks, the global and diverse nature of our operations means that these risks will continue to exist and additional legal proceedings and contingencies may arise from time to time. An adverse ruling or settlement or an unfavorable change in laws, rules or regulations could have a material adverse effect on our results of operations or liquidity in a particular period.

Claims and Insurance

Adverse claims experience, to the extent not covered by insurance, may have an adverse effect on our financial results.  We self-insure a significant portion of our potential liability for workers’ compensation, product liability, cyber liability, product recall, general liability, pollution liability, property liability, automobile liability and employee medical claims. In order to reduce risk, we purchase insurance from highly-rated, licensed insurance carriers that cover most claims in excess of the applicable deductible or retained amounts. We maintain reserves for the estimated cost to resolve open claims as well as an estimate of the cost of claims that have been incurred but not reported. The occurrence of significant claims, our failure to adequately reserve for such claims, a significant cost increase to maintain our insurance or the failure of our insurance providers to perform could have an adverse impact on our financial condition and results of operations.

Accounting and Tax-Related Estimates

We are required to make accounting and tax-related estimates, assumptions and judgments in preparing our consolidated financial statements, and actual results may differ materially from the estimates, assumptions and judgments that we use.  In preparing our consolidated financial statements in accordance with accounting principles generally accepted in the United States, we are required to make certain estimates and assumptions that affect the accounting for and recognition of assets, liabilities, revenues and expenses. These estimates and assumptions must be made because certain information that is used in the preparation of our consolidated financial statements is dependent on future events, or cannot be calculated with a high degree of precision from data available to us. In some cases, these estimates and assumptions are particularly difficult to determine and we must exercise significant judgment. Some of the estimates, assumptions and judgments having the greatest amount of uncertainty, subjectivity and complexity are related to our accounting for bad debts, returns and allowances, inventory, self-insurance reserves, derivatives, stock-based compensation, deferred tax assets and liabilities and asset impairments. Our actual results may differ materially from the estimates, assumptions and judgments that we use, which could have a material adverse effect on our financial condition and results of operations.

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Tax Laws and Regulations

Tax increases or changes in tax laws or regulations could adversely affect our financial results.  We are subject to tax and related obligations in the jurisdictions in which we operate or do business, including state, local, federal and foreign taxes. The taxing rules of the various jurisdictions in which we operate or do business often are complex and subject to varying interpretations. Tax authorities may challenge tax positions that we take or historically have taken, and may assess taxes where we have not made tax filings or may audit the tax filings we have made and assess additional taxes. Some of these assessments may be substantial, and also may involve the imposition of penalties and interest. In addition, governments could change their existing tax laws, impose new taxes on us or increase the rates at which we are taxed in the future. The payment of substantial additional taxes, penalties or interest resulting from tax assessments, or the imposition of any new taxes, could materially and adversely impact our results of operations and financial condition.

In particular, while the passage of the Tax Cuts and Jobs Act (the “TCJA”) reduced our corporate tax rate, any future changes in tax legislation, including changing tax rates and tax base by U.S. states in implementation of the TCJA, or any guidance that may be issued in implementation of the TCJA and related legislation could have a significant impact, whether positive or negative, on our financial performance. We are continuing to review the components of the TCJA and evaluate its anticipated impact. In addition, the portions of the TCJA that transition the U.S. tax regime from a worldwide system to a modified territorial system provide for U.S. tax on certain types of foreign income may also cause tax increases on our foreign operations.

Principal Shareholder

Our principal shareholder may have the ability to exert significant influence in matters requiring a shareholder vote and could delay, deter or prevent a change in control of Worthington Industries.  Pursuant to our charter documents, certain matters such as those in which a person would attempt to acquire or take control of the Company, must be approved by the vote of the holders of common shares representing at least 75% of Worthington Industries’ outstanding voting power. Approximately 30% of our outstanding common shares are beneficially owned, directly or indirectly, by John P. McConnell, our Chairman of the Board and Chief Executive Officer. As a result of his beneficial ownership of our common shares, Mr. McConnell may have the ability to exert significant influence in these matters and other proposals upon which our shareholders may vote.

Key Employees

If we lose senior management or other key employees, our business may be adversely affected. Our ability to successfully operate, grow our business and implement our business strategies is largely dependent on the efforts, abilities and services of our senior management and other key employees. The loss of any of these individuals or our inability to attract, train and retain additional personnel could reduce the competitiveness of our business or otherwise impair our operations or prospects. Our future success will also depend, in part, on our ability to attract and retain qualified personnel, including engineers and other skilled technicians, who have experience in the application of our products and are knowledgeable about our business, markets and products. We cannot assure that we will be able to retain our existing senior management personnel or other key employees or attract additional qualified personnel when needed. The loss of any member of our management team could adversely impact our business and operations.  We have not entered into any formal employment contracts with or other stand-alone change in control provisions relative to our executive officers.  However, we do have certain change in control provisions in our various compensation plans.  We may modify our management structure from time to time or reduce our overall workforce, which may create marketing, operational and other business risks.

Credit Ratings

Ratings agencies may downgrade our credit ratings, which may make it more difficult for us to raise capital and could increase our financing costs.  Any downgrade in our credit ratings may make raising capital more difficult, may increase the cost and affect the terms of future borrowings, may affect the terms under which we purchase goods and services and may limit our ability to take advantage of potential business opportunities. In addition, the interest rate on our revolving credit facility is tied to our credit ratings, and any downgrade of our credit ratings would likely result in an increase in the cost of borrowings under our revolving credit facility.

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Difficult Financial Markets

Should we be required to raise capital in the future, we could face higher borrowing costs, less available capital, more stringent terms and tighter covenants or, in extreme conditions, an inability to raise capital.  Although we currently have significant borrowing availability under our existing credit facilities and should be able to access other capital if needed, should those facilities become unavailable due to covenant or other defaults, or should financial results tighten so that we otherwise cannot raise capital outside our existing facilities, or the terms under which we do so change, we may be negatively impacted. Any adverse change in our access to capital or the terms of our borrowings, including increased costs, could have a negative impact on our financial condition.

Environmental, Health and Safety

We may incur additional costs related to environmental and health and safety matters. Our operations and facilities are subject to a variety of federal, state, local and foreign laws and regulations relating to the protection of the environment and human health and safety. Compliance with these laws and regulations and any changes therein may sometimes involve substantial operating costs and capital expenditures, and any failure to maintain or achieve compliance with these laws and regulations or with the permits required for our operations could result in increased costs and capital expenditures and potentially fines and civil or criminal sanctions, third-party claims for property damage or personal injury, cleanup costs or temporary or permanent discontinuance of operations. Over time, we and predecessor operators of our facilities have generated, used, handled and disposed of hazardous and other regulated wastes.  Environmental liabilities, including cleanup obligations, could exist at our facilities or at off-site locations where materials from our operations were disposed of or at facilities we have divested, which could result in future expenditures that cannot be currently quantified and which could reduce our profits and cash flow. We may be held strictly liable for any contamination of these sites, and the amount of any such liability could be material. Under the “joint and several” liability principle of certain environmental laws, we may be held liable for all remediation costs at a particular site, even with respect to contamination for which we are not responsible. In addition, changes in environmental and human health and safety laws, rules, regulations or enforcement policies could have a material adverse effect on our business, financial condition or results of operations.

Legislation and Regulations

Certain proposed legislation and regulations may have an adverse impact on the economy in general and in our markets specifically, which may adversely affect our businesses.  Our businesses may be negatively impacted by a variety of new or proposed legislation or regulations. For example, legislation and regulations proposing increases in taxation on, or heightened regulation of, greenhouse gas emissions may result in higher prices for steel, higher prices for utilities required to run our facilities, higher fuel costs for us and our suppliers and distributors and other adverse impacts. To the extent that new legislation or regulations increase our costs, we may not be able to fully pass these costs on to our customers without a resulting decline in sales and adverse impact to our profits. Likewise, to the extent new legislation or regulations would have an adverse effect on the economy, our markets or the ability of domestic businesses to compete against foreign operations, we could also be adversely impacted.

Legislation, regulations or other events which could adversely affect the ability or cost to recover natural gas or oil may negatively affect our business.  In recent years, increasing amounts of oil and natural gas have been produced through the hydraulic fracking process throughout the United States and North America. This has resulted in decreasing energy costs, particularly for natural gas and similar energy products. This reduction has helped lower energy costs for U.S. businesses. Also, some of our recent acquisitions supply products which are used by companies engaged in hydraulic fracking. If legislation, regulations or other events limit the ability to recover such fuels through hydraulic fracking or increase the cost thereof, it could have a negative impact on our business, the U.S. economy and U.S. businesses in general, which could result in decreased demand for our products or otherwise negatively impact our business.

The impact of U.S. health care laws could adversely affect our businesses. In the wake of the Patient Protection and Affordable Care Act (“Obamacare”), U.S. health care costs have increased. Many project that there will continue to be significant increases in health care costs which could adversely impact the U.S. economy and U.S. businesses. This could result in a decreased demand for our products, as well as an increase in expenditures for health care costs for our personnel, both of which would negatively impact our profits.  Congress has considered amending or replacing Obamacare, but it is uncertain if any changes or a replacement will be affected or what the impact of any such changes or replacement will be.

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Changes to global data privacy laws and cross-border transfer requirements could adversely affect our businesses and operations.Our businesses depend on the transfer of data between our affiliated entities, to and from our business partners, and with third-party service provides, which may be subject to global data privacy laws and cross-border transfer restrictions.  In particular, the European Union recently implemented the General Data Protection Regulation (“GDPR”), which contains numerous requirements that must be complied with in connection with how we handle personal data related to our European-based operations and employees. While we take steps to comply with these legal requirements, the volatility and changes to the applicability of those laws may impact our ability to effectively transfer data across borders in support of our business operations. Compliance with GDPR, or other regulatory standards, could also increase our cost of doing business and/or force us to change our business practices in a manner adverse to our businesses. In addition, violations of GDPR may result in significant fines, penalties and damage to our brands and businesses which could, individually or in the aggregate, materially harm our businesses and reputation.

Significant changes to the U.S. federal government’s trade policies, including new tariffs or the renegotiation or termination of existing trade agreements and/or treaties, may adversely affect our financial performance. The U.S. federal government has indicated its intention to alter U.S. international trade policy and to renegotiate or terminate certain existing trade agreements and treaties with foreign governments.  Most recently, the U.S. federal government has initiated re-negotiation of the North American Free Trade Agreement (“NAFTA”) with Mexico and Canada. While negotiations among these parties remain ongoing, the U.S. federal government’s potential decision to withdraw or materially modify NAFTA or other existing trade agreements or treaties may adversely impact our business, customers and/or suppliers by disrupting trade and commercial transactions and/or adversely affecting the U.S. economy or specific portions thereof.

Additionally, the U.S. federal government has imposed, and is considering imposing additional tariffs on certain foreign goods. For example, in March and again in May of 2018, the U.S. federal government imposed additional tariffs under Section 232 of the Trade Expansion Act of 1962, as amended, on certain steel products imported into the United States. Although the new steel tariffs may benefit portions of our business, these tariffs, as well as country-specific or product-specific exemptions, may also lead to retaliatory actions from foreign governments and/or modifications to the purchasing patterns of our customers that could adversely affect our business or the steel industry as a whole. In particular, certain foreign governments, including Canada, China and Mexico, as well as the European Union, have instituted or are considering imposing tariffs on certain U.S. goods. Restrictions on trade with foreign countries, imposition of customs duties or further modifications to U.S. international trade policy have the potential to disrupt our supply chain or the supply chains of our customers and to adversely impact demand for our products, our costs, customers, suppliers and/or the U.S. economy or certain sectors thereof, potentially leading to negative effects on our business.

Seasonality

Our operations have been subject to seasonal fluctuations that may impact our cash flows for a particular period. Historically our sales are generally strongest in the fourth quarter of the fiscal year when all of our business segments are normally operating at seasonal peaks, and our sales are generally weaker in the third quarter of the fiscal year, primarily due to reduced activity in the building and construction industry as a result of the colder, more inclement weather, as well as customer plant shutdowns in the automotive industry due to holidays. Our quarterly results may also be affected by the timing of large customer orders. Consequently, our cash flow from operations may fluctuate significantly from quarter to quarter. If, as a result of any such fluctuation, our quarterly cash flows were significantly reduced, we may be unable to service our indebtedness or maintain compliance with certain covenants under our credit facilities. A default under any of the documents governing our indebtedness could prevent us from borrowing additional funds, limit our ability to pay interest or principal and allow our lenders to declare the amounts outstanding to be immediately due and payable and to exercise certain other remedies.

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Impairment Charges

Weakness or instability in the general economy, our markets or our results of operations could result in future asset impairments, which would reduce our reported earnings and net worth.  We review the carrying value of our long-lived assets, excluding purchased goodwill and intangible assets with indefinite lives, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. Impairment testing involves a comparison of the sum of the undiscounted future cash flows of the asset or asset group to its respective carrying amount.  If the sum of the undiscounted future cash flows exceeds the carrying amount, then no impairment exists. If the carrying amount exceeds the sum of the undiscounted future cash flows, then a second step is performed to determine the amount of impairment, if any, to be recognized. For long-lived assets other than goodwill, an impairment loss is recognized to the extent that the carrying amount of the asset or asset group exceeds fair value. Goodwill and intangible assets with indefinite lives are tested for impairment annually, during the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may be present. For goodwill and indefinite lived intangible assets, we test for impairment by completing what is referred to as the “Step 0” analysis which involves evaluating qualitative factors including macroeconomic conditions, industry and market considerations, cost factors, and overall financial performance. If our “Step 0” analysis indicates it is more likely than not that the fair value is less than the carrying amount, we would perform a quantitative impairment test. The quantitative analysis compares the fair value of each reporting unit or indefinite-lived intangible asset to the respective carrying amount, and an impairment loss is recognized in our consolidated statements of earnings equivalent to the excess of the carrying amount over the fair value. Fair value is determined based on discounted cash flows or appraised values, as appropriate. Economic conditions remain fragile in some markets and the possibility remains that the domestic or global economies, or certain industry sectors that are key to our sales, may deteriorate. If certain of our business segments are adversely affected by challenging economic and financial conditions, we may be required to record future impairments, which would negatively impact our results of operations.

Item 1B.  — Unresolved Staff Comments

None.

Item 2.  — Properties.

General

Our principal corporate offices are located in an owned office building in Columbus, Ohio, which also houses the principal corporate offices of our Pressure Cylinders and Engineered Cabs operating segments. Our Steel Processing corporate offices are located in an office building next to the principal corporate offices where we lease office space.  We also own three facilities in Columbus, Ohio used for administrative and medical purposes. As of May 31, 2018, excluding our consolidated and unconsolidated joint ventures, we operated 36 manufacturing facilities and 12 warehouses.  Altogether, as of May 31, 2018, we owned or leased a total of approximately 10,800,000 square feet of space for our operations, of which approximately 9,600,000 square feet (10,400,000 square feet with warehouses) was devoted to manufacturing, product distribution and sales offices.  Major leases contain renewal options for periods of up to 10 years.  For information concerning rental obligations, refer to “Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations – Contractual Cash Obligations and Other Commercial Commitments” as well as “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note R – Operating Leases” of this Annual Report on Form 10-K.  We believe these facilities are well maintained and in good operating condition, and are sufficient to meet our current needs.

Steel Processing

As of May 31, 2018, our wholly-owned operations within the Steel Processing operating segment operated a total of eightmanufacturing facilities, seven of which are owned by the Company, and one which is leased.  These facilities are located in Alabama, New York, Indiana, and Ohio (5).  As of May 31, 2018, this operating segment also owned one warehouse in Ohio and one warehouse in South Carolina.  As noted above, this operating segment’s corporate offices are located in Columbus, Ohio.

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Pressure Cylinders

As of May 31, 2018, our wholly-owned operations within the Pressure Cylinders operating segment operated a total of 24 manufacturing facilities, 21 of which are owned by the Company and three of which are leased.  These facilities are located in Alabama, California, Kansas (2), Kentucky, Maryland, North Carolina, North Dakota, Ohio (6), Oklahoma, Rhode Island, Utah, Wisconsin, Austria, Poland (2), Portugal (2) and Turkey.  As of May 31, 2018, Pressure Cylinders also operated two owned warehouses, one each in Austria and Poland, and five leased warehouses, one each in Ohio, Rhode Island, and Kentucky, and two in Portugal.  As noted above, this operating segment’s corporate offices are located in Columbus, Ohio.

Engineered Cabs

As of May 31, 2018, Engineered Cabs operated four manufacturing facilities, two owned by the Company, which are located in South Dakota and Tennessee, and two leased by the Company, which are located in Indiana and Ohio.  As of May 31, 2018, this operating segment also had three leased warehouses, which are located in South Dakota (2) and Tennessee.  As noted above, this operating segment’s corporate offices are located in Columbus, Ohio.  

Other

The Company also owns a manufacturing facility in Wooster, Ohio, that is subject to a lease agreement with our automotive body panels joint venture, ArtiFlex.  

Joint Ventures

As outlined below, our consolidated and unconsolidated joint ventures operate a total of 49 manufacturing facilities.

Consolidated

• Spartan owns and operates one manufacturing facility in Monroe, Michigan.

• TWB operates ten manufacturing facilities, one owned facility located in Monroe, Michigan, and nine leased facilities located in Kentucky, Tennessee (2), Canada, and Mexico (5).

• WSP owns and operates three steel processing facilities located in Michigan.

Unconsolidated

• ArtiFlex operates six manufacturing facilities, four of which are owned.  These facilities are located in Kentucky (1), Michigan (3), and Ohio (2).

• ClarkDietrich operates 14 manufacturing facilities, one each in Connecticut, Georgia, Hawaii, Illinois, Maryland and Missouri and two each in California, Florida, Ohio and Texas.  The two facilities in Ohio are owned.  The remaining 12 facilities are leased.

• Samuel owns and operates two steel pickling facilities in Ohio.

• Serviacero Worthington owns and operates three steel processing facilities in Mexico. 

• WAVE operates nine manufacturing facilities in five countries, five of which are located in the United States, including one owned facility each in Michigan and Nevada, and one leased facility each in California, Georgia and Maryland.  The foreign facilities include one owned facility each in China, France and India, and one leased facility in the United Kingdom.  WAVE entered into an agreement to sell its operations in Europe and Asia.

• Zhejiang Nisshin Worthington Precision Specialty Steel Co., Ltd, operates one steel processing facility in Pinghu City, Zhejiang, China.

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Item 3.  — Legal Proceedings

The Company is involved in various judicial and administrative proceedings as both plaintiff and defendant, arising in the ordinary course of business.  The Company does not believe that any such proceedings will have a material adverse effect on its business, financial position, results of operation or cash flows.

Item 4.  — Mine Safety Disclosures

Not Applicable

Supplemental Item — Executive Officers of the Registrant

The following table lists the names, positions held and ages of the individuals serving as executive officers of the Registrant as of July 24, 2018.

Name	Age	Position(s) with the Registrant	Present Office Held Since
John P. McConnell	64	Chairman of the Board and Chief Executive Officer; a Director	1996
Mark A. Russell	55	President and Chief Operating Officer	2012
B. Andrew Rose	48	Executive Vice President and Chief Financial Officer	2014
Dale T. Brinkman	65	Vice President-Administration, General Counsel and Secretary	2000
Terrance M. Dyer	51	Vice President-Human Resources	2012
Geoffrey G. Gilmore	46	President-Worthington Cylinder Corporation	2016
John G. Lamprinakos	60	President-The Worthington Steel Company	2016
Catherine M. Lyttle	59	Vice President-Communications and Investor Relations	2009
Richard G. Welch	60	Corporate Controller	2000
Virgil L. Winland	70	Senior Vice President-Manufacturing	2001

John P. McConnell has served as Worthington Industries’ Chief Executive Officer since June 1993, as a director of Worthington Industries continuously since 1990, and as Chairman of the Board of Worthington Industries since September 1996.  Mr. McConnell serves as the Chair of the Executive Committee of Worthington Industries’ Board of Directors.  He served in various positions with the Company from 1975 to June 1993.

Mark A. Russell has served as President and Chief Operating Officer of Worthington Industries since August 1, 2012.  From February 2007 to July 31, 2012, Mr. Russell served as President of The Worthington Steel Company.

B. Andrew ‘Andy’ Rose has served as Executive Vice President of Worthington Industries since July 2014 and as Chief Financial Officer of Worthington Industries since December 2008.  From December 2008 to July 2014, Mr. Rose also served as Vice President of Worthington Industries.  From 2007 to 2008, he served as a senior investment professional with MCG Capital Corporation, a publicly-traded company specializing in debt and equity investments in middle market companies; and from 2002 to 2007, he was a founding partner at Peachtree Equity Partners, L.P., a private equity firm backed by Goldman Sachs.

Dale T. Brinkman has served as Worthington Industries’ Vice President-Administration since December 1998 and as Worthington Industries’ General Counsel since September 1982.  He has been Secretary of Worthington Industries since September 2000 and served as Assistant Secretary of Worthington Industries from September 1982 to September 2000.

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Terrance M. Dyer has served as Vice President-Human Resources of Worthington Industries since June 2012.  From October 2009 to June 2012, he served as the Vice President-Human Resources for our WAVE joint venture in Malvern, Pennsylvania. Prior to serving as Vice President-Human Resources for WAVE, Mr. Dyer spent five years in various human resources roles of increasing responsibility at Armstrong World Industries, Inc.

Geoffrey G. Gilmore has served as President of Worthington Cylinder Corporation since June 2016.  He served as President of The Worthington Steel Company from August 2012 through May 2016.  From July 2011 to July 2012, he served as Vice President-Purchasing for Worthington Industries.  From April 2010 to July 2011, he served as General Manager of The Worthington Steel Company’s Delta, Ohio facility; and from June 2006 to February 2010, he served as Director of Automotive Sales for The Worthington Steel Company.  Mr. Gilmore served in various other positions with the Company from 1998 to June 2006.  

John G. Lamprinakos has served as President of The Worthington Steel Company since June 2016.  He served as President of Worthington Industries Engineered Cabs from June 2013 through May 2016.  From December 2004 to July 2013, Mr. Lamprinakos served as President and Chief Executive Officer of our WAVE joint venture in Malvern, Pennsylvania. Before joining WAVE, Mr. Lamprinakos spent 24 years at Worthington Cylinder Corporation, including as President from 2001 to 2003.

Catherine M. Lyttle has served as Vice President-Communications and Investor Relations of Worthington Industries since April 2009.  She served as Vice President of Communications of Worthington Industries from January 1999 to April 2009.  Ms. Lyttle served as Vice President of Marketing for the Columbus Chamber of Commerce from 1987 to September 1997 and as Vice President of JMAC Hockey from 1997 to 1999.

Richard G. Welch has served as the Corporate Controller of Worthington Industries since March 2000 and prior thereto, he served as Assistant Controller of Worthington Industries from August 1999 to March 2000.  He served as Principal Financial Officer of Worthington Industries on an interim basis from September 2008 to December 2008.  

Virgil L. Winland has served as Senior Vice President-Manufacturing of Worthington Industries since January 2001.  He served in various other positions with the Company from 1971 to January 2001, including as President of Worthington Cylinder Corporation from June 1998 through January 2001.

Executive officers serve at the pleasure of the directors of the Registrant.  There are no family relationships among any of the Registrant's executive officers or directors.  No arrangements or understandings exist pursuant to which any individual has been, or is to be, selected as an executive officer of the Registrant.

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PART II

Item 5. – Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Common Shares Information

The common shares of Worthington Industries, Inc. (“Worthington Industries”) trade on the New York Stock Exchange (“NYSE”) under the symbol "WOR" and are listed in most newspapers as "WorthgtnInd."  As of July 24, 2018, Worthington Industries had 5,233 registered shareholders.  The following table sets forth (i) the low and high closing prices and the closing price per share for Worthington Industries’ common shares for each quarter of fiscal 2018 and fiscal 2017, and (ii) the cash dividends per share declared on Worthington Industries’ common shares for each quarter of fiscal 2018 and fiscal 2017.

							Cash
	Market Price						Dividends
	Low		High		Closing		Declared
Fiscal 2018
Quarter Ended
August 31, 2017	$	41.99	$	53.14	$	49.96	$	0.21
November 30, 2017	$	39.65	$	52.11	$	41.60	$	0.21
February 28, 2018	$	41.22	$	49.53	$	44.24	$	0.21
May 31, 2018	$	39.80	$	48.26	$	47.95	$	0.21
Fiscal 2017
Quarter Ended
August 31, 2016	$	36.26	$	45.47	$	42.90	$	0.20
November 30, 2016	$	39.75	$	62.35	$	56.28	$	0.20
February 28, 2017	$	46.12	$	58.85	$	49.05	$	0.20
May 31, 2017	$	41.18	$	51.96	$	41.97	$	0.20

Dividends are declared at the discretion of Worthington Industries’ Board of Directors (the “Board”).  The Board declared quarterly dividends of $0.21 per common share in fiscal2018and of $0.20 per common share in fiscal 2017.  On June 27, 2018, the Board declared a quarterly dividend of $0.23 per common share for the first quarter of fiscal 2019, an increase of $0.02 per share over the dividend declared for the fourth quarter of fiscal 2018.  This dividend is payable on September 28, 2018, to shareholders of record on September 14, 2018.

The Board reviews the dividend on a quarterly basis and establishes the dividend rate based upon Worthington Industries’ financial condition, results of operations, capital requirements, current and projected cash flows, business prospects and other factors which the directors may deem relevant.  While Worthington Industries has paid a dividend every quarter since becoming a public company in 1968, there is no guarantee this will continue in the future.  We currently have no material contractual or regulatory restrictions on the payment of dividends.

Shareholder Return Performance

The following information in this Item 5 of this Annual Report on Form 10-K is not deemed to be “soliciting material” or to be “filed” with the Securities and Exchange Commission or subject to Regulation 14A or Regulation 14C under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or to the liabilities of Section 18 of the Exchange Act, and will not be deemed to be incorporated by reference into any filing under the  Securities Act of 1933, as amended, or the Exchange Act, except to the extent we specifically incorporate such information into such a filing.

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The following graph compares the five-year cumulative return on Worthington Industries’ common shares, the S&P Midcap 400 Index and the S&P 1500 Steel Composite Index.  The graph assumes that $100 was invested at May 31, 2013, in Worthington Industries’ common shares and each index.

	5/13		5/14		5/15		5/16		5/17		5/18
Worthington Industries, Inc.	$	100.00	$	118.61	$	81.70	$	115.23	$	131.72	$	153.26
S&P Midcap 400 Index	$	100.00	$	118.04	$	132.54	$	131.98	$	154.63	$	177.61
S&P 1500 Steel Composite Index	$	100.00	$	119.49	$	107.47	$	101.36	$	124.36	$	163.28

Data and graph provided by Zacks Investment Research, Inc. Copyright© 2018, Standard & Poor's, a division of The McGraw-Hill Companies, Inc. All rights reserved. Used with permission.

Worthington Industries is a component of the S&P Midcap 400 Index.  The S&P 1500 Steel Composite Index, of which Worthington Industries is also a component, is the most specific index relative to the largest line of business of Worthington Industries and its subsidiaries.  At May 31, 2018, the S&P 1500 Steel Composite Index included 13 steel related companies from the S&P 500, S&P Midcap 400 and S&P 600 indices:  AK Steel Holding Corporation; Allegheny Technologies, Inc.; Carpenter Technology Corporation; Commercial Metals Company; Haynes International, Inc.; Nucor Corporation; Olympic Steel, Inc.; Reliance Steel & Aluminum Co.; Steel Dynamics, Inc.; SunCoke Energy, Inc.; TimkenSteel Corporation; United States Steel Corporation; and Worthington Industries, Inc.

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Issuer Purchases of Equity Securities

The following table provides information about purchases made by, or on behalf of, Worthington Industries, Inc. or any “affiliated purchaser” (as defined in Rule 10b – 18(a) (3) under the Exchange Act) of common shares of Worthington Industries, Inc. during each month of the fiscal quarter ended May 31, 2018:

					Total Number of
					Common Shares
					Purchased as		Maximum Number of
	Total Number		Average Price		Part of Publicly		Common Shares that
	of Common		Paid per		Announced		May Yet Be
	Shares		Common		Plans or		Purchased Under the
Period	Purchased		Share		Programs		Plans or Programs (1)
March 1-31, 2018		-	$	-		-		7,500,000
April 1-30, 2018 (2)		953,270	$	44.33		950,000		6,550,000
May 1-31, 2018 (2)		53,160	$	44.36		50,000		6,500,000
Total		1,006,430	$	44.33		1,000,000

(1) The number shown represents, as of the end of each period, the maximum number of common shares that could be purchased under the publicly announced repurchase authorization then in effect.  On June 26, 2014, Worthington Industries, Inc. announced that on June 25, 2014, the Board had authorized the repurchase of up to 10,000,000 of the outstanding common shares of Worthington Industries, Inc. As of the end of the month of April, 2018 a total of 10,000,000 common shares had been repurchased under this authorization and no further purchases may be made under this authorization. On September 27, 2017, the Board authorized the repurchase of up to an additional 6,828,855 of common shares.  The total number of common shares available for repurchase at May 31, 2018 was 6,500,000.

The common shares available for repurchase under the authorization currently in effect may be purchased from time to time, with consideration given to the market price of the common shares, the nature of other investment opportunities, cash flows from operations, general economic conditions and other appropriate factors.  Repurchases may be made on the open market or through privately negotiated transactions.

(2) Includes an aggregate of 6,430 common shares surrendered by employees in the period from April 1, 2018 through May 31, 2018 to satisfy tax withholding obligations upon the vesting of restricted common shares.  These common shares were not counted against the share repurchase authorizations in effect during fiscal 2018 and discussed in footnote (1) above.

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Item 6. – Selected Financial Data

	Fiscal Years Ended May 31,
(In thousands, except per share amounts)	2018			2017			2016			2015			2014
FINANCIAL RESULTS
Net sales	$	3,581,620		$	3,014,108		$	2,819,714		$	3,384,234		$	3,126,426
Cost of goods sold		3,018,763			2,478,203			2,367,121			2,920,701			2,633,907
Gross margin		562,857			535,905			452,593			463,533			492,519
Selling, general and administrative expense		367,460			316,373			297,402			295,920			300,396
Impairment of goodwill and long-lived assets		61,208			-			25,962			100,129			58,246
Restructuring and other expense (income), net		(7,421	)		6,411			7,177			6,927			(1,876	)
Operating income		141,610			213,121			122,052			60,557			135,753
Miscellaneous income, net		2,996			3,764			11,267			795			16,963
Interest expense		(38,675	)		(29,796	)		(31,670	)		(35,800	)		(26,671	)
Equity in net income of unconsolidated affiliates		103,139			110,038			114,966			87,476			91,456
Earnings before income taxes		209,070			297,127			216,615			113,028			217,501
Income tax expense		8,220			79,190			58,987			25,772			57,349
Net earnings		200,850			217,937			157,628			87,256			160,152
Net earnings attributable to noncontrolling interests		6,056			13,422			13,913			10,471			8,852
Net earnings attributable to controlling interest	$	194,794		$	204,515		$	143,715		$	76,785		$	151,300
Earnings per share - diluted:
Net earnings per share attributable to controlling interest	$	3.09		$	3.15		$	2.22		$	1.12		$	2.11
Depreciation and amortization	$	103,359		$	86,793		$	84,699		$	85,089		$	79,730
Capital expenditures (including acquisitions and investments)		358,716			68,386			136,837			210,346			82,855
Cash dividends declared		51,772			51,448			47,949			48,303			41,816
Per common share	$	0.84		$	0.80		$	0.76		$	0.72		$	0.60
Average common shares outstanding - diluted		63,042			64,874			64,755			68,483			71,664
FINANCIAL POSITION
Total current assets	$	1,241,122		$	1,190,969		$	915,115		$	991,848		$	1,198,550
Total current liabilities		646,895			520,783			430,078			524,392			589,635
Working capital	$	594,227		$	670,186		$	485,037		$	467,456		$	608,915
Total property, plant and equipment, net	$	584,970		$	570,489		$	582,838		$	513,190		$	498,861
Total assets		2,621,787			2,325,344			2,061,264			2,082,305			2,293,578
Total debt		750,368			578,610			581,004			667,905			663,521
Total shareholders' equity - controlling interest		918,769			951,635			793,371			749,112			850,812
Per share	$	15.60		$	15.15		$	12.89		$	11.68		$	12.62
Common shares outstanding		58,877			62,802			61,534			64,141			67,408

The acquisition of the assets of AMTROL has been reflected since June 2017.  The operations of Worthington Energy Innovations, LLC (“WEI”) have been excluded since the disposal of a 65% stake of the Company in WEI in March 2018.  Worthington Specialty Processing has been reflected since March 2016 when the Company obtained effective control of this joint venture. The acquisition of the assets of NetBraze, LLC has been reflected since January 2016. The acquisition of the assets of the CryoScience business of Taylor Wharton has been reflected since December 2015. Our aluminum high-pressure cylinder business has been excluded since its disposal in May 2015. The Advanced Component Technologies, Inc. business has been excluded since its disposal in January 2015. The acquisition of the assets of Rome Strip Steel Company, Inc. has been reflected since January 2015. The operations of dHybrid Systems, LLC have been reflected since October 2014. The acquisition of the assets of Midstream Equipment Fabrication LLC has been reflected since August 2014.  The acquisition of the assets of James Russell Engineering Works, Inc. has been reflected since July 2014. The operations of the tank manufacturing division of Steffes Corporation have been reflected since their acquisition in March 2014. The operations of Worthington Arıtaş Basınçlı Kaplar Sanayi have been reflected since January 2014.  Our small and medium steel high pressure industrial gas and acetylene cylinders business in North America has been excluded from consolidated operating results since its disposal in November 2013.  TWB Company, L.LC. has been reflected since July 2013 when we acquired an additional 10% ownership interest bringing our total to 55%.

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Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations

Selected statements contained in this “Item 7. – Management’s Discussion and Analysis of Financial Condition and Results of Operations” constitute “forward-looking statements” as that term is used in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based, in whole or in part, on management’s beliefs, estimates, assumptions and currently available information. For a more detailed discussion of what constitutes a forward-looking statement and of some of the factors that could cause actual results to differ materially from such forward-looking statements, please refer to the “Safe Harbor Statement” in the beginning of this Annual Report on Form 10-K and “Part I - Item 1A. - Risk Factors” of this Annual Report on Form 10-K.

Introduction

Worthington Industries, Inc. is a corporation formed under the laws of the State of Ohio (individually, the “Registrant” or “Worthington Industries” or, collectively with the subsidiaries of Worthington Industries, Inc., “we,” “our,” “Worthington” or the “Company”).  Founded in 1955, Worthington is primarily a diversified metals manufacturing company, focused on value-added steel processing and manufactured metal products.  Our manufactured metal products include: pressure cylinders for liquefied petroleum gas (“LPG”), compressed natural gas (“CNG”), oxygen, refrigerant and other industrial gas storage; water well tanks for commercial and residential uses; hand torches and filled hand torch cylinders; propane-filled camping cylinders; helium-filled balloon kits; steel and fiberglass tanks and processing equipment primarily for the oil and gas industry; cryogenic pressure vessels for liquefied natural gas (“LNG”) and other gas storage applications; engineered cabs and operator stations and cab components; and, through our joint ventures, complete ceiling grid solutions; laser welded blanks; light gauge steel framing for commercial and residential construction; and current and past model automotive service stampings.  Our number one goal is to increase shareholder value, which we seek to accomplish by optimizing existing operations, developing and commercializing new products and applications, and pursuing strategic acquisitions and joint ventures.

As of May 31, 2018, excluding our joint ventures, we operated 36 manufacturing facilities worldwide, principally in three operating segments, which correspond with our reportable business segments: Steel Processing, Pressure Cylinders and Engineered Cabs.

We also held equity positions in nine joint ventures, which operated 49 manufacturing facilities worldwide, as of May 31, 2018.  Three of these joint ventures are consolidated within Steel Processing with the equity owned by the other joint venture member(s) shown as noncontrolling interests in our consolidated balance sheets, and the other joint venture member(s)’ portion of net earnings and other comprehensive income shown as net earnings or comprehensive income attributable to noncontrolling interests in our consolidated statements of earnings and consolidated statements of comprehensive income, respectively.  The remaining six of these joint ventures are unconsolidated and accounted for using the equity method.

Overview

The Company delivered overall sales growth of 19% for fiscal 2018 compared to fiscal 2017, driven by the June 2, 2017, acquisition of New AMTROL Holdings, Inc. and its subsidiaries (collectively “AMTROL”). Also contributing to sales growth were higher average direct selling prices in Steel Processing and higher volumes in the consumer and industrial products businesses within Pressure Cylinders.  Operating results were mixed, as contributions from AMTROL and near record performance in the consumer and industrial products businesses in Pressure Cylinders were more than offset by an overall decline in earnings at Steel Processing and significant impairment charges related to plans to sell the Company’s cryogenics business in Turkey and certain oil & gas asset groups within Pressure Cylinders.  Lower direct spreads and lower tolling volumes weighed on Steel Processing’s results, offsetting the favorable impact of inventory holding gains resulting from rising steel prices.  Equity in net income of unconsolidated affiliates (“equity income”) decreased from fiscal 2017 as higher steel prices compressed margins at our Clarkwestern Dietrich Building Systems LLC (“ClarkDietrich”) joint venture, and additional allocations resulting from a new cost sharing agreement between its owners were absorbed by WAVE.  The enactment of the Tax Cuts and Jobs Act of 2017 (the “TCJA”) also had a significant favorable impact on net income.  As a result of the TCJA, the Company elected to pass on a portion of the expected cash savings resulting from the lower statutory federal corporate income tax rate in the form of a one-time bonus to non-executive employees, which reduced pre-tax earnings by $5.5 million in the fourth quarter of fiscal 2018. See Recent Business Developmentsfor further discussion of these and other factors affecting the Company’s results.

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Recent Business Developments

• Effective June 1, 2017, the Company made certain organizational changes impacting the internal reporting and management structure of Worthington Steelpac Systems, LLC (“Packaging Solutions”).  As a result of these organizational changes, management responsibilities and internal reporting were realigned, moving Packaging Solutions from the Steel Processing operating segment to the Engineered Cabs operating segment.  Previously reported segment results have not been restated to conform to this new presentation and are immaterial for all periods presented.

• On June 2, 2017, the Company acquired AMTROL, a leading manufacturer of pressure cylinders and water system tanks with operations in the U.S. and Europe.  The total purchase price was approximately $291.9 million after adjusting for excess working capital, and was funded primarily by cash on hand.  The net assets became part of the Pressure Cylinders operating segment at closing, with the well water and expansion tank operations aligning under the consumer products business and the refrigerant, liquid propane and industrial and specialty gas operations aligning under the industrial products business.

• On July 28, 2017, Worthington Industries completed the public offering of $200.0 million aggregate principal amount of senior unsecured notes.  The notes bear interest at a rate of 4.300% and mature on August 1, 2032.

• On September 27, 2017, the Board of Directors of Worthington Industries (the “Board”) authorized the repurchase of up to an additional 6,828,855 of Worthington Industries’ common shares.  During fiscal 2018, the Company repurchased a total of 4,375,000 common shares for $204.3 million at an average price of $46.69 per share.  The total number of common shares available for repurchase at May 31, 2018 was 6,500,000.

• On November 20, 2017, the Company announced that its Worthington Armstrong Venture (“WAVE”) joint venture had agreed to sell its international operations to the Knauf Group, a family-owned manufacturer of building materials headquartered in Germany.  The Company expects to receive proceeds of approximately $45 million for its 50% share of the WAVE operations being sold.  The transaction is subject to regulatory approvals and other customary closing conditions and is anticipated to close before the end of calendar 2018.

• On December 22, 2017, the TCJA was enacted into law.  Among other things, the TCJA lowered the U.S. corporate federal corporate income tax rate from 35% to 21% effective January 1, 2018.  Our best estimate of the Company’s ongoing effective income tax rate as a result of the tax reform legislation is 24% beginning in fiscal 2019.  Results for the full fiscal year ended May 31, 2018 reflected only five months of the lower rate. For additional information, refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note L – Income Taxes” of this Annual Report on Form 10-K.

• On January 16, 2018, the Company amended its accounts receivable securitization facility (the “AR Facility”), reducing the borrowing capacity from $100.0 million to $50.0 million and extending the maturity to January 2019.

• On February 16, 2018, the Company amended its revolving credit facility, extending the maturity by three years to February 2023.  Borrowing capacity remained unchanged at $500.0 million.

• During the fourth quarter of fiscal 2018, management committed to plans to sell the Company’s cryogenics business in Turkey, Worthington Aritas, and certain underperforming oil & gas equipment assets within Pressure Cylinders.  As all of the criteria for classification as assets held for sale were met in both instances, the net assets of each asset group have been presented separately as assets held for sale in our consolidated balance sheets.  

• On June 27, 2018, the Board declared a quarterly dividend of $0.23 per share, an increase of $0.02 per share from the previous quarterly rate.  The dividend is payable on September 28, 2018 to shareholders of record on September 14, 2018.

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Market & Industry Overview

We sell our products and services to a diverse customer base and a broad range of end markets.  The breakdown of our net sales by end market for fiscal 2018 and fiscal 2017 is illustrated in the following chart:

The automotive industry is one of the largest consumers of flat-rolled steel, and thus the largest end market for our Steel Processing operating segment.  Approximately 59% of the net sales of our Steel Processing operating segment are to the automotive market.  North American vehicle production, primarily by Ford, General Motors and FCA US (the “Detroit Three automakers”), has a considerable impact on the activity within this operating segment.  The majority of the net sales of three of our unconsolidated joint ventures are also to the automotive end market.

Approximately 13% of the net sales of our Steel Processing operating segment and 41% of the net sales of our Engineered Cabs operating segment are to the construction market.  The construction market is also the predominant end market for two of our unconsolidated joint ventures: WAVE and ClarkDietrich.  While the market price of steel significantly impacts these businesses, there are other key indicators that are meaningful in analyzing construction market demand, including U.S. gross domestic product (“GDP”), the Dodge Index of construction contracts and, in the case of ClarkDietrich, trends in the relative price of framing lumber and steel.

Substantially all of the net sales of our Pressure Cylinders operating segment, and approximately 28% and 59% of the net sales of our Steel Processing and Engineered Cabs operating segments, respectively, are to other markets such as consumer products, industrial, lawn and garden, agriculture, oil & gas equipment, heavy truck, mining, forestry and appliance.  Given the many different products that make up these net sales and the wide variety of end markets, it is very difficult to detail the key market indicators that drive this portion of our business.  However, we believe that the trend in U.S. GDP growth is a good economic indicator for analyzing the demand of these end markets.

We use the following information to monitor our costs and demand in our major end markets:

	2018			2017			2016			2018 vs. 2017			2017 vs. 2016
U.S. GDP (% growth year-over-year) 1		2.5	%		1.6	%		1.9	%		0.9	%		-0.3	%
Hot-Rolled Steel ($ per ton) 2	$	687		$	593		$	437		$	94		$	156
Detroit Three Auto Build (000's vehicles) 3		8,577			9,216			9,296			(639	)		(80	)
No. America Auto Build (000's vehicles) 3		16,996			18,329			18,181			(1,333	)		148
Zinc ($ per pound) 4	$	1.42		$	1.13		$	0.80		$	0.29		$	0.33
Natural Gas ($ per mcf) 5	$	2.89		$	3.01		$	2.31		$	(0.12	)	$	0.70
On-Highway Diesel Fuel Prices ($ per gallon) 6	$	2.87		$	2.58		$	2.40		$	0.29		$	0.18
Crude Oil - WTI ($ per barrel) 6	$	56.75		$	48.80		$	42.67		$	7.95		$	6.13

¹ 2017/2016 figures based on revised actuals ² CRU Hot-Rolled Index; period average ³ IHS Global ⁴ LME Zinc; period average   ⁵ NYMEX Henry Hub Natural Gas; period average ⁶ Energy Information Administration; period average

29

U.S. GDP growth rate trends are generally indicative of the strength in demand and, in many cases, pricing for our products.  A year-over-year increase in U.S. GDP growth rates is indicative of a stronger economy, which generally increases demand and pricing for our products.  Conversely, decreasing U.S. GDP growth rates generally indicate a weaker economy.  Changes in U.S. GDP growth rates can also signal changes in conversion costs related to production and in selling, general and administrative (“SG&A”) expense.

The market price of hot-rolled steel is one of the most significant factors impacting our selling prices and operating results.  When steel prices fall, we typically have higher-priced material flowing through cost of goods sold, while selling prices compress to what the market will bear, negatively impacting our results.  On the other hand, in a rising price environment, our results are generally favorably impacted, as lower-priced material purchased in previous periods flows through cost of goods sold, while our selling prices increase at a faster pace to cover current replacement costs.  The rapid rise in steel prices experienced during the fourth quarter of fiscal 2018 is expected to continue to result in inventory holding gains in the first quarter of fiscal 2019.

The following table presents the average quarterly market price per ton of hot-rolled steel during fiscal 2018, fiscal 2017 and fiscal 2016:

	Fiscal Year
(Dollars per ton 1 )	2018		2017		2016
1st Quarter	$	604	$	617	$	461
2nd Quarter	$	608	$	511	$	419
3rd Quarter	$	674	$	608	$	381
4th Quarter	$	860	$	636	$	486
Annual Avg.	$	687	$	593	$	437

¹ CRU Hot-Rolled Index

No single customer accounted for more than 10% of our consolidated net sales during fiscal 2018.  While our automotive business is largely driven by the production schedules of the Detroit Three automakers, our customer base is much broader and includes other domestic manufacturers and many of their suppliers.  During fiscal 2018, vehicle production for the Detroit Three automakers was off 7% from the record levels achieved in fiscal 2017, while North American vehicle production as a whole was also down 7%.

Certain other commodities, such as zinc, natural gas and diesel fuel, represent a significant portion of our cost of goods sold, both directly through our plant operations and indirectly through transportation and freight expense.

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Results of Operations

Fiscal 2018 Compared to Fiscal 2017

Consolidated Operations

The following table presents consolidated operating results for the periods indicated:

	Fiscal Year Ended May 31,
				% of						% of			Increase/
(Dollars in millions)	2018			Net sales			2017			Net sales			(Decrease)
Net sales	$	3,581.6			100.0	%	$	3,014.1			100.0	%	$	567.5
Cost of goods sold		3,018.7			84.3	%		2,478.2			82.2	%		540.5
Gross margin		562.9			15.7	%		535.9			17.8	%		27.0
Selling, general and administrative expense		367.5			10.3	%		316.4			10.5	%		51.1
Impairment of goodwill and long-lived assets		61.2			1.7	%		-			0.0	%		61.2
Restructuring and other expense (income), net		(7.4	)		-0.2	%		6.4			0.2	%		(13.8	)
Operating income		141.6			4.0	%		213.1			7.1	%		(71.5	)
Miscellaneous income		3.1			0.1	%		3.8			0.1	%		(0.7	)
Interest expense		(38.7	)		-1.1	%		(29.8	)		-1.0	%		8.9
Equity in net income of unconsolidated affiliates		103.1			2.9	%		110.0			3.6	%		(6.9	)
Income tax expense		(8.2	)		-0.2	%		(79.2	)		-2.6	%		(71.0	)
Net earnings		200.9			5.6	%		217.9			7.2	%		(17.0	)
Net earnings attributable to noncontrolling interests		6.1			0.2	%		13.4			0.4	%		(7.3	)
Net earnings attributable to controlling interest	$	194.8			5.4	%	$	204.5			6.8	%	$	(9.7	)
Equity income by unconsolidated affiliate
WAVE	$	77.5					$	78.3					$	(0.8	)
ClarkDietrich		9.8						17.3						(7.5	)
Serviacero Worthington		8.8						7.2						1.6
ArtiFlex		4.9						7.0						(2.1	)
Other		2.1						0.2						1.9
Total	$	103.1					$	110.0					$	(6.9	)

Fiscal 2018 net earnings attributable to controlling interest decreased $9.7 million from fiscal 2017.  Net sales and operating highlights were as follows:

• Net sales increased $567.5 million over fiscal 2017. The AMTROL acquisition was the largest driver of the increase, contributing net sales of $265.2 million.  The remaining increase in net sales was driven by higher average direct selling prices in Steel Processing and higher overall volumes in Pressure Cylinders, partially offset by lower tolling volume at certain consolidated joint ventures.

• Gross margin increased $27.0 million over fiscal 2017. Pressure Cylinders drove the increase, up $65.1 million, on contributions from AMTROL and higher volumes in the consumer and industrial products businesses.  Lower direct spreads and lower tolling volume at Steel Processing partially offset the overall increase in gross margin.

• SG&A expense increased $51.1 million over fiscal 2017.  The increase was driven primarily by the AMTROL acquisition, which added $36.9 million to SG&A expense in fiscal 2018.  Overall, SG&A expense was 10.3% of consolidated net sales in fiscal 2018 compared to 10.5% in the prior fiscal year.

• Impairment charges totaled $61.2 million, of which $52.9 million related to plans to sell the Company’s cryogenics business in Turkey, Worthington Aritas, and certain underperforming oil & gas equipment asset groups within Pressure Cylinders.  For additional information regarding these impairment charges, refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note C – Goodwill and Other Long-Lived Assets” of this Annual Report on Form 10-K.

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• Restructuring and other income, net totaled $7.4 million in fiscal 2018 driven by a net gain of $10.6 million related to the sale of the legacy real estate of the Company’s former stainless steel business, Precision Specialty Metals, Inc. (“PSM”), partially offset by severance expense of $2.4 million at Pressure Cylinders related to corporate management and other positions at AMTROL that were eliminated.For additional information, refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note D – Restructuring and Other Expense (Income), Net” of this Annual Report on Form 10-K.

• Interest expense increased $8.9 million over fiscal 2017.  The increase was primarily due to the issuance of $200.0 million of aggregate principal amount of senior unsecured notes due August 1, 2032.  For additional information, refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note G – Debt and Receivables Securitization” of this Annual Report on Form 10-K.

• Equity income decreased $6.9 million from fiscal 2017 to $103.1 million. The decrease was driven by lower contributions from ClarkDietrich, down $7.5 million as rising steel prices compressed margins. WAVE was down slightly despite strong volumes as a new cost-sharing agreement between the joint venture and its owners resulted in $7.6 million of additional allocations. This run rate is expected to decline 20%-30% upon the sale of the WAVE international business which is expected to close before the end of calendar 2018.  We received distributions of $89.8 million from our unconsolidated affiliates during fiscal 2018. For additional financial information regarding our unconsolidated affiliates, refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note B – Investments in Unconsolidated Affiliates” of this Annual Report on Form 10-K.

• Income tax expense decreased $71.0 million from fiscal 2017 due to (i) a $38.2 million net income tax benefit from re-measuring the deferred tax balances as a result of the enactment of the TCJA, (ii) a $22.1 million tax benefit associated with the impairment charges recorded for Worthington Aritas, (iii) a lower statutory federal corporate income tax rate, and (iv) lower earnings before income taxes.  These favorable reductions were partially offset by a $12.2 million lower benefit in the current year associated with share-based payment awards, and a $6.9 million one-time mandatory deemed repatriation tax associated with the TCJA.  The TCJA lowered the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018, which due to the Company’s fiscal year, lowered the Company’s fiscal 2018 U.S. federal blended statutory corporate income tax rate to approximately 29.2%.  However, due to the factors mentioned above, the fiscal 2018 income tax expense reflects an effective tax rate attributable to controlling interest of 4.0% vs. 27.9% in fiscal 2017. For additional information, refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note L – Income Taxes” of this Annual Report on Form 10-K.

Segment Operations

Steel Processing

The following table presents a summary of operating results for our Steel Processing operating segment for the periods indicated:

	Fiscal Year Ended May 31,
				% of					% of			Increase/
(Dollars in millions)	2018			Net sales			2017		Net sales			(Decrease)
Net sales	$	2,252.8			100.0	%	$	2,074.8		100.0	%	$	178.0
Cost of goods sold		1,968.3			87.4	%		1,757.0		84.7	%		211.3
Gross margin		284.5			12.6	%		317.8		15.3	%		(33.3	)
Selling, general and administrative expense		141.9			6.3	%		145.5		7.0	%		(3.6	)
Restructuring and other expense (income), net		(10.1	)		-0.4	%		1.8		0.1	%		(11.9	)
Operating income	$	152.7			6.8	%	$	170.5		8.2	%	$	(17.8	)
Material cost	$	1,585.5					$	1,364.5				$	221.0
Tons shipped (in thousands)		3,820						4,070					(250	)

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Net sales and operating highlights were as follows:

• Net sales increased $178.0 million over fiscal 2017 driven by higher average direct selling prices, which increased net sales by $147.6 million, and higher direct volume, partially offset by lower tolling volume due to declines at certain consolidated joint ventures. The mix of direct tons versus toll tons processed was 57% to 43% compared to 52% to 48% in fiscal 2017.

• Operating income decreased $17.8 million from fiscal 2017 as the combined impact of lower direct spreads and lower tolling volume more than offset the improvement in the volume of direct shipments. Unfavorable changes in product mix also contributed to the margin compression. A net restructuring gain of $10.6 million related to the sale of the real estate of the Company’s former stainless steel business, PSM, partially offset the overall decline in operating income.

Pressure Cylinders

The following table presents a summary of operating results for our Pressure Cylinders operating segment for the periods indicated:

	Fiscal Year Ended May 31,
			% of					% of			Increase/
(Dollars in millions)	2018		Net sales			2017		Net sales			(Decrease)
Net sales	$	1,206.2		100.0	%	$	829.8		100.0	%	$	376.4
Cost of goods sold		936.7		77.7	%		625.5		75.4	%		311.2
Gross margin		269.5		22.3	%		204.3		24.6	%		65.2
Selling, general and administrative expense		189.8		15.7	%		146.8		17.7	%		43.0
Impairment of goodwill and long-lived assets		53.9		4.5	%		-		0.0	%		53.9
Restructuring and other expense, net		2.4		0.2	%		3.4		0.4	%		(1.0	)
Operating income	$	23.4		1.9	%	$	54.1		6.5	%	$	(30.7	)
Material cost	$	534.9				$	338.4				$	196.5
Net sales by principal class of products:
Consumer products	$	471.2				$	315.0				$	156.2
Industrial products		526.0					341.2					184.8
Alternative fuels		109.6					111.3					(1.7	)
Oil & gas equipment		99.4					62.3					37.1
Total Pressure Cylinders	$	1,206.2				$	829.8				$	376.4
Units shipped by principal class of products:
Consumer products		72,641,033					60,665,420					11,975,613
Industrial products		17,058,745					10,155,628					6,903,117
Alternative fuels		471,653					512,257					(40,604	)
Oil & gas equipment		2,703					2,308					395
Total Pressure Cylinders		90,174,134					71,335,613					18,838,521

Net sales and operating highlights were as follows:

• Net sales increased $376.4 million over fiscal 2017. AMTROL was the largest driver of the increase, contributing net sales of $265.2 million.  Strong demand in the legacy consumer and industrial products businesses and improvement at the oil & gas equipment business accounted for the balance of the increase. Sales activity related to AMTROL is split between consumer products and industrial products in the table above.

• Operating income decreased $30.7 million from fiscal 2017 as impairment charges negatively impacted results by $53.9 million. Contributions from AMTROL and improvements in the legacy consumer and industrial products businesses helped drive the increase in operating income, excluding the impairment charges.  Improvement in the oil & gas equipment business was largely offset by a decline in the alternative fuels business.  Fiscal 2018 impairment charges related primarily to plans to sell the Company’s cryogenics

33

business in Turkey and certain underperforming asset groups in the oil & gas equipment business.  For additional information regarding these impairment charges, refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note C – Goodwill and Other Long-Lived Assets” of this Annual Report on Form 10-K.

Engineered Cabs

The following table presents a summary of operating results for our Engineered Cabs operating segment for the periods indicated:

	Fiscal Year Ended May 31,
				% of						% of			Increase/
(In millions)	2018			Net sales			2017			Net sales			(Decrease)
Net sales	$	116.6			100.0	%	$	101.4			100.0	%	$	15.2
Cost of goods sold		110.9			95.1	%		92.5			91.2	%		18.4
Gross margin		5.7			4.9	%		8.9			8.8	%		(3.2	)
Selling, general and administrative expense		17.1			14.7	%		15.4			15.2	%		1.7
Restructuring and other expense (income), net		(0.1	)		-0.1	%		1.2			1.2	%		(1.3	)
Operating loss	$	(11.3	)		-9.7	%	$	(7.7	)		-7.6	%	$	(3.6	)
Material cost	$	55.2					$	46.1					$	9.1

Net sales and operating highlights were as follows:

• Net sales increased $15.2 million over fiscal 2017 on higher volume.  

• Operating loss of $11.3 million was $3.6 million higher than fiscal 2017 due to higher labor and conversion costs and unfavorable margins.

Other

The Other category includes certain income and expense items not allocated to our operating segments, including costs associated with our captive insurance company.  The Other category also includes the results of our former Worthington Energy Innovations (“WEI”) operating segment, on a historical basis, through March 31, 2018.  The following table presents a summary of operating results for the Other category for the periods indicated:

	Fiscal Year Ended May 31,
				% of						% of			Increase/
(In millions)	2018			Net sales			2017			Net sales			(Decrease)
Net sales	$	6.0			100.0	%	$	8.0			100.0	%	$	(2.0	)
Cost of goods sold		2.8			46.7	%		3.2			40.0	%		(0.4	)
Gross margin		3.2			53.3	%		4.8			60.0	%		(1.6	)
Selling, general and administrative expense		18.7			311.7	%		8.6			107.5	%		10.1
Impairment of goodwill and long-lived assets		7.3			121.7	%		-			0.0	%		7.3
Restructuring and other expense		0.4			6.7	%		-			0.0	%		0.4
Operating loss	$	(23.2	)		-386.7	%	$	(3.8	)		-47.5	%	$	(19.4	)

Net sales and operating highlights were as follows:

• Net sales decreased $2.0 million from fiscal 2017 due to the sale of WEI effective March 31, 2018.  

• Operating loss of $23.2 million in fiscal 2018 was driven by lower earnings at WEI due to a $7.3 million charge for the impairment of goodwill and certain intangible assets and higher SG&A expense driven by non-allocated corporate costs. For additional information regarding the impairment charge, refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note C – Goodwill and Other Long-Lived Assets” of this Annual Report on Form 10-K.

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Fiscal 2017 Compared to Fiscal 2016

Consolidated Operations

The following table presents consolidated operating results for the periods indicated:

	Fiscal Year Ended May 31,
				% of						% of			Increase/
(Dollars in millions)	2017			Net sales			2016			Net sales			(Decrease)
Net sales	$	3,014.1			100.0	%	$	2,819.7			100.0	%	$	194.4
Cost of goods sold		2,478.2			82.2	%		2,367.1			83.9	%		111.1
Gross margin		535.9			17.8	%		452.6			16.1	%		83.3
Selling, general and administrative expense		316.4			10.5	%		297.4			10.5	%		19.0
Impairment of long-lived assets		-			0.0	%		26.0			0.9	%		(26.0	)
Restructuring and other expense, net		6.4			0.2	%		7.2			0.3	%		(0.8	)
Operating income		213.1			7.1	%		122.0			4.3	%		91.1
Miscellaneous income		3.8			0.1	%		11.3			0.4	%		(7.5	)
Interest expense		(29.8	)		-1.0	%		(31.7	)		-1.1	%		(1.9	)
Equity in net income of unconsolidated affiliates		110.0			3.6	%		115.0			4.1	%		(5.0	)
Income tax expense		(79.2	)		-2.6	%		(59.0	)		-2.1	%		20.2
Net earnings		217.9			7.2	%		157.6			5.6	%		60.3
Net earnings attributable to noncontrolling interests		13.4			0.4	%		13.9			0.5	%		(0.5	)
Net earnings attributable to controlling interest	$	204.5			6.8	%	$	143.7			5.1	%	$	60.8
Equity income by unconsolidated affiliate
WAVE	$	78.3					$	82.7					$	(4.4	)
ClarkDietrich		17.3						14.6						2.7
Serviacero Worthington		7.2						6.3						0.9
ArtiFlex		7.0						10.3						(3.3	)
WSP		-						1.7						(1.7	)
Other		0.2						(0.6	)					0.8
Total	$	110.0					$	115.0					$	(5.0	)

Fiscal 2017 net earnings attributable to controlling interest increased $60.8 million over fiscal 2016.  Net sales and operating highlights were as follows:

• Net sales increased $194.4 million from fiscal 2016.  The increase was driven by higher average direct selling prices in Steel Processing, which favorably impacted net sales by $156.9 million, partially offset by lower volume in Engineered Cabs and certain Pressure Cylinder businesses.  Net sales were also favorably impacted by the consolidation of the WSP joint venture effective March 1, 2016.

• Gross margin increased $83.3 million over fiscal 2016. The increase was driven primarily by higher gross margin at Steel Processing, up $68.9 million on an improved pricing spread and contributions from the consolidation of WSP.  The remaining improvement in gross margin was driven by increases in Pressure Cylinders, where strength in consumer products was partially offset by weakness in industrial products and oil & gas equipment.

• SG&A expense increased $19.0 million over fiscal 2016. The consolidation of WSP and the impact of prior year acquisitions in Pressure Cylinders accounted for $8.1 million of the increase.  The remaining increase in SG&A expense was driven primarily by higher profit sharing and bonus expense and an increase in accrued legal costs, which were up a combined $14.2 million.    

• Impairment charges of $26.0 million in fiscal 2016 consisted of $23.0 million related to the impairment of certain long-lived assets in our oil & gas equipment business and $3.0 million related to the September 30, 2015 closure of the Engineered Cabs facility in Florence, South Carolina.  For additional information regarding these impairment charges, refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note C – Goodwill and Other Long-Lived Assets” of this Annual Report on Form 10-K.

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• Restructuring and other expense totaled $6.4 million in fiscal 2017. A total of $3.4 million related to activities within Pressure Cylinders, including $2.0 million of costs incurred in connection with a plant consolidation at our cryogenics business in Turkey.  The remaining activity related to ongoing costs associated with previously completed plant closures in Steel Processing and Engineered Cabs.

• Miscellaneous income decreased $7.5 million from fiscal 2016.  The decrease was primarily the result of a $6.9 million pre-tax gain related to the consolidation of WSP in fiscal 2016.  The gain represents the difference between the fair value of the Company’s previously-held ownership in WSP and its carrying value at the acquisition date.  

• Interest expense decreased $1.9 million from fiscal 2016.  The decrease was driven primarily by lower average short-term borrowings. For additional information, refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note G – Debt and Receivables Securitization” of this Annual Report on Form 10-K.

• Equity income decreased $5.0 million from fiscal 2016 to $110.0 million.  The decrease was driven by lower contributions from WAVE due to accelerated customer purchases in the fourth quarter of fiscal 2016, lower offload business at ArtiFlex and the impact of the consolidation of WSP.  The impact of these items was partially offset by higher contributions from ClarkDietrich, up $2.7 million despite a $4.5 million favorable impact related to legal settlements in fiscal 2016.  We received distributions of $102.0 million from our unconsolidated affiliates during fiscal 2017.  For additional financial information regarding our unconsolidated affiliates, refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note B – Investments in Unconsolidated Affiliates” of this Annual Report on Form 10-K.

• Income tax expense increased $20.2 million over fiscal 2016 due to higher earnings, partially offset by a $13.1 million increase in tax benefits associated with share-based payment awards.  Fiscal 2017 income tax expense reflected an effective tax rate attributable to controlling interest of 27.9% vs. 29.1% in fiscal 2016.  The 27.9% rate is lower than the federal statutory income tax rate of 35% primarily as a result of tax benefits associated with share-based payment awards, benefits from the qualified production activities deduction, and lower tax rates on foreign income, offset partially by state and local income taxes.  For additional information, refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note L – Income Taxes” of this Annual Report on Form 10-K.

Segment Operations

Steel Processing

The following table presents a summary of operating results for our Steel Processing operating segment for the periods indicated:

	Fiscal Year Ended May 31,
			% of					% of			Increase/
(Dollars in millions)	2017		Net sales			2016		Net sales			(Decrease)
Net sales	$	2,074.8		100.0	%	$	1,843.7		100.0	%	$	231.1
Cost of goods sold		1,757.0		84.7	%		1,594.8		86.5	%		162.2
Gross margin		317.8		15.3	%		248.9		13.5	%		68.9
Selling, general and administrative expense		145.5		7.0	%		132.8		7.2	%		12.7
Restructuring and other expense		1.8		0.1	%		4.1		0.2	%		(2.3	)
Operating income	$	170.5		8.2	%	$	112.0		6.1	%	$	58.5
Material cost	$	1,364.5				$	1,245.1				$	119.4
Tons shipped (in thousands)		4,071					3,523					548

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Net sales and operating highlights were as follows:

• Net sales increased $231.1 million over fiscal 2016 driven primarily by higher average direct selling prices, which increased net sales by $156.9 million.  The remaining increase was due to higher overall volume, including $49.6 million related to the consolidation of the WSP joint venture.  The mix of direct versus toll tons processed was 52% to 48% compared to 58% to 42% in fiscal 2016. The change in mix was driven primarily by the consolidation of WSP.

• Operating income increased $58.5 million over fiscal 2016 on higher gross margin, partially offset by higher SG&A expense.  Favorable pricing spreads, which benefited from significant inventory holding gains in fiscal 2017 compared to inventory holding losses in fiscal 2016, and higher direct volume increased gross margin by $71.6 million and $10.8 million, respectively.  This was partially offset by higher manufacturing expenses driven by higher profit sharing and bonus expense, an increase in healthcare costs and production/start-up costs associated with new production lines at our TWB joint venture.  SG&A expense increased $12.7 million on higher allocated corporate costs, the consolidation of WSP, and higher profit sharing and bonus expense.  Restructuring and other expense in fiscal 2017 consisted primarily of costs related to the closure of our stainless steel business.  

Pressure Cylinders

The following table presents a summary of operating results for our Pressure Cylinders operating segment for the periods indicated:

	Fiscal Year Ended May 31,
			% of					% of			Increase/
(Dollars in millions)	2017		Net sales			2016		Net sales			(Decrease)
Net sales	$	829.8		100.0	%	$	844.9		100.0	%	$	(15.1	)
Cost of goods sold		625.5		75.4	%		649.3		76.8	%		(23.8	)
Gross margin		204.3		24.6	%		195.6		23.2	%		8.7
Selling, general and administrative expense		146.8		17.7	%		143.8		17.0	%		3.0
Impairment of long-lived assets		-		0.0	%		23.0		2.7	%		(23.0	)
Restructuring and other expense, net		3.4		0.4	%		0.4		0.0	%		3.0
Operating income	$	54.1		6.5	%	$	28.4		3.4	%	$	25.7
Material cost	$	338.4				$	359.8				$	(21.4	)
Net sales by principal class of products:
Consumer products	$	315.0				$	293.2				$	21.8
Industrial products		341.2					362.7					(21.5	)
Alternative fuels		111.3					98.7					12.6
Oil & gas equipment		62.3					90.3					(28.0	)
Total Pressure Cylinders	$	829.8				$	844.9				$	(15.1	)
Units shipped by principal class of products:
Consumer products		60,665,420					61,631,907					(966,487	)
Industrial products		10,155,628					10,484,892					(329,264	)
Alternative fuels		512,257					422,630					89,627
Oil & gas equipment		2,308					3,668					(1,360	)
Total Pressure Cylinders		71,335,613					72,543,097					(1,207,484	)

Net sales and operating highlights were as follows:

• Net sales decreased $15.1 million from fiscal 2016. The decrease was driven by lower volumes in the oil & gas equipment and industrial products businesses, partially offset by improvements in consumer products and alternative fuels.  Softness in the oil & gas equipment market led to a 31%, or $28.0 million, decline in net sales.  However, this market began to show signs of improvement in the fourth quarter of fiscal 2017.  Net sales in the industrial products business were down $21.5 million on lower volume due to weaker demand for our refillable propane cylinder products, as well as softness for high pressure cylinders in Europe.  

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• Operating income increased$25.7 million over fiscal 2016on lower impairment and restructuring charges, which declines a combined $20.0 million.  The remaining increase was driven by improvements in the consumer products business, up on the combined impact of higher pricing spreads and an improved product mix, partially offset by declines in the industrial products and oil & gas equipment businesses.

Engineered Cabs

The following table presents a summary of operating results for our Engineered Cabs operating segment for the periods indicated:

	Fiscal Year Ended May 31,
				% of						% of			Increase/
(In millions)	2017			Net sales			2016			Net sales			(Decrease)
Net sales	$	101.4			100.0	%	$	121.9			100.0	%	$	(20.5	)
Cost of goods sold		92.5			91.2	%		116.2			95.3	%		(23.7	)
Gross margin		8.9			8.8	%		5.7			4.7	%		3.2
Selling, general and administrative expense		15.4			15.2	%		18.4			15.1	%		(3.0	)
Impairment of long-lived assets		-			0.0	%		3.0			2.5	%		(3.0	)
Restructuring and other expense		1.2			1.2	%		3.6			3.0	%		(2.4	)
Operating loss	$	(7.7	)		-7.6	%	$	(19.3	)		-15.8	%	$	11.6
Material cost	$	46.1					$	57.3					$	(11.2	)

Net sales and operating highlights were as follows:

• Net sales decreased $20.5 million from fiscal 2016 on lower volumes due to declines in market demand.

• Operating loss improved $11.6 million to $7.7 million on lower impairment and restructuring charges and the impact of cost reduction efforts, which led to margin improvements and a 16% decline in SG&A expense.

Other

The Other category included the WEI operating segment for both fiscal 2017 and fiscal 2016.  Certain income and expense items not allocated to our operating segments are also included in the Other category, including costs associated with our captive insurance company.  The Other category also includes the results of our former Construction Services operating segment, on a historical basis, through May 31, 2016.  The following table presents a summary of operating results for the Other category for the periods indicated:

	Fiscal Year Ended May 31,
				% of						% of			Increase/
(In millions)	2017			Net sales			2016			Net sales			(Decrease)
Net sales	$	8.0			100.0	%	$	9.2			100.0	%	$	(1.2	)
Cost of goods sold		3.2			40.0	%		6.9			75.0	%		(3.7	)
Gross margin		4.8			60.0	%		2.3			25.0	%		2.5
Selling, general and administrative expense		8.6			107.5	%		2.2			23.9	%		6.4
Restructuring and other income		-			0.0	%		(0.9	)		-9.8	%		(0.9	)
Operating income (loss)	$	(3.8	)		-47.5	%	$	1.0			10.9	%	$	(4.8	)

Net sales and operating highlights were as follows:

• Net sales decreased $1.2 million from fiscal 2016.  The decrease was driven by the exit of the Construction Services business, partially offset by improvement at WEI.

• Operating loss of $3.8 million in fiscal 2017 was driven primarily by higher SG&A expense, up $6.4 million due primarily to higher profit sharing and bonus expense and an increase in accrued legal costs.  Gross margin increased $2.5 million on higher contributions from WEI and a lower loss in the Construction Services business, which ceased operations during the first quarter of fiscal 2017.

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Liquidity and Capital Resources

During fiscal 2018, we generated $281.3 million of cash from operating activities, spent $285.0 million to acquire AMTROL, net of cash acquired, and invested $76.1 million in property, plant and equipment. Additionally, we repurchased 4,375,000 of our common shares for $204.3 million, repaid $32.1 million in short-term borrowings and long-term debt and paid $51.4 million of dividends on our common shares.  The following table summarizes our consolidated cash flows for each period shown:

	Fiscal Year Ended
	May 31,
(in millions)	2018			2017			2016
Net cash provided by operating activities	$	281.3		$	335.7		$	413.3
Net cash used by investing activities		(337.4	)		(63.0	)		(127.0	)
Net cash used by financing activities		(100.0	)		(78.8	)		(233.2	)
Increase (decrease) in cash and cash equivalents		(156.1	)		193.9			53.1
Cash and cash equivalents at beginning of period		278.1			84.2			31.1
Cash and cash equivalents at end of period	$	122.0		$	278.1		$	84.2

We believe we have access to adequate resources to meet our needs for normal operating costs, capital expenditures, debt repayments, dividend payments and working capital for our existing businesses.  These resources include cash and cash equivalents, cash provided by operating activities and unused lines of credit.  We also believe we have adequate access to the financial markets to allow us to be in a position to sell long-term debt or equity securities. We routinely monitor current operational requirements, financial market conditions, and credit relationships and we may choose to seek additional capital by issuing new debt and/or equity securities to strengthen our liquidity or capital structure. However, should we seek such additional capital, there can be no assurance that we would be able to obtain such additional capital on terms acceptable to us, if at all, and such additional equity or debt financing could dilute the interests of our existing shareholders and/or increase our interest costs.  

Operating Activities

Our business is cyclical and cash flows from operating activities may fluctuate during the year and from year to year due to economic and industry conditions.  We rely on cash and short-term borrowings to meet cyclical increases in working capital needs.  These needs generally rise during periods of increased economic activity or increasing raw material prices, requiring higher levels of inventory and accounts receivable.  During economic slowdowns or periods of decreasing raw material costs, working capital needs generally decrease as a result of the reduction of inventories and accounts receivable.

Net cash provided by operating activities was $281.3 million during fiscal 2018 compared to $335.7 million in fiscal 2017.  The $54.4 million decrease in net cash provided by operating activities in fiscal 2018 was driven primarily by higher working capital resulting from higher average steel prices and lower distributions from unconsolidated joint ventures.  Net cash provided by operating activities in fiscal 2017 was affected by an increase in working capital levels as a result of higher average steel prices, partially offset by higher net earnings as compared to fiscal 2016.

Investing Activities

Net cash used by investing activities was $337.4 million during fiscal 2018 compared to $63.0 million in fiscal 2017, an increase of $274.4 million.  The increase was driven primarily by the acquisition of AMTROL supplemented by higher capital expenditures, which increased $7.7 million.  During fiscal 2018, we spent a combined $285.0 million, net of cash acquired, to acquire AMTROL.  Net cash used by investing activities in fiscal 2017 was affected by the absence of acquisitions and lower capital expenditures.  

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Capital expenditures reflect cash used for investment in property, plant and equipment and are presented below by reportable business segment (this information excludes cash flows related to acquisition and divestiture activity):

	Fiscal Year Ended
	May 31,
(in millions)	2018		2017		2016
Steel Processing	$	32.0	$	40.8	$	42.1
Pressure Cylinders		32.7		24.8		29.9
Engineered Cabs		2.1		0.8		6.9
Other		9.3		2.0		18.1
Total capital expenditures	$	76.1	$	68.4	$	97.0

Capital expenditures were $76.1 million in fiscal 2018. Significant capital expenditures in fiscal 2018 included $7.2 million for ongoing corporate renovations, $5.6 million to expand capacity at TWB, our consolidated laser welding joint venture, $5.1 million for capital improvements at Spartan, our steel coating joint venture, and $4.4 million for a new building for our oil & gas equipment business in Skiatook, Oklahoma to replace an expiring leased facility.

Investment activities are largely discretionary and future investment activities could be reduced significantly, or eliminated, as economic conditions warrant. We assess acquisition opportunities as they arise, and any such opportunities may require additional financing.  There can be no assurance, however, that any such opportunities will arise, that any such acquisition opportunities will be consummated, or that any needed additional financing will be available on satisfactory terms when required.  

Financing Activities

Net cash used by financing activities was $100.0 million in fiscal 2018 compared to $78.8 million in fiscal 2017. During fiscal 2018, we paid $204.3 million to repurchase 4,375,000 of our common shares, reduced long-term debt by $31.1 million, and paid dividends of $51.4 million on our common shares.  In fiscal 2017, there were no share repurchases and repayments of short-term borrowings were lower.

Long-term debt – Our senior unsecured long-term debt is rated “investment grade” by both Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Group. We typically use the net proceeds from long-term debt for acquisitions, refinancing of outstanding debt, capital expenditures and general corporate purposes.  As of May 31, 2018, we were in compliance with our long-term financial debt covenants.  Our long-term debt agreements do not include ratings triggers or material adverse change provisions.

On July 28, 2017, we issued $200.0 million aggregate principal amount of senior unsecured notes due August 1, 2032.  The 2032 Notes bear interest at a rate of 4.300%.  The 2032 Notes were sold to the public at 99.901% of the principal amount thereof, to yield 4.309% to maturity.  We used a portion of the net proceeds from the offering to repay amounts then outstanding under our multi-year revolving credit facility and amounts then outstanding under our revolving trade accounts receivable securitization facility.

On September 26, 2014, Worthington Aritas, executed a five-year term loan denominated in Euros.  On May 29, 2018, the Company paid off this term loan and settled the interest rate swap in anticipation of the planned sale of Worthington Aritas.  

Short-term borrowings – Our short-term debt agreements do not include ratings triggers or material adverse change provisions.  We were in compliance with our short-term financial debt covenants at May 31, 2018.

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We maintain a $500.0 million multi-year revolving credit facility (the “Credit Facility”) with a group of lenders that matures in February 2023.  Borrowings under the Credit Facility have maturities of up to one year and have been classified as short-term borrowings within current liabilities on our consolidated balance sheets.  We have the option to borrow at rates equal to an applicable margin over the LIBOR, Prime or Overnight Bank Funding rate.  The applicable margin is determined by our credit rating.  There were no borrowings outstanding under the Credit Facility at May 31, 2018.  As discussed in “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note F – Guarantees,” we provided $14.5 millionin letters of credit for third-party beneficiaries as of May 31, 2018.  While not drawn against at May 31, 2018, $13.2 million of these letters of credit were issued against availability under the Credit Facility, leaving $486.8 million available at May 31, 2018.

We maintain a $50.0 million revolving trade accounts receivable securitization facility (the “AR Facility”) that matures in January 2019.  Pursuant to the terms of the AR Facility, certain of our subsidiaries sell their accounts receivable without recourse, on a revolving basis, to Worthington Receivables Corporation (“WRC”), a wholly-owned, consolidated, bankruptcy-remote subsidiary.  In turn, WRC may sell without recourse, on a revolving basis, up to $50.0 million of undivided ownership interests in this pool of accounts receivable to a third-party bank.  We retain an undivided interest in this pool and are subject to risk of loss based on the collectability of the receivables from this retained interest.  Because the amount eligible to be sold excludes receivables more than 90 days past due, receivables offset by an allowance for doubtful accounts due to bankruptcy or other cause, concentrations over certain limits with specific customers and certain reserve amounts, we believe additional risk of loss is minimal.  As of May 31, 2018, no undivided ownership interests in this pool of accounts receivable had been sold.  

Common shares – We declared dividends at a quarterly rate of $0.21 per common share for each quarter of fiscal 2018 compared to $0.20 per common share for each quarter of fiscal 2017.  Dividends paid on our common shares totaled $51.4 million and $50.7 million during fiscal 2018 and fiscal 2017, respectively. On June 27, 2018, the Board declared a quarterly dividend of $0.23 per common share.  The dividend is payable on September 28, 2018 to shareholders of record on September 14, 2018.

On June 25, 2014, the Board authorized the repurchase of up to 10,000,000 of the outstanding common shares of Worthington Industries Inc. and on September 27, 2017, the Board authorized the repurchase of up to an additional 6,828,855 of common shares.  The total number of common shares available to repurchase at May 31, 2018 is 6,500,000.

During fiscal 2018, we repurchased 4,375,000 common shares having an aggregate cost of $204.3 million.  No common shares were repurchased during fiscal 2017 due to the anticipated investment opportunity in AMTROL.  

The common shares available for repurchase under the authorization currently in effect may be purchased from time to time, with consideration given to the market price of the common shares, the nature of other investment opportunities, cash flows from operations, general economic conditions and other relevant factors.  Repurchases may be made on the open market or through privately negotiated transactions.

Dividend Policy

We currently have no material contractual or regulatory restrictions on the payment of dividends.  Dividends are declared at the discretion of the Board.  The Board reviews the dividend quarterly and establishes the dividend rate based upon our financial condition, results of operations, capital requirements, current and projected cash flows, business prospects and other relevant factors.  While we have paid a dividend every quarter since becoming a public company in 1968, there is no guarantee that payments of dividends will continue in the future.

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Contractual Cash Obligations and Other Commercial Commitments

The following table summarizes our contractual cash obligations as of May 31, 2018.  Certain of these contractual obligations are reflected in our consolidated balance sheet, while others are disclosed as future obligations in accordance with U.S. GAAP.

	Payments Due by Period
			Less Than		1 - 3		4 - 5		After
(in millions)	Total		1 Year		Years		Years		5 Years
Long-term debt	$	754.7	$	1.5	$	151.7	$	1.2	$	600.3
Interest expense on long-term debt		263.8		36.6		62.3		62.0		102.9
Operating leases		43.4		11.4		15.6		10.9		5.5
Royalty obligations		10.0		2.0		4.0		4.0		-
Total contractual cash obligations	$	1,071.9	$	51.5	$	233.6	$	78.1	$	708.7

Interest expense on long-term debt is computed by using the rates of interest on each tranche of long-term debt, including impacts of the related interest rate hedges.  Royalty obligations relate to a trademark license agreement executed in connection with the acquisition of Coleman Cylinders in fiscal 2012.  Due to the uncertainty regarding the timing of future cash outflows associated with the unfunded portion of our pension benefit obligations and our unrecognized tax benefits, we are unable to make a reliable estimate of the periods of cash settlement and have not included these amounts in the contractual cash obligations table above.  For additional information, refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note K – Employee Pension Plans” and “Note L – Income Taxes” of this Annual Report on Form 10-K.

The following table summarizes our other commercial commitments as of May 31, 2018.  These commercial commitments are not reflected in our consolidated balance sheet.

	Commitment Expiration by Period
			Less Than		1 - 3		4 - 5		After
(in millions)	Total		1 Year		Years		Years		5 Years
Guarantees	$	8.4	$	8.4	$	-	$	-	$	-
Standby letters of credit		14.5		14.5		-		-		-
Total commercial commitments	$	22.9	$	22.9	$	-	$	-	$	-

Off-Balance Sheet Arrangements

We do not have guarantees or other off-balance sheet financing arrangements that we believe are reasonably likely to have a material current or future effect on our consolidated financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.  However, as of May 31, 2018, we were party to an operating lease for an aircraft in which we have guaranteed a residual value at the termination of the lease.  The maximum obligation under the terms of this guarantee was approximately $8.4 million at May 31, 2018.  Based on current facts and circumstances, we have estimated the likelihood of payment pursuant to this guarantee is not probable and, therefore, no amount has been recognized in our consolidated financial statements.

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Recently Issued Accounting Standards

In May 2014, new accounting guidance was issued that replaces most existing revenue recognition guidance under U.S. GAAP.  The new guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.  Subsequently, additional guidance was issued on several areas including guidance intended to improve the operability and understandability of the implementation of principal versus agent considerations and clarifications on the identification of performance obligations and implementation of guidance related to licensing.  The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.  The guidance permits the use of either the retrospective or cumulative effect transition method.  The Company adopted this guidance on June 1, 2018 using the cumulative effect transition method.  Based on our evaluation, which included a review of significant contracts with customers across all revenue streams, it resulted in a change in timing of revenue recognition for the toll processing and oil & gas equipment revenue streams and did not have a material impact on our consolidated financial position or results of operations.  As a result of the adoption of this guidance, the Company will make additional disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers as required by the new guidance.

In February 2016, amended accounting guidance was issued that replaces most existing lease accounting guidance under U.S. GAAP.  Among other changes, the amended guidance requires that lease assets and liabilities be recognized on the balance sheet by lessees for those leases classified as operating leases under previous guidance.  The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  Early adoption is permitted, and the change is to be applied using a modified retrospective approach as of the beginning of the earliest period presented.  We are in the process of evaluating the effect this guidance will have on our consolidated financial position, results of operations and cash flows, and we have not determined the effect of the amended guidance on our ongoing financial reporting.  As of May 31, 2018, we have operating leases with $43.4 million of future minimum lease payments.

In June 2016, amended accounting guidance was issued related to the measurement of credit losses on financial instruments.  The amended guidance changes the impairment model for most financial assets to require measurement and recognition of expected credit losses for financial assets held.  The amended guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.  We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations; however, we do not expect the amended guidance to have a material impact on our ongoing financial reporting.

In October 2016, amended accounting guidance was issued that requires the income tax consequences of an intra-entity transfer of an asset other than inventory to be recognized when the transfer occurs.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption.  Early adoption is permitted.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position, results of operations and cash flows.

In November 2016, amended accounting guidance was issued that requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Early adoption is permitted.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated cash flows.

In March 2017, amended accounting guidance was issued that requires an employer to report the service cost component of pension and postretirement benefits in the same line item as other current employee compensation costs.  Additionally, other components of net benefit cost are to be presented in the income statement separately from the service cost component and outside of income from operations.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and is to be applied retrospectively for the presentation in the income statement and prospectively on and after the

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effective date for the capitalization of service cost.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position, results of operations and cash flows.

In May 2017, amended accounting guidance was issued to provide guidance about which changes to the terms or conditions of a share-based payment award require application of modification accounting.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Early adoption is permitted.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position or results of operations.

In August 2017, amended accounting guidance was issued that modifies hedge accounting by making more hedge strategies eligible for hedge accounting, amending presentation and disclosure requirements, and changing how companies assess effectiveness.  The intent is to simplify application of hedge accounting and increase transparency of information about an entity’s risk management activities.  The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  It is to be applied using a modified retrospective transition approach for cash flow and net investment hedges existing at the date of adoption.  The presentation and disclosure guidance is only required prospectively.  Early adoption is permitted.  We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations, and have not determined the effect on our ongoing financial reporting.

Environmental

We do not believe that compliance with environmental laws has or will have a material effect on our capital expenditures, future results of operations or financial position or competitive position.

Inflation

The effects of inflation on our operations were not significant during the periods presented in the consolidated financial statements.

Critical Accounting Policies

The discussion and analysis of our consolidated financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.  The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.  We continually evaluate our estimates, including those related to our valuation of receivables, inventories, intangible assets, accrued liabilities, income and other tax accruals and contingencies and litigation.  We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances.  These results form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.  Critical accounting policies are defined as those that reflect our significant judgments and uncertainties that could potentially result in materially different results under different assumptions and conditions.  Although actual results historically have not deviated significantly from those determined using our estimates, as discussed below, our consolidated financial position or results of operations could be materially different if we were to report under different conditions or to use different assumptions in the application of such policies.  We believe the following accounting policies are the most critical to us, as these are the primary areas where financial information is subject to our estimates, assumptions and judgment in the preparation of our consolidated financial statements.

Revenue Recognition:  We recognize revenue upon transfer of title and risk of loss, or in the case of toll processing revenue, upon delivery of the goods, provided evidence of an arrangement exists, pricing is fixed and determinable and the ability to collect is probable.  In circumstances where the collection of payment is not probable at the time of shipment, we defer recognition of revenue until payment is collected.  We provide for returns and allowances based on historical experience and current customer activities.  We also provide for customer rebates and sales discounts based on specific agreements and recent and anticipated levels of customer activity.

Receivables:  In order to ensure that our receivables are properly valued, we utilize two contra-receivable accounts: returns and allowances and allowance for doubtful accounts.  Returns and allowances are used to record estimates of returns or other allowances resulting from quality, delivery, discounts or other issues affecting the value

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of receivables.  This account is estimated based on historical trends and current market conditions, with the offset to net sales.

The allowance for doubtful accounts is used to record the estimated risk of loss related to the customers’ inability to pay.  This allowance is maintained at a level that we consider appropriate based on factors that affect collectability, such as the financial health of our customers, historical trends of charge-offs and recoveries and current economic and market conditions.  As we monitor our receivables, we identify customers that may have payment problems, and we adjust the allowance accordingly, with the offset to SG&A expense.  Account balances are charged off against the allowance when recovery is considered remote.

We review our receivables on an ongoing basis to ensure that they are properly valued and collectible.  Based on this review, we believe our related reserves are appropriate.  The allowance for doubtful accounts decreased approximately $2.8 million during fiscal 2018 to $0.6 million.

While we believe our allowance for doubtful accounts is adequate, changes in economic conditions, the financial health of customers and bankruptcy settlements could impact our future earnings.  If the economic environment and market conditions deteriorate, particularly in the automotive and construction end markets where our exposure is greatest, additional bad debt reserves may be required.

Inventory Valuation:  Inventories are valued at the lower of cost or net realizable value.  Cost is determined using the first-in, first-out method for all inventories. The assessment of net realizable value requires the use of significant estimates to determine cost to complete, normal profit margin and the ultimate selling price of the inventory.  We believe our inventories were valued appropriately as of May 31, 2018 and May 31, 2017.

Impairment of Definite-Lived Long-Lived Assets:  We review the carrying value of our long-lived assets, including intangible assets with finite useful lives, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable.  Impairment testing involves a comparison of the sum of the undiscounted future cash flows of the asset or asset group to its respective carrying amount.  If the sum of the undiscounted future cash flows exceeds the carrying amount, then no impairment exists. If the carrying amount exceeds the sum of the undiscounted future cash flows, then a second step is performed to determine the amount of impairment, if any, to be recognized.  An impairment loss is recognized to the extent that the carrying amount of the asset or asset group exceeds its fair value.

Fiscal 2018:  During the fourth quarter of fiscal 2018, management committed to plans to sell the Company’s cryogenics business in Turkey, Worthington Aritas, and certain underperforming oil & gas equipment assets within Pressure Cylinders.  As all of the criteria for classification as assets held for sale were met in both instances, the net assets of each asset group have been presented separately as assets held for sale in our consolidated balance sheets.  In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell.  The book value of Worthington Aritas exceeded its estimated fair market value of $9.0 million, resulting in an impairment charge of $42.4 million.  The book value of the oil & gas equipment asset group also exceeded its estimated fair market value of $21.0 million resulting in an impairment charge of $10.5 million.

During the second quarter of fiscal 2018, the Company determined that indicators of impairment were present with regard to the goodwill and intangible assets of the former WEI reporting unit.  As a result, these assets were written down to their estimated fair value resulting in an impairment charge of $7.3 million.  During the second quarter of fiscal 2018, the Company also identified the presence of impairment indicators with regard to vacant land at the oil & gas equipment facility in Bremen, Ohio, resulting in an impairment charge of $1.0 million to write the vacant land down to its estimated fair value.  

Fiscal 2016:  Due to the decline in oil prices and resulting reduced demand for products, management determined that an impairment indicator was present for the long-lived assets in the oil & gas equipment business within Pressure Cylinders.  The Company had tested the five asset groups in its oil & gas equipment business for impairment during the fourth quarter of fiscal 2015 and again in the first quarter of fiscal 2016.  In each of these tests, the Company’s estimate of the undiscounted future cash flows for each asset group indicated that the carrying amounts were expected to be recovered as of those measurement dates.

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During the second quarter of fiscal 2016, the continued decline of oil prices further reduced the demand for oil & gas equipment products, causing a significant decrease in the long-term cash flow projections of that business.  Based on these revised cash flow projections, the Company determined that long-lived assets of two of the facilities with a combined carrying amount of $59.9 million were impaired and wrote them down to their estimated fair value of $36.9 million, resulting in an impairment charge of $23.0 million.  Fair value was based on expected future cash flows using Level 3 inputs under Accounting Standard Codification (“ASC”) 820.  The cash flows are those expected to be generated by market participants, discounted at an appropriate rate for the risks inherent in those cash flow projections, or 13%.  

During the first quarter of fiscal 2016, management finalized its plan to close the Engineered Cabs facility in Florence, South Carolina and transfer the majority of the business to the Engineered Cabs facility in Greeneville, Tennessee.  Under the plan, certain machinery and equipment was transferred to the Greeneville facility to support higher volume requirements.  Management reevaluated the recoverability of the remaining assets and determined that long-lived assets with a carrying value of $4.1 million were impaired.  As a result, these long-lived assets were written down to their estimated fair value of $1.1 million resulting in an impairment charge of $3.0 million during the first quarter of fiscal 2016.  The Company ceased production at the Florence facility on September 30, 2015

Impairment of Indefinite-Lived Long-Lived Assets:  Goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment annually, during the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may be present.  Application of goodwill impairment testing involves judgment, including but not limited to, the identification of reporting units and estimation of the fair value of each reporting unit.  A reporting unit is defined as an operating segment or one level below an operating segment. With the exception of Pressure Cylinders, we test goodwill at the operating segment level as we have determined that the characteristics of the reporting units within each operating segment are similar and allow for their aggregation in accordance with the applicable accounting guidance.  For our Pressure Cylinders operating segment, the oil & gas equipment business has been treated as a separate reporting unit since the second quarter of fiscal 2016.

For goodwill and indefinite lived intangible assets, we test for impairment by completing what is referred to as the “Step 0” analysis which involves evaluating qualitative factors including macroeconomic conditions, industry and market considerations, cost factors, and overall financial performance. If our “Step 0” analysis indicates it is more likely than not that the fair value is less than the carrying amount, we would perform a quantitative impairment test. The quantitative analysis compares the fair value of each reporting unit or indefinite-lived intangible asset to the respective carrying amount, and an impairment loss is recognized in our consolidated statements of earnings equivalent to the excess of the carrying amount over the fair value. Fair value is determined based on discounted cash flows or appraised values, as appropriate.

As a result of the fiscal 2016 impairment of the oil & gas equipment assets noted above, the Company also performed an impairment review of the goodwill of the Pressure Cylinders reporting unit during the second quarter of fiscal 2016.  The Company first assessed the reporting unit structure and determined that it was no longer appropriate to aggregate the oil & gas equipment component with the rest of Pressure Cylinders for purposes of goodwill impairment testing.  This determination was driven by changes in the economic characteristics of the oil & gas equipment business as a result of sustained low oil prices, which indicated that the risk profile and prospects for growth and profitability were no longer similar to the other components of Pressure Cylinders.  In accordance with the applicable accounting guidance, the Company allocated a portion of Pressure Cylinders goodwill totaling $26.0 million to the oil & gas equipment reporting unit using a relative fair value approach.  A subsequent comparison of the fair values of the oil & gas equipment and the Pressure Cylinders reporting units, determined using discounted cash flows, to their respective carrying values indicated that a step 2 calculation to quantify a potential impairment was not required.  The key assumptions that drive the fair value calculations are projected cash flows and the discount rate.  Prior to the allocation of goodwill, the Company tested the goodwill of the old Pressure Cylinders reporting unit for impairment and determined that fair value exceeded carrying value by a significant amount.

We performed our annual impairment evaluation of goodwill and other indefinite-lived intangible assets during the fourth quarter of fiscal 2018 and concluded that the fair value of each reporting unit substantially exceeded its carrying value; therefore, no additional impairment charges were recognized.  For additional information on impairment, refer to “Item 8.  Financial Statements – Notes to Consolidated Financial Statements – NOTE C – Goodwill and Other Long-Lived Assets” of this Annual Report on Form 10-K.

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Accounting for Derivatives and Other Contracts at Fair Value:  We use derivatives in the normal course of business to manage our exposure to fluctuations in commodity prices, foreign currency exchange rates and interest rates.  Fair values for these contracts are based upon valuation methodologies deemed appropriate in the circumstances; however, the use of different assumptions could affect the estimated fair values.

Stock-Based Compensation: All share-based awards, including those to employees and non-employee directors, are recorded as expense in the consolidated statements of earnings based on the fair value of each award at the date of grant.  We estimate forfeitures at the date of grant based on historic experience.

Income Taxes:  In accordance with the authoritative accounting guidance, we account for income taxes using the asset and liability method.  The asset and liability method requires the recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between the tax basis and financial reporting basis of our assets and liabilities.  In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that some, or a portion, of the deferred tax assets will not be realized.  We provide a valuation allowance for deferred income tax assets when it is more likely than not that a portion of such deferred income tax assets will not be realized.

In accordance with accounting literature related to uncertainty in income taxes, tax benefits from uncertain tax positions that are recognized in the financial statements are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

We have reserves for taxes and associated interest and penalties that may become payable in future years as a result of audits by taxing authorities.  It is our policy to record these in income tax expense.  While we believe the positions taken on previously filed tax returns are appropriate, we have established the tax and interest reserves in recognition that various taxing authorities may challenge our positions.  These reserves are analyzed periodically, and adjustments are made as events occur to warrant adjustment to the reserves, such as lapsing of applicable statutes of limitations, conclusion of tax audits, additional exposure based on current calculations, identification of new issues, and release of administrative guidance or court decisions affecting a particular tax issue.

Self-Insurance Reserves: We are largely self-insured with respect to workers’ compensation, general and automobile liability, property damage, employee medical claims and other potential losses.  In order to reduce risk and better manage our overall loss exposure, we purchase stop-loss insurance that covers individual claims in excess of the deductible amounts.  We maintain reserves for the estimated cost to settle open claims, which includes estimates of legal costs expected to be incurred, as well as an estimate of the cost of claims that have been incurred but not reported.  These estimates are based on actuarial valuations that take into consideration the historical average claim volume, the average cost for settled claims, current trends in claim costs, changes in our business and workforce, general economic factors and other assumptions believed to be reasonable under the circumstances.  The estimated reserves for these liabilities could be affected if future occurrences and claims differ from assumptions used and historical trends.  Facility consolidations, a focus on safety initiatives and an emphasis on property loss prevention and product quality have resulted in an improvement in our loss history and the related assumptions used to analyze many of the current self-insurance reserves.  We will continue to review these reserves on a quarterly basis, or more frequently if factors dictate a more frequent review is warranted.

The critical accounting policies discussed herein are not intended to be a comprehensive list of all of our accounting policies.  In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S. GAAP, with a lesser need for our judgment in their application.  There are also areas in which our judgment in selecting an available alternative would not produce a materially different result.

Item 7A. – Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, we are exposed to various market risks.  We continually monitor these risks and regularly develop appropriate strategies to manage them.  Accordingly, from time to time, we may enter into certain financial and commodity-based derivative instruments.  These instruments are used solely to mitigate market exposure and are not used for trading or speculative purposes.  Refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note P – Derivative Instruments and Hedging Activities” of this Annual Report on Form 10-K for additional information.

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Interest Rate Risk

We are exposed to changes in interest rates primarily as a result of our borrowing and investing activities to maintain liquidity and fund operations.  The nature and amount of our long-term and short-term debt can be expected to fluctuate as a result of business requirements, market conditions and other factors.  We manage exposures to interest rates using a mix of fixed and variable rate debt.  We use interest rate swap instruments to manage our exposure to interest rate movements.

We entered into an interest rate swap in June 2017, in anticipation of the issuance of $200.0 million principal amount of our 2032 Notes.  Refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note G – Debt and Receivables Securitization” of this Annual Report on Form 10-K for additional information regarding the 2032 Notes.  The interest rate swap had a notional amount of $150.0 million to hedge the risk of changes in the semi-annual interest rate payments attributable to changes in the benchmark interest rate during the several days leading up to the issuance of the 2032 Notes.  Upon pricing of the 2032 Notes, the derivative instrument was settled resulting in a gain of approximately $3.1 million, which was reflected in accumulated other comprehensive loss in our consolidated statements of equity and will be recognized in earnings, as a decrease to interest expense, over the life of the related 2032 Notes.

We entered into an interest rate swap in October 2014 to hedge changes in cash flows attributable to changes in EURIBOR associated with a five-year, euro-denominated term loan entered into by Worthington Aritas.  Under the terms of the swap, we received interest at a variable rate equal to the three-month EURIBOR plus 1.5% and paid interest at a fixed rate of 2.015%.  The interest rate swap had a notional amount equal to 60% of the borrowings outstanding under the facility.  On May 29, 2018, in anticipation of the planned sale of our cryogenics business in Turkey, the term loan was paid off and the derivative instrument settled for an immaterial loss.

We entered into an interest rate swap in March 2014, in anticipation of the issuance of $250.0 million principal amount of our 2026 Notes.  Refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note G – Debt and Receivables Securitization” of this Annual Report on Form 10-K for additional information regarding the 2026 Notes.  The interest rate swap had a notional amount of $150.0 million to hedge the risk of changes in the semi-annual interest payments attributable to changes in the benchmark interest rate during the several days leading up to the issuance of the 12-year fixed-rate debt.  Upon pricing of the 2026 Notes, the derivative instrument was settled and resulted in a loss of approximately $3.1 million, a significant portion of which was reflected within accumulated other comprehensive loss in our consolidated statements of equity and will be recognized in earnings, as an increase to interest expense, over the life of the related 2026 Notes.

We entered into a U.S. Treasury Rate-based treasury lock in April 2010, in anticipation of the issuance of $150.0 million principal amount of our 2020 Notes.  Refer to “Item 8. – Financial Statements and Supplementary Data – Notes to Consolidated Financial Statements – Note G – Debt and Receivables Securitization” of this Annual Report on Form 10-K for additional information regarding the 2020 Notes.  The treasury lock had a notional amount of $150.0 million to hedge the risk of changes in the semi-annual interest payments attributable to changes in the benchmark interest rate during the several days leading up to the issuance of the 10-year fixed-rate debt.  Upon pricing of the 2020 Notes, the derivative instrument was settled and resulted in a loss of approximately $1.4 million, which has been reflected within accumulated other comprehensive loss in our consolidated statements of equity.  That balance is being recognized in earnings, as an increase to interest expense, over the life of the related 2020 Notes.

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Foreign Currency Exchange Risk

The translation of foreign currencies into U.S. dollars subjects us to exposure related to fluctuating foreign currency exchange rates.  Derivative instruments are not used to manage this risk; however, we do make use of forward contracts to manage exposure to certain intercompany loans with our foreign affiliates as well as exposure to transactions denominated in a currency other than the related foreign affiliate’s local currency.  Such forward contracts limit exposure to both favorable and unfavorable currency exchange rate fluctuations.  At May 31, 2018, the difference between the contract and book value of these forward contracts was not material to our consolidated financial position, results of operations or cash flows.  A 10% change in the exchange rate to the U.S. dollar forward rate is not expected to materially impact our consolidated financial position, results of operations or cash flows.  A sensitivity analysis of changes in the U.S. dollar on these foreign currency-denominated contracts indicates that if the U.S. dollar uniformly weakened by 10% against all of these foreign currency exposures, the fair value of these forward contracts would not be materially impacted.  Any resulting changes in fair value would be offset by changes in the underlying hedged balance sheet position.  A sensitivity analysis of changes in the foreign currency exchange rates of our foreign locations indicates that a 10% increase in those rates would not have materially impacted our net results.  The sensitivity analysis assumes a uniform shift in all foreign currency exchange rates.  The assumption that foreign currency exchange rates change in uniformity may overstate the impact of changing exchange rates on assets and liabilities denominated in a foreign currency.

Commodity Price Risk

We are exposed to market risk for price fluctuations on purchases of steel, natural gas, zinc and other raw materials as well as our utility requirements.  We attempt to negotiate the best prices for commodities and to competitively price products and services to reflect the fluctuations in market prices. Derivative financial instruments have been used to manage a portion of our exposure to fluctuations in the cost of certain commodities, including steel, natural gas, zinc and other raw materials.  These contracts covered periods commensurate with known or expected exposures throughout fiscal 2019.  The derivative instruments were executed with highly rated financial institutions.  No credit loss is anticipated.  No derivatives are held for trading purposes.

A sensitivity analysis of changes in the price of hedged commodities indicates that a 10% decline in the market prices of steel, zinc, natural gas or any combination of these would not have a material impact to the value of our hedges or our reported results.

The fair values of our outstanding derivative positions as of May 31, 2018 and 2017 are summarized below.  Fair values of these derivatives do not consider the offsetting impact of the underlying hedged item.

	Fair Value At
	May 31,
(in millions)	2018			2017
Interest rate contracts	$	-		$	(0.3	)
Foreign exchange contracts		(0.1	)		0.1
Commodity contracts		10.7			7.4
	$	10.6		$	7.2

Safe Harbor

Quantitative and qualitative disclosures about market risk include forward-looking statements with respect to management’s opinion about risks associated with the use of derivative instruments.  These statements are based on certain assumptions with respect to market prices and industry supply of, and demand for, steel products and certain raw materials.  To the extent these assumptions prove to be inaccurate, future outcomes with respect to hedging programs may differ materially from those discussed in the forward-looking statements.

49

Item 8. – Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders
Worthington Industries, Inc.:

Opinion on the ConsolidatedFinancial Statements

We have audited the accompanying consolidated balance sheets of Worthington Industries, Inc. and subsidiaries (the Company) as of May 31, 2018 and 2017, the related consolidated statements of earnings, comprehensive income, equity, and cash flows for each of the years in the three‑year period ended May 31, 2018, and the related notes and financial statement schedule of valuation and qualifying accounts (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of May 31, 2018 and 2017, and the results of its operations and its cash flows for each of the years in the three‑year period ended May 31, 2018, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of May 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated July 30, 2018 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/KPMG LLP

We have served as the Company’s auditor since 2001.

Columbus, Ohio
July 30, 2018

50

WORTHINGTON INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands)

	May 31,
	2018		2017
ASSETS
Current assets:
Cash and cash equivalents	$	121,967	$	278,081
Receivables, less allowances of $632 and $3,444 at May 31, 2018
and May 31, 2017, respectively		572,689		486,730
Inventories:
Raw materials		237,471		185,001
Work in process		122,977		95,630
Finished products		93,579		73,303
Total inventories		454,027		353,934
Income taxes receivable		1,650		7,164
Assets held for sale		30,655		9,654
Prepaid expenses and other current assets		60,134		55,406
Total current assets		1,241,122		1,190,969
Investments in unconsolidated affiliates		216,010		208,591
Goodwill		345,183		247,673
Other intangible assets, net of accumulated amortization of $74,922 and
$63,134 at May 31, 2018 and May 31, 2017, respectively		214,026		82,781
Other assets		20,476		24,841
Property, plant and equipment:
Land		24,229		22,077
Buildings and improvements		300,542		297,951
Machinery and equipment		1,030,720		961,542
Construction in progress		32,282		27,616
Total property, plant and equipment		1,387,773		1,309,186
Less: accumulated depreciation		802,803		738,697
Total property, plant and equipment, net		584,970		570,489
Total assets	$	2,621,787	$	2,325,344

See notes to consolidated financial statements.

51

WORTHINGTON INDUSTRIES, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

	May 31,
	2018			2017
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	473,485		$	368,071
Short-term borrowings		-			123
Accrued compensation, contributions to employee benefit plans and related taxes		96,487			86,201
Dividends payable		13,731			13,698
Other accrued items		57,125			41,551
Income taxes payable		4,593			4,448
Current maturities of long-term debt		1,474			6,691
Total current liabilities		646,895			520,783
Other liabilities		74,237			61,498
Distributions in excess of investment in unconsolidated affiliate		55,198			63,038
Long-term debt		748,894			571,796
Deferred income taxes, net		60,188			34,300
Total liabilities		1,585,412			1,251,415
Shareholders' equity - controlling interest:
Preferred shares, without par value; authorized - 1,000,000 shares; issued and
outstanding - none		-			-
Common shares, without par value; authorized - 150,000,000 shares; issued and
outstanding, 2018 - 58,876,921 shares, 2017 - 62,802,456 shares		-			-
Additional paid-in capital		295,592			303,391
Accumulated other comprehensive loss, net of taxes of $2,908 and $5,310 at
May 31, 2018 and May 31, 2017, respectively		(14,580	)		(27,775	)
Retained earnings		637,757			676,019
Total shareholders' equity - controlling interest		918,769			951,635
Noncontrolling interests		117,606			122,294
Total equity		1,036,375			1,073,929
Total liabilities and equity	$	2,621,787		$	2,325,344

See notes to consolidated financial statements.

52

WORTHINGTON INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(In thousands, except per share amounts)

	Fiscal Years Ended May 31,
	2018			2017			2016
Net sales	$	3,581,620		$	3,014,108		$	2,819,714
Cost of goods sold		3,018,763			2,478,203			2,367,121
Gross margin		562,857			535,905			452,593
Selling, general and administrative expense		367,460			316,373			297,402
Impairment of goodwill and long-lived assets		61,208			-			25,962
Restructuring and other expense (income), net		(7,421	)		6,411			7,177
Operating income		141,610			213,121			122,052
Other income (expense):
Miscellaneous income, net		2,996			3,764			11,267
Interest expense		(38,675	)		(29,796	)		(31,670	)
Equity in net income of unconsolidated affiliates		103,139			110,038			114,966
Earnings before income taxes		209,070			297,127			216,615
Income tax expense		8,220			79,190			58,987
Net earnings		200,850			217,937			157,628
Net earnings attributable to noncontrolling interests		6,056			13,422			13,913
Net earnings attributable to controlling interest	$	194,794		$	204,515		$	143,715
Basic
Average common shares outstanding		60,923			62,443			62,469
Earnings per share attributable to controlling interest	$	3.20		$	3.28		$	2.30
Diluted
Average common shares outstanding		63,042			64,874			64,755
Earnings per share attributable to controlling interest	$	3.09		$	3.15		$	2.22

See notes to consolidated financial statements.

53

WORTHINGTON INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

	Fiscal Years Ended May 31,
	2018		2017			2016
Net earnings	$	200,850	$	217,937		$	157,628
Other comprehensive income (loss):
Foreign currency translation		12,744		1,342			4,716
Pension liability adjustment, net of tax		1,566		2,242			(2,058	)
Cash flow hedges, net of tax		959		(2,822	)		22,208
Other comprehensive income		15,269		762			24,866
Comprehensive income		216,119		218,699			182,494
Comprehensive income attributable to noncontrolling interests		6,429		13,394			16,640
Comprehensive income attributable to controlling interest	$	209,690	$	205,305		$	165,854

See notes to consolidated financial statements.

54

WORTHINGTON INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in thousands, except per share amounts)

	Controlling Interest
									Accumulated
									Other
						Additional			Comprehensive
	Common Shares					Paid-in			Loss,			Retained						Noncontrolling
(in thousands)	Shares			Amount		Capital			Net of Tax			Earnings			Total			Interests			Total
Balance at May 31, 2015		64,141,478		$	-	$	289,078		$	(50,704	)	$	510,738		$	749,112		$	90,937		$	840,049
Net earnings		-			-		-			-			143,715			143,715			13,913			157,628
Other comprehensive income		-			-		-			22,139			-			22,139			2,727			24,866
Acquisition of Worthington Specialty Processing		-			-		-			-			-			-			28,004			28,004
Common shares issued, net of withholding tax		892,190			-		8,707			-			-			8,707			-			8,707
Theoretical common shares in NQ plans		-			-		960			-			-			960			-			960
Stock-based compensation		-			-		16,534			-			-			16,534			-			16,534
Purchases and retirement of common shares		(3,500,000	)		-		(16,295	)		-			(83,552	)		(99,847	)		-			(99,847	)
Dividends to noncontrolling interests		-			-		-			-			-			-			(9,106	)		(9,106	)
Cash dividends declared ($0.76 per share)		-			-		-			-			(47,949	)		(47,949	)		-			(47,949	)
Balance at May 31, 2016		61,533,668		$	-	$	298,984		$	(28,565	)	$	522,952		$	793,371		$	126,475		$	919,846
Net earnings		-			-		-			-			204,515			204,515			13,422			217,937
Other comprehensive income (loss)		-			-		-			790			-			790			(28	)		762
Common shares issued, net of withholding tax		1,268,788			-		(9,075	)		-			-			(9,075	)		-			(9,075	)
Theoretical common shares in NQ plans		-			-		1,259			-			-			1,259			-			1,259
Stock-based compensation		-			-		13,158			-			-			13,158			-			13,158
Purchase of noncontrolling interest in dHybrid    Systems, LLC		-			-		(935	)		-			-			(935	)		(1,953	)		(2,888	)
Dividends to noncontrolling interests		-			-		-			-			-			-			(15,622	)		(15,622	)
Cash dividends declared ($0.80 per share)		-			-		-			-			(51,448	)		(51,448	)		-			(51,448	)
Balance at May 31, 2017		62,802,456		$	-	$	303,391		$	(27,775	)	$	676,019		$	951,635		$	122,294		$	1,073,929
Net earnings		-			-		-			-			194,794			194,794			6,056			200,850
Other comprehensive income		-			-		-			14,896			-			14,896			373			15,269
Common shares issued, net of withholding tax		449,465			-		(2,120	)		-			-			(2,120	)		-			(2,120	)
Theoretical common shares in NQ plans		-			-		1,218			-			-			1,218			-			1,218
Stock-based compensation		-			-		13,460			-			-			13,460			-			13,460
Purchase of noncontrolling interest in Worthington    Aritas		-			-		924			-			-			924			(2,837	)		(1,913	)
Sale of controlling interest in WEI		-			-		-			-			-			-			(365	)		(365	)
Reclassification of stranded tax effects		-			-		-			(1,701	)		1,701			-			-			-
Purchases and retirement of common shares		(4,375,000	)		-		(21,281	)		-			(182,986	)		(204,267	)		-			(204,267	)
Dividends to noncontrolling interests		-			-		-			-			-			-			(7,915	)		(7,915	)
Cash dividends declared ($0.84 per share)		-			-		-			-			(51,771	)		(51,771	)		-			(51,771	)
Balance at May 31, 2018		58,876,921		$	-	$	295,592		$	(14,580	)	$	637,757		$	918,769		$	117,606		$	1,036,375

See notes to consolidated financial statements

55

WORTHINGTON INDUSTRIES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Fiscal Years Ended May 31,
	2018			2017			2016
Operating activities:
Net earnings	$	200,850		$	217,937		$	157,628
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		103,359			86,793			84,699
Impairment of goodwill and long-lived assets		61,208			-			25,962
Provision for (benefit from) deferred income taxes		(38,237	)		18,443			7,354
Bad debt expense		11			269			346
Equity in net income of unconsolidated affiliates, net of distributions		(13,352	)		(8,023	)		(29,473	)
Net (gain) loss on assets		(10,522	)		7,951			(12,996	)
Stock-based compensation		13,758			14,349			15,836
Gain on previously held equity interest in Worthington Specialty Processing		-			-			(6,877	)
Changes in assets and liabilities, net of impact of acquisitions:
Receivables		(53,066	)		(39,927	)		66,117
Inventories		(84,654	)		(34,599	)		66,351
Prepaid expenses and other current assets		(12,402	)		985			18,327
Other assets		(1,258	)		1,905			(4,530	)
Accounts payable and accrued expenses		105,984			67,492			20,180
Other liabilities		9,666			2,097			4,460
Net cash provided by operating activities		281,345			335,672			413,384
Investing activities:
Investment in property, plant and equipment		(76,088	)		(68,386	)		(97,036	)
Acquisitions, net of cash acquired		(285,028	)		-			(34,206	)
Distributions from (investments in) unconsolidated affiliates		2,400			-			(5,595	)
Proceeds from sale of assets and insurance		21,311			5,422			9,797
Net cash used by investing activities		(337,405	)		(62,964	)		(127,040	)
Financing activities:
Net repayments of short-term borrowings, net of issuance costs		(948	)		(2,528	)		(85,843	)
Proceeds from long-term debt, net of issuance costs		197,685			-			921
Principal payments on long-term debt		(31,130	)		(874	)		(862	)
Proceeds from issuance of common shares, net of tax withholdings		(2,120	)		(9,075	)		8,707
Payments to noncontrolling interests		(7,915	)		(15,622	)		(9,106	)
Repurchase of common shares		(204,267	)		-			(99,847	)
Dividends paid		(51,359	)		(50,716	)		(47,193	)
Net cash used by financing activities		(100,054	)		(78,815	)		(233,223	)
Increase (decrease) in cash and cash equivalents		(156,114	)		193,893			53,121
Cash and cash equivalents at beginning of year		278,081			84,188			31,067
Cash and cash equivalents at end of year	$	121,967		$	278,081		$	84,188

See notes to consolidated financial statements.

56

WORTHINGTON INDUSTRIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Fiscal Years Ended May 31, 2018, 2017 and 2016

Note A – Summary of Significant Accounting Policies

Consolidation:  The consolidated financial statements include the accounts of Worthington Industries, Inc. and consolidated subsidiaries (collectively, “we,” “our,” “Worthington,” or the “Company”).  Investments in unconsolidated affiliates are accounted for using the equity method.  Significant intercompany accounts and transactions are eliminated.

The Company owns controlling interests in the following three joint ventures: Spartan Steel Coating, LLC (“Spartan”) (52%), TWB Company, L.L.C. (“TWB”) (55%), and Worthington Specialty Processing (“WSP”) (51%).  These joint ventures are consolidated with the equity owned by the other joint venture members shown as noncontrolling interests in our consolidated balance sheets, and their portions of net earnings and other comprehensive income (loss) (“OCI”) shown as net earnings or comprehensive income attributable to noncontrolling interests in our consolidated statements of earnings and comprehensive income, respectively. On January 1, 2017, the Company acquired the minority membership interest in dHybrid Systems, LLC (“dHybrid”) from the noncontrolling member in a non-cash transaction.  The difference between the fair value of the noncontrolling interest and its carrying value was recorded as a reduction to additional paid-in capital in the amount of $935,000 (net of tax of $539,000).  Effective March 31, 2018, the Company sold its controlling stake in Worthington Energy Innovations, LLC (“WEI”) to the minority member.  There was no impact to net earnings as a result of the transaction as the fair value of the consideration received approximated the net book value of WEI.  On May 23, 2018, the Company acquired the minority ownership interest in Turkey-based Worthington Arıtaş Basınçlı Kaplar Sanayi (“Worthington Aritas”) from the noncontrolling members in a non-cash transaction. The difference between the fair value of the noncontrolling interest and its carrying value was recorded as an increase to additional paid-in-capital in the amount of $924,000.  

Use of Estimates:  The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.  Actual results could differ from those estimates.

Cash and Cash Equivalents:  We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Inventories:  Inventories are valued at the lower cost or net realizable value.  Cost is determined using the first-in, first-out method for all inventories.  The assessment of net realizable value requires the use of significant estimates to determine cost to complete, normal profit margin and the ultimate selling price of the inventory.  We believe our inventories were valued appropriately as of May 31, 2018 and 2017.

Derivative Financial Instruments:We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations.  The primary risks managed through the use of derivative instruments include interest rate risk, currency exchange risk and commodity price risk.  All derivative instruments are accounted for using mark-to-market accounting.  The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it.  Gains and losses on fair value hedges are recognized in current period earnings in the same line as the underlying hedged item.  The effective portion of gains and losses on cash flow hedges is deferred as a component of accumulated other comprehensive income or loss (“AOCI”) and recognized in earnings at the time the hedged item affects earnings, in the same financial statement caption as the underlying hedged item.  Ineffectiveness of the hedges during the fiscal year ended May 31, 2018 (“fiscal 2018”), the fiscal year ended May 31, 2017 (“fiscal 2017”) and the fiscal year ended May 31, 2016 (“fiscal 2016”) was immaterial. Classification in the consolidated statements of earnings of gains and losses related to derivative instruments that do not qualify for hedge accounting is determined based on the underlying intent of the instruments.  Cash flows related to derivative instruments are generally classified as operating activities in our consolidated statements of cash flows.

57

In order for hedging relationships to qualify for hedge accounting under current accounting guidance, we formally document each hedging relationship and its risk management objective.  This documentation includes the hedge strategy, the hedging instrument, the hedged item, the nature of the risk being hedged, how hedge effectiveness will be assessed prospectively and retrospectively as well as a description of the method used to measure hedge ineffectiveness.

Derivative instruments are executed only with highly-rated counterparties.  No credit loss is anticipated on existing instruments, and no material credit losses have been experienced to date.  We monitor our positions, as well as the credit ratings of counterparties to those positions.

We discontinue hedge accounting when it is determined that the derivative instrument is no longer effective in offsetting the hedged risk, expires or is sold, is terminated or is no longer designated as a hedging instrument because it is unlikely that a forecasted transaction will occur or we determine that designation of the hedging instrument is no longer appropriate.  In all situations in which hedge accounting is discontinued and the derivative instrument is retained, we continue to carry the derivative instrument at its fair value on the consolidated balance sheet and recognize any subsequent changes in its fair value in net earnings immediately.  When it is probable that a forecasted transaction will not occur, we discontinue hedge accounting and immediately recognize the gains and losses that were accumulated in AOCI.

Refer to “Note P – Derivative Instruments and Hedging Activities” for additional information regarding the consolidated balance sheet location and the risk classification of our derivative instruments.

Risks and Uncertainties:  As of May 31, 2018, excluding our joint ventures, we operated 36 manufacturing facilities worldwide, principally in three operating segments, which correspond with our reportable business segments: Steel Processing, Pressure Cylinders, and Engineered Cabs.  We also held equity positions in 9 joint ventures, which operated 49 manufacturing facilities worldwide, as of May 31, 2018.  Our largest end market is the automotive industry, which comprised 37%, 43%, and 42% of consolidated net sales in fiscal 2018, fiscal 2017, and fiscal 2016, respectively.  Our international operations represented 9%, 7%, and 6% of consolidated net sales and 6%, 4%, and 8% of net earnings attributable to controlling interest in fiscal 2018, fiscal 2017, and fiscal 2016, respectively, and 14% and 11% of consolidated net assets as of May 31, 2018 and May 31, 2017, respectively.  As of May 31, 2018, approximately 9% of our consolidated labor force was represented by collective bargaining agreements.  The concentration of credit risks from financial instruments related to the markets we serve is not expected to have a material adverse effect on our consolidated financial position, cash flows or future results of operations.

In fiscal 2018, our largest customer accounted for approximately 8% of our consolidated net sales, and our ten largest customers accounted for approximately 30% of our consolidated net sales.  A significant loss of, or decrease in, business from any of these customers could have an adverse effect on our consolidated net sales and financial results if we were not able to obtain replacement business.  Also, due to consolidation within the industries we serve, including the construction, automotive and retail industries, our sales may be increasingly sensitive to deterioration in the financial condition of, or other adverse developments with respect to, one or more of our largest customers.

Our principal raw material is flat-rolled steel, which we purchase from multiple primary steel producers.  The steel industry as a whole has been cyclical, and at times availability and pricing can be volatile due to a number of factors beyond our control. This volatility can significantly affect our steel costs.  In an environment of increasing prices for steel and other raw materials, in general, competitive conditions may impact how much of the price increases we can pass on to our customers.  To the extent we are unable to pass on future price increases in our raw materials to our customers, our financial results could be adversely affected.  Also, if steel prices decrease, in general, competitive conditions may impact how quickly we must reduce our prices to our customers, and we could be forced to use higher-priced raw materials to complete orders for which the selling prices have decreased.  Declining steel prices could also require us to write-down the value of our inventories to reflect current market pricing.  Further, the number of suppliers has decreased in recent years due to industry consolidation and the financial difficulties of certain suppliers, and consolidation may continue.  Accordingly, if delivery from a major steel supplier is disrupted, it may be more difficult to obtain an alternative supply than in the past.

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Receivables:  We review our receivables on an ongoing basis to ensure that they are properly valued and collectible.  This is accomplished through two contra-receivable accounts: returns and allowances and allowance for doubtful accounts.  Returns and allowances are used to record estimates of returns or other allowances resulting from quality, delivery, discounts or other issues affecting the value of receivables.  This account is estimated based on historical trends and current market conditions, with the offset to net sales.  The returns and allowances account decreased approximately $538,000 during fiscal 2018 to $6,199,000.  

The allowance for doubtful accounts is used to record the estimated risk of loss related to the customers’ inability to pay.  This allowance is maintained at a level that we consider appropriate based on factors that affect collectability, such as the financial health of our customers, historical trends of charge-offs and recoveries and current economic and market conditions.  As we monitor our receivables, we identify customers that may have payment problems, and we adjust the allowance accordingly, with the offset to selling, general and administrative (“SG&A”) expense.  Account balances are charged off against the allowance when recovery is considered remote.  The allowance for doubtful accounts decreased approximately $2,812,000 during fiscal 2018 to $632,000.

While we believe our allowance for doubtful accounts is adequate, changes in economic conditions, the financial health of customers and bankruptcy settlements could impact our future earnings.  If the economic environment and market conditions deteriorate, particularly in the automotive and construction end markets where our exposure is greatest, additional reserves may be required.

Property and Depreciation:  Property, plant and equipment are carried at cost and depreciated using the straight-line method.  Buildings and improvements are depreciated over 10 to 40 years and machinery and equipment over 3 to 20 years.  Depreciation expense was $83,680,000, $73,268,000 and $68,886,000 during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  Accelerated depreciation methods are used for income tax purposes.

Goodwill and Other Long-Lived Assets: We use the purchase method of accounting for all business combinations and recognize amortizable and indefinite-lived intangible assets separately from goodwill.  The acquired assets and assumed liabilities in an acquisition are measured and recognized based on their estimated fair values at the date of acquisition, with goodwill representing the excess of the purchase price over the fair value of the identifiable net assets.  A bargain purchase may occur, wherein the fair value of identifiable net assets exceeds the purchase price, and a gain is then recognized in the amount of that excess. Goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment annually, during the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may be present.  Application of goodwill impairment testing involves judgment, including but not limited to, the identification of reporting units and estimation of the fair value of each reporting unit.  A reporting unit is defined as an operating segment or one level below an operating segment.  With the exception of Pressure Cylinders, we test goodwill at the operating segment level as we have determined that the characteristics of the reporting units within each operating segment are similar and allow for their aggregation in accordance with the applicable accounting guidance.  For our Pressure Cylinders operating segment, the oil & gas equipment business has been treated as a separate reporting unit since the second quarter of fiscal 2016.

For goodwill and indefinite-lived intangible assets, we test for impairment by completing what is referred to as the “Step 0” analysis which involves evaluating qualitative factors including macroeconomic conditions, industry and market considerations, cost factors, and overall financial performance. If our “Step 0” analysis indicates it is more likely than not that the fair value is less than the carrying amount, we would perform a quantitative impairment test. The quantitative analysis compares the fair value of each reporting unit or indefinite-lived intangible asset to the respective carrying amount, and an impairment loss is recognized in our consolidated statements of earnings equivalent to the excess of the carrying amount over the fair value. Fair value is determined based on discounted cash flows or appraised values, as appropriate.

We review the carrying value of our long-lived assets, including intangible assets with finite useful lives, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable.  Impairment testing involves a comparison of the sum of the undiscounted future cash flows of the asset or asset group to its respective carrying amount.  If the sum of the undiscounted future cash flows exceeds the carrying amount, then no impairment exists.  If the carrying amount exceeds the sum of the undiscounted future cash flows, then a second step is performed to determine the amount of impairment, if any, to be recognized.  The impairment loss recognized is equal to the amount that the carrying value of the asset or asset group exceeds its fair value.  Long-lived assets held for sale are reported at the lower of cost or fair value less costs to sell and are recorded in a single line in the consolidated balance sheets. We classify assets as held for sale if we commit to a plan to sell the assets within one year and actively market the assets in their current condition for a price that is reasonable in comparison to their estimated fair value.

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Our impairment testing for both goodwill and other long-lived assets, including intangible assets with finite useful lives, is largely based on cash flow models that require significant judgment and require assumptions about future volume trends, revenue and expense growth rates; and, in addition, external factors such as changes in economic trends and cost of capital.  Significant changes in any of these assumptions could impact the outcomes of the tests performed. See “Note C – Goodwill and Other Long-Lived Assets” for additional details regarding these assets and related impairment testing.

Leases:  Certain lease agreements contain fluctuating or escalating payments and rent holiday periods.  The related rent expense is recorded on a straight-line basis over the lease term.  Leasehold improvements made by the lessee, whether funded by the lessee or by landlord allowances or incentives, are recorded as leasehold improvement assets and will be amortized over the shorter of the economic life or the lease term.  These incentives are recorded as deferred rent and amortized as reductions in rent expense over the lease term.

Stock-Based Compensation:  At May 31, 2018, we had stock-based compensation plans for our employees as well as our non-employee directors as described more fully in “Note J – Stock-Based Compensation.”  All share-based awards, including grants of stock options and restricted common shares, are recorded as expense in the consolidated statements of earnings based on their grant-date fair values.  We estimate forfeitures at the date of grant based on historic experience.

Revenue Recognition:  We recognize revenue upon transfer of title and risk of loss, or in the case of toll processing revenue, upon delivery of the goods, provided evidence of an arrangement exists, pricing is fixed and determinable and the ability to collect is probable.  We provide, through charges to net sales, for returns and allowances based on experience and current customer activities.  We also provide, through charges to net sales, for customer rebates and sales discounts based on specific agreements and recent and anticipated levels of customer activity.  In circumstances where the collection of payment is not probable at the time of shipment, we defer recognition of revenue until payment is collected.

Advertising Expense:  Advertising costs are expensed as incurred and included in SG&A expense.  Advertising expense was $15,236,000, $14,822,000, and $13,970,000 for fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

Shipping and Handling Fees and Costs:  Shipping and handling fees billed to customers are included in net sales.  Shipping and handling costs incurred are included in cost of goods sold.

Environmental Costs:  Environmental costs are capitalized if the costs extend the life of the property, increase its capacity, and/or mitigate or prevent contamination from future operations.  Costs related to environmental contamination treatment and cleanup are charged to expense as incurred.

Statements of Cash Flows:  Supplemental cash flow information was as follows for the fiscal years ended May 31:

(in thousands)	2018		2017		2016
Interest paid, net of amount capitalized	$	34,839	$	29,826	$	30,431
Income taxes paid, net of refunds	$	44,819	$	55,652	$	50,750

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 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.  

Income Taxes:  We account for income taxes using the asset and liability method.  The asset and liability method requires the recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between the tax basis and the financial reporting basis of our assets and liabilities.  In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that all, or a portion, of the deferred tax assets will not be realized.  We provide a valuation allowance for deferred income tax assets when it is more likely than not that a portion of such deferred income tax assets will not be realized.

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Tax benefits from uncertain tax positions that are recognized in the consolidated financial statements are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

We have reserves for income taxes and associated interest and penalties that may become payable in future years as a result of audits by taxing authorities.  It is our policy to record these in income tax expense.  While we believe the positions taken on previously filed tax returns are appropriate, we have established the tax and interest reserves in recognition that various taxing authorities may challenge our positions.  These reserves are analyzed periodically, and adjustments are made as events occur to warrant adjustment to the reserves, such as lapsing of applicable statutes of limitations, conclusion of tax audits, additional exposure based on current calculations, identification of new issues and release of administrative guidance or court decisions affecting a particular tax issue.

Self-Insurance Reserves:  We are largely self-insured with respect to workers’ compensation, general and automobile liability, property damage, employee medical claims and other potential losses.  In order to reduce risk and better manage our overall loss exposure, we purchase stop-loss insurance that covers individual claims in excess of the deductible amounts.  We maintain reserves for the estimated cost to settle open claims, which includes estimates of legal costs expected to be incurred, as well as an estimate of the cost of claims that have been incurred but not reported.  These estimates are based on actuarial valuations that take into consideration the historical average claim volume, the average cost for settled claims, current trends in claim costs, changes in our business and workforce, general economic factors and other assumptions believed to be reasonable under the circumstances.  The estimated reserves for these liabilities could be affected if future occurrences and claims differ from the assumptions used and historical trends.

Recently Adopted Accounting Standards:

In July 2015, amended accounting guidance was issued regarding the measurement of inventory.  The amended guidance requires that inventory accounted for under the first-in, first-out (FIFO) or average cost methods be measured at the lower of cost and net realizable value, where net realizable value represents the estimated selling price of inventory in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.  The amended guidance has no impact on inventory accounted for under the last-in, first-out (LIFO) or retail inventory methods.  The Company adopted this amended guidance on a prospective basis effective June 1, 2017.  The adoption of this guidance did not impact our consolidated financial position or results of operations.

In August 2016, amended accounting guidance was issued to clarify the proper cash flow presentation of certain specific types of cash payments and cash receipts.  The Company early adopted this amended guidance on a prospective basis effective June 1, 2017.  The adoption of this guidance did not impact our consolidated statements of cash flows or ongoing financial reporting.

In January 2017, amended accounting guidance was issued to clarify the definition of a business to provide additional guidance to assist in evaluating whether transactions should be accounted for as an acquisition (or disposal) of either an asset or a business.  The Company early adopted this amended guidance on a prospective basis effective September 1, 2017.  The adoption of this guidance did not impact our consolidated financial position or results of operations.

In January 2017, amended accounting guidance was issued to simplify the goodwill impairment calculation, by removing Step 2 of the goodwill impairment test.  Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of the goodwill.  The Company early adopted this amended guidance on a prospective basis effective September 1, 2017.  The adoption of this guidance did not impact our consolidated financial position or results of operations.

In February 2018, amended guidance was issued that would allow a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (“TCJA”) signed into law in December 2017.  The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  It is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized.  The Company early adopted this amended guidance in the fourth quarter of fiscal 2018.  As a result, the stranded tax effects in AOCI of $1,701,000, related to various unrealized gains and losses associated with the Company’s hedge instruments and minimum pension liability, were reclassified to retained earnings.

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Recently Issued Accounting Standards:  

In May 2014, new accounting guidance was issued that replaces most existing revenue recognition guidance under U.S. GAAP.  The new guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.  Subsequently, additional guidance was issued on several areas including guidance intended to improve the operability and understandability of the implementation of principal versus agent considerations and clarifications on the identification of performance obligations and implementation of guidance related to licensing.  The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.  The guidance permits the use of either the retrospective or cumulative effect transition method.  The Company adopted this guidance on June 1, 2018 using the cumulative effect transition method.  Based on our evaluation, which included a review of significant contracts with customers across all revenue streams, it resulted in a change in timing of revenue recognition for the toll processing and oil & gas equipment revenue streams and did not have a material impact on our consolidated financial position or results of operations.  As a result of the adoption of this guidance, the Company will make additional disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers as required by the new guidance.

In February 2016, new accounting guidance was issued that replaces most existing lease accounting guidance under U.S. GAAP.  Among other changes, the new guidance requires that leased assets and liabilities be recognized on the balance sheet by lessees for those leases classified as operating leases under previous guidance.  The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  Early adoption is permitted, and the change is to be applied using a modified retrospective approach as of the beginning of the earliest period presented.  We are in the process of evaluating the effect this guidance will have on our consolidated financial position, results of operations and cash flows, and we have not determined the effect of the new guidance on our ongoing financial reporting.  As of May 31, 2018, we have operating leases with $43,400,000 of future minimum lease payments.

In June 2016, amended accounting guidance was issued related to the measurement of credit losses on financial instruments.  The amended guidance changes the impairment model for most financial assets to require measurement and recognition of expected credit losses for financial assets held.  The amended guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.  We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations; however, we do not expect the amended guidance to have a material impact on our ongoing financial reporting.

In October 2016, amended accounting guidance was issued that requires the income tax consequences of an intra-entity transfer of an asset other than inventory to be recognized when the transfer occurs.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption.  Early adoption is permitted.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position, results of operations and cash flows.

In November 2016, amended accounting guidance was issued that requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Early adoption is permitted.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated cash flows.

In March 2017, amended accounting guidance was issued that requires an employer to report the service cost component of pension and postretirement benefits in the same line item as other current employee compensation costs.  Additionally, other components of net benefit cost are to be presented in the income statement separately from the service cost component and outside of income from operations.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and is to be applied retrospectively for the presentation in the income statement and prospectively on and after the

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effective date for the capitalization of service cost.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position, results of operations and cash flows.

In May 2017, amended accounting guidance was issued to provide guidance about which changes to the terms or conditions of a share-based payment award require application of modification accounting.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Early adoption is permitted.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position or results of operations.

In August 2017, amended accounting guidance was issued that modifies hedge accounting by making more hedge strategies eligible for hedge accounting, amending presentation and disclosure requirements, and changing how companies assess effectiveness.  The intent is to simplify application of hedge accounting and increase transparency of information about an entity’s risk management activities.  The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  It is to be applied using a modified retrospective transition approach for cash flow and net investment hedges existing at the date of adoption.  The presentation and disclosure guidance is only required prospectively.  Early adoption is permitted.  We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations, and have not determined the effect on our ongoing financial reporting.

Note B – Investments in Unconsolidated Affiliates

Our investments in affiliated companies that we do not control, either through majority ownership or otherwise, are accounted for using the equity method.  These include ArtiFlex Manufacturing, LLC (“ArtiFlex”) (50%), Clarkwestern Dietrich Building Systems LLC (“ClarkDietrich”) (25%), Samuel Steel Pickling Company (31.25%), Serviacero Planos, S. de R. L. de C.V. (“Serviacero Worthington”) (50%), Worthington Armstrong Venture (“WAVE”) (50%), and Zhejiang Nisshin Worthington Precision Specialty Steel Co., Ltd. (10%).

We received distributions from unconsolidated affiliates totaling $89,787,000, $102,015,000, and $86,513,000 in fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  We have received cumulative distributions from WAVE in excess of our investment balance, which resulted in an amount recorded within other liabilities on our consolidated balance sheets of $55,198,000 and $63,038,000 at May 31, 2018 and 2017, respectively.  In accordance with the applicable accounting guidance, we reclassified the negative balance to the liabilities section of our consolidated balance sheet.  We will continue to record our equity in the net income of WAVE as a debit to the investment account, and if it becomes positive, it will again be shown as an asset on our consolidated balance sheet. If it becomes probable that any excess distribution may not be returned (upon joint venture liquidation or otherwise), we will recognize any balance classified as a liability as income immediately.

The following table presents combined information regarding the financial position of our unconsolidated affiliates accounted for using the equity method as of May 31:

(in thousands)	2018		2017
Cash	$	52,812	$	55,541
Other current assets		590,578		541,746
Current assets for discontinued operations		37,640		17,275
Noncurrent assets		358,927		342,938
Noncurrent assets for discontinued operations		-		18,168
Total assets	$	1,039,957	$	975,668
Current liabilities	$	166,493	$	148,056
Current liabilities for discontinued operations		7,142		8,891
Short-term borrowings		26,599		8,172
Current maturities of long-term debt		23,243		5,827
Long-term debt		259,588		268,711
Other noncurrent liabilities		17,536		20,890
Noncurrent liabilities for discontinued operations		-		490
Equity		539,356		514,631
Total liabilities and equity	$	1,039,957	$	975,668

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The following table presents summarized financial information for our four largest unconsolidated affiliates as of, and for the fiscal years ended May 31.  All other unconsolidated affiliates are combined and presented in the Other category, including WSP through March 1, 2016.  On March 1, 2016, the Company obtained effective control over the operations of WSP and, as a result, began consolidating its financial results within those of Steel Processing.

(in thousands)	2018			2017			2016
Net sales
WAVE	$	360,395		$	334,031		$	329,050
ClarkDietrich		790,887			711,735			615,609
Serviacero Worthington		315,098			275,315			260,337
ArtiFlex		197,061			208,922			219,510
Other		28,578			17,784			74,214
Total net sales	$	1,692,019		$	1,547,787		$	1,498,720
Gross margin (loss)
WAVE	$	201,581		$	190,350		$	191,535
ClarkDietrich		97,437			128,098			95,427
Serviacero Worthington		32,396			37,080			15,328
ArtiFlex		18,266			22,829			30,181
Other		(6,399	)		(4,313	)		13,142
Total gross margin	$	343,281		$	374,044		$	345,613
Operating income (loss)
WAVE	$	158,697		$	158,030		$	162,026
ClarkDietrich		39,153			68,696			33,897
Serviacero Worthington		24,232			29,975			11,110
ArtiFlex		11,395			15,519			22,612
Other		(10,584	)		(8,407	)		6,910
Total operating income	$	222,893		$	263,813		$	236,555
Depreciation and amortization
WAVE	$	1,659		$	2,978		$	2,245
ClarkDietrich		11,864			12,718			14,289
Serviacero Worthington		3,919			3,862			3,508
ArtiFlex		5,515			5,850			6,105
Other		749			698			3,081
Total depreciation and amortization	$	23,706		$	26,106		$	29,228
Interest expense (income)
WAVE	$	8,365		$	7,182		$	6,635
ClarkDietrich		114			20			80
Serviacero Worthington		397			89			114
ArtiFlex		1,333			1,429			1,650
Other		(1	)		-			(10	)
Total interest expense	$	10,208		$	8,720		$	8,469
Income tax expense (benefit)
WAVE	$	119		$	2,398		$	(14	)
ClarkDietrich		-			-			-
Serviacero Worthington		5,141			11,740			6,249
ArtiFlex		208			(2	)		289
Other		-			(2	)		53
Total income tax expense	$	5,468		$	14,134		$	6,577
Net earnings (loss)
WAVE (1)	$	152,329		$	154,866		$	164,132
ClarkDietrich		39,138			69,122			58,539
Serviacero Worthington		17,577			18,140			6,246
ArtiFlex		9,854			14,092			20,673
Other		(11,922	)		(5,472	)		8,516
Total net earnings	$	206,976		$	250,748		$	258,106

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(1) On November 20, 2017, WAVE agreed to sell its business and operations in Europe and Asia to the Knauf Group, a family-owned manufacturer of building materials headquartered in Germany.  WAVE has classified its businesses to be sold as discontinued operations.  These net earnings include net income attributable to discontinued operations of $2,226,000, $6,775,000, and $8,930,000 in fiscal 2018, fiscal 2017, and fiscal 2016, respectively.  All other amounts presented in the table above exclude the activity of the discontinued operations of WAVE  

At May 31, 2018 and 2017, $42,636,000 and $28,803,000, respectively, of our consolidated retained earnings represented undistributed earnings of our unconsolidated affiliates, net of tax.

Note C – Goodwill and Other Long-Lived Assets

Goodwill

The following table summarizes the changes in the carrying amount of goodwill during fiscal 2018 and fiscal 2017 by reportable business segment:

(in thousands)	Steel Processing		Pressure Cylinders			Engineered Cabs			Other			Total
Balance at May 31, 2016
Goodwill	$	7,045	$	233,371		$	44,933		$	127,245		$	412,594
Accumulated impairment losses		-		-			(44,933	)		(121,594	)		(166,527	)
		7,045		233,371			-			5,651			246,067
Acquisitions and purchase accounting adjustments		854		-			-			-			854
Translation adjustments		-		752			-			-			752
		854		752			-			-			1,606
Balance at May 31, 2017
Goodwill		7,899		234,123			44,933			127,245			414,200
Accumulated impairment losses		-		-			(44,933	)		(121,594	)		(166,527	)
		7,899		234,123			-			5,651			247,673
Acquisitions and purchase accounting adjustments		-		103,437			-			-			103,437
Translation adjustments		-		3,739			-			-			3,739
Impairment losses		-		(4,015	)		-			(5,651	)		(9,666	)
		-		103,161			-			(5,651	)		97,510
Balance at May 31, 2018
Goodwill		7,899		341,299			44,933			127,245			521,376
Accumulated impairment losses		-		(4,015	)		(44,933	)		(127,245	)		(176,193	)
	$	7,899	$	337,284		$	-		$	-		$	345,183

For additional information regarding the Company’s acquisitions, refer to “Note O – Acquisitions.”  Fiscal 2018 impairment charges noted in the table above consisted of $4,015,000 of goodwill allocated to oil & gas equipment assets available for sale and $5,651,000 related to the sale of a 65% stake in WEI on March 31, 2018.  

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Other Intangible Assets

Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives, which range from one to 20 years.  The following table summarizes other intangible assets by class as of May 31, 2018 and 2017:

	2018				2017
			Accumulated				Accumulated
(in thousands)	Cost		Amortization		Cost		Amortization
Indefinite-lived intangible assets:
Trademarks	$	76,701	$	-	$	14,501	$	-
Total indefinite-lived intangible assets		76,701		-		14,501		-
Definite-lived intangible assets:
Customer relationships	$	173,363	$	57,125	$	96,262	$	45,822
Non-compete agreements		8,669		8,137		9,443		7,751
Technology / know-how		26,411		5,856		21,755		5,607
Other		3,804		3,804		3,954		3,954
Total definite-lived intangible assets		212,247		74,922		131,414		63,134
Total intangible assets	$	288,948	$	74,922	$	145,915	$	63,134

The increase in the carrying value of other intangible assets was primarily driven by the June 2, 2017 acquisition of AMTROL, as disclosed in “Note O – Acquisitions”, partially offset by impairment charges of $11,549,000, $3,849,000 and $1,674,000 related to intangible assets of Worthington Aritas, certain oil & gas equipment asset groups in Pressure Cylinders and WEI, respectively, as further discussed below.

Amortization expense totaled $19,679,000, $13,525,000, and $15,813,000 in fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

Amortization expense for each of the next five fiscal years is estimated to be:

(in thousands)
2019	$	15,308
2020	$	13,299
2021	$	12,539
2022	$	10,858
2023	$	10,221

Impairment of Long-Lived Assets

Fiscal 2018:  During the fourth quarter of fiscal 2018, management committed to plans to sell the Company’s cryogenics business in Turkey, Worthington Aritas, and certain underperforming oil & gas equipment assets within Pressure Cylinders.  As all of the criteria for classification as assets held for sale were met in both instances, the net assets of each asset group have been presented separately as assets held for sale in our consolidated balance sheets.  In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell.  The book value of Worthington Aritas exceeded its estimated fair market value of $9,000,000, resulting in an impairment charge of $42,422,000, consisting of $19,621,000, $11,549,000, and $11,252,000 related to fixed assets, intangible assets, and other assets, respectively.  The impairment charge related to intangible assets was for customer relationships and technological know-how.  The book value of the oil & gas equipment asset group also exceeded its estimated fair market value of $21,000,000, resulting in an impairment charge of $10,497,000, consisting of $4,015,000, $3,849,000, and $2,633,000 related to allocated goodwill, intangible assets, and fixed assets, respectively.  The impairment charge related to intangible assets was for the full write-off of the remaining book value of customer relationships.  In both instances, fair value was determined using observable (Level 2) inputs.

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During the second quarter of fiscal 2018, the Company determined that indicators of impairment were present with regard to the goodwill and intangible assets of the former WEI reporting unit.  As a result, these assets were written down to their estimated fair value resulting in an impairment charge of $7,325,000.  During the second quarter of fiscal 2018, the Company also identified the presence of impairment indicators with regard to vacant land at the oil & gas equipment facility in Bremen, Ohio, resulting in an impairment charge of $964,000 to write the vacant land down to its estimated fair value.  

Fiscal 2016:  Due to the decline in oil prices and resulting reduced demand for products, management determined that an impairment indicator was present for the long-lived assets in the oil & gas equipment business within Pressure Cylinders.  The Company had tested the five asset groups in its oil & gas equipment business for impairment during the fourth quarter of fiscal 2015 and again in the first quarter of fiscal 2016.  In each of these tests, the Company’s estimate of the undiscounted future cash flows for each asset group indicated that the carrying amounts were expected to be recovered as of those measurement dates.  

During the second quarter of fiscal 2016, the continued decline of oil prices further reduced the demand for oil & gas equipment products, causing a significant decrease in the long-term cash flow projections of that business.  Based on these revised cash flow projections, the Company determined that long-lived assets of two of the facilities with a combined carrying amount of $59,895,000 were impaired and wrote them down to their estimated fair value of $36,933,000, resulting in an impairment charge of $22,962,000.  Fair value was based on expected future cash flows using Level 3 inputs under Accounting Standard Codification (“ASC”) 820.  The cash flows are those expected to be generated by market participants, discounted at an appropriate rate for the risks inherent in those cash flow projections, or 13%.  

As a result of the impairment of the oil & gas equipment assets noted above, the Company also performed an impairment review of the goodwill of the Pressure Cylinders reporting unit during the second quarter of fiscal 2016.  The Company first assessed the reporting unit structure and determined that it was no longer appropriate to aggregate the oil & gas equipment component with the rest of Pressure Cylinders for purposes of goodwill impairment testing.  This determination was driven by changes in the economic characteristics of the oil & gas equipment business as a result of sustained low oil prices, which indicated that the risk profile and prospects for growth and profitability were no longer similar to the other components of Pressure Cylinders.  In accordance with the applicable accounting guidance, the Company allocated a portion of Pressure Cylinders goodwill totaling $25,982,000 to the Oil & Gas Equipment reporting unit using a relative fair value approach.  A subsequent comparison of the fair values of the Oil & Gas Equipment and the Pressure Cylinders reporting units, determined using discounted cash flows, to their respective carrying values indicated that a step 2 calculation to quantify a potential impairment was not required.  The key assumptions that drive the fair value calculations are projected cash flows and the discount rate.  Prior to the allocation of goodwill, the Company tested the goodwill of the old Pressure Cylinders reporting unit for impairment and determined that fair value exceeded carrying value by a significant amount.

During the first quarter of fiscal 2016, management finalized its plan to close the Engineered Cabs facility in Florence, South Carolina and transfer the majority of the business to the Engineered Cabs facility in Greeneville, Tennessee.  Under the plan, certain machinery and equipment was transferred to the Greeneville facility to support higher volume requirements.  Management reevaluated the recoverability of the remaining assets and determined that long-lived assets with a carrying value of $4,059,000 were impaired.  As a result, these long-lived assets were written down to their estimated fair value of $1,059,000 resulting in an impairment charge of $3,000,000 during the first quarter of fiscal 2016.  The Company ceased production at the Florence facility on September 30, 2015.

Note D – Restructuring and Other Expense (Income), Net

We consider restructuring activities to be programs whereby we fundamentally change our operations such as closing and consolidating manufacturing facilities or moving manufacturing of a product to another location.  Restructuring activities may also involve substantial realignment of the management structure of a business unit in response to changing market conditions.

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A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other income, net financial statement caption in our consolidated statement of earnings for fiscal 2018, is summarized below:

	Beginning										Ending
(in thousands)	Balance		Expense			Payments			Adjustments		Balance
Early retirement and severance	$	253	$	2,549		$	(1,787	)	$	101	$	1,116
Facility exit and other costs		536		482			(1,018	)		-		-
	$	789		3,031		$	(2,805	)	$	101	$	1,116
Net gain on sale of assets				(10,452	)
Restructuring and other income, net			$	(7,421	)

During fiscal 2018, the following actions were taken related to the Company’s restructuring activities:

• In connection with the acquisition of AMTROL on June 2, 2017, the Company recognized severance expense of $2,365,000 related to corporate management and other positions at AMTROL that were eliminated.

• In connection with the closure of the Company’s stainless steel business, Precision Specialty Metals, Inc. (“PSM”), the Company recognized facility exit costs of $560,000 and a net gain on disposal of assets of $10,595,000 for the sale of the real estate of this business.  Net proceeds were $15,874,000.

• In connection with other non-significant restructuring activities, the Company recognized severance expense of $184,000 and a credit to facility exit costs of $78,000.  The Company also recognized a net loss on disposal of assets of $143,000.

The total liability as of May 31, 2018 is expected to be paid in the next twelve months.

Note E – Contingent Liabilities and Commitments

Legal Proceedings

We are defendants in certain legal actions.  In the opinion of management, the outcome of these actions, which is not clearly determinable at the present time, would not significantly affect our consolidated financial position or future results of operations.  We also believe that environmental issues will not have a material effect on our capital expenditures, consolidated financial position or future results of operations.

Note F – Guarantees

We do not have guarantees that we believe are reasonably likely to have a material current or future effect on our consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.  However, as of May 31, 2018, we were party to an operating lease for an aircraft in which we have guaranteed a residual value at the termination of the lease.  The maximum obligation under the terms of this guarantee was approximately $8,354,000 at May 31, 2018.  Based on current facts and circumstances, we have estimated the likelihood of payment pursuant to this guarantee is not probable and, therefore, no amounts have been recognized in our consolidated financial statements.

We also had in place $14,493,000 of outstanding stand-by letters of credit issued to third-party service providers at May 31, 2018.  The fair value of these guarantee instruments, based on premiums paid, was not material and no amounts were drawn against them at May 31, 2018.

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Note G – Debt and Receivables Securitization

The following table summarizes our long-term debt and short-term borrowings outstanding at May 31, 2018 and 2017:

(in thousands)	2018			2017
Short-term borrowings	$	-		$	123
4.30% senior notes due August 1, 2032		200,000			-
4.55% senior notes due April 15, 2026		250,000			250,000
4.60% senior notes due August 10, 2024		150,000			150,000
6.50% senior notes due April 15, 2020		150,000			150,000
Term loans		829			30,400
Other		3,899			668
Total debt		754,728			581,191
Unamortized discount and debt issuance costs		(4,360	)		(2,581	)
Total debt, net		750,368			578,610
Less: current maturities and short-term borrowings		1,474			6,814
Total long-term debt	$	748,894		$	571,796

Maturities on long-term debt in the next five fiscal years, and the remaining years thereafter, are as follows:

(in thousands)
2019	$	1,474
2020		151,111
2021		639
2022		656
2023		541
Thereafter		600,307
Total	$	754,728

Long-Term Debt

On September 26, 2014, Worthington Aritas executed a five-year term loan denominated in Euros, with interest at a variable rate based on EURIBOR.  On October 15, 2014, we entered into an interest rate swap to fix the interest rate on 60% of the borrowings outstanding under this facility at 2.015% starting on December 26, 2014.  Borrowings against the facility were used for the construction of a cryogenics manufacturing facility in Turkey.  In anticipation of the planned sale of the Company’s cryogenics business in Turkey, the Company paid off this term loan and settled the derivative instrument for an immaterial loss during the fourth quarter of fiscal 2018.

On July 28, 2017, we issued $200,000,000 aggregate principal amount of senior unsecured notes due August 1, 2032 (the “2032 Notes”).  The 2032 Notes bear interest at a rate of 4.300%.  The 2032 Notes were sold to the public at 99.901% of the principal amount thereof, to yield 4.309% to maturity.  We used a portion of the net proceeds from the offering to repay amounts then outstanding under our multi-year revolving credit facility and amounts then outstanding under our revolving trade accounts receivable securitization facility, both of which are described in more detail below.  We entered into an interest rate swap in June 2017, in anticipation of the issuance of the 2032 Notes.  The interest rate swap had a notional amount of $150,000,000 to hedge the risk of changes in the semi-annual interest rate payments attributable to changes in the benchmark interest rate during the several days leading up to the issuance of the 2032 Notes.  Upon pricing of the 2032 Notes, the derivative instrument was settled resulting in a gain of approximately $3,098,000, which was reflected in AOCI.  Approximately $2,116,000 and $198,000 were allocated to debt issuance costs and the debt discount, respectively.  The debt issuance costs and the debt discount were recorded on the consolidated balance sheet within long-term debt as a contra-liability.  Each will continue to be amortized, through interest expense, in our consolidated statements of earnings over the term of the 2032 Notes.  The unamortized portion of the debt issuance costs and debt discount was $1,998,000 and $187,000, respectively, at May 31, 2018.

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On April 15, 2014, we issued $250,000,000 aggregate principal amount of unsecured senior notes due on April 15, 2026 (the “2026 Notes”).  The 2026 Notes bear interest at a rate of 4.55%.  The 2026 Notes were sold to the public at 99.789% of the principal amount thereof, to yield 4.573% to maturity.  We used a portion of the net proceeds from the offering to repay borrowings then outstanding under our revolving credit facilities.  Approximately $3,081,000, $2,279,000 and $528,000 were allocated to the settlement of a derivative contract entered into in anticipation of the issuance of the 2026 Notes, debt issuance costs, and the debt discount, respectively.  The debt issuance costs and debt discount were recorded on the consolidated balance sheets within long-term debt as a contra-liability, and the loss on the derivative contract recorded within AOCI.  Each will continue to be amortized, through interest expense, in our consolidated statements of earnings over the term of the 2026 Notes.  The unamortized portion of the debt issuance costs and debt discount was $1,488,000 and $344,000, respectively, at May 31, 2018and $1,677,000 and $388,000, respectively at May 31, 2017.

On August 10, 2012, we issued $150,000,000 aggregate principal amount of unsecured senior notes due August 10, 2024 (the “2024 Notes”).  The 2024 Notes bear interest at a rate of 4.60%.  The net proceeds from this issuance were used to repay a portion of the then outstanding borrowings under our revolving credit facilities.  Approximately $80,000 of the aggregate proceeds were allocated to debt issuance costs.  The unamortized portion of the debt issuance costs was $41,000 and $48,000 at May 31, 2018 and 2017, respectively.

On April 27, 2012, we executed a $5,880,000 seven-year term loan that matures on May 1, 2019 and requires monthly payments of $76,350.  The loan bears interest at a rate of 2.49% and is secured by an aircraft that was purchased with its proceeds.  Borrowings outstanding totaled $829,000 and $1,713,000 as of May 31, 2018 and 2017, respectively.

On April 13, 2010, we issued $150,000,000 aggregate principal amount of unsecured senior notes due on April 15, 2020 (the “2020 Notes”).  The 2020 Notes bear interest at a rate of 6.50%.  The 2020 Notes were sold to the public at 99.890% of the principal amount thereof, to yield 6.515% to maturity.  We used the net proceeds from the offering to repay a portion of the then outstanding borrowings under our revolving credit facilities.  Approximately $1,358,000, $1,486,000 and $165,000 were allocated to the settlement of a derivative contract entered into in anticipation of the issuance of the 2020 Notes, debt issuance costs, and the debt discount.  The debt discount and debt issuance costs were recorded on the consolidated balance sheets within long-term debt as a contra-liability, and the loss on the derivative contract within AOCI.  Each will continue to be amortized, through interest expense, in our consolidated statements of earnings over the remaining term of the 2020 Notes.  The unamortized portion of the debt issuance costs and debt discount was $272,000 and $30,000, respectively, at May 31, 2018 and $421,000 and $47,000, respectively at May 31, 2017.

Other Financing Arrangements

We maintain a $50,000,000 revolving trade accounts receivable securitization facility (the “AR Facility”).  On January 16, 2018, the Company amended the terms of the AR Facility, extending the maturity by one year to January 2019 and reducing the borrowing capacity from $100,000,000 to $50,000,000.  Pursuant to the terms of the AR Facility, certain of our subsidiaries sell their accounts receivable without recourse, on a revolving basis, to Worthington Receivables Corporation (“WRC”), a wholly-owned, consolidated, bankruptcy-remote subsidiary.  In turn, WRC may sell without recourse, on a revolving basis, up to $50,000,000 of undivided ownership interests in this pool of accounts receivable to a third-party bank.  We retain an undivided interest in this pool and are subject to risk of loss based on the collectability of the receivables from this retained interest.  Because the amount eligible to be sold excludes receivables more than 90 days past due, receivables offset by an allowance for doubtful accounts due to bankruptcy or other cause, concentrations over certain limits with specific customers and certain reserve amounts, we believe additional risk of loss is minimal.  As of May 31, 2018, no undivided ownership interests in this pool of accounts receivable had been sold.  Facility fees of $383,000, $354,000, and $540,000 were recognized within interest expense during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

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We also maintain a $500,000,000 multi-year revolving credit facility (the “Credit Facility”) with a group of lenders.  On February 16, 2018, the Company amended the terms of the Credit Facility, extending the maturity by three years to February 2023. Debt issuance costs of $805,000 were incurred as a result of the renewal.  These costs have been deferred and will be amortized over the life of the Credit Facility to interest expense.  Borrowings under the Credit Facility have maturities of up to one year.  We have the option to borrow at rates equal to an applicable margin over the LIBOR, Prime rate or Overnight Bank Funding rate.  The applicable margin is determined by our credit rating.  There were no borrowings outstanding under the Credit Facility at May 31, 2018.  As discussed in “Note F – Guarantees,” we provided $14,493,000 in letters of credit for third-party beneficiaries as of May 31, 2018.  While not drawn against at May 31, 2018, $13,245,000 of these letters of credit were issued against availability under the Credit Facility, leaving $486,755,000 available at May 31, 2018.

Note H – Comprehensive Income (Loss)

Other Comprehensive Income (Loss):  The following table summarizes the tax effects of each component of other comprehensive income (loss) for the fiscal years ended May 31:

	2018							2017									2016
(in thousands)	Before-Tax		Tax			Net-of-Tax		Before-Tax			Tax			Net-of-Tax			Before-Tax			Tax			Net-of-Tax
Foreign currency translation	$	12,744	$	-		$	12,744	$	1,342		$	-		$	1,342		$	4,716		$	-		$	4,716
Pension liability adjustment		1,875		(309	)		1,566		3,400			(1,158	)		2,242			(3,233	)		1,175			(2,058	)
Cash flow hedges		1,351		(392	)		959		(4,522	)		1,700			(2,822	)		35,524			(13,316	)		22,208
Other comprehensive income	$	15,970	$	(701	)	$	15,269	$	220		$	542		$	762		$	37,007		$	(12,141	)	$	24,866

Accumulated Other Comprehensive Loss:  The components of the changes in accumulated other comprehensive loss for the fiscal years ended May 31, 2018 and May 31, 2017 were as follows:

										Accumulated
	Foreign			Pension						Other
	Currency			Liability			Cash Flow			Comprehensive
(in thousands)	Translation			Adjustment			Hedges			Loss
Balance at May 31, 2016	$	(18,728	)	$	(17,061	)	$	7,224		$	(28,565	)
Other comprehensive income before reclassifications		1,370			2,841			7,669			11,880
Reclassification adjustments to income (a)		-			559			(12,191	)		(11,632	)
Income taxes		-			(1,158	)		1,700			542
Balance at May 31, 2017	$	(17,358	)	$	(14,819	)	$	4,402		$	(27,775	)
Other comprehensive income before reclassifications		12,371			1,402			14,980			28,753
Reclassification adjustments to income (a)		-			473			(13,629	)		(13,156	)
Reclassification of stranded tax effects		-			(2,818	)		1,117			(1,701	)
Current income tax effect		-			(309	)		(392	)		(701	)
Balance at May 31, 2018	$	(4,987	)	$	(16,071	)	$	6,478		$	(14,580	)

(a) The statement of earnings classification of amounts reclassified to income for cash flow hedges is disclosed in “Note P – Derivative Instruments and Hedging Activities.”

The estimated net amount of the gains in AOCI at May 31, 2018 expected to be reclassified into net earnings within the succeeding twelve months is $5,775,000 (net of tax of $1,751,000).  This amount was computed using the fair value of the cash flow hedges at May 31, 2018, and will change before actual reclassification from other comprehensive income to net earnings during fiscal2018.

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Note I – Equity

Preferred Shares:  The Worthington Industries, Inc. Amended Articles of Incorporation authorize two classes of preferred shares and their relative voting rights.  The Board of Directors of Worthington Industries, Inc. is empowered to determine the issue prices, dividend rates, amounts payable upon liquidation and other terms of the preferred shares when issued.  No preferred shares are issued or outstanding.

Common Shares:On June 26, 2014, Worthington Industries, Inc. announced that on June 25, 2014, the Board of Directors of Worthington Industries, Inc. authorized the repurchase of up to 10,000,000 of our outstanding common shares.  As of the end of the month of April, 2018 a total of 10,000,000 common shares had been repurchased under this authorization and, no further purchases may be made under this authorization. On September 27, 2017, the Board authorized the repurchase of up to an additional 6,828,855 common shares.  The total number of common shares available for repurchase at May 31, 2018 was 6,500,000.

During fiscal 2018, we repurchased 4,375,000 common shares having an aggregate cost of $204,267,000.  During fiscal 2017, no common shares were repurchased under the then-existing authorization.  During fiscal 2016, we repurchased 3,500,000 common shares having an aggregate cost of $99,847,000 under the then-existing authorization.

Common shares available for repurchase under the authorization currently in effect may be purchased from time to time, with consideration given to the market price of the common shares, the nature of other investment opportunities, cash flows from operations, general economic conditions and other relevant considerations.  Repurchases may be made on the open market or through privately negotiated transactions.

On October 1, 2014, the Company amended its non-qualified deferred compensation plans for employees to require that any portion of a participant’s current account credited to the theoretical common share option, which reflects the fair value of the Company’s common shares with dividends reinvested, and any new contributions credited to the theoretical common share option remain credited to the theoretical common share option until distributed.  For amounts credited to the theoretical common share option, payouts are required to be made in the form of whole common shares of the Company and cash in lieu of fractional common shares.  As a result, we account for the deferred compensation obligation credited to the theoretical common share option within equity.  The amounts recorded in equity totaled $1,218,000 and $1,259,000 during fiscal 2018 and fiscal 2017, respectively.  Prior to October 1, 2014, participant accounts credited to the theoretical common share option were settled in cash and classified as a liability in the Company’s consolidated balance sheets.

Note J – Stock-Based Compensation

Under our employee and non-employee director stock-based compensation plans (the “Plans”), we may grant incentive or non-qualified stock options, restricted common shares and performance shares to employees and non-qualified stock options and restricted common shares to non-employee directors.  We classify share-based compensation expense within SG&A expense to correspond with the same financial statement caption as the majority of the cash compensation paid to employees.  A total of 2,958,967 of our common shares were authorized and available for issuance in connection with the stock-based compensation plans in place at May 31, 2018.

We recognized pre-tax stock-based compensation expense of $13,758,000 ($9,482,000 after-tax), $14,349,000 ($9,112,000 after-tax), and $15,836,000 ($10,056,000 after-tax) under the Plans during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  At May 31, 2018, the total unrecognized compensation cost related to non-vested awards was $14,312,000, which will be expensed over the next three fiscal years.

Non-Qualified Stock Options

Stock options may be granted to purchase common shares at not less than 100% of the fair market value of the underlying common shares on the date of the grant.  All outstanding stock options are non-qualified stock options.  The exercise price of all stock options granted has been set at 100% of the fair market value of the underlying common shares on the date of grant.  Generally, stock options granted to employees vest and become exercisable at the rate of (i) 20% per year for options issued before June 30, 2011, and (ii) 33% per year for options issued on or after June 30, 2011, in each case beginning one year from the date of grant, and expire ten years after the date of grant.  Non-qualified stock options granted to non-employee directors vest and become exercisable on the earlier of (a) the first anniversary of the date of grant or (b) the date on which the next annual meeting of shareholders is held following the date of grant for any stock option granted as of the date of an annual meeting of shareholders of Worthington Industries, Inc.  Stock options can be exercised through net-settlement, at the election of the option holder.

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U.S. GAAP requires that all share-based awards be recorded as expense in the statement of earnings based on their grant-date fair value.  We calculate the fair value of our non-qualified stock options using the Black-Scholes option pricing model and certain assumptions.  The computation of fair values for all stock options incorporates the following assumptions: expected volatility (based on the historical volatility of our common shares); risk-free interest rate (based on the United States Treasury strip rate for the expected term of the stock options); expected term (based on historical exercise experience); and dividend yield (based on annualized current dividends and an average quoted price of our common shares over the preceding annual period).

The table below sets forth the non-qualified stock options granted during each of the last three fiscal years.  For each grant, the exercise price was equal to the closing market price of the underlying common shares at each respective grant date.  The fair values of these stock options were based on the Black-Scholes option pricing model, calculated at the respective grant dates.  The calculated pre-tax stock-based compensation expense for these stock options, which is after an estimate of forfeitures, will be recognized on a straight-line basis over the respective vesting periods of the stock options.

(in thousands, except per share amounts)	2018		2017		2016
Granted		90		111		154
Weighted average exercise price, per share	$	47.76	$	42.30	$	30.92
Weighted average grant date fair value, per share	$	14.99	$	11.60	$	9.55
Pre-tax stock-based compensation, net of forfeitures	$	1,203	$	1,146	$	1,305

The weighted average fair value of stock options granted in fiscal 2018, fiscal 2017 and fiscal 2016 was based on the following weighted average assumptions:

	2018			2017			2016
Assumptions used:
Dividend yield		1.81	%		2.59	%		2.33	%
Expected volatility		36.65	%		36.86	%		38.40	%
Risk-free interest rate		1.98	%		1.15	%		1.98	%
Expected life (years)		6.0			6.0			6.0

The following tables summarize our stock option activity for the years ended May 31:

	2018					2017					2016
(in thousands, except per share amounts)	Stock Options			Weighted Average Exercise Price		Stock Options			Weighted Average Exercise Price		Stock Options			Weighted Average Exercise Price
Outstanding, beginning of year		2,307		$	20.99		3,306		$	19.01		4,044		$	18.25
Granted		90			47.76		111			42.30		154			30.92
Exercised		(371	)		20.37		(1,076	)		16.90		(874	)		17.22
Forfeited		(7	)		33.02		(34	)		29.95		(18	)		32.25
Outstanding, end of year		2,019			22.26		2,307			20.99		3,306			19.01
Exercisable at end of year		1,800			20.03		2,067			19.17		3,059			17.85

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			Weighted
			Average
			Remaining		Aggregate
	Number of		Contractual		Intrinsic
	StockOptions		Life		Value
	(in thousands)		(in years)		(in thousands)
May 31, 2018
Outstanding		2,019		3.59	$	51,858
Exercisable		1,800		3.06	$	50,673
May 31, 2017
Outstanding		2,307		3.95	$	48,509
Exercisable		2,067		3.47	$	47,488
May 31, 2016
Outstanding		3,306		4.33	$	61,178
Exercisable		3,059		4.01	$	60,082

The total intrinsic value of stock options exercised during fiscal 2018 was $5,758,000.  The total amount of cash received from the exercise of stock options during fiscal 2018 was $3,864,000, and the related excess tax benefit realized from share-based payment awards was $4,075,000.

The following table summarizes information about non-vested stock option awards for the year ended May 31, 2018:

				Weighted Average
	Number of			Grant Date
	Stock Options			Fair Value
	(in thousands)			per share
Non-vested, beginning of year		240		$	9.99
Granted		90			14.99
Vested		(104	)		11.06
Forfeited		(7	)		9.59
Non-vested, end of year		219		$	11.55

Service-Based Restricted Common Shares

We have awarded restricted common shares to certain employees and non-employee directors that contain service-based vesting conditions.  Service-based restricted common shares granted to employees cliff vest three years from the date of grant.  Service-based restricted common shares granted to non-employee directors vest under the same parameters as the non-employee stock options discussed above.  All service-based restricted common shares are valued at the closing market price of our common shares on the date of the grant.

The table below sets forth the service-based restricted common shares we granted during each of fiscal 2018, fiscal 2017 and fiscal 2016.  The calculated pre-tax stock-based compensation expense for these restricted common shares will be recognized on a straight-line basis over their respective vesting periods.

(in thousands, except per share amounts)	2018		2017		2016
Granted		176		525		217
Weighted average grant date fair value, per share	$	47.88	$	42.28	$	29.49
Pre-tax stock-based compensation, net of forfeitures	$	7,605	$	19,841	$	5,800

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The following tables summarize the activity for our service-based restricted common shares for the years ended May 31:

	2018					2017					2016
(in thousands, except per share amounts)	Restricted Common Shares			Weighted Average Grant Date Fair Value		Restricted Common Shares			Weighted Average Grant Date Fair Value		Restricted Common Shares			Weighted Average Grant Date Fair Value
Outstanding, beginning of year		865		$	39.49		698		$	33.69		635		$	33.65
Granted		176			47.88		525			42.28		217			29.49
Vested		(205	)		40.96		(310	)		31.81		(120	)		24.14
Forfeited		(40	)		41.58		(48	)		38.82		(34	)		34.53
Outstanding, end of year		796			40.80		865			39.49		698			33.69
Weighted average remaining contractual life of
outstanding restricted common shares (in years)		1.21					1.57					1.04
Aggregate intrinsic value of outstanding restricted
common shares	$	38,160				$	36,298				$	26,059
Aggregate intrinsic value of restricted common shares
vested during the year	$	10,330				$	12,840				$	3,527

Market-Based Restricted Common Shares

During fiscal 2015, we granted an aggregate of 50,000 market-based restricted common shares to two key employees under one of our stock-based compensation plans.  Vesting of these restricted common share awards is contingent upon the price of our common shares reaching $60.00 per share and remaining at or above that price for 30 consecutive days during the five-year period following the date of grant and the completion of a five-year service vesting period.  The grant-date fair value of these restricted common shares, as determined by a Monte Carlo simulation model, was $32.06 per share.  The following assumptions were used to determine the grant-date fair value and the derived service period for these market-based restricted common shares:

Dividend yield	1.60	%
Expected volatility	44.00	%
Risk-free interest rate	1.70	%

The calculated pre-tax stock-based compensation expense was determined to be $1,603,000.  In fiscal 2016, 25,000 of these shares were cancelled.  At May 31, 2018, the remaining 25,000 restricted common shares were outstanding.

Performance Shares

We have awarded performance shares to certain key employees that are contingent (i.e., vest) upon achieving corporate targets for cumulative corporate economic value added, earnings per share growth and, in the case of business unit executives, business unit operating income targets for the three-year periods ended or ending May 31, 2018, 2019 and 2020.  These performance share awards will be paid, to the extent earned, in common shares of the Company in the fiscal quarter following the end of the applicable three-year performance period.  The fair value of our performance shares is determined by the closing market prices of the underlying common shares at their respective grant dates and the pre-tax stock-based compensation expense is based on our periodic assessment of the probability of the targets being achieved and our estimate of the number of common shares that will ultimately be issued.

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The table below sets forth the performance shares we granted (at target levels) during fiscal 2018, fiscal 2017 and fiscal 2016:

(in thousands, except per share amounts)	2018		2017		2016
Granted		54		67		87
Weighted average grant date fair value, per share	$	50.61	$	44.91	$	31.12
Pre-tax stock-based compensation	$	2,748	$	2,995	$	2,623

Note K – Employee Pension Plans

We provide retirement benefits to employees mainly through defined contribution retirement plans.  Eligible participants make pre-tax contributions based on elected percentages of eligible compensation, subject to annual addition and other limitations imposed by the Internal Revenue Code and the various plans’ provisions.  Company contributions consist of company matching contributions, annual or monthly employer contributions and discretionary contributions, based on individual plan provisions.

We also have one defined benefit plan, The Gerstenslager Company Bargaining Unit Employees’ Pension Plan (the “Gerstenslager Plan” or “defined benefit plan”).  The Gerstenslager Plan is a non‑contributory pension plan, which covers certain employees based on age and length of service.  Our contributions have complied with ERISA's minimum funding requirements.  Effective May 9, 2011, in connection with the formation of the ArtiFlex joint venture, the Gerstenslager Plan was frozen, which qualified as a curtailment under the applicable accounting guidance.  We did not recognize a gain or loss in connection with the curtailment of the Gerstenslager Plan.

The following table summarizes the components of net periodic pension cost for the defined benefit plan and the defined contribution plans for the years ended May 31:

(in thousands)	2018			2017			2016
Defined benefit plan:
Interest cost	$	1,522		$	1,527		$	1,621
Actuarial (return) loss on plan assets		(1,361	)		(2,224	)		1,154
Net amortization and deferral		(20	)		1,025			(2,664	)
Net periodic pension cost on defined benefit plan		141			328			111
Defined contribution plans		14,972			14,542			13,300
Total retirement plan cost	$	15,113		$	14,870		$	13,411

The following actuarial assumptions were used for our defined benefit plan:

	2018			2017			2016
To determine benefit obligation:
Discount rate		4.02	%		3.94	%		3.75	%
To determine net periodic pension cost:
Discount rate		3.94	%		3.75	%		4.07	%
Expected long-term rate of return		7.00	%		7.00	%		7.00	%
Rate of compensation increase	n/a			n/a			n/a

To calculate the discount rate we used the expected cash flows of the benefit payments and the Citigroup Pension Index.  The Gerstenslager Plan’s expected long-term rate of return in fiscal 2018, fiscal 2017 and fiscal 2016 was based on the actual historical returns adjusted for a change in the frequency of lump-sum settlements upon retirement.  In determining our benefit obligation, we use the actuarial present value of the vested benefits to which each eligible employee is currently entitled, based on the employee’s expected date of separation or retirement.

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The following tables provide a reconciliation of the changes in the projected benefit obligation and fair value of plan assets and the funded status of the Gerstenslager Plan as of, and for the fiscal years ended May 31:

(in thousands)	2018			2017
Change in benefit obligation
Benefit obligation, beginning of year	$	39,174		$	41,168
Interest cost		1,522			1,527
Actuarial gain		(1,516	)		(2,459	)
Benefits paid		(1,170	)		(1,062	)
Benefits obligation, end of year	$	38,010		$	39,174
Change in plan assets
Fair value, beginning of year	$	27,022		$	25,566
Actuarial return on plan assets		1,361			2,224
Company contributions		-			294
Benefits paid		(1,171	)		(1,062	)
Fair value, end of year		27,212			27,022
Funded status	$	(10,798	)	$	(12,152	)
Amounts recognized in the consolidated balance sheets consist of:
Other liabilities	$	(10,798	)	$	(12,152	)
Accumulated other comprehensive loss		16,343			17,839
Amounts recognized in accumulated other comprehensive loss consist    of:
Net loss		16,343			17,839
Total	$	16,343		$	17,839

The following table shows other changes in plan assets and benefit obligations recognized in OCI during the fiscal years ended May 31:

(in thousands)	2018		2017
Net actuarial gain	$	1,023	$	2,926
Amortization of net loss		473		559
Total recognized in other comprehensive income	$	1,496	$	3,485
Total recognized in net periodic benefit cost and other comprehensive income	$	1,355	$	3,157

The estimated net loss for the defined benefit plan that will be amortized from AOCI into net periodic pension cost during fiscal 2019 is $441,000.

Pension plan assets are required to be disclosed at fair value in the consolidated financial statements.  Fair value is defined in “Note Q – Fair Value Measurements.”  The pension plan assets’ fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

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The following table sets forth, by level within the fair value hierarchy, a summary of the defined benefit plan’s assets measured at fair value on a recurring basis at May 31, 2018:

			Quoted		Significant
			Prices		Other		Significant
			in Active		Observable		Unobservable
			Markets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(level 3)
Investment:
Money market funds	$	291	$	291	$	-	$	-
Bond funds		14,887		14,887		-		-
Equity funds		12,034		12,034		-		-
Total	$	27,212	$	27,212	$	-	$	-

The following table sets forth, by level within the fair value hierarchy, a summary of the defined benefit plan’s assets measured at fair value on a recurring basis at May 31, 2017:

			Quoted		Significant
			Prices		Other		Significant
			in Active		Observable		Unobservable
			Markets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(level 3)
Investment:
Money market funds	$	294	$	294	$	-	$	-
Bond funds		14,613		14,613		-		-
Equity funds		12,115		12,115		-		-
Total	$	27,022	$	27,022	$	-	$	-

Fair values of the money market, bond and equity funds held by the defined benefit plan were determined by quoted market prices.

Plan assets for the defined benefit plan consisted principally of the following as of the respective measurement dates:

	May 31,			May 31,
	2018			2017
Asset category:
Equity securities		44	%		45	%
Debt securities		55	%		54	%
Other		1	%		1	%
Total		100	%		100	%

Equity securities include no employer stock.  The investment policy and strategy for the defined benefit plan is: (i) long-term in nature with liquidity requirements that are anticipated to be minimal due to the projected normal retirement date of the average employee and the current average age of participants;  (ii) to earn nominal returns, net of investment fees, equal to or in excess of the defined benefit plan’s liability growth rate; and (iii) to include a diversified asset allocation of domestic and international equities and fixed income investments.  We have already contributed $104,000 in fiscal 2019 and have five contributions planned for fiscal 2019 totaling $876,000.

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The following estimated future benefits, which reflect expected future service, as appropriate, are expected to be paid under the defined benefit plan during the fiscal years noted:

(in thousands)
2019	$	1,223
2020	$	1,237
2021	$	1,275
2022	$	1,382
2023	$	1,476
2024-2028	$	9,066

Commercial law requires us to pay severance and service benefits to employees at our Austrian Pressure Cylinders location.  Severance benefits must be paid to all employees hired before December 31, 2002.  Employees hired after that date are covered under a governmental plan that requires us to pay benefits as a percentage of compensation (included in payroll tax withholdings).  Service benefits are based on a percentage of compensation and years of service.  The accrued liability for these unfunded plans was $6,561,000 and $6,149,000 at May 31, 2018 and 2017, respectively, and was included in other liabilities on the consolidated balance sheets.  Net periodic pension cost for these plans was $601,000, $554,000, and $617,000, for fiscal 2018, fiscal 2017 and fiscal 2016, respectively. The assumed salary rate increase was 2.75%, 2.75%, and 2.75% for fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  The discount rate at May 31, 2018, 2017 and 2016 was 1.80%, 1.60%, and 1.75%, respectively.  Each discount rate was based on a published corporate bond rate with a term approximating the estimated benefit payment cash flows and is consistent with European and Austrian regulations.

Note L – Income Taxes

On December 22, 2017, the TCJA was enacted into federal law. The TCJA significantly revised the U.S. corporate income tax system by lowering the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. In addition, the TCJA added several new provisions including changes to bonus depreciation, the deduction for executive compensation, a tax on global intangible low-taxed income (“GILTI”), the base erosion anti-abuse tax (“BEAT”) and a deduction for foreign-derived intangible income (“FDII”). Many of these provisions, including the tax on GILTI, the BEAT and the deduction for FDII, do not apply to the Company until June 1, 2018. The Company has elected to account for the tax on GILTI as a period cost and thus has not adjusted any of the deferred tax assets and liabilities of its foreign subsidiaries for the new tax. The two material items that impacted the Company for fiscal 2018 were the reduction in the tax rate and a one-time mandatory deemed repatriation tax imposed on the Company’s unremitted foreign earnings. Due to the Company’s fiscal year, the Company’s fiscal 2018 U.S. federal blended statutory income tax rate is 29.2%. The Company’s U.S. federal statutory income tax rate will be 21.0% starting June 1, 2018.

Consistent with applicable Securities and Exchange Commission guidance in Staff Accounting Bulletin 118 (“SAB118”), the Company has made a reasonable estimate of the one-time mandatory deemed repatriation tax required by the TCJA. As such, the Company recognized a provisional income tax expense of $6.9 million for the one-time mandatory deemed repatriation tax for fiscal 2018.  SAB118 allows companies to use a measurement period, similar to that used in business combinations, to account for the impacts of the TCJA in their consolidated financial statements.  The Company considers key estimates on the deemed repatriation tax to be incomplete due to our continuing analysis of final year-end data and the impact of expected further authoritative guidance and interpretations.  We expect to complete our analysis of the amount recorded within the measurement period of one year from the enactment of the TCJA.

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Earnings before income taxes for the three fiscal years ended May 31 include the following components:

(in thousands)	2018		2017		2016
United States based operations	$	177,088	$	266,222	$	180,467
Non – United States based operations		31,982		30,905		36,148
Earnings before income taxes		209,070		297,127		216,615
Less: Net earnings attributable to noncontrolling    interests*		6,056		13,422		13,913
Earnings before income taxes attributable to    controlling interest	$	203,014	$	283,705	$	202,702

* Net earnings attributable to noncontrolling interests are not taxable to Worthington.

Significant components of income tax expense (benefit) for the fiscal years ended May 31 were as follows:

(in thousands)	2018			2017			2016
Current
Federal	$	33,261		$	50,200		$	42,837
State and local		3,292			2,954			2,157
Foreign		9,904			7,593			6,639
		46,457			60,747			51,633
Deferred
Federal		(34,442	)		18,177			7,584
State and local		388			476			934
Foreign		(4,183	)		(210	)		(1,164	)
		(38,237	)		18,443			7,354
	$	8,220		$	79,190		$	58,987

The tax benefit related to the purchase of noncontrolling interest in dHybrid Systems, LLC credited to additional paid-in capital was $539,000 for fiscal 2017.  Tax benefits (expense) related to defined benefit pension liability that were credited to (deducted from) OCI were $(309,000), $(1,158,000), and $1,175,000 for fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  Tax benefits (expenses) related to cash flow hedges that were credited to (deducted from) OCI were $(392,000), $1,700,000, and $(13,316,000) for fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

A reconciliation of the federal statutory corporate income tax rate to total tax provision follows:

	2018			2017			2016
Federal statutory corporate income tax rate		29.2	%		35.0	%		35.0	%
State and local income taxes, net of federal tax benefit		2.3			1.5			1.5
Non-U.S. income taxes at other than federal statutory rate		(1.4	)		(1.4	)		(3.0	)
Qualified production activities deduction		(2.3	)		(1.9	)		(2.2	)
Impact of tax reform (1)		(15.4	)		-			-
Worthington Aritas write down		(4.8	)		-			-
Excess benefit related to share-based payment awards		(2.0	)		(5.7	)		(1.6	)
AMTROL acquisition		(1.9	)		-			-
Other		0.3			0.4			(0.6	)
Effective tax rate attributable to controlling interest		4.0	%		27.9	%		29.1	%

(1) Amount reflects the impact of the re-measurement of the Company’s deferred tax balances at the lower federal statutory corporate income tax rate, net of the mandatory deemed repatriation tax on unremitted foreign earnings.

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The above effective tax rate attributable to controlling interest excludes any impact from the inclusion of net earnings attributable to noncontrolling interests in our consolidated statements of earnings. The effective tax rates upon inclusion of net earnings attributable to noncontrolling interests were 3.9%, 26.7% and 27.2% for fiscal 2018, fiscal 2017 and fiscal 2016, respectively. Net earnings attributable to noncontrolling interests are primarily a result of our WSP, Spartan, and TWB consolidated joint ventures and Worthington Aritas through May 23, 2018, which is the date we purchased the remaining 25% ownership interest.  The earnings attributable to the noncontrolling interests in WSP, Spartan and TWB’s U.S. operations do not generate tax expense to Worthington since the investors in WSP, Spartan and TWB’s U.S. operations are taxed directly based on the earnings attributable to them. The tax expense of Worthington Aritas (a foreign corporation), and TWB’s wholly-owned foreign corporations, is reported in our consolidated tax expense.    

Under applicable accounting guidance, a tax benefit may be recognized from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position.  Any tax benefits recognized in our financial statements from such a position were measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

The total amount of unrecognized tax benefits were $2,638,000, $2,975,000, and $2,827,000 as of May 31, 2018, 2017 and 2016, respectively.  The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate attributable to controlling interest was $2,235,000 as of May 31, 2018.  Unrecognized tax benefits are the differences between a tax position taken, or expected to be taken in a tax return, and the benefit recognized for accounting purposes.  Accrued amounts of interest and penalties related to unrecognized tax benefits are recognized as part of income tax expense within our consolidated statements of earnings.  As of May 31, 2018, 2017 and 2016, we had accrued liabilities of $271,000, $307,000 and $538,000, respectively, for interest and penalties related to unrecognized tax benefits.

A tabular reconciliation of unrecognized tax benefits follows:

(In thousands)
Balance at May 31, 2017	$	2,975
Decreases - tax positions taken in prior years		(107	)
Increases - tax positions taken in prior years		81
Increases - current tax positions		12
Settlements		(184	)
Lapse of statutes of limitations		(139	)
Balance at May 31, 2018	$	2,638

Approximately $753,000 of the liability for unrecognized tax benefits is expected to be settled in the next twelve months due to the expiration of statutes of limitations in various tax jurisdictions and as a result of expected settlements with various tax jurisdictions. While it is expected that the amount of unrecognized tax benefits will change in the next twelve months, any change is not expected to have a material impact on our consolidated financial position, results of operations or cash flows.

The following is a summary of the tax years open to examination by major tax jurisdiction:

U.S. Federal –2015 and forward

U.S. State and Local –2013 and forward

Austria – 2013 and forward

Canada –2014 and forward

Mexico – 2013 and forward

Portugal – 2014 and forward

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The components of our deferred tax assets and liabilities as of May 31 were as follows:

(in thousands)	2018			2017
Deferred tax assets
Accounts receivable	$	1,455		$	2,157
Inventories		5,004			6,624
Accrued expenses		23,219			30,065
Net operating loss carry forwards		14,201			13,256
Tax credit carry forwards		811			3,206
Stock-based compensation		10,588			17,668
Other		502			205
Total deferred tax assets		55,780			73,181
Valuation allowance for deferred tax assets		(14,006	)		(12,987	)
Net deferred tax assets		41,774			60,194
Deferred tax liabilities
Property, plant and equipment		(74,512	)		(42,599	)
Investment in affiliated companies, principally due to undistributed earnings		(22,918	)		(46,001	)
Derivative contracts		(2,653	)		(1,745	)
Other		(1,879	)		(4,149	)
Total deferred tax liability		(101,962	)		(94,494	)
Net deferred tax liability	$	(60,188	)	$	(34,300	)

At May 31, 2018, we had tax benefits for state net operating loss carry forwards of $9,363,000 that expire from fiscal 2019 to the fiscal year ending May 31, 2038, tax benefits for foreign net operating loss carry forwards of $4,837,000 that expire from fiscal 2019 to the fiscal year ending May 31, 2023, tax benefits for foreign investment tax credit carry forwards of $649,000, that expire in the fiscal year ending May 31, 2025, and tax benefits for foreign income tax credit carry forwards of $162,000, that expire in the fiscal year ending May 31, 2028.

The valuation allowance for deferred tax assets of $14,006,000 at May 31, 2018 is associated primarily with the net operating loss carry forwards.  The valuation allowance includes $9,537,000 for state and $4,469,000 for foreign deferred tax assets.  The majority of the state valuation allowance relates to our facility in Decatur, Alabama. The foreign valuation allowance relates to the Company’s operations in Turkey.  Based on our history of profitability, the scheduled reversal of deferred tax liabilities, and taxable income projections, we have determined that it is more likely than not that the remaining deferred tax assets are otherwise realizable.

Note M – Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the fiscal years ended May 31:

(in thousands, except per share amounts)	2018		2017		2016
Numerator (basic & diluted):
Net earnings attributable to controlling interest - income available to
common shareholders	$	194,794	$	204,515	$	143,715
Denominator:
Denominator for basic earnings per share attributable to controlling
interest - weighted average common shares		60,923		62,443		62,469
Effect of dilutive securities		2,119		2,431		2,286
Denominator for diluted earnings per share attributable to controlling
interest - adjusted weighted average common shares		63,042		64,874		64,755
Basic earnings per share attributable to controlling interest	$	3.20	$	3.28	$	2.30
Diluted earnings per share attributable to controlling interest	$	3.09	$	3.15	$	2.22

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Stock options covering 188,504, 100,048, and 326,585 common shares for fiscal 2018, fiscal 2017 and fiscal 2016, respectively, have been excluded from the computation of diluted earnings per share because the effect of their inclusion would have been anti-dilutive for those periods.

Note N – Segment Data

Our operations are managed principally on a products and services basis and include three reportable business segments: Steel Processing, Pressure Cylinders and Engineered Cabs, each of which is comprised of a similar group of products and services.  Factors used to identify reportable business segments include the nature of the products and services provided by each business, the management reporting structure, similarity of economic characteristics and certain quantitative measures, as prescribed by authoritative guidance.  A discussion of each of our reportable business segments is outlined below.

Effective June 1, 2017, we made certain organizational changes impacting the internal reporting and management structure of Worthington Steelpac Systems, LLC (“Packaging Solutions”).  As a result of these organizational changes, management responsibilities and internal reporting were realigned, moving Packaging Solutions from the Steel Processing operating segment to the Engineered Cabs operating segment.  Previously reported segment information has not been restated to conform to this new presentation and is immaterial for all periods presented.

Steel Processing: The Steel Processing reportable segment consists of the Worthington Steel business unit and includes three consolidated joint ventures: Spartan, TWB and WSP.  Spartan operates a cold-rolled, hot-dipped galvanizing line and TWB operates a laser welded blanking business.  WSP serves primarily as a toll processor for United States Steel Corporation and others.  Its services include slitting, blanking, cutting-to-length, laser blanking, laser welding, tension leveling and warehousing.  Worthington Steel is an intermediate processor of flat-rolled steel.  This operating segment’s processing capabilities include cold reducing, configured blanking, coil fed laser blanking, cutting-to-length, dry-lube, hot-dipped galvanizing, hydrogen annealing, laser welding, pickling, slitting, oscillate slitting, temper rolling, tension leveling, and non-metallic coating, including  acrylic and paint coating. Worthington Steel sells to customers principally in the automotive, aerospace, agricultural, appliance, construction, container, hardware, HVAC, lawn and garden, leisure and recreation, office furniture and office equipment markets. Worthington Steel also toll processes steel for steel mills, large end-users, service centers and other processors.  Toll processing is different from typical steel processing in that the mill, end-user or other party retains title to the steel and has the responsibility for selling the end product.  Steel Processing also includes the results of Packaging Solutions through May 31, 2017.  The percentage of our consolidated net sales generated by Steel Processing was approximately 63%, 69% and 65%, in fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

Pressure Cylinders: The Pressure Cylinders reportable segment consists of the Worthington Cylinders business unit and Worthington Aritas.  Worthington Aritas is a Turkish manufacturer of cryogenic pressure vessels for LNG and other gas storage applications.  During the fourth quarter of fiscal 2018, management committed to a plan to sell the Company’s cryogenics business in Turkey and the net assets of the asset group have been presented separately as assets held for sale in our consolidated balance sheets.  The percentage of our consolidated net sales generated by Pressure Cylinders was approximately 34%, 28% and 30% in fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  We acquired AMTROL on June 2, 2017, which has been included in the Pressure Cylinders reportable segment since that date, and accounted for approximately 7%of our consolidated net sales in fiscal 2018.

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Pressure Cylinders manufactures and sells filled and unfilled pressure cylinders, tanks, hand torches, well water and expansion tanks, and oil and gas equipment along with various accessories and related products for diversified end-use market applications.  The following is a description of these markets:

• Industrial Products: This market sector includes high pressure and acetylene cylinders for industrial gases, refrigerant and certain propane gas cylinders, cryogenic equipment, and systems and services for handling liquid gasses, and other specialty products. Cylinders in this market sector are generally sold to gas producers, cylinder exchangers and industrial distributors. Industrial cylinders hold fuel for uses such as cutting, brazing and soldering, semiconductor production, and beverage delivery. Refrigerant gas cylinders are used to hold refrigerant gases for commercial, residential and automotive air conditioning and refrigeration systems.  LPG cylinders hold fuel for barbeque grills, recreational vehicle equipment, residential and light commercial heating systems, industrial forklifts and commercial/residential cooking (the latter, generally outside North America). Cryogenic equipment and systems include LNG systems for marine and mining applications, liquid nitrogen storage freezers and shipping containers for organic specimens in healthcare markets, and tanks, trailers, and regasification plants for liquefied nitrogen, oxygen, argon, hydrogen, and natural gas. Specialty products include a variety of fire suppression and chemical tanks.

• Consumer Products: This market sector includes propane-filled cylinders for torches, camping stoves and other applications, hand held torches and accessories such as solder and brazing rods, and Balloon Time® helium-filled balloon kits, well water tanks and expansion tanks. These products are sold primarily to mass merchandisers and distributors.

• Alternative Fuels: This market sector includes composite and steel cylinders used to hold CNG and hydrogen for automobiles, buses, and light-duty trucks, and to hold propane/autogas for automobiles and light- and medium-duty trucks, as well as CNG fuel systems for heavy duty, refuse and other trucks.

• Oil & Gas Equipment:  This market sector includes steel and fiberglass storage tanks, separation equipment, controls and other products primarily used in the energy markets, including oil and gas and nuclear. This market sector also includes hoists and other marine products which are used principally in shipyard lift systems. This market sector also leverages its manufacturing competencies to produce pressure vessels, atmospheric tanks, controls and various custom machined components for other industrial and agricultural end markets.

Engineered Cabs: The Engineered Cabs reportable segment consists of the Worthington Industries Engineered Cabs business unit, a non-captive designer and manufacturer of high-quality, custom-engineered open and enclosed cabs and operator stations and custom fabrications for heavy mobile equipment used primarily in the agricultural, construction, forestry, military and mining industries.  Engineered Cabs’ product design, engineering support and broad manufacturing capabilities enable it to produce cabs and structures used in products ranging from small utility equipment to large earthmovers.  Engineered Cabs also includes Packaging Solutions, effective June 1, 2017.  Packaging Solutions designs and manufactures reusable custom steel platforms, racks and pallets for supporting, protecting and handling products throughout the shipping process.  For fiscal 2018, fiscal 2017 and fiscal 2016, the percentage of our consolidated net sales generated by the Engineered Cabs operating segment was approximately 3%, 3%, and 4%, respectively.

Other: The Other category includes the former Worthington Energy Innovations operating segment, as it did not meet the quantitative thresholds for separate disclosure prior to disposal of a 65% stake effective March 31, 2018.  Certain income and expense items not allocated to our operating segments are also included in Other, including costs associated with our captive insurance company.  The Other category also includes the results of our former Construction Services operating segment, on a historical basis, through May 31, 2016.

The accounting policies of the reportable business segments and other operating segments are described in “Note A – Summary of Significant Accounting Policies.”  We evaluate operating segment performance based on operating income (loss). Inter-segment sales are not material.

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The following table presents summarized financial information for our reportable business segments as of, and for the fiscal years ended, May 31:

(in thousands)	2018			2017			2016
Net sales
Steel Processing	$	2,252,771		$	2,074,869		$	1,843,661
Pressure Cylinders		1,206,183			829,846			844,898
Engineered Cabs		116,631			101,388			121,946
Other		6,035			8,005			9,209
Total net sales	$	3,581,620		$	3,014,108		$	2,819,714
Operating income (loss)
Steel Processing	$	152,690		$	170,481		$	112,001
Pressure Cylinders		23,396			54,098			28,375
Engineered Cabs		(11,305	)		(7,685	)		(19,331	)
Other		(23,171	)		(3,773	)		1,007
Total operating income	$	141,610		$	213,121		$	122,052
Depreciation and amortization
Steel Processing	$	43,331		$	42,861		$	38,523
Pressure Cylinders		46,691			31,052			32,403
Engineered Cabs		5,415			5,197			6,205
Other		7,922			7,683			7,568
Total depreciation and amortization	$	103,359		$	86,793		$	84,699
Impairment of goodwill and long-lived assets
Steel Processing	$	-		$	-		$	-
Pressure Cylinders		53,883			-			22,962
Engineered Cabs		-			-			3,000
Other		7,325			-			-
Total impairment of goodwill and long-lived assets	$	61,208		$	-		$	25,962
Restructuring and other expense (income), net
Steel Processing	$	(10,087	)	$	1,828		$	4,110
Pressure Cylinders		2,365			3,411			392
Engineered Cabs		(78	)		1,219			3,570
Other		379			(47	)		(895	)
Total restructuring and other expense (income), net	$	(7,421	)	$	6,411		$	7,177
Total assets
Steel Processing	$	999,238		$	882,863		$	819,853
Pressure Cylinders		1,147,268			766,611			787,786
Engineered Cabs		66,456			62,141			75,124
Other		408,825			613,729			378,501
Total assets	$	2,621,787		$	2,325,344		$	2,061,264
Capital expenditures
Steel Processing	$	31,966		$	40,775		$	42,063
Pressure Cylinders		32,697			24,798			29,916
Engineered Cabs		2,067			755			6,945
Other		9,358			2,058			18,112
Total capital expenditures	$	76,088		$	68,386		$	97,036

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The following table presents net sales by geographic region for the fiscal years ended May 31:

(in thousands)	2018		2017		2016
North America	$	3,275,090	$	2,805,182	$	2,662,196
International		306,530		208,926		157,518
Total	$	3,581,620	$	3,014,108	$	2,819,714

The following table presents property, plant and equipment, net, by geographic region as of May 31:

(in thousands)	2018		2017
North America	$	512,439	$	501,776
International		72,531		68,713
Total	$	584,970	$	570,489

Note O – Acquisitions

AMTROL

On June 2, 2017, the Company acquired AMTROL, a leading manufacturer of pressure cylinders and water system tanks with operations in the U.S. and Europe.  The total purchase price was $291,921,000 after adjusting for excess working capital and was funded primarily with cash on hand.  The net assets became part of the Pressure Cylinders operating segment at closing, with the well water and expansion tank operations aligning under the consumer products business and the refrigerant, liquid propane and industrial and specialty gas operations aligning under the industrial products business.  Total acquisition-related expenses were $3,568,000, of which $1,568,000 were incurred during fiscal 2018.

The assets acquired and liabilities assumed were recognized at their acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired.  In connection with the acquisition, we identified and valued the following identifiable intangible assets:

(in thousands)			Useful Life
Category	Amount		(Years)
Customer relationships	$	90,800	14-17
Trade names		62,200	Indefinite
Technology		13,000	15-16
Total acquired identifiable intangible assets	$	166,000

The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under accounting rules (e.g. assembled workforce) or of immaterial value.  The purchase price also includes a going-concern element that represents our ability to earn a higher rate of return on this group of assets than would be expected on the separate assets as determined during the valuation process.  This additional investment value resulted in goodwill, which is not expected to be deductible for income tax purposes.

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The following table summarized the consideration transferred for the assets of AMTROL and the fair value assigned to the assets acquired and liabilities assumed at the acquisition date:

			Measurement
	Preliminary		Period			Revised
(in thousands)	Valuation		Adjustments			Valuation
Cash	$	6,893	$	-		$	6,893
Accounts receivable		40,212		-			40,212
Inventories		37,249		-			37,249
Prepaid expenses		981		-			981
Other assets		2,550		-			2,550
Intangible assets		166,000		-			166,000
Property, plant and equipment		52,870		-			52,870
Total assets		306,755		-			306,755
Accounts payable		25,945		-			25,945
Accrued liabilities		21,016		-			21,016
Long-term debt including current maturities		2,287		-			2,287
Other accrued items		3,993		1,501			5,494
Deferred income taxes, net		64,495		(966	)		63,529
Net identifiable assets		189,019		(535	)		188,484
Goodwill		102,902		535			103,437
Purchase price	$	291,921	$	-		$	291,921

Operating results of AMTROL have been included in the Company’s consolidated statements of earnings since the date of the acquisition.  During the fiscal year ended May 31, 2018, AMTROL contributed net sales of $265,198,000 and operating income of $18,899,000.  

The following unaudited pro forma information presents consolidated financial information as if AMTROL had been acquired at the beginning of fiscal 2017.  Depreciation and amortization expense included in the pro forma results reflect the acquisition-date fair values assigned to the definite-lived intangible assets and fixed assets of AMTROL assuming a June 1, 2016 acquisition date.  Adjustment has also been made for the acquisition-related costs incurred in each period presented.  Pro forma results for the fiscal year ended May 31, 2018 have also been adjusted to remove the impact of the acquisition-date fair value adjustments to inventories and accrued severance costs related to headcount reductions at AMTROL initiated during the first quarter of fiscal 2018, as discussed in “Note D – Restructuring and Other Expense (Income), Net.”  The pro forma adjustments noted above have been adjusted for the applicable income tax impact.  The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place as of June 1, 2016

(in thousands, except per share amounts)	2018		2017
Net sales	$	3,581,620	$	3,263,315
Net earnings attributable to controlling interest	$	199,038	$	215,182
Diluted earnings per share attributable to controlling interest	$	3.16	$	3.32

Note P – Derivative Instruments and Hedging Activities

We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative instruments include interest rate risk, foreign currency exchange risk and commodity price risk. While certain of our derivative instruments are designated as hedging instruments, we also enter into derivative instruments that are designed to hedge a risk, but are not designated as hedging instruments and therefore do not qualify for hedge accounting. These derivative instruments are adjusted to current fair value through earnings at the end of each period.

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Interest Rate Risk Management – We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on cash flows and the market value of our borrowings. We utilize a mix of debt maturities along with both fixed-rate and variable-rate debt to manage changes in interest rates. In addition, we enter into interest rate swaps to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs.

Foreign Currency Exchange Risk Management – We conduct business in several major international currencies and are therefore subject to risks associated with changing foreign currency exchange rates. We enter into various contracts that change in value as foreign currency exchange rates change to manage this exposure. Such contracts limit exposure to both favorable and unfavorable currency exchange rate fluctuations. The translation of foreign currencies into United States dollars also subjects us to exposure related to fluctuating currency exchange rates; however, derivative instruments are not used to manage this risk.

Commodity Price Risk Management – We are exposed to changes in the price of certain commodities, including steel, natural gas, zinc and other raw materials, and our utility requirements. Our objective is to reduce earnings and cash flow volatility associated with forecasted purchases and sales of these commodities to allow management to focus its attention on business operations. Accordingly, we enter into derivative contracts to manage the associated price risk.

We are exposed to counterparty credit risk on all of our derivative instruments. Accordingly, we have established and maintain strict counterparty credit guidelines. We have credit support agreements in place with certain counterparties to limit our credit exposure.  These agreements require either party to post cash collateral if its cumulative market position exceeds a predefined liability threshold.  Amounts posted to the margin accounts accrue interest at market rates and are required to be refunded in the period in which the cumulative market position falls below the required threshold.  We do not have significant exposure to any one counterparty and management believes the risk of loss is remote and, in any event, would not be material.

Refer to "Note Q – Fair Value Measurements" for additional information regarding the accounting treatment for our derivative instruments, as well as how fair value is determined.

The following table summarizes the fair value of our derivative instruments and the respective line in which they were recorded in the consolidated balance sheet at May 31, 2018:

	Asset Derivatives			Liability Derivatives
	Balance			Balance
	Sheet	Fair		Sheet	Fair
(in thousands)	Location	Value		Location	Value
Derivatives designated as hedging
instruments:
Commodity contracts	Receivables	$	6,385	Accounts payable	$	-
	Other assets		68	Other liabilities		-
Totals		$	6,453		$	-
Derivatives not designated as hedging
instruments:
Commodity contracts	Receivables	$	4,749	Accounts payable	$	613
	Other assets		221	Other liabilities		158
			4,970			771
Foreign exchange contracts	Receivables		-	Accounts payable		75
Totals		$	4,970		$	846
Total derivative instruments		$	11,423		$	846

The amounts in the table above reflect the fair value of the Company’s derivative contracts on a net basis. Had these amounts been recognized on a gross basis, the impact would have been a $351,000 increase in receivables with a corresponding increase in accounts payable.

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The following table summarizes the fair value of our derivative instruments and the respective line in which they were recorded in the consolidated balance sheet at May 31, 2017:

	Asset Derivatives			Liability Derivatives
	Balance			Balance
	Sheet	Fair		Sheet	Fair
(in thousands)	Location	Value		Location	Value
Derivatives designated as hedging
instruments:
Commodity contracts	Receivables	$	7,148	Accounts payable	$	111
	Other assets		6	Other liabilities		159
			7,154			270
Interest rate contracts	Receivables		-	Accounts payable		141
	Other assets		-	Other liabilities		160
			-			301
Totals		$	7,154		$	571
Derivatives not designated as hedging
instruments:
Commodity contracts	Receivables	$	1,110	Accounts payable	$	570
	Other assets		-	Other liabilities		1
			1,110			571
Foreign exchange contracts	Receivables		62	Accounts payable		-
Totals		$	1,172		$	571
Total derivative instruments		$	8,326		$	1,142

The amounts in the table above reflect the fair value of the Company’s derivative contracts on a net basis. Had these amounts been recognized on a gross basis, the impact would have been a $100,000 increase in receivables with a corresponding increase in accounts payable.

Cash Flow Hedges

We enter into derivative instruments to hedge our exposure to changes in cash flows attributable to interest rate and commodity price fluctuations associated with certain forecasted transactions.  These derivative instruments are designated and qualify as cash flow hedges.  Accordingly, the effective portion of the gain or loss on the derivative instrument is reported as a component of OCI and reclassified into earnings in the same line associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings.  The ineffective portion of the gain or loss on the derivative instrument is recognized in earnings immediately.

The following table summarizes our cash flow hedges outstanding at May 31, 2018:

	Notional
(in thousands)	Amount		Maturity Date
Commodity contracts	$	15,276	June 2018 - June 2019

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The following table summarizes the gain recognized in OCI and the gain (loss) reclassified from AOCI into earnings for derivative instruments designated as cash flow hedges during fiscal 2018 and fiscal 2017:

							Location of
			Location of				Gain	Gain
			Gain (Loss)	Gain (Loss)			(Ineffective	(Ineffective
	Gain		Reclassified	Reclassified			Portion)	Portion)
	Recognized		from	from			Excluded	Excluded
	in OCI		AOCI	AOCI			from	from
	(Effective		(Effective	(Effective			Effectiveness	Effectiveness
(in thousands)	Portion)		Portion)	Portion)			Testing	Testing
For the fiscal year ended
May 31, 2018:
Interest rate contracts	$	3,363	Interest expense	$	(407	)	Interest expense	$	-
Commodity contracts		11,620	Cost of goods sold		14,034		Cost of goods sold		-
Totals	$	14,983		$	13,627			$	-
For the fiscal year ended
May 31, 2017:
Interest rate contracts	$	26	Interest expense	$	(211	)	Interest expense	$	-
Commodity contracts		7,643	Cost of goods sold		12,402		Cost of goods sold		-
Totals	$	7,669		$	12,191			$	-

The estimated net amount of the gains in AOCI at May 31, 2018 expected to be reclassified into net earnings within the succeeding twelve months is $5,775,000 (net of tax of $1,751,000).  This amount was computed using the fair value of the cash flow hedges at May 31, 2018, and will change before actual reclassification from other comprehensive income to net earnings during fiscal 2019.

Economic (Non-designated) Hedges

We enter into foreign exchange contracts to manage our foreign exchange exposure related to inter-company and financing transactions that do not meet the requirements for hedge accounting treatment.  We also enter into certain commodity contracts that do not qualify for hedge accounting treatment.  Accordingly, these derivative instruments are adjusted to current market value at the end of each period through earnings.

The following table summarizes our economic (non-designated) derivative instruments outstanding at May 31, 2018:

	Notional
(in thousands)	Amount		Maturity Date(s)
Commodity contracts	$	31,814	June 2018 - December 2019
Foreign exchange contracts		10,448	June 2018 - August 2018

The following table summarizes the gain (loss) recognized in earnings for economic (non-designated) derivative financial instruments during fiscal 2018 and fiscal 2017:

		Gain (Loss)
		Recognized in Earnings
		Fiscal Year Ended
	Location of Gain (Loss)	May 31,
(in thousands)	Recognized in Earnings	2018			2017
Commodity contracts	Cost of goods sold	$	6,284		$	3,749
Foreign exchange contracts	Miscellaneous income, net		(264	)		(553	)
Total		$	6,020		$	3,196

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Note Q – Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Fair value is an exit price concept that assumes an orderly transaction between willing market participants and is required to be based on assumptions that market participants would use in pricing an asset or a liability.  Current accounting guidance establishes a three-tier fair value hierarchy as a basis for considering such assumptions and for classifying the inputs used in the valuation methodologies.  This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.  The three levels of inputs used to measure fair values are as follows:

Level 1	–	Observable prices in active markets for identical assets and liabilities.
Level 2	–	Inputs other than quoted prices included within Level 1 that are observable for the assets and liabilities, either directly or indirectly.
Level 3	–	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities.

Recurring Fair Value Measurements

At May 31, 2018, our financial assets and liabilities measured at fair value on a recurring basis were as follows:

			Significant
	Quoted Prices		Other		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Totals
Assets
Derivative contracts (1)	$	-	$	11,423	$	-	$	11,423
Total Assets	$	-	$	11,423	$	-	$	11,423
Liabilities
Derivative contracts (1)	$	-	$	846	$	-	$	846
Total liabilities	$	-	$	846	$	-	$	846

At May 31, 2017, our financial assets and liabilities measured at fair value on a recurring basis were as follows:

			Significant
	Quoted Prices		Other		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Totals
Assets
Derivative contracts (1)	$	-	$	8,326	$	-	$	8,326
Total assets	$	-	$	8,326	$	-	$	8,326
Liabilities
Derivative contracts (1)	$	-	$	1,142	$	-	$	1,142
Contingent consideration obligation (2)		-		-		585		585
Total liabilities	$	-	$	1,142	$	585	$	1,727

(1) The fair value of our derivative contracts was based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the

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respective maturities.  Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows.  Refer to “Note P – Derivative Instruments and Hedging Activities” for additional information regarding our use of derivative instruments.

(2) The fair value of the contingent consideration obligation was determined using a probability weighted cash flow approach based on management’s projections of future cash flows of the acquired business.  The fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 measurements.

Non-Recurring Fair Value Measurements

At May 31, 2018, our assets measured at fair value on a non-recurring basis were categorized as follows:

			Significant
	Quoted Prices		Other		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Totals
Assets
Long-lived assets held for sale (1)	$	-	$	30,000	$	-	$	30,000
Total assets	$	-	$	30,000	$	-	$	30,000

(1) During the fourth quarter of fiscal 2018, management committed to a plan to sell the Company’s cryogenics business in Turkey, Worthington Aritas, and certain underperforming oil & gas equipment assets within Pressure Cylinders.  In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell.  The book value of Worthington Aritas exceeded its estimated fair market value of $9,000,000, resulting in an impairment charge of $42,422,000.  The book value of the oil & gas equipment asset group also exceeded its estimated fair market value of $21,000,000, resulting in an impairment charge of $10,497,000.

At May 31, 2017, there were no assets or liabilities measured at fair value on a non-recurring basis on the Company’s consolidated balance sheet.

The non-derivative financial instruments included in the carrying amounts of cash and cash equivalents, receivables, income taxes receivable, other assets, deferred income taxes, accounts payable, short-term borrowings, accrued compensation, contributions to employee benefit plans and related taxes, other accrued expenses, income taxes payable and other liabilities approximate fair value due to their short-term nature.  The fair value of long-term debt, including current maturities, based upon models utilizing primarily market observable (Level 2) inputs and credit risk, was $757,069,000 and $618,059,000 at May 31, 2018 and 2017, respectively.  The carrying amount of long-term debt, including current maturities, was $750,368,000 and $578,487,000 at May 31, 2018 and 2017, respectively.

Note R – Operating Leases

We lease certain property and equipment from third parties under non-cancelable operating lease agreements.  Rent expense under operating leases was $16,277,000, $13,519,000 and $14,683,000 in fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  Future minimum lease payments for non-cancelable operating leases having an initial or remaining term in excess of one year at May 31, 2018, were as follows:

(in thousands)
2019	$	11,348
2020		8,839
2021		6,774
2022		5,825
2023		5,097
Thereafter		5,508
Total	$	43,391

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Note S – Related Party Transactions

We purchase from, and sell to, affiliated companies certain raw materials and services at prevailing market prices.  Net sales to affiliated companies for fiscal 2018, fiscal 2017 and fiscal 2016 totaled $57,382,000, $56,588,000, and $32,496,000, respectively.  Purchases from affiliated companies for fiscal 2018, fiscal 2017 and fiscal 2016 totaled $7,292,000, $7,145,000, and $15,737,000, respectively.  Accounts receivable from affiliated companies were $2,479,000 and $4,616,000 at May 31, 2018 and 2017, respectively.  Accounts payable to affiliated companies were $76,000 at May 31, 2017.

Note T – Quarterly Results of Operations (Unaudited)

The following table summarizes the unaudited quarterly consolidated results of operations for fiscal 2018 and fiscal 2017:

(in thousands, except per share)	Three Months Ended
Fiscal 2018	August 31		November 30		February 28		May 31
Net sales	$	848,237	$	871,266	$	841,657	$	1,020,460
Gross margin		132,778		140,079		127,055		162,946
Impairment of goodwill and long-lived assets (1)				8,289		-		52,919
Net earnings		48,074		41,622		78,297		32,857
Net earnings attributable to controlling interest		45,534		39,403		79,087		30,770
Basic earnings per share - controlling interest	$	0.73	$	0.64	$	1.31	$	0.52
Diluted earnings per share - controlling interest	$	0.70	$	0.62	$	1.27	$	0.50
Fiscal 2017	August 31		November 30		February 28		May 31
Net sales	$	737,549	$	727,780	$	703,436	$	845,343
Gross margin		147,282		122,803		110,990		154,830
Net earnings		68,536		49,867		38,951		60,583
Net earnings attributable to controlling interest		65,567		46,565		35,889		56,494
Basic earnings per share - controlling interest	$	1.06	$	0.75	$	0.57	$	0.90
Diluted earnings per share - controlling interest	$	1.02	$	0.72	$	0.55	$	0.87

(1) For additional information regarding the Company’s impairment activity, refer to “Note C – Goodwill and Other Long-Lived Assets.”

The sum of the quarterly earnings per share data presented in the table may not equal the annual results due to rounding and the impact of dilutive securities on the annual versus the quarterly earnings per share calculations.

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WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

COL. A.	COL. B.	COL. C.		COL. D.	COL. E.
Description	Balance at Beginning of Period	Additions		Deductions – Describe  (B)	Balance at End of Period
		Charged to Costs and Expenses	Charged to Other Accounts – Describe  (A)

Year Ended May 31, 2018:
Deducted from asset accounts: Allowance for    possible losses on trade accounts receivable	$	3,444,000	$	11,000	$	-	$	2,823,000	$	632,000
Year Ended May 31, 2017:
Deducted from asset accounts: Allowance for    possible losses on trade accounts receivable	$	4,579,000	$	269,000	$	-	$	1,404,000	$	3,444,000
Year Ended May 31, 2016:
Deducted from asset accounts: Allowance for    possible losses on trade accounts receivable	$	3,085,000	$	1,556,000	$	394,000	$	456,000	$	4,579,000

Note A – Miscellaneous amounts.

Note B – Uncollectable accounts charged to the allowance.  For fiscal 2018, the balance also includes $1,215,000 related to Worthington Aritas that was reclassified to assets held for sale.

See accompanying Report of Independent Registered Public Accounting Firm.

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Item 9. – Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. - Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures [as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)] that are designed to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Management, with the participation of our principal executive officer and our principal financial officer, performed an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the fiscal year covered by this Annual Report on Form 10-K (the fiscal year ended May 31, 2018).  Based on that evaluation, our principal executive officer and our principal financial officer have concluded that such disclosure controls and procedures were effective at a reasonable assurance level as of the end of the fiscal year covered by this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred in the last fiscal quarter (the fiscal quarter ended May 31, 2018) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Annual Report of Management on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States.  Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of Worthington Industries, Inc. and our consolidated subsidiaries; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States, and that receipts and expenditures of Worthington Industries, Inc. and our consolidated subsidiaries are being made only in accordance with authorizations of management and directors of Worthington Industries, Inc. and our consolidated subsidiaries, as appropriate; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of Worthington Industries, Inc. and our consolidated subsidiaries that could have a material effect on the financial statements.

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Management, with the participation of our principal executive officer and our principal financial officer, evaluated the effectiveness of our internal control over financial reporting as of May 31, 2018, the end of our fiscal year.  Management based its assessment on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.  The scope of the assessment included all of the consolidated operations of the Company except for those of New AMTROL Holdings, Inc. and its subsidiaries (collectively, “AMTROL”). AMTROL was acquired on June 2, 2017.  The total assets and net sales of AMTROL represented $418.6 million and $265.2 million of consolidated total assets and consolidated net sales of the Company, respectively, as of and for the year ended May 31, 2018.  

Management’s assessment included evaluation of such elements as the design and operating effectiveness of key controls over financial reporting, process documentation, accounting policies and our overall control environment.  This assessment is supported by testing and monitoring performed under the direction of management.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  Accordingly, even an effective system of internal control over financial reporting will provide only reasonable assurance with respect to financial statement preparation.

Based on the assessment of our internal control over financial reporting, management has concluded that our internal control over financial reporting was effective at a reasonable assurance level as of May 31, 2018.  The results of management’s assessment were reviewed with the Audit Committee of the Board of Directors of Worthington Industries, Inc.

Additionally, our independent registered public accounting firm, KPMG LLP, independently assessed the effectiveness of our internal control over financial reporting and issued the accompanying Report of Independent Registered Public Accounting Firm.

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

Worthington Industries, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Worthington Industries, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of May 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of May 31, 2018, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of May 31, 2018, and 2017, and the related consolidated statements of earnings, comprehensive income, equity, and cash flows for each of the years in the three-year period ended May 31, 2018, and related notes and financial statement schedule of valuation and qualifying accounts (collectively, the consolidated financial statements), and our report dated July 30, 2018 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired New AMTROL Holdings, Inc. and its subsidiaries (AMTROL) during the year ended May 31, 2018, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of May 31, 2018, AMTROL’s internal control over financial reporting associated with total assets of $418.6 million and net sales of $265.2 million included in the consolidated financial statements of the Company as of and for the year ended May 31, 2018. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of AMTROL.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Annual Report of Management on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

	/s/KPMG LLP
Columbus, Ohio
July 30, 2018

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Item 9B. – Other Information

There is nothing to be reported under this Item 9B.

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PART III

Item 10. – Directors, Executive Officers and Corporate Governance

Directors, Executive Officers and Persons Nominated or Chosen to Become Directors or Executive Officers

The information required by Item 401 of SEC Regulation S-K concerning the directors of Worthington Industries, Inc. (“Worthington Industries” or the “Registrant”) and the nominees for re-election as directors of Worthington Industries at the Annual Meeting of Shareholders to be held on September 27, 2018 (the “2018 Annual Meeting”) is incorporated herein by reference from the disclosure to be included under the caption “PROPOSAL 1:  ELECTION OF DIRECTORS” in Worthington Industries’ definitive Proxy Statement relating to the 2018 Annual Meeting (“Worthington Industries’ Definitive 2018 Proxy Statement”), which will be filed pursuant to SEC Regulation 14A not later than 120 days after the end of Worthington Industries’ fiscal 2018 (the fiscal year ended May 31, 2018).

The information required by Item 401 of SEC Regulation S-K concerning the executive officers of Worthington Industries is incorporated herein by reference from the disclosure included under the caption “Supplemental Item – Executive Officers of the Registrant” in Part I of this Annual Report on Form 10-K.

Compliance with Section 16(a) of the Exchange Act

The information required by Item 405 of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT – Section 16(a) Beneficial Ownership Reporting Compliance” in Worthington Industries’ Definitive 2018 Proxy Statement.

Procedures by which Shareholders may Recommend Nominees to Worthington Industries’ Board of Directors

Information concerning the procedures by which shareholders of Worthington Industries may recommend nominees to Worthington Industries’ Board of Directors is incorporated herein by reference from the disclosure to be included under the captions “PROPOSAL 1:  ELECTION OF DIRECTORS – Committees of the Board – Nominating and Governance Committee” and “CORPORATE GOVERNANCE – Nominating Procedures” in Worthington Industries’ Definitive 2018 Proxy Statement.  These procedures have not materially changed from those described in Worthington Industries’ definitive Proxy Statement for the 2017 Annual Meeting of Shareholders held on September 27, 2017.

Audit Committee Matters

The information required by Items 407(d)(4) and 407(d)(5) of SEC Regulation S‑K is incorporated herein by reference from the disclosure to be included under the caption “PROPOSAL 1:  ELECTION OF DIRECTORS –Committees of the Board – Audit Committee” in Worthington Industries’ Definitive 2018 Proxy Statement.

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Code of Conduct; Committee Charters; Corporate Governance Guidelines; Charter of Lead Independent Director

Worthington Industries’ Board of Directors has adopted Charters for each of the Audit Committee, the Compensation Committee, the Executive Committee and the Nominating and Governance Committee as well as Corporate Governance Guidelines as contemplated by the applicable sections of the New York Stock Exchange Listed Company Manual.  Worthington Industries’ Board of Directors has also adopted a Charter of the Lead Independent Director of Worthington Industries’ Board of Directors.

In accordance with the requirements of Section 303A.10 of the New York Stock Exchange Listed Company Manual, the Board of Directors of Worthington Industries has adopted a Code of Conduct covering the directors, officers and employees of Worthington Industries and its subsidiaries, including Worthington Industries’ Chairman of the Board and Chief Executive Officer (the principal executive officer), Worthington Industries’ Executive Vice President and Chief Financial Officer (the principal financial officer) and Worthington Industries’ Controller (the principal accounting officer).  The Registrant will disclose the following events, if they occur, in a current report on Form 8-K to be filed with the SEC within the required four business days following their occurrence: (A) the date and nature of any amendment to a provision of Worthington Industries’ Code of Conduct that (i) applies to Worthington Industries’ principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, (ii) relates to any element of the “code of ethics” definition enumerated in Item 406(b) of SEC Regulation S‑K, and (iii) is not a technical, administrative or other non-substantive amendment; and (B) a description of any waiver (including the nature of the waiver, the name of the person to whom the waiver was granted and the date of the waiver), including an implicit waiver, from a provision of the Code of Conduct granted to Worthington Industries’ principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, that relates to one or more of the elements of the “code of ethics” definition set forth in Item 406(b) of SEC Regulation S-K.  In addition, Worthington Industries will disclose any waivers from the provisions of the Code of Conduct granted to a director or an executive officer of Worthington Industries in a current report on Form 8-K to be filed with the SEC within the required four business days following their occurrence.

The text of each of the Charter of the Audit Committee, the Charter of the Compensation Committee, the Charter of the Executive Committee, the Charter of the Nominating and Governance Committee, the Charter of the Lead Independent Director, the Corporate Governance Guidelines and the Code of Conduct is posted on the “Corporate Governance” page of the “Investor Center” section of Worthington Industries’ Internet web site located at www.worthingtonindustries.com.  In addition, a copy of the Code of Conduct was filed as Exhibit 14 to Worthington Industries’ Annual Report on Form 10-K for the fiscal year ended May 31, 2012.

Item 11. – Executive Compensation

The information required by Item 402 of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the captions “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT,” “EXECUTIVE COMPENSATION” and “COMPENSATION OF DIRECTORS” in Worthington Industries’ Definitive 2018 Proxy Statement.

The information required by Item 407(e)(4) of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “CORPORATE GOVERNANCE — Compensation Committee Interlocks and Insider Participation” in Worthington Industries’ Definitive 2018 Proxy Statement.

The information required by Item 407(e)(5) of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “EXECUTIVE COMPENSATION — Compensation Committee Report”in Worthington Industries’ Definitive 2018 Proxy Statement.

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Item 12. – Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Ownership of Common Shares of Worthington Industries

The information required by Item 403 of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” in Worthington Industries’ Definitive 2018 Proxy Statement.

Equity Compensation Plan Information

The information required by Item 201(d) of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the caption “EQUITY COMPENSATION PLAN INFORMATION” in Worthington Industries’ Definitive 2018 Proxy Statement.

Item 13. – Certain Relationships and Related Transactions, and Director Independence

Certain Relationships and Related Person Transactions

The information required by Item 404 of SEC Regulation S-K is incorporated herein by reference from the disclosure in respect of John P. McConnell to be included under the caption “SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT” and from the disclosure to be included under the caption “TRANSACTIONS WITH CERTAIN RELATED PERSONS” in Worthington Industries’ Definitive 2018 Proxy Statement.

Director Independence

The information required by Item 407(a) of SEC Regulation S-K is incorporated herein by reference from the disclosure to be included under the captions “CORPORATE GOVERNANCE – Director Independence” and “TRANSACTIONS WITH CERTAIN RELATED PERSONS” in Worthington Industries’ Definitive 2018 Proxy Statement.

Item 14. – Principal Accountant Fees and Services

The information required by this Item 14 is incorporated herein by reference from the disclosure to be included under the captions “AUDIT COMMITTEE MATTERS – Independent Registered Public Accounting Firm Fees” and “AUDIT COMMITTEE MATTERS – Pre-Approval of Services Performed by the Independent Registered Public Accounting Firm” in Worthington Industries’ Definitive 2018 Proxy Statement.

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PART IV

Item 15. – Exhibits and Financial Statement Schedules

(a) The following documents are filed as a part of this Annual Report on Form 10-K:

(1)Consolidated Financial Statements:

The consolidated financial statements (and report thereon) listed below are filed as a part of this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm (KPMG LLP)

Consolidated Balance Sheets as of May 31, 2018 and 2017

Consolidated Statements of Earnings for the fiscal years ended May 31, 2018, 2017 and 2016

Consolidated Statements of Comprehensive Income for the fiscal years ended May 31, 2018, 2017 and 2016

Consolidated Statements of Equity for the fiscal years ended May 31, 2018, 2017 and 2016

Consolidated Statements of Cash Flows for the fiscal years ended May 31, 2018, 2017 and 2016

Notes to Consolidated Financial Statements – fiscal years ended May 31, 2018, 2017 and 2016

(2)Financial Statement Schedule:

Schedule II – Valuation and Qualifying Accounts

All other financial statement schedules for which provision is made in the applicable accounting regulations of the SEC are omitted because they are not required or the required information has been presented in the aforementioned consolidated financial statements or notes thereto.

(3)Exhibits Required by Item 601 of Regulation S-K:

The documents listed below are filed or furnished with this Annual Report on Form 10-K as exhibits or incorporated into this Annual Report on Form 10-K by reference as noted:

Exhibit	Description of Exhibit	Location
2.1	Agreement and Plan of Merger, dated as of June 2, 2017, by and among Worthington Steel of Michigan, Inc., Worthington Rhode Island Corporation, New AMTROL Holdings, Inc. and Aqua Stockholder Representative, LLC, as Stockholder Representative ☨	Incorporated herein by reference to Exhibit 2.1 to the Current Report on Form 8-K of Worthington Industries, Inc., an Ohio corporation (the “Registrant”), dated June 6, 2017 and filed with the SEC on the same date  (SEC File No. 1-8399)
3.1	Amended Articles of Incorporation of Worthington Industries, Inc., as filed with the Ohio Secretary of State on October 13, 1998 P	Incorporated herein by reference to Exhibit 3(a) to the Registrant’s Quarterly Report on Form 10-Q  for the quarterly period ended August 31, 1998 (SEC File No. 0-4016)
3.2	Code of Regulations of Worthington Industries, Inc. (reflecting all amendments through the date of this Annual Report on Form 10-K) [This document represents the Code of Regulations of Worthington Industries, Inc. in compiled form incorporating all amendments.]	Incorporated herein by reference to Exhibit 3(b) to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2000 (SEC File No. 1-8399)

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Exhibit	Description of Exhibit	Location
4.1	Second Amended and Restated Credit Agreement, dated as of February 16, 2018, among Worthington Industries, Inc., as a Borrower; Worthington Industries International S.à.r.l., as a Borrower; PNC Bank, National Association, as a Lender, the Swingline Lender, an Issuing Bank and Administrative Agent; JPMorgan Chase Bank, N.A., as a Lender and Syndication Agent; Bank of America, N.A.; Branch Banking and Trust Company; U.S. Bank National Association; Wells Fargo Bank, National Association; Fifth Third Bank; The Huntington National Bank; and The Northern Trust Company, as Lenders (collectively with PNC Bank, National Association and JPMorgan Chase Bank, N.A., the “Lenders”); with Bank of America, N.A., Branch Banking and Trust Company, U.S. Bank National Association and Wells Fargo Bank, National Association serving as Co-Documentation Agents; and JPMorgan Chase Bank, N.A. and PNC Capital Markets LLC serving as Joint Bookrunners and Joint Lead Arrangers	Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated February 22, 2018 and filed with the SEC on the same date (SEC File No. 1-8399)
4.2	Indenture, dated as of April 13, 2010, between Worthington Industries, Inc. and U.S. Bank National Association, as Trustee	Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated April 13, 2010 and filed with the SEC on the same date (SEC File No. 1-8399)
4.3	First Supplemental Indenture, dated as of April 13, 2010, between Worthington Industries, Inc. and U.S. Bank National Association, as Trustee	Incorporated herein by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated April 13, 2010 and filed with the SEC on the same date (SEC File No. 1-8399)
4.4	Form of 6.50% Global Note due April 15, 2020 (included as Exhibit A in Exhibit 4.3 incorporated by reference in this Annual Report on Form 10-K)	Incorporated herein by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated April 13, 2010 and filed with the SEC on the same date (SEC File No. 1-8399)
4.5	Second Supplemental Indenture, dated as of April 15, 2014, between Worthington Industries, Inc. and U.S. Bank National Association, as Trustee	Incorporated herein by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated April 15, 2014 and filed with the SEC on the same date (SEC File No. 1-8399)
4.6	Form of 4.55% Global Note due April 15, 2026 (included as Exhibit A in Exhibit 4.5 incorporated by reference in this Annual Report on Form 10-K)	Incorporated herein by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated April 15, 2014 and filed with the SEC on the same date (SEC File No. 1-8399)
4.7	Third Supplemental Indenture, dated as of July 28, 2017, between Worthington Industries, Inc. and U.S. Bank National Association, as Trustee	Incorporated herein by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated July 28, 2017 and filed with the SEC on the same date (SEC File No. 1-8399)

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Exhibit	Description of Exhibit	Location
4.8	Form of 4.300% Global Note due August 1, 2032 (included as Exhibit A in Exhibit 4.7 incorporated by reference in this Annual Report on Form 10-K)	Incorporated herein by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated July 28, 2017 and filed with the SEC on the same date (SEC File No. 1-8399)
4.9	Note Agreement, dated as of August 10, 2012, between Worthington Industries, Inc. and The Prudential Insurance Company of America, Pruco Life Insurance Company of New Jersey, Pruco Life Insurance Company, Prudential Arizona Reinsurance Universal Company, Prudential Annuities Life Assurance Corporation, The Prudential Life Insurance Company, Ltd. and The Gibraltar Life Insurance Co., Ltd.	Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated August 15, 2012 and filed with the SEC on the same date (SEC File No. 1-8399)
4.10	Form of 4.60% Senior Note due August 10, 2024 (included as Exhibit A in Exhibit 4.9 incorporated by reference in this Annual Report on Form 10-K)	Incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated August 15, 2012 and filed with the SEC on the same date (SEC File No. 1-8399)
4.11	Amendment No. 1 to Note Agreement, dated June 10, 2015, among Worthington Industries, Inc., on the one hand, and The Prudential Insurance Company of America, Pruco Life Insurance Company of New Jersey, Pruco Life Insurance Company, Prudential Arizona Reinsurance Universal Company, Prudential Annuities Life Assurance Corporation, The Prudential Life Insurance Company, Ltd. and The Gibraltar Life Insurance Co., Ltd., on the other hand	Incorporated herein by reference to Exhibit 4.9 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2015 (SEC File No. 1-8399)
4.12	Agreement to furnish instruments and agreements defining rights of holders of long-term debt to the Securities and Exchange Commission upon request	Filed herewith
10.1	Worthington Industries, Inc. Non-Qualified Deferred Compensation Plan effective March 1, 2000*	Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2005 (SEC File No. 1-8399)
10.2	Amendment to the Worthington Industries, Inc. Non-Qualified Deferred Compensation Plan (Amendment effective as of September 1, 2011)*	Incorporated herein by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2011 (SEC File No. 1-8399)
10.3	Second Amendment to the Worthington Industries, Inc. Non-Qualified Deferred Compensation Plan (Second Amendment effective as of October 1, 2014)*	Incorporated herein by reference to Exhibit 10.3 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2014 (SEC File No. 1-8399)
10.4	Worthington Industries, Inc. Amended and Restated 2005 Non-Qualified Deferred Compensation Plan (Restatement effective December 2008)*	Incorporated herein by reference to Exhibit 10.10 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2008 (SEC File No. 1-8399)

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Exhibit	Description of Exhibit	Location
10.5	First Amendment to the Worthington Industries, Inc. Amended and Restated 2005 Non-Qualified Deferred Compensation Plan (First Amendment effective as of September 1, 2011)*	Incorporated herein by reference to Exhibit 10.9 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2011 (SEC File No. 1-8399)
10.6	Second Amendment to the Worthington Industries, Inc. Amended and Restated 2005 Non-Qualified Deferred Compensation Plan (Second Amendment effective as of October 1, 2014)*	Incorporated herein by reference to Exhibit 10.6 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2014 (SEC File No. 1-8399)
10.7	Worthington Industries, Inc. Deferred Compensation Plan for Directors, as Amended and Restated, effective June 1, 2000*	Incorporated herein by reference to Exhibit 10(d) to the Registrant's Annual Report on Form 10-K for the fiscal year ended May 31, 2000 (SEC File No. 1-8399)
10.8	Amendment to the Worthington Industries, Inc. Deferred Compensation Plan for Directors, as Amended and Restated, effective June 1, 2000 (Amendment effective as of September 1, 2011)*	Incorporated herein by reference to Exhibit 10.10 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2011 (SEC File No. 1-8399)
10.9	Second Amendment to the Worthington Industries, Inc. Deferred Compensation Plan for Directors, as Amended and Restated (Second Amendment effective as of October 1, 2014)*	Incorporated herein by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2014 (SEC File No. 1-8399)
10.10	Worthington Industries, Inc. Amended and Restated 2005 Deferred Compensation Plan for Directors (Restatement effective as of December 2008)*	Incorporated herein by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2008 (SEC File No. 1-8399)
10.11	First Amendment to the Worthington Industries, Inc. Amended and Restated 2005 Deferred Compensation Plan for Directors (First Amendment effective as of September 1, 2011)*	Incorporated herein by reference to Exhibit 10.11 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2011 (SEC File No. 1-8399)
10.12	Second Amendment to the Worthington Industries, Inc. Amended and Restated 2005 Deferred Compensation Plan for Directors (Second Amendment effective as of October 1, 2014)*	Incorporated herein by reference to Exhibit 10.12 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2014 (SEC File No. 1-8399)
10.13	Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan (amendment and restatement effective as of November 1, 2008)*	Incorporated herein by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2008 (SEC File No. 1-8399)
10.14	First Amendment to the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan (First Amendment effective as of June 26, 2013; performance goals approved by shareholders on September 26, 2013)*	Incorporated herein by reference to Exhibit 10.2 to the Registrant's Current Report on Form 8-K dated October 1, 2013 and filed with the SEC on the same date (SEC File No. 1-8399)
10.15	Second Amendment to the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan (Second Amendment effective as of September 26, 2013)*	Incorporated herein by reference to Exhibit 10.3 to the Registrant's Current Report on Form 8-K dated October 1, 2013 and filed with the SEC on the same date (SEC File No. 1-8399)

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Exhibit	Description of Exhibit	Location
10.16	Third Amendment to the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan (Third Amendment effective as of June 28, 2017)*	Incorporated herein by reference to Exhibit 10.16 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2017 (SEC File No. 1-8399)
10.17	Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan (reflects the First Amendment, the Second Amendment and the Third Amendment thereto)*	Incorporated herein by reference to Exhibit 10.17 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2017 (SEC File No. 1-8399)
10.18	Form of Notice of Grant of Stock Options and Option Agreement for non-qualified stock options under the Worthington Industries, Inc. 1997 Long-Term Incentive Plan (now known as the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan)*	Incorporated herein by reference to Exhibit 10.7 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2010 (SEC File No. 1-8399)
10.19	Form of Letter Evidencing Performance Awards Granted and to be Granted under the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan with targets for three-fiscal-year periods ending on or after May 31, 2015*	Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated July 2, 2013 and filed with the SEC on the same date (SEC File No. 1-8399)
10.20	Form of Restricted Stock Award Agreement for awards granted after June 1, 2014 entered into by Worthington Industries, Inc. in order to evidence grants of restricted common shares on and after June 30, 2014 and prior to June 28, 2017, in each case which will vest on the third anniversary of the grant date, subject to the terms thereof and of the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan*	Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated July 1, 2014 and filed with the SEC on the same date (SEC File No. 1-8399)
10.21	Form of Restricted Stock Award Agreement for awards granted after June 28, 2017 entered into by Worthington Industries, Inc. in order to evidence the grant, after June 28, 2017, of restricted common shares, in each case which will vest on the fourth anniversary of the grant date, subject to the terms thereof and of the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan*	Incorporated herein by reference to Exhibit 10.22 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2017 (SEC File No. 1-8399)
10.22	Form of Restricted Stock Award Agreement entered into by Worthington Industries, Inc. with Geoffrey G. Gilmore, in order to evidence the grant, effective June 24, 2014, of 25,000 performance-based restricted common shares pursuant to the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan*	Incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated July 1, 2014 and filed with the SEC on the same date (SEC File No. 1-8399)
10.23	Form of Restricted Stock Award Agreement for awards granted after June 28, 2017 to be entered into by Worthington Industries, Inc. in order to evidence the grant, after June 28, 2017, of restricted common shares, in each case which will vest on the third anniversary of the grant date, subject to the terms thereto and of the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan*	Incorporated herein by reference to Exhibit 10.24 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2017 (SEC File No. 1-8399)

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Exhibit	Description of Exhibit	Location
10.24	Worthington Industries, Inc. Amended and Restated 2003 Stock Option Plan (amendment and restatement effective November 1, 2008)*	Incorporated herein by reference to Exhibit 10.6 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2008 (SEC File No. 1-8399)
10.25	First Amendment to the Worthington Industries, Inc. Amended and Restated 2003 Stock Option Plan (First Amendment effective September 26, 2013)*	Incorporated herein by reference to Exhibit 10.6 to the Registrant's Current Report on Form 8-K dated October 1, 2013 and filed with the SEC on the same date (SEC File No. 1-8399)
10.26	Second Amendment to the Worthington Industries, Inc. Amended and Restated 2003 Stock Option Plan (Second Amendment effective June 28, 2017)*	Incorporated herein by reference to Exhibit 10.27 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2017 (SEC File No. 1-8399)
10.27	Form of Notice of Grant of Stock Options and Option Agreement for non-qualified stock options granted under the Worthington Industries, Inc. 2003 Stock Option Plan (now known as the Worthington Industries, Inc. Amended and Restated 2003 Stock Option Plan)*	Incorporated herein by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2010 (SEC File No. 1-8399)
10.28	Worthington Industries, Inc. Amended and Restated 2006 Equity Incentive Plan for Non-Employee Directors (amended and restated effective as of September 2016)*	Incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated October 3, 2016 and filed with the SEC on the same day (SEC File No. 1-8399)
10.29	Form of Notice of Grant of Stock Options and Option Agreement under the Worthington Industries, Inc. 2006 Equity Incentive Plan for Non-Employee Directors (now known as the Worthington Industries, Inc. Amended and Restated 2006 Equity Incentive Plan for Non-Employee Directors) to evidence the grant of non-qualified stock options to non-employee directors of Worthington Industries, Inc. on and after September 24, 2008*	Incorporated herein by reference to Exhibit 10.17 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2010 (SEC File No. 1-8399)
10.30	Form of Restricted Stock Award Agreement under the Worthington Industries, Inc. 2006 Equity Incentive Plan for Non-Employee Directors (now known as the Worthington Industries, Inc. Amended and Restated 2006 Equity Incentive Plan for Non-Employee Directors) entered into by Worthington Industries, Inc. in order to evidence the grant of restricted stock to non-employee directors of Worthington Industries, Inc. on September 24, 2008 and to be entered into by Worthington Industries, Inc. in order to evidence future grants of restricted stock to non-employee directors of Worthington Industries, Inc. *	Incorporated herein by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2008 (SEC File No. 1-8399)
10.31	Worthington Industries, Inc. 2010 Stock Option Plan*	Incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated October 5, 2010 and filed with the SEC on the same date (SEC File No. 1-8399)

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Exhibit	Description of Exhibit	Location
10.32	First Amendment to the Worthington Industries, Inc. 2010 Stock Option Plan (First Amendment effective September 26, 2013) *	Incorporated herein by reference to Exhibit 10.7 to the Registrant's Current Report on Form 8-K dated October 1, 2013 and filed with the SEC on the same date (SEC File No. 1-8399)
10.33	Second Amendment to the Worthington Industries, Inc. 2010 Stock Option Plan (Second Amendment effective as of June 28, 2017)*	Incorporated herein by reference to Exhibit 10.35 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2017 (SEC File No. 1-8399)
10.34	Form of Non-Qualified Stock Option Award Agreement entered into by Worthington Industries, Inc. in order to evidence the grant of non-qualified stock options to executive officers of Worthington Industries, Inc. effective as of June 30, 2011 pursuant to the Worthington Industries, Inc. 2010 Stock Option Plan and to be entered into by Worthington Industries, Inc. in order to evidence future grants of non-qualified stock options to executive officers pursuant to the Worthington Industries, Inc. 2010 Stock Option Plan*	Incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated July 6, 2011 and filed with the SEC on the same date (SEC File No. 1-8399)
10.35	Worthington Industries, Inc. Annual Incentive Plan for Executives*	Incorporated herein by reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K dated September 30, 2008 and filed with the SEC on the same date (SEC File No. 1-8399)
10.36	First Amendment to the Worthington Industries, Inc. Annual Incentive Plan for Executives (approved by shareholders on September 26, 2013)*	Incorporated herein by reference to Exhibit 10.5 to the Registrant's Current Report on Form 8-K dated October 1, 2013 and filed with the SEC on the same date (SEC File No. 1-8399)
10.37	Form of Letter Evidencing Cash Performance Bonus Awards Granted and to be Granted under the Worthington Industries, Inc. Annual Incentive Plan for Executives (sometimes also referred to as the Worthington Industries, Inc. Annual Short Term Incentive Plan) *	Incorporated herein by reference to Exhibit 10.42 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2014 (SEC File No. 1-8399)
10.38	Receivables Purchase Agreement, dated as of November 30, 2000, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, members of various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10(h)(i) to the Registrant's Annual Report on Form 10-K for the fiscal year ended May 31, 2001 (SEC File No. 1-8399)
10.39	Amendment No. 1 to Receivables Purchase Agreement, dated as of May 18, 2001, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, members of various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10(h)(ii) to the Registrant's Annual Report on Form 10-K for the fiscal year ended May 31, 2001 (SEC File No. 1-8399)

109

Exhibit	Description of Exhibit	Location
10.40	Amendment No. 2 to Receivables Purchase Agreement, dated as of May 31, 2004, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, members of various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10(g)(x) to the Registrant's Annual Report on Form 10-K for the fiscal year ended May 31, 2004 (SEC File No. 1-8399)
10.41	Amendment No. 3 to Receivables Purchase Agreement, dated as of January 27, 2005, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.15 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2005 (SEC File No. 1-8399)
10.42	Amendment No. 4 to Receivables Purchase Agreement, dated as of January 25, 2008, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.20 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2008 (SEC File No. 1-8399)
10.43	Amendment No. 5 to Receivables Purchase Agreement, dated as of January 22, 2009, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2009 (SEC File No. 1-8399)
10.44	Amendment No. 6 to Receivables Purchase Agreement, dated as of April 30, 2009, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.30 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2009 (SEC File No. 1-8399)
10.45	Amendment No. 7 to Receivables Purchase Agreement, dated as of January 21, 2010, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2010 (SEC File No. 1-8399)
10.46	Amendment No. 8 to Receivables Purchase Agreement, dated as of April 16, 2010, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.30 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2010 (SEC File No. 1-8399)

110

Exhibit	Description of Exhibit	Location
10.47	Amendment No. 9 to Receivables Purchase Agreement, dated as of January 20, 2011, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2011 (SEC File No. 1-8399)
10.48	Amendment No. 10 to Receivables Purchase Agreement, dated as of February 28, 2011, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2011 (SEC File No. 1-8399)
10.49	Amendment No. 11 to Receivables Purchase Agreement, dated as of May 6, 2011, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.36 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2011 (SEC File No. 1-8399)
10.50	Amendment No. 12 to Receivables Purchase Agreement, dated as of January 19, 2012, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended February 29, 2012 (SEC File No. 1-8399)
10.51	Amendment No. 13 to Receivables Purchase Agreement, dated as of January 18, 2013, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2013 (SEC File No. 1-8399)
10.52	Amendment No. 14 to Receivables Purchase Agreement, dated as of July 15, 2013, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.48 to the Registrant's Annual Report on Form 10-K for the fiscal year ended May 31, 2013 (SEC File No. 1-8399)
10.53	Amendment No. 15 to Receivables Purchase Agreement, dated as of October 11, 2013, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.57 to the Registrant's Annual Report on Form 10-K for the fiscal year ended May 31, 2015 (SEC File No. 1-8399)

111

Exhibit	Description of Exhibit	Location
10.54	Amendment No. 16 to Receivables Purchase Agreement, dated as of May 23, 2014, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.58 to the Registrant's Annual Report on Form 10-K for the fiscal year ended May 31, 2015 (SEC File No. 1-8399)
10.55	Amendment No. 17 to Receivables Purchase Agreement, dated as of January 16, 2015, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2015 (SEC File No. 1-8399)
10.56	Amendment No. 18 to Receivables Purchase Agreement, dated as of January 16, 2018, among Worthington Receivables Corporation, as Seller, Worthington Industries, Inc., as Servicer, the members of the various purchaser groups from time to time party to the Receivables Purchase Agreement and PNC Bank, National Association, as Administrator	Incorporated herein by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2018 (SEC File No. 1-8399)
10.57	Purchase and Sale Agreement, dated as of November 30, 2000, between the various originators listed therein and Worthington Receivables Corporation	Incorporated herein by reference to Exhibit 10(h)(iii) to the Registrant's Annual Report on Form 10-K for the fiscal year ended May 31, 2001 (SEC File No. 1-8399)
10.58	Amendment No. 1, dated as of May 18, 2001, to Purchase and Sale Agreement, dated as of November 30, 2000, between the various originators listed therein and Worthington Receivables Corporation	Incorporated herein by reference to Exhibit 10(h)(iv) to the Registrant's Annual Report on Form 10-K for the fiscal year ended May 31, 2001 (SEC File No. 1-8399)
10.59	Amendment No. 2, dated as of August 25, 2006, to Purchase and Sale Agreement, dated as of November 30, 2000, between the various originators listed therein and Worthington Receivables Corporation	Incorporated herein by reference to Exhibit 10.5 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2006 (SEC File No. 1-8399)
10.60	Amendment No. 3, dated as of October 1, 2008, to Purchase and Sale Agreement, dated as of November 30, 2000, among the various originators listed therein, Worthington Taylor, Inc. and Worthington Receivables Corporation	Incorporated herein by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2011 (SEC File No. 1-8399)
10.61	Amendment No. 4, dated as of February 28, 2011, to Purchase and Sale Agreement, dated as of November 30, 2000, among the various originators listed therein, Dietrich Industries, Inc. and Worthington Receivables Corporation	Incorporated herein by reference to Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2011 (SEC File No. 1-8399)

112

Exhibit	Description of Exhibit	Location
10.62	Amendment No. 5, dated as of May 6, 2011, to Purchase and Sale Agreement, dated as of November 30, 2000, among the various originators listed therein, The Gerstenslager Company and Worthington Receivables Corporation	Incorporated herein by reference to Exhibit 10.42 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2011 (SEC File No. 1-8399)
10.63	Amendment No. 6, dated as of January 19, 2012, to Purchase and Sale Agreement, dated as of November 30, 2000, among the various originators listed therein and Worthington Receivables Corporation	Incorporated herein by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended February 29, 2012 (SEC File No. 1-8399)
10.64	Amendment No. 7, dated as of January 16, 2015, to Purchase and Sale Agreement, dated as of November 30, 2000, among the various originators listed therein, Advanced Component Technologies, Inc., Worthington Cylinders Mississippi, LLC, Worthington Steel of Kentucky, L.L.C., The Worthington Steel Company (North Carolina), and Worthington Receivables Corporation	Incorporated herein by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2015 (SEC File No. 1-8399)
10.65	Amendment No. 8, dated as of February 18, 2015, to Purchase and Sale Agreement, dated as of November 30, 2000, among the various originators listed therein and Worthington Receivables Corporation	Incorporated herein by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the quarterly period ended February 28, 2015 (SEC File No. 1-8399)
10.66	Summary of Annual Base Salaries Approved for Named Executive Officers of Worthington Industries, Inc.*	Filed herewith
10.67	Summary of Annual Cash Performance Bonus Awards, Long-Term Performance Awards, Stock Options and Restricted Shares granted in Fiscal 2012 for Named Executive Officers*	Incorporated herein by reference to Exhibit 10.47 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2011 (SEC File No. 1-8399)
10.68	Summary of Annual Cash Incentive Bonus Awards, Long-Term Performance Awards, Stock Options and Restricted Common Shares granted in Fiscal 2013 for Named Executive Officers*	Incorporated herein by reference to Exhibit 10.56 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2012 (SEC File No. 1-8399)
10.69	Summary of Annual Cash Incentive Bonus Awards, Long-Term Performance Awards, Stock Options and Restricted Common Shares granted in Fiscal 2014 for Named Executive Officers*	Incorporated herein by reference to Exhibit 10.62 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2013 (SEC File No. 1-8399)
10.70	Summary of Annual Cash Incentive Bonus Awards, Long-Term Performance Awards, Stock Options and Restricted Common Shares granted in Fiscal 2015 for Named Executive Officers*	Incorporated herein by reference to Exhibit 10.71 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2014 (SEC File No. 1-8399)
10.71	Summary of Annual Cash Incentive Bonus Awards, Long-Term Performance Awards, Stock Options and Restricted Common Shares granted in Fiscal 2016 for Named Executive Officers*	Incorporated herein by reference to Exhibit 10.74 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2015 (SEC File No. 1-8399)

113

Exhibit	Description of Exhibit	Location
10.72	Summary of Annual Cash Incentive Bonus Awards, Long-Term Performance Awards, Stock Options and Restricted Common Shares granted in Fiscal 2017 for Named Executive Officers*	Incorporated herein by reference to Exhibit 10.71 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2016 (SEC File No. 1-8399)
10.73	Summary of Annual Cash Incentive Bonus Awards, Long-Term Performance Awards, Stock Options and Restricted Common Shares granted in Fiscal 2018 for Named Executive Officers*	Incorporated herein by reference to Exhibit 10.74 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2017 (SEC File No. 1-8399)
10.74	Summary of Annual Cash Incentive Bonus Awards, Long-Term Performance Awards, Stock Options and Restricted Common Shares granted in Fiscal 2019 for Named Executive Officers*	Filed herewith
10.75	Form of Indemnification Agreement entered into between Worthington Industries, Inc. and each executive officer of Worthington Industries, Inc. *	Incorporated herein by reference to Exhibit 10.33 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2008 (SEC File No. 1-8399)
10.76	Form of Indemnification Agreement entered into between Worthington Industries, Inc. and each non-employee director of Worthington Industries, Inc. *	Incorporated herein by reference to Exhibit 10.32 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2008 (SEC File No. 1-8399)
14	Worthington Industries, Inc. Code of Conduct	Incorporated herein by reference to Exhibit 14 to the Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2012 (SEC File No. 1-8399)
21	Subsidiaries of Worthington Industries, Inc.	Filed herewith
23.1	Consent of Independent Registered Public Accounting Firm (KPMG LLP)	Filed herewith
23.2	Consent of Independent Auditor (KPMG LLP) with respect to consolidated financial statements of  Worthington Armstrong Venture	Filed herewith
24	Powers of Attorney of Directors and Certain Executive Officers of Worthington Industries, Inc.	Filed herewith
31.1	Rule 13a - 14(a) / 15d - 14(a) Certifications (Principal Executive Officer)	Filed herewith
31.2	Rule 13a - 14(a) / 15d - 14(a) Certifications (Principal Financial Officer)	Filed herewith
32.1	Certifications of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Furnished herewith
32.2	Certifications of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Furnished herewith
99.1	Worthington Armstrong Venture Consolidated Financial Statements as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015	Filed herewith
101.INS	XBRL Instance Document	Submitted electronically herewith #
101.SCH	XBRL Taxonomy Extension Schema Document	Submitted electronically herewith #

114

Exhibit	Description of Exhibit	Location
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	Submitted electronically herewith #
101.DEF	XBRL Taxonomy Definition Linkbase Document	Submitted electronically herewith #
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	Submitted electronically herewith #
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	Submitted electronically herewith #

☨ The DisclosureSchedules and Exhibits referenced in the Agreement and Plan of Merger have been omitted pursuant to Item 601(b)(2) of SEC Regulation S-K.  Worthington Industries, Inc. hereby undertakes to furnish a copy of any of the omitted Disclosure Schedules and Exhibits to the Securities and Exchange Commission upon request.

* Indicates management contract or compensatory plan or arrangement.

# Attached as Exhibit 101 to this Annual Report on Form 10-K for the fiscal year ended May 31, 2018 of Worthington Industries, Inc. are the following documents formatted in XBRL (eXtensible Business Reporting Language):  

(i) Consolidated Balance Sheets at May 31, 2018 and 2017;  

(ii) Consolidated Statements of Earnings for the fiscal years ended May 31, 2018, 2017 and 2016;

(iii) Consolidated Statements of Comprehensive Income for the fiscal years ended May 31, 2018, 2017 and 2016;

(iv) Consolidated Statements of Equity for the fiscal years ended May 31, 2018, 2017 and 2016;

(v) Consolidated Statements of Cash Flows for the fiscal years ended May 31, 2018, 2017 and 2016; and  

(vi) Notes to Consolidated Financial Statements – fiscal years ended May 31, 2018, 2017 and 2016.

(b) Exhibits:  The documents listed in Item 15(a)(3) above are filed or furnished with this Annual Report on Form 10-K as exhibits or incorporated into this Annual Report on Form 10-K by reference.

(c) Financial Statement Schedule:  The financial statement schedule listed in Item 15(a)(2) above is filed with this Annual Report on Form 10-K.

Item 16. – Form 10-K Summary

None.

115

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	WORTHINGTON INDUSTRIES, INC.
Date:   July 30, 2018	By:	/s/ John P. McConnell
		John P. McConnell,
		Chairman of the Board and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.

SIGNATURE	DATE	TITLE
/s/ John P. McConnell	July 30, 2018	Director, Chairman of the Board and Chief
John P. McConnell		Executive Officer (Principal Executive Officer)
/s/ B. Andrew Rose	July 30, 2018	Executive Vice President and Chief Financial
B. Andrew Rose		Officer (Principal Financial Officer)
/s/ Richard G. Welch	July 30, 2018	Controller
Richard G. Welch		(Principal Accounting Officer)
*	*	Director
Kerrii B. Anderson
*	*	Director
John B. Blystone
*	*	Director
Mark C. Davis
*	*	Director
Michael J. Endres
*	*	Director
Ozey K. Horton, Jr.
*	*	Director
Peter Karmanos, Jr.
*	*	Director
Carl A. Nelson, Jr.
*	*	Director
Sidney A. Ribeau
*	*	Director
Mary Schiavo

* The undersigned, by signing his name hereto, does hereby sign this report on behalf of each of the above-identified directors of the Registrant pursuant to powers of attorney executed by such directors, which powers of attorney are filed with this report within Exhibit 24.

*By:	/s/ John P. McConnell	Date:  July 30, 2018
	John P. McConnell
	Attorney-In-Fact

116

EX-4.12

EXHIBIT 4.12

July 30, 2018

Securities and Exchange Commission

100 F Street, NE

Washington, D.C.  20549

Re: Worthington Industries, Inc. – Annual Report on Form 10-K for the fiscal year ended May 31, 2018

- SEC File No. 1-8399

Ladies and Gentlemen:

Worthington Industries, Inc., an Ohio corporation, is today filing its Annual Report on Form 10-K for the fiscal year ended May 31, 2018 (the “Form 10-K”).

None of (i) Worthington Industries, Inc., (ii) any of the consolidated subsidiaries of Worthington Industries, Inc. or (iii) Worthington Armstrong Venture, a 50%-owned unconsolidated joint venture (in the form of a general partnership between Armstrong Ventures, Inc., a subsidiary of Armstrong World Industries, Inc., and The Worthington Steel Company (Delaware), a subsidiary of Worthington Industries, Inc.), for which financial statements are required to be filed with the Form 10-K, has outstanding any instrument or agreement with respect to its long-term debt, other than those filed or incorporated by reference as an exhibit to the Form 10-K, under which the total amount of long-term debt authorized exceeds 10% of the total assets of Worthington Industries, Inc. and its subsidiaries on a consolidated basis.  In accordance with the provisions of Item 601(b)(4)(iii) of SEC Regulation S-K, Worthington Industries, Inc. hereby agrees to furnish to the SEC, upon request, a copy of each instrument or agreement defining (i) the rights of holders of the long-term debt of Worthington Industries, Inc. or (ii) the rights of holders of the long-term debt of a consolidated subsidiary of Worthington Industries, Inc. or (iii) the rights of holders of the long-term debt of Worthington Armstrong Venture, in each case which is not being filed or incorporated by reference as an exhibit to the Form 10-K.

Very truly yours,

WORTHINGTON INDUSTRIES, INC.

/s/ B. Andrew Rose

B. Andrew Rose

Executive Vice President and Chief Financial Officer

EX-10.66

Exhibit 10.66

ANNUAL BASE SALARIES APPROVED FOR NAMED EXECUTIVE OFFICERS

OF

WORTHINGTON INDUSTRIES, INC.

In June 2018, the Compensation Committee of the Board of Directors of Worthington Industries, Inc. (the “Registrant”) approved base salary increases for the following executive officers of the Registrant who either are named executive officers of the Registrant for purposes of the disclosure included in the Registrant’s Proxy Statement for the 2017 Annual Meeting of Shareholders held on September 27, 2017 and/or will be named executive officers of the Registrant for purposes of the disclosure to be included in the Registrant’s Proxy Statement for the 2018 Annual Meeting of Shareholders to be held on September 26, 2018, which will become effective August 26, 2018.

Name and Principal Position	Base Salary
John P. McConnell Chairman and Chief Executive Officer of the Registrant	$	682,954
Mark A. Russell President and Chief Operating Officer of the Registrant	$	574,053
B. Andrew Rose Executive Vice President and Chief Financial Officer of the Registrant	$	518,886
Geoffrey G. Gilmore President, Worthington Cylinder Corporation	$	519,120
Virgil L. Winland Senior Vice President-Manufacturing of the Registrant	$	387,198
John G. Lamprinakos President-The Worthington Steel Company	$	386,250

EX-10.74

Exhibit 10.74

SUMMARY OF ANNUAL CASH INCENTIVE BONUS AWARDS,

LONG-TERM PERFORMANCE AWARDS, STOCK OPTIONS AND RESTRICTED COMMON

SHARES GRANTED IN FISCAL 2019 FOR NAMED EXECUTIVE OFFICERS

OF WORTHINGTON INDUSTRIES, INC.

Annual Cash Incentive Bonus Awards Granted In Fiscal 2019

The following table sets forth the annual cash incentive bonus awards granted to the following executive officers of Worthington Industries, Inc. (the “Registrant”) who either are named executive officers of the Registrant for purposes of the disclosure included in the Registrant’s Proxy Statement for the 2017 Annual Meeting of Shareholders held on September 27, 2017 and/or will be named executive officers of the Registrant for purposes of the disclosure to be included in the Registrant’s Proxy Statement for the 2018 Annual Meeting of Shareholders to be held on September 26, 2018, which grants were made under the Worthington Industries, Inc. Annual Incentive Plan for Executives for the twelve-month performance period ending May 31, 2019:

Annual Cash Incentive Bonus Awards Granted for Fiscal 2019

Name	Annual Cash Incentive Bonus Awards for Twelve-Month Performance Period Ending May 31, 2019 (1)
	Threshold ($)	Target ($)	Maximum ($)
John P. McConnell	469,873	939,745	1,879,490
B. Andrew Rose	306,017	612,033	1,224,066
Mark A. Russell	371,315	742,630	1,485,260
Geoffrey G. Gilmore	259,560	519,120	1,038,240
Virgil L. Winland	238,703	477,405	954,810
John G. Lamprinakos	193,125	386,250	772,500

________________________

(1) Payouts which can be earned under these annual cash incentive bonus awards are generally tied to achieving specified levels (threshold, target and maximum) of corporate economic value added (“EVA”) and earnings per share (“EPS”) for the twelve-month performance period with each performance measure carrying a 50% weighting.  For Mr. Gilmore, a Pressure Cylinders business unit executive, the corporate EPS measure carries a 20% weighting, the applicable Pressure Cylinders operating income (“EOI”) carries a 30% weighting, and the Pressure Cylinders EVA carries a 50% weighting.  For Mr. Lamprinakos, a Steel Processing business unit executive, the corporate EPS measure carries a 20% weighting, the applicable Steel Processing EOI carries a 30% weighting and the Steel Processing EVA carries a 50% weighting.   For all calculations, restructuring charges and non-recurring items are excluded and both Corporate EPS and the Steel Processing business unit business unit EOI results are to be adjusted to eliminate the impact of FIFO gains and losses.  If the performance level falls between threshold and target or between target and maximum, the award is linearly prorated.  If threshold levels are not reached for any performance measure, no annual cash incentive bonus will be paid.  Annual cash incentive bonus award payouts earned will be made within a reasonable time following the end of the performance period.  In the event of a change in control of the Company (followed by actual or constructive termination of an NEO’s employment during the performance period), the annual cash incentive bonus award would be considered to be earned at “target” and payable as of the date of termination of employment.

Long-Term Performance Awards, Option Awards and Restricted Common Share Awards Granted in Fiscal 2019

The following table sets forth the long-term performance awards (consisting of long-term cash performance awards and long-term performance share awards) for the three-fiscal-year period ending May 31, 2021 and the option

awards and restricted common share awards granted to the NEOs in the fiscal year ending May 31, 2019 (“Fiscal 2019”).

Long-Term Performance Awards, Option Awards and

Restricted Common Share Awards Granted in Fiscal 2019

Name	Long-Term Cash Performance Awards for Three-Fiscal-Year Period Ending May 31, 2021 (1)			Long-Term Performance Share Awards for Three-Fiscal-Year Period Ending May 31, 2021 (1)			Option Awards: Number of Common Shares Underlying Options (2)	Exercise or Base Price of Option Awards ($/Share) (2)	Restricted Common Share Awards
	Threshold ($)	Target ($)	Maximum ($)	Threshold (# of Common Shares)	Target (# of Common Shares)	Maximum (# of Common Shares)
John P. McConnell	500,000	1,000,000	2,000,000	6,000	12,000	24,000	22,000	$42.91	20,000 (3)
B. Andrew Rose	300,000	600,000	1,200,000	3,250	6,500	13,000	11,500	$42.91	10,000 (3)
Mark A. Russell	300,000	600,000	1,200,000	3,250	6,500	13,000	11,500	$42.91	10,000 (3)
Geoffrey G. Gilmore	165,000	330,000	660,000	2,200	4,400	8,800	6,400	$42.91	6,500 (3)
Virgil L. Winland	115,000	230,000	460,000	1,100	2,200	4,400	3,000	$42.91	3,300 (3)
John G. Lamprinakos	137,500	275,000	550,000	1,850	3,700	7,400	4,800	$42.91	5,100 (3)

(1) These columns show the potential payouts under the long-term cash performance awards and the long-term performance share awards granted to the NEOs under the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan (as amended, the “1997 LTIP”) for the three-fiscal-year performance period from June 1, 2018 to May 31, 2021.  Payouts of long-term cash performance awards and long-term performance share awards for Corporate executives are tied to achieving specified levels (threshold, target and maximum) of cumulative corporate EVA for the three-fiscal-year performance period and EPS growth over that performance period, with each performance measure carrying a 50% weighting.  For Mr. Gilmore, a Pressure Cylinders business unit executive, the cumulative corporate EVA and EPS growth measures together carry a 50% weighting, and the Pressure Cylinders business unit EOI targets are weighted 50%.  For Mr. Lamprinakos, a Steel Processing business unit executive, the cumulative corporate EVA and EPS growth measures together carry a 50% weighting, and the Steel Processing business unit, and Pressure Cylinders business unit, EOI targets are weighted 50%.  In all calculations, restructuring charges and non-recurring items are excluded, and Corporate EPS and Steel Processing business unit EOI results are to be adjusted to eliminate the impact of FIFO gains or losses.  No awards are paid or distributed if none of the three-fiscal-year threshold financial measures are met.  If the performance levels fall between threshold and target or between target and maximum, the award is linearly prorated.

(2) Effective June 28, 2018, under the Worthington Industries, Inc. 2010 Stock Option Plan, the NEOs were granted non-qualified stock options with respect to the number of common shares shown, with an exercise price equal to $42.91, the fair market value of the underlying common shares on the date of grant.  The options become exercisable over three years in increments of one-third per year on each anniversary of their grant date.

(3) These annual time-vested restricted common share awards were granted effective June 28, 2018 under the 1997 LTIP and will generally cliff vest on the third anniversary of the grant date.

EX-21

EXHIBIT 21

SUBSIDIARIES OF WORTHINGTON INDUSTRIES, INC.

The following is a list of the subsidiaries, direct and indirect, of Worthington Industries, Inc., an Ohio corporation, together with their respective jurisdictions of incorporation or organization as of July 30, 2018.  The names of indirectly-owned subsidiaries are indented under the names of their respective immediate parents:

Enterprise Protection Insurance Company	Vermont
Worthington Industries Leasing, LLC	Ohio
Worthington Services, LLC	Ohio
Worthington Industries Medical Center, Inc.	Ohio
Worthington Steel of Michigan, Inc. (d/b/a The Worthington Steel Company)	Michigan
New AMTROL Holdings, Inc.	Delaware
AMTROL Inc.	Rhode Island
AMTROL North American Cylinders, LLC	Delaware
Red Hen, LLC	Rhode Island
AMTROL Water Technology, LLC	Delaware
AMTROL Canada Ltd.	Toronto, Canada
AMTROL International Investments Inc.	Rhode Island
AMTROL Holding Netherlands B.V.	Netherlands
AMTROL Holding Portugal, SGPS, Unipessoal, Lda	Portugal
AMTROL-ALFA Metalomecanica, S.A.	Portugal
AMTROL Brasil Representacao Ltda.	Brazil
AMTROL Licensing Inc.	Rhode Island
Cleveland Pickling, Inc.	Delaware
GerCo Holdings, Inc.	Ohio
Precision Specialty Metals, Inc.	Delaware
WI Ventures, LLC	Ohio
Worthington-Buckeye, Inc.	Ohio
Worthington Cylinder Corporation	Ohio
dHybrid Systems, LLC	Ohio
Westerman, Inc. (d/b/a Palmer Mfg. & Tank, Inc.)	Ohio
Westerman Acquisition Co., LLC	Ohio
Westerman Rocky Mountain LLC	Ohio
Structural Composites Industries, LLC	Delaware
Worthington Cryogenics, LLC	Ohio
Worthington Cylinder Corporation, LLC	Ohio
Worthington Cylinders Mexico, S. de R.L. de C.V.	Mexico
WI Netherlands Holdings, C.V.	Netherlands
Worthington Industries Global Holdings, LLC	Ohio
Worthington Industries Global Holdings, LLC & Co. OG	Austria
Worthington Industries International S.à.r.l.	Luxembourg
Worthington Arıtaş  Basınçlı Kaplar Sanayi Anonim Şirketi (8)	Turkey
Stako Sp. z.o.o.	Poland
Worthington Cylinders GmbH	Austria
Worthington Steel Mexico, S.A. de C.V.	Mexico
Worthington Cylinders-Embalagens Industriais de Gas, S.A.	Portugal
Worthington Cylinders Kansas, LLC	Ohio
Worthington Cylinders Mississippi, LLC	Ohio
Worthington Cylinders Wisconsin, LLC	Ohio
Worthington Torch, LLC	Ohio
Worthington Energy Group, Inc.	Ohio
Worthington Industries Engineered Cabs, Inc. (d/b/a Angus Industries, Inc.)	Delaware

Worthington Industries Engineered Cabs, LLC (d/b/a Angus-Palm, LLC)	Delaware
Worthington Precision Steel, Inc.	Ohio
Worthington OEG Company	Michigan
Worthington Steel Company of Alabama, Inc.  Co OEG	Austria
The Worthington Steel Company (formerly Worthington Ventures, Inc.)	Delaware
Worthington CDBS Holding, LLC	Ohio
Worthington Steelpac Systems, LLC (d/b/a Worthington Industries Packaging Solutions)	Delaware
Worthington Mid-Rise Construction, Inc.	Ohio
Worthington Military Construction, Inc.	Ohio
The Worthington Steel Company	Ohio
Worthington Receivables Corporation	Delaware
The Worthington Steel Company, LLC	Ohio
The Worthington Steel Company of Decatur, Inc.	Michigan
Worthington Steel Company of Decatur, L.L.C.	Alabama
Worthington Steel Rome, LLC	Ohio
Worthington WSP, LLC	Michigan
Joint Ventures
ArtiFlex Manufacturing, LLC (1)	Delaware
4400 Donker Land, LLC	Michigan
Clarkwestern Dietrich Building Systems, LLC (2)	Ohio
Samuel Steel Pickling Company (3)	New York
Serviacero Planos, S.A. de R.L. de C.V. (4)	Mexico
(Serviacero Planos Servicios, S.A. de C.V. (i.e., services company to JV Company) (4)	Mexico
Spartan Steel Coating, LLC (5)	Michigan
TWB Company, L.L.C. (6)	Michigan
Tailor Welded Blanks of Canada, Inc.	Canada
TWB of Ohio, Inc.	Ohio
TWB Industries, S.A. de C.V.	Mexico
TWB de Mexico, S.A. de C.V.	Mexico
Worthington Armstrong Venture (WAVE) (7)	Delaware
Worthington Energy Innovations, LLC (8)	Ohio
Worthington Modern Steel Framing System Co., Ltd. (9)	China
Worthington Specialty Processing  (WSP) (10)	Michigan
Worthington Taylor, LLC	Michigan
ProCoil Company, LLC	Delaware
Zhejiang Nisshin Worthington Precision Specialty Steel Co., Ltd.  (11)	China

(1) Unconsolidated joint venture with 50% owned by GerCo Holdings, Inc. and 50% owned by ITS-H Holdings, LLC

(2) Unconsolidated joint venture with 25% owned by Worthington CDBS Holding, LLC and 75% owned by CWBS-MISA, Inc.

(3) Unconsolidated joint venture with 31.25% owned by Cleveland Pickling, Inc. and 68.75% owned by Samuel Manu-Tech Pickling Inc.

(4) Unconsolidated joint venture with 50% owned by Worthington Steel Mexico, S.A. de C.V. and 50% owned by Inverzer, S.A. de C.V.

(5) Consolidated joint venture with 52% owned by Worthington Steel of Michigan, Inc. and 48% owned by AK Steel Corporation.

(6) Consolidated joint venture with 55% owned by Worthington Steel of Michigan, Inc. and 45% owned by a subsidiary of Boashan Iron & Steel Co., Ltd.

(7) Unconsolidated joint venture, operating as a general partnership, with 50% owned by The Worthington Steel Company (Delaware) and 50% owned by Armstrong Ventures, Inc., a subsidiary of Armstrong World Industries, Inc.

(8) Passive holding with 10% owned by Worthington Energy Group, Inc.

(9) Unconsolidated joint venture with 60% owned by Hubei Modern Urban Construction & Development Group Co., Ltd. and 40% owned by Worthington Industries International S.à.r.l.

(10) Consolidated joint venture, operating as a general partnership, with 51% owned by Worthington WSP, LLC and 49% by USS WSP, LLC, a subsidiary of United States Steel Corporation.

(11) Unconsolidated joint venture with 55% owned by Nisshin Steel Co., Ltd., 35% owned by Marubeni-Itochu Steel Inc., and 10% owned by Worthington Industries International S.à.r.l.

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Worthington Industries, Inc.:

We consent to the incorporation by reference in the registration statements:

• (Form S-3 No. 333-219349) pertaining to the shelf registration of common shares, without par value, and debt securities of Worthington Industries, Inc.;

• (Forms S-8 Nos. 033-57981 and 333-168421) pertaining to the Worthington Industries, Inc. Deferred Profit Sharing Plan;

• (Forms S-3 Nos. 333-168418 and 333-48627) pertaining to the Worthington Industries, Inc. Dividend Reinvestment and Stock Purchase Plan;

• (Forms S-8 Nos. 333-42849 and 333-191668) pertaining to the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan, as amended;

• (Form S-8 No. 333-109619) pertaining to the Worthington Industries, Inc. Amended and Restated 2003 Stock Option Plan, as amended;

• (Forms S-8 Nos. 333-137614 and 333-177237) pertaining to the Worthington Industries, Inc. Amended and Restated 2006 Equity Incentive Plan for Non-Employee Directors, as amended;

• (Form S-8 No. 333-126183) pertaining to the Worthington Industries, Inc. Retirement Savings Plan for Collectively Bargained Employees;

• (Form S-8 No. 333-169769) pertaining to the Worthington Industries, Inc. 2010 Stock Option Plan, as amended;

• (Form S-8 No. 333-198203) pertaining to the Worthington Industries, Inc. Amended and Restated 2005 Deferred Compensation Plan for Directors, as amended;

• (Form S-8 No. 333-198201) pertaining to the Worthington Industries, Inc. Non-Qualified Deferred Compensation Plan, as amended;

• (Form S-8 No. 333-198200) pertaining to the Worthington Industries, Inc. Amended and Restated 2005 Non-Qualified Deferred Compensation Plan, as amended; and

• (Form S-8 No. 333-198199) pertaining to the Worthington Industries, Inc. Deferred Compensation Plan for Directors, as amended

of our reports dated July 30, 2018 with respect to the consolidated balance sheets of Worthington Industries, Inc. and subsidiaries (the Company) as of May 31, 2018 and 2017, and the related consolidated statements of earnings, comprehensive income, equity, and cash flows for each of the years in the three-year period ended May 31, 2018, and the related notes and financial statement schedule, and the effectiveness of internal control over financial reporting as of May 31, 2018, which reports appear in the Annual Report on Form 10‑K of Worthington Industries, Inc. for the year-ended May 31, 2018.

Our report dated July 30, 2018 on the effectiveness of internal control over financial reporting as of May 31, 2018 contains an explanatory paragraph that states that management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting, internal control over financial reporting of New AMTROL Holdings, Inc. and its subsidiaries (AMTROL), which were acquired by the Company during the year-ended May 31, 2018. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over the financial reporting of AMTROL.

/s/ KPMG LLP

Columbus, Ohio

July 30, 2018

EX-23.2

EXHIBIT 23.2

Consent of Independent Auditors

The Board of Directors

Worthington Armstrong Venture:

We consent to the incorporation by reference in the registration statements:

• (Form S-3 No. 333-219349) pertaining to the shelf registration of common shares, without par value, and debt securities of Worthington Industries, Inc.;

• (Forms S-8 Nos. 033-57981 and 333-168421) pertaining to the Worthington Industries, Inc. Deferred Profit Sharing Plan;

• (Forms S-3 Nos. 333-168418 and 333-48627) pertaining to the Worthington Industries, Inc. Dividend Reinvestment and Stock Purchase Plan;

• (Forms S-8 Nos. 333-42849 and 333-191668) pertaining to the Worthington Industries, Inc. Amended and Restated 1997 Long-Term Incentive Plan, as amended;

• (Form S-8 No. 333-109619) pertaining to Worthington Industries, Inc. Amended and Restated 2003 Stock Option Plan, as amended;

• (Forms S-8 Nos. 333-137614 and 333-177237) pertaining to the Worthington Industries, Inc. Amended and Restated 2006 Equity Incentive Plan for Non-Employee Directors, as amended;

• (Form S-8 No. 333-126183) pertaining to the Worthington Industries, Inc. Retirement Savings Plan for Collectively Bargained Employees;

• (Form S-8 No. 333-169769) pertaining to the Worthington Industries, Inc. 2010 Stock Option Plan, as amended;

• (Form S-8 No. 333-198203) pertaining to the Worthington Industries, Inc. Amended and Restated 2005 Deferred Compensation Plan for Directors, as amended;

• (Form S-8 No. 333-198201) pertaining to the Worthington Industries, Inc. Non-Qualified Deferred Compensation Plan, as amended;

• (Form S-8 No. 333-198200) pertaining to the Worthington Industries, Inc. Amended and Restated 2005 Non-Qualified Deferred Compensation Plan, as amended; and

• (Form S-8 No. 333-198199) pertaining to the Worthington Industries, Inc. Deferred Compensation Plan for Directors, as amended.

of our report dated February 19, 2018, with respect to the consolidated balance sheets of Worthington Armstrong Venture and subsidiaries as of December 31, 2017 and 2016, and the related consolidated statements of income and comprehensive income, partners’ deficit, and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes, which report appears in Exhibit 99.1 in the May 31, 2018 annual report on Form 10-K of Worthington Industries, Inc.

/s/ KPMG LLP

Philadelphia, Pennsylvania
July 30, 2018

EX-24

EXHIBIT 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer and director of Worthington Industries, Inc., an Ohio corporation, which anticipates filing its Annual Report on Form 10-K for the fiscal year ended May 31, 2018, with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, hereby makes, constitutes and appoints B. Andrew Rose and Dale T. Brinkman, each with full power to act without the other, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign such Annual Report on Form 10-K and any and all amendments to such Annual Report on Form 10-K, and to file the same with all exhibits, financial statements and schedules related thereto, and any and all applications or other documents pertaining to such Annual Report on Form 10-K, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do if personally present.  The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th day of June, 2018.

/s/ John P. McConnell

John P. McConnell

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer of Worthington Industries, Inc., an Ohio corporation, which anticipates filing its Annual Report on Form 10-K for the fiscal year ended May 31, 2018, with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, hereby makes, constitutes and appoints John P. McConnell and Dale T. Brinkman, each with full power to act without the other, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign such Annual Report on Form 10-K and any and all amendments to such Annual Report on Form 10-K, and to file the same with all exhibits, financial statements and schedules related thereto, and any and all applications or other documents pertaining to such Annual Report on Form 10-K, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do if personally present.  The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th day of June, 2018.

/s/ B. Andrew Rose

B. Andrew Rose

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned officer of Worthington Industries, Inc., an Ohio corporation, which anticipates filing its Annual Report on Form 10-K for the fiscal year ended May 31, 2018, with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, hereby makes, constitutes and appoints John P. McConnell, B. Andrew Rose and Dale T. Brinkman, each with full power to act without the others, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign such Annual Report on Form 10-K and any and all amendments to such Annual Report on Form 10-K, and to file the same with all exhibits, financial statements and schedules related thereto, and any and all applications or other documents pertaining to such Annual Report on Form 10-K, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do if personally present.  The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th day of June, 2018.

/s/ Richard G. Welch

Richard G. Welch

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Worthington Industries, Inc., an Ohio corporation, which anticipates filing its Annual Report on Form 10-K for the fiscal year ended May 31, 2018, with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, hereby makes, constitutes and appoints John P. McConnell, B. Andrew Rose and Dale T. Brinkman, each with full power to act without the others, her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for her and in her name, place and stead, in any and all capacities, to sign such Annual Report on Form 10-K and any and all amendments to such Annual Report on Form 10-K, and to file the same with all exhibits, financial statements and schedules related thereto, and any and all applications or other documents pertaining to such Annual Report on Form 10-K, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as she might or could do if personally present.  The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 28th day of June, 2018.

/s/ Kerrii B. Anderson

Kerrii B. Anderson

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Worthington Industries, Inc., an Ohio corporation, which anticipates filing its Annual Report on Form 10-K for the fiscal year ended May 31, 2018, with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, hereby makes, constitutes and appoints John P. McConnell, B. Andrew Rose and Dale T. Brinkman, each with full power to act without the others, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign such Annual Report on Form 10-K and any and all amendments to such Annual Report on Form 10-K, and to file the same with all exhibits, financial statements and schedules related thereto, and any and all applications or other documents pertaining to such Annual Report on Form 10-K, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do if personally present.  The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th day of June, 2018.

/s/ John B. Blystone

John B. Blystone

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Worthington Industries, Inc., an Ohio corporation, which anticipates filing its Annual Report on Form 10-K for the fiscal year ended May 31, 2018, with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, hereby makes, constitutes and appoints John P. McConnell, B. Andrew Rose and Dale T. Brinkman, each with full power to act without the others, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign such Annual Report on Form 10-K and any and all amendments to such Annual Report on Form 10-K, and to file the same with all exhibits, financial statements and schedules related thereto, and any and all applications or other documents pertaining to such Annual Report on Form 10-K, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do if personally present.  The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th day of June, 2018.

/s/ Mark C. Davis

Mark C. Davis

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Worthington Industries, Inc., an Ohio corporation, which anticipates filing its Annual Report on Form 10-K for the fiscal year ended May 31, 2018, with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, hereby makes, constitutes and appoints John P. McConnell, B. Andrew Rose and Dale T. Brinkman, each with full power to act without the others, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign such Annual Report on Form 10-K and any and all amendments to such Annual Report on Form 10-K, and to file the same with all exhibits, financial statements and schedules related thereto, and any and all applications or other documents pertaining to such Annual Report on Form 10-K, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do if personally present.  The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th day of June, 2018.

/s/ Michael J. Endres

Michael J. Endres

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Worthington Industries, Inc., an Ohio corporation, which anticipates filing its Annual Report on Form 10-K for the fiscal year ended May 31, 2018, with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, hereby makes, constitutes and appoints John P. McConnell, B. Andrew Rose and Dale T. Brinkman, each with full power to act without the others, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign such Annual Report on Form 10-K and any and all amendments to such Annual Report on Form 10-K, and to file the same with all exhibits, financial statements and schedules related thereto, and any and all applications or other documents pertaining to such Annual Report on Form 10-K, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do if personally present.  The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th day of June, 2018.

/s/ Ozey K. Horton, Jr.

Ozey K. Horton, Jr.

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Worthington Industries, Inc., an Ohio corporation, which anticipates filing its Annual Report on Form 10-K for the fiscal year ended May 31, 2018, with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, hereby makes, constitutes and appoints John P. McConnell, B. Andrew Rose and Dale T. Brinkman, each with full power to act without the others, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign such Annual Report on Form 10-K and any and all amendments to such Annual Report on Form 10-K, and to file the same with all exhibits, financial statements and schedules related thereto, and any and all applications or other documents pertaining to such Annual Report on Form 10-K, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do if personally present.  The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th day of June, 2018.

/s/ Peter Karmanos, Jr.

Peter Karmanos, Jr.

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Worthington Industries, Inc., an Ohio corporation, which anticipates filing its Annual Report on Form 10-K for the fiscal year ended May 31, 2018, with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, hereby makes, constitutes and appoints John P. McConnell, B. Andrew Rose and Dale T. Brinkman, each with full power to act without the others, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign such Annual Report on Form 10-K and any and all amendments to such Annual Report on Form 10-K, and to file the same with all exhibits, financial statements and schedules related thereto, and any and all applications or other documents pertaining to such Annual Report on Form 10-K, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do if personally present.  The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th day of June, 2018.

/s/ Carl A. Nelson, Jr.

Carl A. Nelson, Jr.

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Worthington Industries, Inc., an Ohio corporation, which anticipates filing its Annual Report on Form 10-K for the fiscal year ended May 31, 2018, with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, hereby makes, constitutes and appoints John P. McConnell, B. Andrew Rose and Dale T. Brinkman, each with full power to act without the others, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign such Annual Report on Form 10-K and any and all amendments to such Annual Report on Form 10-K, and to file the same with all exhibits, financial statements and schedules related thereto, and any and all applications or other documents pertaining to such Annual Report on Form 10-K, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he might or could do if personally present.  The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 28th day of June, 2018.

/s/ Sidney A. Ribeau

Sidney A. Ribeau

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of Worthington Industries, Inc., an Ohio corporation, which anticipates filing its Annual Report on Form 10-K for the fiscal year ended May 31, 2018, with the Securities and Exchange Commission, Washington, D.C., under the provisions of the Securities Exchange Act of 1934, as amended, hereby makes, constitutes and appoints John P. McConnell, B. Andrew Rose and Dale T. Brinkman, each with full power to act without the others, her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for her and in her name, place and stead, in any and all capacities, to sign such Annual Report on Form 10-K and any and all amendments to such Annual Report on Form 10-K, and to file the same with all exhibits, financial statements and schedules related thereto, and any and all applications or other documents pertaining to such Annual Report on Form 10-K, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as she might or could do if personally present.  The undersigned hereby ratifies and confirms all that each said attorney-in-fact and agent, or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned has hereunto set her hand this 28th day of June, 2018.

/s/ Mary Schiavo

Mary Schiavo

EX-31.1

Exhibit 31.1

RULE 13a-14(a) / 15d-14(a)

CERTIFICATIONS (PRINCIPAL EXECUTIVE OFFICER)

CERTIFICATIONS

I, John P. McConnell, certify that:

1. I have reviewed this Annual Report on Form 10-K for the fiscal year ended May 31, 2018 of Worthington Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  July 30, 2018	By:	/s/ John P. McConnell
		John P. McConnell, Chairman of the Board and
		Chief Executive Officer

EX-31.2

Exhibit 31.2

RULE 13a-14(a) / 15d-14(a)

CERTIFICATIONS (PRINCIPAL FINANCIAL OFFICER)

CERTIFICATIONS

I, B. Andrew Rose, certify that:

1. I have reviewed this Annual Report on Form 10-K for the fiscal year ended May 31, 2018 of Worthington Industries, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  July 30, 2018	By:	/s/ B. Andrew Rose
		B. Andrew Rose,
		Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Annual Report of Worthington Industries, Inc. (the “Company”) on Form 10-K for the fiscal year ended May 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John P. McConnell, Chairman of the Board and Chief Executive Officer of the Company, certify, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company and its subsidiaries.

/s/ John P. McConnell

Printed Name: John P. McConnell

Title: Chairman of the Board and Chief Executive Officer

Date:  July 30, 2018

*These certifications are being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section.  These certifications shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that Worthington Industries, Inc. specifically incorporates these certifications by reference.

EX-32.2

Exhibit 32.2

CERTIFICATIONS OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002*

In connection with the Annual Report of Worthington Industries, Inc. (the “Company”) on Form 10-K for the fiscal year ended May 31, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, B. Andrew Rose, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the consolidated financial condition and results of operations of the Company and its subsidiaries.

/s/ B. Andrew Rose

Printed Name: B. Andrew Rose

Title: Executive Vice President and Chief Financial Officer

Date:  July 30, 2018

*These certifications are being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section.  These certifications shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that Worthington Industries, Inc. specifically incorporates these certifications by reference.

EX-99.1

Exhibit 99.1

WORTHINGTON ARMSTRONG VENTURE

Consolidated Financial Statements

December 31, 2017 and 2016

(With Independent Auditors’ Report Thereon)

WORTHINGTON ARMSTRONG VENTURE

Table of Contents

	Page
Independent Auditors’ Report	1
Consolidated Balance Sheets, December 31, 2017 and 2016	2
Consolidated Statements of Income and Comprehensive Income, Years ended December 31, 2017, 2016, and 2015	3
Consolidated Statements of Partners’ Deficit, Years ended December 31, 2017, 2016, and 2015	4
Consolidated Statements of Cash Flows, Years ended December 31, 2017, 2016, and 2015	5
Notes to Consolidated Financial Statements	6

KPMG LLP

1601 Market Street

Philadelphia, PA 19103-2499

Independent Auditors’ Report

The Board of Directors

Worthington Armstrong Venture:

We have audited the accompanying consolidated financial statements of Worthington Armstrong Venture and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2017 and 2016, and the related consolidated statements of income and comprehensive income, partners’ deficit, and cash flows for each of the years in the three year period ended December 31, 2017, and the related notes to the consolidated financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with U.S. generally accepted accounting principles; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Worthington Armstrong Venture and its subsidiaries as of December 31, 2017 and 2016, and the results of their operations and their cash flows for each of the years in the three year period ended December 31, 2017 in accordance with U.S. generally accepted accounting principles.

Philadelphia, Pennsylvania

February 19, 2018

WORTHINGTON ARMSTRONG VENTURE

Consolidated Balance Sheets

December 31, 2017 and 2016

(Dollar amounts in thousands)

Assets	2017			2016
Current assets:
Cash and cash equivalents	$	26,856			34,387
Short-term investments		6,897			5,782
Accounts receivable, net		27,751			23,523
Receivables from affiliates		2,594			4,212
Inventory, net		32,586			28,196
Other current assets		97			172
Current assets of discontinued operations held for sale (Note 3)		36,439			16,863
Total current assets		133,220			113,135
Property, plant, and equipment, net		24,311			24,830
Goodwill		8,037			8,037
Other assets		218			41
Non-current assets of discontinued operations held for sale (Note 3)		—			17,373
Total assets	$	165,786			163,416
Liabilities and Partners’ Deficit
Current liabilities:
Accounts payable	$	11,810			14,117
Accounts payable to affiliates		1,145			751
Accrued expenses		5,021			4,095
Taxes payable		158			172
Short-term borrowings		—			14,000
Current liabilities of discontinued operations held for sale (Note 3)		8,095			8,173
Total current liabilities		26,229			41,308
Long-term liabilities:
Long-term debt		243,508			239,522
Other long-term liabilities		3,104			4,489
Total long-term liabilities		246,612			244,011
Total liabilities		272,841			285,319
Partners’ deficit:
Accumulated deficit		(94,421	)		(102,870	)
Accumulated other comprehensive loss		(12,634	)		(19,033	)
Total partners’ deficit		(107,055	)		(121,903	)
Total liabilities and partners’ deficit	$	165,786			163,416

See accompanying notes to consolidated financial statements.

2

WORTHINGTON ARMSTRONG VENTURE

Consolidated Statements of Income and Comprehensive Income

Years ended December 31, 2017, 2016, and 2015

(Dollar amounts in thousands)

	2017			2016			2015
Net sales	$	344,483			330,717			309,670
Cost of sales		(151,820	)		(138,321	)		(137,528	)
Gross margin		192,663			192,396			172,142
Selling, general, and administrative expenses		(40,053	)		(31,857	)		(28,659	)
		152,610			160,539			143,483
Other (expense), net		(239	)		(183	)		(185	)
Interest income		31			13			4
Interest expense		(7,873	)		(6,878	)		(6,533	)
Income from continuing operations before tax expense		144,529			153,491			136,769
Income tax expense		(239	)		(1,604	)		(300	)
Net income from continuing operations		144,290			151,887			136,469
Discontinued Operations (Note 3)
Net income from discontinued operations, net of tax expense		4,159			6,976			7,963
Total net income		148,449			158,863			144,432
Other comprehensive income (loss):
Change in pension plan		461			(234	)		(182	)
Change in cash flow hedge		1,154			522			(259	)
Foreign currency adjustments		4,784			(3,623	)		(5,496	)
Total other comprehensive income (loss)		6,399			(3,335	)		(5,937	)
Total comprehensive income	$	154,848			155,528			138,495

See accompanying notes to consolidated financial statements.

3

WORTHINGTON ARMSTRONG VENTURE

Consolidated Statements of Partners’ Deficit

Years ended December 31, 2017, 2016, and 2015

(Dollar amounts in thousands)

	Contributed capital
			The					Accumulated
	Armstrong		Worthington					other			Total
	Ventures,		Steel		Accumulated			comprehensive			partners’
	Inc.		Company		deficit			income (loss)			deficit
Balance, December 31, 2014		—		—		(99,187	)		(9,761	)		(108,948	)
Net income		—		—		144,432			—			144,432
Distributions		—		—		(131,000	)		—			(131,000	)
Change in pension plan		—		—		—			(182	)		(182	)
Change in cash flow hedge		—		—		—			(259	)		(259	)
Foreign currency translation adjustments		—		—		—			(5,496	)		(5,496	)
Balance, December 31, 2015		—		—		(85,755	)		(15,698	)		(101,453	)
Net income		—		—		158,863			—			158,863
Other		—		—		22			—			22
Distributions		—		—		(176,000	)		—			(176,000	)
Change in pension plan		—		—		—			(234	)		(234	)
Change in cash flow hedge		—		—		—			522			522
Foreign currency translation adjustments		—		—		—			(3,623	)		(3,623	)
Balance, December 31, 2016	$	—		—		(102,870	)		(19,033	)		(121,903	)
Net income		—		—		148,449			—			148,449
Distributions		—		—		(140,000	)		—			(140,000	)
Change in pension plan		—		—		—			461			461
Change in cash flow hedge		—		—		—			1,154			1,154
Foreign currency translation adjustments		—		—		—			4,784			4,784
Balance, December 31, 2017	$	—		—		(94,421	)		(12,634	)		(107,055	)

See accompanying notes to consolidated financial statements.

4

WORTHINGTON ARMSTRONG VENTURE

Consolidated Statements of Cash Flows

Years ended December 31, 2017, 2016, and 2015

(Dollar amounts in thousands)

	2017			2016			2015
Cash flows from operating activities:
Net income	$	148,449			158,863			144,432
Adjustments to reconcile net income to net cash    provided by operating activities:
Depreciation and amortization		5,160			4,681			4,173
Deferred income taxes		476			388			27
Changes in assets and liabilities:
Change in receivables		(102	)		(5,392	)		6,131
Change in inventory		(4,879	)		(3,633	)		5,933
Change in payables and accrued expenses		1,065			3,702			(2,405	)
Other		(4,986	)		71			(312	)
Net cash provided by operating activities		145,183			158,680			157,979
Cash flows from investing activities:
Purchases of property, plant, and equipment		(4,444	)		(4,924	)		(8,329	)
Sale of property, plant, and equipment		34			38			(83	)
Change in short-term investments		(1,115	)		(348	)		840
Acquisition of business, net of cash acquired		—			—			(8,400	)
Net cash provided by/(used) in investing activities		(5,525	)		(5,234	)		(15,972	)
Cash flows from financing activities:
Proceeds from revolving credit facility		176,000			264,000			132,000
Issuance of short-term debt		—			14,000			—
Repayment of short-term debt		(14,000	)		—			—
Repayment of revolving credit facility		(171,500	)		(267,500	)		(126,500	)
Financing cost		(832	)		—			—
Distributions paid		(140,000	)		(176,000	)		(131,000	)
Net cash used in financing activities		(150,332	)		(165,500	)		(125,500	)
Effect of exchange rate changes on cash and cash equivalents		3,143			(1,577	)		(4,159	)
Net increase (decrease) in cash and cash equivalents		(7,531	)		(13,631	)		12,348
Cash and cash equivalents at beginning of year		34,387			48,018			35,670
Cash and cash equivalents at end of year	$	26,856			34,387			48,018
Supplemental disclosures:
Interest paid	$	7,873			6,961			6,736
Income taxes paid		168			2,728			2,457

See accompanying notes to consolidated financial statements.

5

WORTHINGTON ARMSTRONG VENTURE

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

(Dollar amounts in thousands)

(1) Description of Business

Worthington Armstrong Venture (the Company) is a general partnership, formed in June 1992, between Armstrong Ventures, Inc. (Armstrong), a subsidiary of Armstrong World Industries, Inc., and The Worthington Steel Company (Worthington), a Delaware corporation (a subsidiary of Worthington Industries, Inc.). Its business is to manufacture and market suspension systems for commercial and residential ceiling markets throughout the world. The Company has manufacturing plants located in the United States, France, the United Kingdom, the People’s Republic of China, and India.

On November 17, 2017, Armstrong World Industries, Inc. entered into a Share Purchase Agreement (the Purchase Agreement) with Knauf International GmbH (Knauf) to sell certain subsidiaries comprising its business in Europe, the Middle East, Africa (EMEA) and the Pacific Rim. The sale also includes the corresponding businesses and operations of the Company, which was approved by both Armstrong and Worthington. The consideration to be paid by Knauf for the Company’s businesses is approximately $90 million, subject to certain adjustments as provided in the Purchase Agreement, including adjustments based on the economic impact of any required regulatory remedies and a working capital adjustment. The transaction, which is subject to regulatory approvals and other customary conditions, is currently anticipated to close in mid-2018. EMEA and Pacific Rim’s financial results have been reflected in the Company’s Consolidated Financial Statements as discontinued operations for all periods presented. Refer to Note 3 for additional information.

(2) Summary of Significant Accounting Policies

(a) Use of Estimates

These consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and include management estimates and judgments, where appropriate. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the carrying amount of property, plant, and equipment and goodwill, valuation allowances for receivables and inventories, valuation of derivatives, and assets and obligations related to employee benefits.

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions have been eliminated.

(b) Revenue Recognition

The Company recognizes revenue from the sale of products when title transfers, generally on the date of shipment and collection of the relevant receivable is probable. At the time of shipment, a provision is made for estimated applicable discounts and losses that reduce revenue. The Company’s standard sales terms are “Free On Board” (FOB) shipping point. The Company has some sales terms that are FOB destination.

Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and, therefore, are excluded from revenues in the consolidated statements of income and comprehensive income.

6 (Continued)

WORTHINGTON ARMSTRONG VENTURE

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

(Dollar amounts in thousands)

(c) Derivative Instruments and Hedging Activities

The Company recognizes all derivative instruments as either assets or liabilities in the balance sheet at their respective fair values. For derivatives designated in hedging relationships, changes in the fair value are recognized in accumulated other comprehensive income, to the extent the derivative is effective at offsetting the changes in cash flows being hedged until the hedged item affects earnings.

For derivatives not designated as hedges or that do not meet the criteria for hedge accounting, all changes in fair value are recorded immediately to profit or loss.

(d) Advertising Costs

The Company recognizes advertising expense as incurred. Advertising expense was $1,243, $1,170, $1,116 and for the years ended December 31, 2017, 2016, and 2015 respectively.

(e) Research and Development Expenditures

The Company recognizes research and development expense as expenditures are incurred. Total research and development expense was $4,653, $4,305, and $3,998 for the years ended December 31, 2017, 2016, and 2015 respectively.

(f) Taxes

The Company is a general partnership in the United States, and accordingly, generally, U.S. federal and state income taxes are the responsibility of the two general partners. The Company recognizes the effect of uncertain income tax positions only if those positions are more likely than not of being sustained. Recognized income tax benefits are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

(g) Cash and Cash Equivalents

Short-term investments that have original maturities of three months or less when purchased are considered to be cash equivalents.

(h) Short Term Investments

Short-term investments that have maturity dates greater than three months consist primarily of one year certificates of deposits.

(i) Trade Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses, current receivables aging, and existing industry and national economic data. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers.

7 (Continued)

WORTHINGTON ARMSTRONG VENTURE

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

(Dollar amounts in thousands)

(j) Inventories

Inventories are valued at the lower of cost or market. Cost is determined on the first-in, first-out method.

(k) Long-Lived Assets

Property, plant, and equipment are stated at cost, with accumulated depreciation and amortization deducted to arrive at net book value. Depreciation charges are determined generally on the straight-line basis over the useful lives as follows: buildings, 30 years; machinery and equipment, 5 to 15 years; and leasehold improvements over the shorter of 10 years or the life of the lease. Impairment losses are recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. If an impairment exists, the asset is reduced to fair value.

(l) Goodwill

Goodwill represents the excess of the aggregate purchase price over the fair value of the net assets acquired in a purchase business combination. Goodwill is tested for impairment at least annually. The impairment tests performed in 2017, 2016, and 2015 did not result in an impairment of the Company’s goodwill.

(m) Foreign Currency Translation

Gaines and losses on foreign currency translation are recognized in accumulated other comprehensive income in the accompanying consolidated balance sheets.

(3) Discontinued Operations

As discussed in Note 1, Armstrong World Industries, Inc. entered into a Purchase Agreement with Knauf to sell certain subsidiaries comprising its business in Europe, the Middle East, Africa (EMEA) and the Pacific Rim. The sale also includes the corresponding businesses and operations of the Company. Accordingly, the assets and liabilities and results of operations of our EMEA and Pacific Rim businesses have been reported as discontinued operations in the accompanying consolidated financial statements.

The Company and Knauf will also enter into an agreement related to the mutual supply of certain products and a license agreement relating to the use of certain intellectual property.

8 (Continued)

WORTHINGTON ARMSTRONG VENTURE

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

(Dollar amounts in thousands)

The following table presents the carrying amounts of major classes of assets and liabilities of the discontinued operations held for sale in the consolidated balance sheets as of December 31, 2017 and 2016:

Assets	2017		2016
Accounts receivable, net	$	5,190		7,269
Inventory, net		9,629		8,647
Other current assets		2,030		947
Property, plant and equipment (1)		16,504		15,312
Other non-current assets (1)		3,086		2,061
Total assets of discontinued operations held for sale (2)		36,439		34,236
Liabilities
Accounts payable		4,587		4,088
Accrued expenses		2,985		2,695
Other liabilities		523		1,390
Total liabilities of discontinued operations held for sale (2)		8,095		8,173
Total net assets	$	28,344		26,063

(1) Presented as "Non-current assets of discontinued operations held for sale" on the consolidated balance sheet as of December 31, 2016.

(2) Presented as "Current assets / liabilities of discontinued operations held for sale" on the consolidated balance sheet as of December 31, 2017.

The following table represents the results of our discontinued operations:  

	2017			2016			2015
Net sales	$	63,222			63,024			64,744
Cost of sales		51,400			46,764			49,496
Selling, general, and administrative expenses		8,004			6,279			5,529
Interest income, expense, other, net		(309	)		(733	)		(505	)
Income from discontinued operations before tax expense		4,127			10,714			10,224
Income tax benefit (expense)		32			(3,738	)		(2,261	)
Net income from discontinued operations,    net of tax expense	$	4,159			6,976			7,963

The following is a summary of total depreciation and amortization and capital expenditures of our discontinued operations, which are presented as components of operating and investing activities in our consolidated statement of cash flows:  

	2017		2016		2015
Depreciation and amortization	$	1,958		1,896		1,867
Purchase of property, plant and equipment		1,753		1,285		2,360

9 (Continued)

WORTHINGTON ARMSTRONG VENTURE

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

(Dollar amounts in thousands)

(4) Accounts Receivable

The Company sells its products to select, preapproved customers whose businesses are directly affected by changes in economic and market conditions. The Company considers these factors and the financial condition of each customer when establishing its allowance for losses from doubtful accounts. The allowance for doubtful accounts was $136 and $147 at December 31, 2017 and 2016, respectively.

(5) Inventory

	2017		2016
Finished goods	$	11,841		11,014
Goods in process		94		564
Raw materials		18,114		14,179
Supplies		2,537		2,439
Total inventory, net of reserves	$	32,586		28,196

(6) Derivative Instruments and Hedging Activities

The Company uses variable-rate London Interbank Offered Rate (LIBOR) debt to finance its operations. The debt obligations expose the Company to variability in interest payments due to changes in interest rates. Management believes that it is prudent to limit the variability of a portion of its interest payments. To meet this objective, management enters into LIBOR based interest rate swap agreements to manage fluctuations in cash flows resulting from changes in the benchmark interest rate of LIBOR. The swap changes the variable-rate cash flow exposure on the debt obligations to fixed cash flows. Under the terms of the interest rate swaps, the Company receives LIBOR-based variable interest rate payments and makes fixed interest rate payments, thereby creating the equivalent of fixed-rate debt for the notional amount of its debt hedged.  On July 16, 2013, the Company entered into a LIBOR-based interest rate swap agreement to manage fluctuations in cash flows resulting from changes in the benchmark interest rate of LIBOR. The swap has a notional amount of $50,000 maturing in July 2020, under the terms of which the Company pays a fixed rate of 2.136% and receives one-month LIBOR. This swap is designated as a cash flow hedge.  

On April 28, 2017 the Company entered into another swap with a notional amount of $50,000 maturing in February 2022, under the terms of which the Company pays a fixed rate of 1.9365% and receives one-month LIBOR.  This swap is designated as a cash flow hedge.  

As of December 31, 2017 and 2016, the total notional amount of the Company’s outstanding interest-rate swap agreements that were entered into to hedge outstanding or forecasted debt obligations were $100,000 and $50,000, respectively.

10 (Continued)

WORTHINGTON ARMSTRONG VENTURE

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

(Dollar amounts in thousands)

The fair value of derivatives designated as hedging instruments held as of December 31, 2017 and 2016 are as follows:

	2017			2016
	Balance Sheet			Balance Sheet
	Location	Fair value		Location	Fairvalue
Interest rate swap	Other assets	$	165	Other assets	$	—
	Long-term liabilities		—	Long-term liabilities		(977	)
Total derivatives		$	165		$	(977	)

The amount of gain (loss) recognized in accumulated other comprehensive income was $177 and $(977), respectively as of December 31, 2017 and 2016.

(7) Property, Plant, and Equipment

	2017			2016
Land	$	673			673
Buildings		13,143			12,836
Machinery and equipment		57,391			53,037
Computer software		1,328			1,316
Construction in process		2,595			5,713
		75,130			73,575
Accumulated depreciation and amortization		(50,819	)		(48,745	)
Total property, plant, and equipment, net	$	24,311			24,830

Depreciation and amortization expense was $3,202, $2,785 and $2,306 for the years ended December 31, 2017, 2016 and 2015, respectively.

(8) Fair Value of Financial Instruments

The Company does not hold or issue financial instruments for trading purposes.

The carrying amounts of cash and cash equivalents, short-term investments, accounts receivable, and accounts payable approximate their fair value due to the short-term maturity of these instruments. The carrying value and estimated fair value of debt was $243,508 and $243,529 respectively, at December 31, 2017. The carrying value and estimated fair value of debt was $239,522 and $239,400, respectively, at December 31, 2016.

The fair value of the Company’s debt is based on the amount of future cash flows discounted using rates the Company would currently be able to realize for similar instruments of comparable maturity.

11 (Continued)

WORTHINGTON ARMSTRONG VENTURE

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

(Dollar amounts in thousands)

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows:

Level 1 – Quoted prices in active markets for identical assets or liabilities.

Level 2 – Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets  that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies, and similar techniques that use significant unobservable inputs.

The Company’s derivatives are valued using Level 2 inputs. The fair values are disclosed in Note 6. The Company does not have any significant financial or nonfinancial assets or liabilities that are valued using Level 3 inputs.

(9) Debt

The Company had a $200,000 revolving credit facility (Facility) with PNC Bank and other lenders that was due to expire on February 21, 2019. On March 22, 2017, the Company refinanced the Facility with PNCBank and other lenders increasing the size of the revolver from $200,000 to $250,000 and extending the terms to March 22, 2022. At the same time, the Company paid off their $50,000 private floating rate debt with New York Life Insurance Company. As of December 31, 2017 and 2016 there was $194,500 and $140,000, respectively, outstanding under the Facility. The Company can borrow at rates with a range over LIBOR of 1.125% to 1.75%, depending on the Company’s leverage ratio, as defined by the terms of the Facility. As of December 31, 2017 and 2016, the rate was 2.82% and 1.86%, respectively.

On December 23, 2011, the Company issued $50,000 of 10-year private placement notes (Prudential Notes) with Prudential Insurance Company that mature in December 2021. At December 31, 2017 and 2016, there was $50,000 outstanding. The Prudential Notes bear interest at 4.9% that is paid on a quarterly basis.

The debt agreements contain certain restrictive financial covenants, including, among others, interest coverage and leverage ratios. The Company was in compliance with its covenants during the years ended and as of December 31, 2017 and 2016.

(10) Pension Benefit Programs

The Company contributes to the Worthington Industries Deferred Profit Sharing Plan for eligible U.S. employees. Costs for this plan were $1,399, $1,413 and $1,258 for 2017, 2016 and 2015, respectively.

12 (Continued)

WORTHINGTON ARMSTRONG VENTURE

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

(Dollar amounts in thousands)

The Company also has a U.S. defined-benefit pension plan for eligible hourly employees that worked in its former manufacturing plant located in Malvern, Pennsylvania. This plan was curtailed in January 2004 due to the consolidation of the Company’s East Coast operations, which eliminated the expected future years of service for participants in the plan. The following tables set forth the defined-benefit pension plan’s benefit obligations, fair value of plan assets, and funded status at December 31, 2017 and 2016:

	2017			2016
Projected benefit obligation at beginning of year	$	11,005			11,185
Interest cost		417			457
Actuarial (gain) loss		353			322
Benefits paid		(630	)		(959	)
Projected benefit obligation at end of year	$	11,145			11,005

	2017			2016
Benefit obligation at December 31	$	11,145			11,005
Fair value of plan assets as of December 31		9,065			8,222
Funded status at end of year	$	(2,080	)		(2,783	)
Amounts recognized in the balance sheets consist of:
Other long-term liabilities	$	(2,080	)		(2,783	)
Accumulated other comprehensive loss		6,141			6,602
Net amount recognized	$	4,061			3,819

Amounts recognized in accumulated other comprehensive loss represent unrecognized net actuarial losses.

The components of net periodic benefit cost (benefit) are as follows:

	2017			2016			2015
Interest cost	$	417			457			451
Expected return on plan assets		(593	)		(600	)		(643	)
Recognized net actuarial loss		334			332			343
Net periodic benefit cost	$	158			189			151

The accumulated benefit obligation for the U.S. defined-benefit pension plan was $11,145 and $11,005 at December 31, 2017 and 2016, respectively. The unrecognized net loss for the defined-benefit pension plan that will be amortized from accumulated other comprehensive income into net periodic benefit cost over the next fiscal year is $250.

The valuations and assumptions reflect the Society of Actuaries updated RP-2014 mortality tables with MP-2017 generational projection scales as of December 31, 2017.

13 (Continued)

WORTHINGTON ARMSTRONG VENTURE

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

(Dollar amounts in thousands)

Weighted average assumptions used to determine benefit obligations for the years ended and as of December 31, 2017 and 2016 are as follows:

	2017			2016
Weighted average assumptions for the year ended December 31:
Discount rate		3.95	%		4.13	%
Expected long-term rate of return on plan assets		7.25			7.25
Weighted average assumptions as of December 31:
Discount rate		3.52	%		3.95	%
Expected long-term rate of return on plan assets		7.25			7.25

Pension plan assets are required to be disclosed at fair value in the consolidated financial statements. Fair value is defined in Note 8 – Fair Value of Financial Instruments.

The U.S. defined-benefit pension plan assets’ fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The following tables set forth by level within the fair value hierarchy a summary of the plan’s assets measured at fair value on a recurring basis as of December 31, 2017 and 2016, respectively:

			2017
			Fair value based on
			Quoted active		Observable
			markets		inputs
	Fair value		(Level 1)		(Level 2)
Investment:
Cash and money market funds	$	332		332		—
Debt securities		2,799		—		2,799
Common stocks		5,934		5,934		—
	$	9,065		6,266		2,799

			2016
			Fair value based on
			Quoted active		Observable
			markets		inputs
	Fair value		(Level 1)		(Level 2)
Investment:
Cash and money market funds	$	1,844		1,844		—
Debt securities		1,342		—		1,342
Common stocks		5,036		5,036		—
	$	8,222		6,880		1,342

14 (Continued)

WORTHINGTON ARMSTRONG VENTURE

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

(Dollar amounts in thousands)

Following is a description of the valuation methodologies used for assets measured at fair value. There have been no changes in the methodologies used at December 31, 2017 and 2016.

Cash: Consists of cash and cash equivalents. The carrying amounts of cash and cash equivalents approximate fair value due to the short-term maturity of these instruments.

Money market funds: The money market investment consists of an institutional investor money market fund, valued at the fund’s net asset value (NAV), which is normally calculated at the close of business daily. The fund’s assets are valued as of this time for the purpose of computing the fund’s NAV.

Debt securities: Consist of investments in individual corporate bonds, municipal bonds, or government bonds. These bonds are each individually valued using a yield curve model, based on observable inputs, which may also incorporate available trade and bid/ask spread data where available.

Common stocks: Consist of investments in common stocks that are valued at the closing price reported on the active market on which the individual security is traded.

In developing the 7.25% expected long-term rate of return assumption, the Company considered its historical returns and reviewed asset class return expectations and long-term inflation assumptions.

The primary investment objective of the defined-benefit pension plan is to achieve long-term growth of capital in excess of 7.25% annually, exclusive of contributions or withdrawals. This objective is to be achieved through a balanced portfolio comprising equities, fixed income, and cash investments.

Each asset class utilized by the defined-benefit pension plan has a targeted percentage. The following table shows the asset allocation target and the December 31, 2017 and 2016 position:

				Position at December 31
	Targetweight			2017			2016
Equity securities		65	%		74	%		62	%
Fixed income securities		35			22			16
Cash and equivalents		—			4			22

The Company made contributions of $400, $500, and $510 to the U.S. defined-benefit pension plan in 2017, 2016, and 2015 respectively. The Company expects to contribute $400 to the plan in 2018.

15 (Continued)

WORTHINGTON ARMSTRONG VENTURE

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

(Dollar amounts in thousands)

The benefits expected to be paid in each of the next five years and in the aggregate for the five years thereafter are shown in the following table:

Expected future payments for the year(s)    ending December 31:
2018	$	660
2019		662
2020		667
2021		655
2022		670
2023-2027		3,250

The expected benefits are based on the same assumptions used to measure the Company’s benefit obligation at December 31, 2017.

(11) Income Taxes

The Company is a general partnership in the United States, and accordingly, U.S. federal and state income taxes are generally the responsibility of the two general partners. Therefore, no federal income tax provision has been recorded on U.S. income.

(12) Leases

The Company rents certain real estate and equipment. Several leases include options for renewal or purchase and contain clauses for payment of real estate taxes and insurance. In most cases, management expects that in the normal course of business, leases will be renewed or replaced by other leases. Minimum rent payments under operating leases are recognized on a straight-line basis over the term of the lease including any periods of free rent. Rent expense during 2017, 2016 and 2015 amounted to $2,258, $2,309 and $2,134, respectively.

Future minimum payments by year and in the aggregate for operating leases having noncancelable lease terms in excess of one year are as follows:

Year:
2018	$	2,429
2019		1,848
2020		1,698
2021		1,659
2022		1,087
Thereafter		—
Total	$	8,721

16 (Continued)

WORTHINGTON ARMSTRONG VENTURE

Notes to Consolidated Financial Statements

December 31, 2017 and 2016

(Dollar amounts in thousands)

(13) Accumulated Other Comprehensive Income (Loss)

The following table summarizes the activity, by component, related to the change in AOCI for December 31, 2017 and the balances for accumulated other comprehensive income (loss):

										Accumulated
	Foreign									other
	currency			Cash flow						comprehensive
	translation			hedge			Pension plan			(loss)
Balance, December 31, 2015	$	(7,830	)		(1,499	)		(6,369	)		(15,698	)
Other comprehensive (loss) income before reclassifications		(3,623	)		522			(466	)		(3,567	)
Amounts reclassified from accumulated other    comprehensive income		—			—			232			232
Net current period other comprehensive (loss) income		(3,623	)		522			(234	)		(3,335	)
Balance, December 31, 2016		(11,453	)		(977	)		(6,603	)		(19,033	)
Other comprehensive (loss) before reclassifications		4,784			1,154			231			6,169
Amounts reclassified from accumulated other    comprehensive income		—			—			230			230
Net current period other comprehensive (loss)		4,784			1,154			461			6,399
Balance, December 31, 2017	$	(6,669	)		177			(6,142	)		(12,634	)

The amount reclassified from AOCI was recorded in cost of goods sold in the consolidated statements of income and comprehensive income.

(14) Related Parties

Armstrong World Industries, Inc. provides certain selling, promotional, and administrative processing services to the Company for which it receives reimbursement. Armstrong purchases grid products from the Company, which are then resold along with Armstrong inventory to the customer.  

	2017		2016		2015
Services provided by Armstrong	$	14,878		9,098		8,828
Sales to Armstrong		18,224		18,004		18,194

Armstrong owed the Company $2,594 and $4,212 for purchases of product as of December 31, 2017 and 2016, respectively. The Company owed $1,145 and $751 to Worthington and affiliates of Worthington as of December 31, 2017 and 2016, respectively, which are included in accounts payable to affiliates.

Worthington, and affiliates of Worthington, provide certain administrative processing services, steel processing services, and insurance-related coverages to the Company for which it receives reimbursement.

	2017		2016		2015
Administrative services by Worthington	$	1,382		501		509
Insurance-related coverage net of premiums by Worthington		840		824		656
Steel processing services by Worthington and affiliates    of Worthington		1,656		3,394		292

17 (Continued)

(15) Acquisition

On March 6, 2015, the Company acquired the assets utilized by Fry Reglet Corporation (Fry) in the manufacturing of two product lines (the Business). Assets of the Business and the results of the Business’s operations have been included in the consolidated financial statements since the acquisition date. Prior to the acquisition, Fry was the sole supplier of those products to the Company. The Company concluded that the assets met the definition of a business under Accounting Standard Codification section 805, Business Combinations, and therefore the transaction has been accounted for as a business combination. As a result of the acquisition, the Company has vertically integrated the customer service, design and drawing, and manufacturing processes of the Business.

The total purchase price of $8,400 was paid in cash. The estimated fair value of the identifiable assets acquired at the acquisition date were Property, Plant and Equipment of $363, and the remainder recorded as Goodwill in the amount of $8,037.

In connection with the acquisition, the Company paid Fry a $500 consulting fee for transition services. The Company incurred acquisition related costs of $240. These consulting fees and acquisition related costs are included within Selling, General, and Administrative expenses.

(16) Legal Proceedings

The Company is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations, or liquidity.

(17) Business and Credit Concentrations

Approximately 22%, 20%, and 20% of net sales were to the Company’s largest third-party customer for 2017, 2016, and 2015 respectively. The Company’s 10 largest third-party customers accounted for approximately 77%, 74%, and 64% of the Company’s net sales for 2017, 2016, and 2015 respectively, and approximately 73% and 66% of the Company’s accounts receivable balances at December 31, 2017 and 2016, respectively. See Note 14 for sales to and amounts owed to the Company from Armstrong World Industries, Inc.

(18) Subsequent Events

Management has evaluated subsequent events through the date the annual consolidated financial statements were available to be issued, February 19, 2018.

18

XML

Document and Entity Information - USD ($)	12 Months Ended
	May 31, 2018	Jul. 24, 2018	Nov. 30, 2017
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	May 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Trading Symbol	WOR
Entity Registrant Name	WORTHINGTON INDUSTRIES INC
Entity Central Index Key	0000108516
Current Fiscal Year End Date	--05-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		59,839,778
Entity Public Float			$ 1,781,949,312

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	May 31, 2018	May 31, 2017
Current assets:
Cash and cash equivalents	$ 121,967	$ 278,081
Receivables, less allowances of $632 and $3,444 at May 31, 2018 and May 31, 2017, respectively	572,689	486,730
Inventories:
Raw materials	237,471	185,001
Work in process	122,977	95,630
Finished products	93,579	73,303
Total inventories	454,027	353,934
Income taxes receivable	1,650	7,164
Assets held for sale	30,655	9,654
Prepaid expenses and other current assets	60,134	55,406
Total current assets	1,241,122	1,190,969
Investments in unconsolidated affiliates	216,010	208,591
Goodwill	345,183	247,673
Other intangible assets, net of accumulated amortization of $74,922 and $63,134 at May 31, 2018 and May 31, 2017, respectively	214,026	82,781
Other assets	20,476	24,841
Property, plant and equipment:
Land	24,229	22,077
Buildings and improvements	300,542	297,951
Machinery and equipment	1,030,720	961,542
Construction in progress	32,282	27,616
Total property, plant and equipment	1,387,773	1,309,186
Less: accumulated depreciation	802,803	738,697
Total property, plant and equipment, net	584,970	570,489
Total assets	2,621,787	2,325,344
Current liabilities:
Accounts payable	473,485	368,071
Short-term borrowings		123
Accrued compensation, contributions to employee benefit plans and related taxes	96,487	86,201
Dividends payable	13,731	13,698
Other accrued items	57,125	41,551
Income taxes payable	4,593	4,448
Current maturities of long-term debt	1,474	6,691
Total current liabilities	646,895	520,783
Other liabilities	74,237	61,498
Distributions in excess of investment in unconsolidated affiliate	55,198	63,038
Long-term debt	748,894	571,796
Deferred income taxes, net	60,188	34,300
Total liabilities	1,585,412	1,251,415
Shareholders' equity - controlling interest:
Preferred shares, without par value; authorized - 1,000,000 shares; issued and outstanding - none
Common shares, without par value; authorized - 150,000,000 shares; issued and outstanding, 2018 - 58,876,921 shares, 2017 - 62,802,456 shares
Additional paid-in capital	295,592	303,391
Accumulated other comprehensive loss, net of taxes of $2,908 and $5,310 at May 31, 2018 and May 31, 2017, respectively	(14,580)	(27,775)
Retained earnings	637,757	676,019
Total shareholders' equity - controlling interest	918,769	951,635
Noncontrolling interests	117,606	122,294
Total equity	1,036,375	1,073,929
Total liabilities and equity	$ 2,621,787	$ 2,325,344

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	May 31, 2018	May 31, 2017
Statement Of Financial Position [Abstract]
Receivables, allowances	$ 632	$ 3,444
Other intangible assets, accumulated amortization	$ 74,922	$ 63,134
Preferred shares, without par value
Preferred shares, shares authorized	1,000,000	1,000,000
Preferred shares, shares issued	0	0
Preferred shares, shares outstanding	0	0
Common stock, without par value
Common shares, authorized	150,000,000	150,000,000
Common shares, shares issued	58,876,921	62,802,456
Common shares, shares outstanding	58,876,921	62,802,456
Accumulated other comprehensive income (loss), taxes	$ 2,908	$ 5,310

XML

Consolidated Statements of Earnings - USD ($) shares in Thousands, $ in Thousands		12 Months Ended
		May 31, 2018	May 31, 2017	May 31, 2016
Income Statement [Abstract]
Net sales		$ 3,581,620	$ 3,014,108	$ 2,819,714
Cost of goods sold		3,018,763	2,478,203	2,367,121
Gross margin		562,857	535,905	452,593
Selling, general and administrative expense		367,460	316,373	297,402
Impairment of goodwill and long-lived assets		61,208		25,962
Restructuring and other expense (income), net		(7,421)	6,411	7,177
Operating income		141,610	213,121	122,052
Other income (expense):
Miscellaneous income, net		2,996	3,764	11,267
Interest expense		(38,675)	(29,796)	(31,670)
Equity in net income of unconsolidated affiliates		103,139	110,038	114,966
Earnings before income taxes		209,070	297,127	216,615
Income tax expense		8,220	79,190	58,987
Net earnings		200,850	217,937	157,628
Net earnings attributable to noncontrolling interests	[1]	6,056	13,422	13,913
Net earnings attributable to controlling interest		$ 194,794	$ 204,515	$ 143,715
Basic
Average common shares outstanding		60,923	62,443	62,469
Earnings per share attributable to controlling interest		$ 3.20	$ 3.28	$ 2.30
Diluted
Average common shares outstanding		63,042	64,874	64,755
Earnings per share attributable to controlling interest		$ 3.09	$ 3.15	$ 2.22

[1] Net earnings attributable to noncontrolling interests are not taxable to Worthington.

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Statement Of Income And Comprehensive Income [Abstract]
Net earnings	$ 200,850	$ 217,937	$ 157,628
Other comprehensive income (loss):
Foreign currency translation	12,744	1,342	4,716
Pension liability adjustment, net of tax	1,566	2,242	(2,058)
Cash flow hedges, net of tax	959	(2,822)	22,208
Other comprehensive income	15,269	762	24,866
Comprehensive income	216,119	218,699	182,494
Comprehensive income attributable to noncontrolling interests	6,429	13,394	16,640
Comprehensive income attributable to controlling interest	$ 209,690	$ 205,305	$ 165,854

XML

Consolidated Statements of Equity - USD ($) $ in Thousands	Total	DHybrid Systems LLC	Worthington Aritas	WEI	Common Shares	Additional Paid-in Capital	Additional Paid-in Capital DHybrid Systems LLC	Additional Paid-in Capital Worthington Aritas	Accumulated Other Comprehensive Loss, Net of Tax	Retained Earnings	Total	Total DHybrid Systems LLC	Total Worthington Aritas	Noncontrolling Interests	Noncontrolling Interests DHybrid Systems LLC	Noncontrolling Interests Worthington Aritas	Noncontrolling Interests WEI
Balance at May. 31, 2015	$ 840,049					$ 289,078			$ (50,704)	$ 510,738	$ 749,112			$ 90,937
Balance (in shares) at May. 31, 2015					64,141,478
Net earnings	157,628									143,715	143,715			13,913
Other comprehensive income (loss)	24,866								22,139		22,139			2,727
Acquisition	28,004													28,004
Common shares issued, net of withholding tax	8,707					8,707					8,707
Common shares issued, net of withholding tax (in shares)					892,190
Theoretical common shares in NQ plans	960					960					960
Stock-based compensation	16,534					16,534					16,534
Purchases and retirement of common shares	$ (99,847)					(16,295)				(83,552)	(99,847)
Purchases and retirement of common shares (in shares)	(3,500,000)				(3,500,000)
Dividends to noncontrolling interests	$ (9,106)													(9,106)
Cash dividends declared ($0.76 per share in 2016, $0.80 per share in 2017 and $0.84 per share in 2018)	(47,949)									(47,949)	(47,949)
Balance at May. 31, 2016	919,846					298,984			(28,565)	522,952	793,371			126,475
Balance (in shares) at May. 31, 2016					61,533,668
Net earnings	217,937									204,515	204,515			13,422
Other comprehensive income (loss)	762								790		790			(28)
Common shares issued, net of withholding tax	(9,075)					(9,075)					(9,075)
Common shares issued, net of withholding tax (in shares)					1,268,788
Theoretical common shares in NQ plans	1,259					1,259					1,259
Stock-based compensation	13,158					13,158					13,158
Purchase of noncontrolling interest		$ (2,888)					$ (935)					$ (935)			$ (1,953)
Dividends to noncontrolling interests	(15,622)													(15,622)
Cash dividends declared ($0.76 per share in 2016, $0.80 per share in 2017 and $0.84 per share in 2018)	(51,448)									(51,448)	(51,448)
Balance at May. 31, 2017	1,073,929					303,391			(27,775)	676,019	951,635			122,294
Balance (in shares) at May. 31, 2017					62,802,456
Net earnings	200,850									194,794	194,794			6,056
Other comprehensive income (loss)	15,269								14,896		14,896			373
Common shares issued, net of withholding tax	(2,120)					(2,120)					(2,120)
Common shares issued, net of withholding tax (in shares)					449,465
Theoretical common shares in NQ plans	1,218					1,218					1,218
Stock-based compensation	13,460					13,460					13,460
Purchase of noncontrolling interest			$ (1,913)					$ 924					$ 924			$ (2,837)
Sale of controlling interest				$ (365)													$ (365)
Reclassification of stranded tax effects	(1,701)								(1,701)	1,701
Purchases and retirement of common shares	$ (204,267)					(21,281)				(182,986)	(204,267)
Purchases and retirement of common shares (in shares)	(4,375,000)				(4,375,000)
Dividends to noncontrolling interests	$ (7,915)													(7,915)
Cash dividends declared ($0.76 per share in 2016, $0.80 per share in 2017 and $0.84 per share in 2018)	(51,771)									(51,771)	(51,771)
Balance at May. 31, 2018	$ 1,036,375					$ 295,592			$ (14,580)	$ 637,757	$ 918,769			$ 117,606
Balance (in shares) at May. 31, 2018					58,876,921

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Consolidated Statements of Equity (Parenthetical) - $ / shares	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Statement Of Stockholders Equity [Abstract]
Cash dividend declared, per share	$ 0.84	$ 0.80	$ 0.76

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Operating activities:
Net earnings	$ 200,850	$ 217,937	$ 157,628
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	103,359	86,793	84,699
Impairment of goodwill and long-lived assets	61,208		25,962
Provision for (benefit from) deferred income taxes	(38,237)	18,443	7,354
Bad debt expense	11	269	346
Equity in net income of unconsolidated affiliates, net of distributions	(13,352)	(8,023)	(29,473)
Net (gain) loss on assets	(10,522)	7,951	(12,996)
Stock-based compensation	13,758	14,349	15,836
Gain on previously held equity interest in Worthington Specialty Processing			(6,877)
Changes in assets and liabilities, net of impact of acquisitions:
Receivables	(53,066)	(39,927)	66,117
Inventories	(84,654)	(34,599)	66,351
Prepaid expenses and other current assets	(12,402)	985	18,327
Other assets	(1,258)	1,905	(4,530)
Accounts payable and accrued expenses	105,984	67,492	20,180
Other liabilities	9,666	2,097	4,460
Net cash provided by operating activities	281,345	335,672	413,384
Investing activities:
Investment in property, plant and equipment	(76,088)	(68,386)	(97,036)
Acquisitions, net of cash acquired	(285,028)		(34,206)
Distributions from (investments in) unconsolidated affiliates	2,400		(5,595)
Proceeds from sale of assets and insurance	21,311	5,422	9,797
Net cash used by investing activities	(337,405)	(62,964)	(127,040)
Financing activities:
Net repayments of short-term borrowings, net of issuance costs	(948)	(2,528)	(85,843)
Proceeds from long-term debt, net of issuance costs	197,685		921
Principal payments on long-term debt	(31,130)	(874)	(862)
Proceeds from issuance of common shares, net of tax withholdings	(2,120)	(9,075)	8,707
Payments to noncontrolling interests	(7,915)	(15,622)	(9,106)
Repurchase of common shares	(204,267)	0	(99,847)
Dividends paid	(51,359)	(50,716)	(47,193)
Net cash used by financing activities	(100,054)	(78,815)	(233,223)
Increase (decrease) in cash and cash equivalents	(156,114)	193,893	53,121
Cash and cash equivalents at beginning of year	278,081	84,188	31,067
Cash and cash equivalents at end of year	$ 121,967	$ 278,081	$ 84,188

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Summary of Significant Accounting Policies

12 Months Ended

May 31, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note A – Summary of Significant Accounting Policies

Consolidation:  The consolidated financial statements include the accounts of Worthington Industries, Inc. and consolidated subsidiaries (collectively, “we,” “our,” “Worthington,” or the “Company”).  Investments in unconsolidated affiliates are accounted for using the equity method.  Significant intercompany accounts and transactions are eliminated.

The Company owns controlling interests in the following three joint ventures: Spartan Steel Coating, LLC (“Spartan”) (52%), TWB Company, L.L.C. (“TWB”) (55%), and Worthington Specialty Processing (“WSP”) (51%).  These joint ventures are consolidated with the equity owned by the other joint venture members shown as noncontrolling interests in our consolidated balance sheets, and their portions of net earnings and other comprehensive income (loss) (“OCI”) shown as net earnings or comprehensive income attributable to noncontrolling interests in our consolidated statements of earnings and comprehensive income, respectively. On January 1, 2017, the Company acquired the minority membership interest in dHybrid Systems, LLC (“dHybrid”) from the noncontrolling member in a non-cash transaction.  The difference between the fair value of the noncontrolling interest and its carrying value was recorded as a reduction to additional paid-in capital in the amount of $935,000 (net of tax of $539,000).  Effective March 31, 2018, the Company sold its controlling stake in Worthington Energy Innovations, LLC (“WEI”) to the minority member.  There was no impact to net earnings as a result of the transaction as the fair value of the consideration received approximated the net book value of WEI.  On May 23, 2018, the Company acquired the minority ownership interest in Turkey-based Worthington Arıtaş Basınçlı Kaplar Sanayi (“Worthington Aritas”) from the noncontrolling members in a non-cash transaction. The difference between the fair value of the noncontrolling interest and its carrying value was recorded as an increase to additional paid-in-capital in the amount of $924,000.  

Use of Estimates:  The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.  Actual results could differ from those estimates.

Cash and Cash Equivalents:  We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Inventories:  Inventories are valued at the lower cost or net realizable value.  Cost is determined using the first-in, first-out method for all inventories.  The assessment of net realizable value requires the use of significant estimates to determine cost to complete, normal profit margin and the ultimate selling price of the inventory.  We believe our inventories were valued appropriately as of May 31, 2018 and 2017.

Derivative Financial Instruments:We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations.  The primary risks managed through the use of derivative instruments include interest rate risk, currency exchange risk and commodity price risk.  All derivative instruments are accounted for using mark-to-market accounting.  The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it.  Gains and losses on fair value hedges are recognized in current period earnings in the same line as the underlying hedged item.  The effective portion of gains and losses on cash flow hedges is deferred as a component of accumulated other comprehensive income or loss (“AOCI”) and recognized in earnings at the time the hedged item affects earnings, in the same financial statement caption as the underlying hedged item.  Ineffectiveness of the hedges during the fiscal year ended May 31, 2018 (“fiscal 2018”), the fiscal year ended May 31, 2017 (“fiscal 2017”) and the fiscal year ended May 31, 2016 (“fiscal 2016”) was immaterial. Classification in the consolidated statements of earnings of gains and losses related to derivative instruments that do not qualify for hedge accounting is determined based on the underlying intent of the instruments.  Cash flows related to derivative instruments are generally classified as operating activities in our consolidated statements of cash flows.

In order for hedging relationships to qualify for hedge accounting under current accounting guidance, we formally document each hedging relationship and its risk management objective.  This documentation includes the hedge strategy, the hedging instrument, the hedged item, the nature of the risk being hedged, how hedge effectiveness will be assessed prospectively and retrospectively as well as a description of the method used to measure hedge ineffectiveness.

Derivative instruments are executed only with highly-rated counterparties.  No credit loss is anticipated on existing instruments, and no material credit losses have been experienced to date.  We monitor our positions, as well as the credit ratings of counterparties to those positions.

We discontinue hedge accounting when it is determined that the derivative instrument is no longer effective in offsetting the hedged risk, expires or is sold, is terminated or is no longer designated as a hedging instrument because it is unlikely that a forecasted transaction will occur or we determine that designation of the hedging instrument is no longer appropriate.  In all situations in which hedge accounting is discontinued and the derivative instrument is retained, we continue to carry the derivative instrument at its fair value on the consolidated balance sheet and recognize any subsequent changes in its fair value in net earnings immediately.  When it is probable that a forecasted transaction will not occur, we discontinue hedge accounting and immediately recognize the gains and losses that were accumulated in AOCI.

Refer to “Note P – Derivative Instruments and Hedging Activities” for additional information regarding the consolidated balance sheet location and the risk classification of our derivative instruments.

Risks and Uncertainties:  As of May 31, 2018, excluding our joint ventures, we operated 36 manufacturing facilities worldwide, principally in three operating segments, which correspond with our reportable business segments: Steel Processing, Pressure Cylinders, and Engineered Cabs.  We also held equity positions in 9 joint ventures, which operated 49 manufacturing facilities worldwide, as of May 31, 2018.  Our largest end market is the automotive industry, which comprised 37%, 43%, and 42% of consolidated net sales in fiscal 2018, fiscal 2017, and fiscal 2016, respectively.  Our international operations represented 9%, 7%, and 6% of consolidated net sales and 6%, 4%, and 8% of net earnings attributable to controlling interest in fiscal 2018, fiscal 2017, and fiscal 2016, respectively, and 14% and 11% of consolidated net assets as of May 31, 2018 and May 31, 2017, respectively.  As of May 31, 2018, approximately 9% of our consolidated labor force was represented by collective bargaining agreements.  The concentration of credit risks from financial instruments related to the markets we serve is not expected to have a material adverse effect on our consolidated financial position, cash flows or future results of operations.

In fiscal 2018, our largest customer accounted for approximately 8% of our consolidated net sales, and our ten largest customers accounted for approximately 30% of our consolidated net sales.  A significant loss of, or decrease in, business from any of these customers could have an adverse effect on our consolidated net sales and financial results if we were not able to obtain replacement business.  Also, due to consolidation within the industries we serve, including the construction, automotive and retail industries, our sales may be increasingly sensitive to deterioration in the financial condition of, or other adverse developments with respect to, one or more of our largest customers.

Our principal raw material is flat-rolled steel, which we purchase from multiple primary steel producers.  The steel industry as a whole has been cyclical, and at times availability and pricing can be volatile due to a number of factors beyond our control.  This volatility can significantly affect our steel costs.  In an environment of increasing prices for steel and other raw materials, in general, competitive conditions may impact how much of the price increases we can pass on to our customers.  To the extent we are unable to pass on future price increases in our raw materials to our customers, our financial results could be adversely affected.  Also, if steel prices decrease, in general, competitive conditions may impact how quickly we must reduce our prices to our customers, and we could be forced to use higher-priced raw materials to complete orders for which the selling prices have decreased.  Declining steel prices could also require us to write-down the value of our inventories to reflect current market pricing.  Further, the number of suppliers has decreased in recent years due to industry consolidation and the financial difficulties of certain suppliers, and consolidation may continue.  Accordingly, if delivery from a major steel supplier is disrupted, it may be more difficult to obtain an alternative supply than in the past.

Receivables:  We review our receivables on an ongoing basis to ensure that they are properly valued and collectible.  This is accomplished through two contra-receivable accounts: returns and allowances and allowance for doubtful accounts.  Returns and allowances are used to record estimates of returns or other allowances resulting from quality, delivery, discounts or other issues affecting the value of receivables.  This account is estimated based on historical trends and current market conditions, with the offset to net sales.  The returns and allowances account decreased approximately $538,000 during fiscal 2018 to $6,199,000.  

The allowance for doubtful accounts is used to record the estimated risk of loss related to the customers’ inability to pay.  This allowance is maintained at a level that we consider appropriate based on factors that affect collectability, such as the financial health of our customers, historical trends of charge-offs and recoveries and current economic and market conditions.  As we monitor our receivables, we identify customers that may have payment problems, and we adjust the allowance accordingly, with the offset to selling, general and administrative (“SG&A”) expense.  Account balances are charged off against the allowance when recovery is considered remote.  The allowance for doubtful accounts decreased approximately $2,812,000 during fiscal 2018 to $632,000.

While we believe our allowance for doubtful accounts is adequate, changes in economic conditions, the financial health of customers and bankruptcy settlements could impact our future earnings.  If the economic environment and market conditions deteriorate, particularly in the automotive and construction end markets where our exposure is greatest, additional reserves may be required.

Property and Depreciation:  Property, plant and equipment are carried at cost and depreciated using the straight-line method.  Buildings and improvements are depreciated over 10 to 40 years and machinery and equipment over 3 to 20 years.  Depreciation expense was $83,680,000, $73,268,000 and $68,886,000 during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  Accelerated depreciation methods are used for income tax purposes.

Goodwill and Other Long-Lived Assets: We use the purchase method of accounting for all business combinations and recognize amortizable and indefinite-lived intangible assets separately from goodwill.  The acquired assets and assumed liabilities in an acquisition are measured and recognized based on their estimated fair values at the date of acquisition, with goodwill representing the excess of the purchase price over the fair value of the identifiable net assets.  A bargain purchase may occur, wherein the fair value of identifiable net assets exceeds the purchase price, and a gain is then recognized in the amount of that excess. Goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment annually, during the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may be present.  Application of goodwill impairment testing involves judgment, including but not limited to, the identification of reporting units and estimation of the fair value of each reporting unit.  A reporting unit is defined as an operating segment or one level below an operating segment.  With the exception of Pressure Cylinders, we test goodwill at the operating segment level as we have determined that the characteristics of the reporting units within each operating segment are similar and allow for their aggregation in accordance with the applicable accounting guidance.  For our Pressure Cylinders operating segment, the oil & gas equipment business has been treated as a separate reporting unit since the second quarter of fiscal 2016.

For goodwill and indefinite-lived intangible assets, we test for impairment by completing what is referred to as the “Step 0” analysis which involves evaluating qualitative factors including macroeconomic conditions, industry and market considerations, cost factors, and overall financial performance. If our “Step 0” analysis indicates it is more likely than not that the fair value is less than the carrying amount, we would perform a quantitative impairment test. The quantitative analysis compares the fair value of each reporting unit or indefinite-lived intangible asset to the respective carrying amount, and an impairment loss is recognized in our consolidated statements of earnings equivalent to the excess of the carrying amount over the fair value. Fair value is determined based on discounted cash flows or appraised values, as appropriate.

We review the carrying value of our long-lived assets, including intangible assets with finite useful lives, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable.  Impairment testing involves a comparison of the sum of the undiscounted future cash flows of the asset or asset group to its respective carrying amount.  If the sum of the undiscounted future cash flows exceeds the carrying amount, then no impairment exists.  If the carrying amount exceeds the sum of the undiscounted future cash flows, then a second step is performed to determine the amount of impairment, if any, to be recognized.  The impairment loss recognized is equal to the amount that the carrying value of the asset or asset group exceeds its fair value.  Long-lived assets held for sale are reported at the lower of cost or fair value less costs to sell and are recorded in a single line in the consolidated balance sheets. We classify assets as held for sale if we commit to a plan to sell the assets within one year and actively market the assets in their current condition for a price that is reasonable in comparison to their estimated fair value.

Our impairment testing for both goodwill and other long-lived assets, including intangible assets with finite useful lives, is largely based on cash flow models that require significant judgment and require assumptions about future volume trends, revenue and expense growth rates; and, in addition, external factors such as changes in economic trends and cost of capital.  Significant changes in any of these assumptions could impact the outcomes of the tests performed. See “Note C – Goodwill and Other Long-Lived Assets” for additional details regarding these assets and related impairment testing.

Leases:  Certain lease agreements contain fluctuating or escalating payments and rent holiday periods.  The related rent expense is recorded on a straight-line basis over the lease term.  Leasehold improvements made by the lessee, whether funded by the lessee or by landlord allowances or incentives, are recorded as leasehold improvement assets and will be amortized over the shorter of the economic life or the lease term.  These incentives are recorded as deferred rent and amortized as reductions in rent expense over the lease term.

Stock-Based Compensation:  At May 31, 2018, we had stock-based compensation plans for our employees as well as our non-employee directors as described more fully in “Note J – Stock-Based Compensation.”  All share-based awards, including grants of stock options and restricted common shares, are recorded as expense in the consolidated statements of earnings based on their grant-date fair values.  We estimate forfeitures at the date of grant based on historic experience.

Revenue Recognition:  We recognize revenue upon transfer of title and risk of loss, or in the case of toll processing revenue, upon delivery of the goods, provided evidence of an arrangement exists, pricing is fixed and determinable and the ability to collect is probable.  We provide, through charges to net sales, for returns and allowances based on experience and current customer activities.  We also provide, through charges to net sales, for customer rebates and sales discounts based on specific agreements and recent and anticipated levels of customer activity.  In circumstances where the collection of payment is not probable at the time of shipment, we defer recognition of revenue until payment is collected.

Advertising Expense:  Advertising costs are expensed as incurred and included in SG&A expense.  Advertising expense was $15,236,000, $14,822,000, and $13,970,000 for fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

Shipping and Handling Fees and Costs:  Shipping and handling fees billed to customers are included in net sales.  Shipping and handling costs incurred are included in cost of goods sold.

Environmental Costs:  Environmental costs are capitalized if the costs extend the life of the property, increase its capacity, and/or mitigate or prevent contamination from future operations.  Costs related to environmental contamination treatment and cleanup are charged to expense as incurred.

Statements of Cash Flows:  Supplemental cash flow information was as follows for the fiscal years ended May 31:

(in thousands)	2018		2017		2016
Interest paid, net of amount capitalized	$	34,839	$	29,826	$	30,431
Income taxes paid, net of refunds	$	44,819	$	55,652	$	50,750

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 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.  

Income Taxes:  We account for income taxes using the asset and liability method.  The asset and liability method requires the recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between the tax basis and the financial reporting basis of our assets and liabilities.  In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that all, or a portion, of the deferred tax assets will not be realized.  We provide a valuation allowance for deferred income tax assets when it is more likely than not that a portion of such deferred income tax assets will not be realized.

Tax benefits from uncertain tax positions that are recognized in the consolidated financial statements are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

We have reserves for income taxes and associated interest and penalties that may become payable in future years as a result of audits by taxing authorities.  It is our policy to record these in income tax expense.  While we believe the positions taken on previously filed tax returns are appropriate, we have established the tax and interest reserves in recognition that various taxing authorities may challenge our positions.  These reserves are analyzed periodically, and adjustments are made as events occur to warrant adjustment to the reserves, such as lapsing of applicable statutes of limitations, conclusion of tax audits, additional exposure based on current calculations, identification of new issues and release of administrative guidance or court decisions affecting a particular tax issue.

Self-Insurance Reserves:  We are largely self-insured with respect to workers’ compensation, general and automobile liability, property damage, employee medical claims and other potential losses.  In order to reduce risk and better manage our overall loss exposure, we purchase stop-loss insurance that covers individual claims in excess of the deductible amounts.  We maintain reserves for the estimated cost to settle open claims, which includes estimates of legal costs expected to be incurred, as well as an estimate of the cost of claims that have been incurred but not reported.  These estimates are based on actuarial valuations that take into consideration the historical average claim volume, the average cost for settled claims, current trends in claim costs, changes in our business and workforce, general economic factors and other assumptions believed to be reasonable under the circumstances.  The estimated reserves for these liabilities could be affected if future occurrences and claims differ from the assumptions used and historical trends.

Recently Adopted Accounting Standards:

In July 2015, amended accounting guidance was issued regarding the measurement of inventory.  The amended guidance requires that inventory accounted for under the first-in, first-out (FIFO) or average cost methods be measured at the lower of cost and net realizable value, where net realizable value represents the estimated selling price of inventory in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.  The amended guidance has no impact on inventory accounted for under the last-in, first-out (LIFO) or retail inventory methods.  The Company adopted this amended guidance on a prospective basis effective June 1, 2017.  The adoption of this guidance did not impact our consolidated financial position or results of operations.

In August 2016, amended accounting guidance was issued to clarify the proper cash flow presentation of certain specific types of cash payments and cash receipts.  The Company early adopted this amended guidance on a prospective basis effective June 1, 2017.  The adoption of this guidance did not impact our consolidated statements of cash flows or ongoing financial reporting.

In January 2017, amended accounting guidance was issued to clarify the definition of a business to provide additional guidance to assist in evaluating whether transactions should be accounted for as an acquisition (or disposal) of either an asset or a business.  The Company early adopted this amended guidance on a prospective basis effective September 1, 2017.  The adoption of this guidance did not impact our consolidated financial position or results of operations.

In January 2017, amended accounting guidance was issued to simplify the goodwill impairment calculation, by removing Step 2 of the goodwill impairment test.  Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of the goodwill.  The Company early adopted this amended guidance on a prospective basis effective September 1, 2017.  The adoption of this guidance did not impact our consolidated financial position or results of operations.

In February 2018, amended guidance was issued that would allow a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (“TCJA”) signed into law in December 2017.  The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  It is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized.  The Company early adopted this amended guidance in the fourth quarter of fiscal 2018.  As a result, the stranded tax effects in AOCI of $1,701,000, related to various unrealized gains and losses associated with the Company’s hedge instruments and minimum pension liability, were reclassified to retained earnings.

Recently Issued Accounting Standards:  

In May 2014, new accounting guidance was issued that replaces most existing revenue recognition guidance under U.S. GAAP.  The new guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.  Subsequently, additional guidance was issued on several areas including guidance intended to improve the operability and understandability of the implementation of principal versus agent considerations and clarifications on the identification of performance obligations and implementation of guidance related to licensing.  The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.  The guidance permits the use of either the retrospective or cumulative effect transition method.  The Company adopted this guidance on June 1, 2018 using the cumulative effect transition method.  Based on our evaluation, which included a review of significant contracts with customers across all revenue streams, it resulted in a change in timing of revenue recognition for the toll processing and oil & gas equipment revenue streams and did not have a material impact on our consolidated financial position or results of operations.  As a result of the adoption of this guidance, the Company will make additional disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers as required by the new guidance.

In February 2016, new accounting guidance was issued that replaces most existing lease accounting guidance under U.S. GAAP.  Among other changes, the new guidance requires that leased assets and liabilities be recognized on the balance sheet by lessees for those leases classified as operating leases under previous guidance.  The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  Early adoption is permitted, and the change is to be applied using a modified retrospective approach as of the beginning of the earliest period presented.  We are in the process of evaluating the effect this guidance will have on our consolidated financial position, results of operations and cash flows, and we have not determined the effect of the new guidance on our ongoing financial reporting.  As of May 31, 2018, we have operating leases with $43,400,000 of future minimum lease payments.

In June 2016, amended accounting guidance was issued related to the measurement of credit losses on financial instruments.  The amended guidance changes the impairment model for most financial assets to require measurement and recognition of expected credit losses for financial assets held.  The amended guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.  We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations; however, we do not expect the amended guidance to have a material impact on our ongoing financial reporting.

In October 2016, amended accounting guidance was issued that requires the income tax consequences of an intra-entity transfer of an asset other than inventory to be recognized when the transfer occurs.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption.  Early adoption is permitted.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position, results of operations and cash flows.

In November 2016, amended accounting guidance was issued that requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Early adoption is permitted.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated cash flows.

In March 2017, amended accounting guidance was issued that requires an employer to report the service cost component of pension and postretirement benefits in the same line item as other current employee compensation costs.  Additionally, other components of net benefit cost are to be presented in the income statement separately from the service cost component and outside of income from operations.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and is to be applied retrospectively for the presentation in the income statement and prospectively on and after the effective date for the capitalization of service cost.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position, results of operations and cash flows.

In May 2017, amended accounting guidance was issued to provide guidance about which changes to the terms or conditions of a share-based payment award require application of modification accounting.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Early adoption is permitted.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position or results of operations.

In August 2017, amended accounting guidance was issued that modifies hedge accounting by making more hedge strategies eligible for hedge accounting, amending presentation and disclosure requirements, and changing how companies assess effectiveness.  The intent is to simplify application of hedge accounting and increase transparency of information about an entity’s risk management activities.  The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  It is to be applied using a modified retrospective transition approach for cash flow and net investment hedges existing at the date of adoption.  The presentation and disclosure guidance is only required prospectively.  Early adoption is permitted.  We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations, and have not determined the effect on our ongoing financial reporting.

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Investments in Unconsolidated Affiliates

12 Months Ended

May 31, 2018

Equity Method Investments And Joint Ventures [Abstract]

Investments in Unconsolidated Affiliates

Note B – Investments in Unconsolidated Affiliates

Our investments in affiliated companies that we do not control, either through majority ownership or otherwise, are accounted for using the equity method.  These include ArtiFlex Manufacturing, LLC (“ArtiFlex”) (50%), Clarkwestern Dietrich Building Systems LLC (“ClarkDietrich”) (25%), Samuel Steel Pickling Company (31.25%), Serviacero Planos, S. de R. L. de C.V. (“Serviacero Worthington”) (50%), Worthington Armstrong Venture (“WAVE”) (50%), and Zhejiang Nisshin Worthington Precision Specialty Steel Co., Ltd. (10%).

We received distributions from unconsolidated affiliates totaling $89,787,000, $102,015,000, and $86,513,000 in fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  We have received cumulative distributions from WAVE in excess of our investment balance, which resulted in an amount recorded within other liabilities on our consolidated balance sheets of $55,198,000 and $63,038,000 at May 31, 2018 and 2017, respectively.  In accordance with the applicable accounting guidance, we reclassified the negative balance to the liabilities section of our consolidated balance sheet.  We will continue to record our equity in the net income of WAVE as a debit to the investment account, and if it becomes positive, it will again be shown as an asset on our consolidated balance sheet. If it becomes probable that any excess distribution may not be returned (upon joint venture liquidation or otherwise), we will recognize any balance classified as a liability as income immediately.

The following table presents combined information regarding the financial position of our unconsolidated affiliates accounted for using the equity method as of May 31:

(in thousands)	2018		2017
Cash	$	52,812	$	55,541
Other current assets		590,578		541,746
Current assets for discontinued operations		37,640		17,275
Noncurrent assets		358,927		342,938
Noncurrent assets for discontinued operations		-		18,168
Total assets	$	1,039,957	$	975,668
Current liabilities	$	166,493	$	148,056
Current liabilities for discontinued operations		7,142		8,891
Short-term borrowings		26,599		8,172
Current maturities of long-term debt		23,243		5,827
Long-term debt		259,588		268,711
Other noncurrent liabilities		17,536		20,890
Noncurrent liabilities for discontinued operations		-		490
Equity		539,356		514,631
Total liabilities and equity	$	1,039,957	$	975,668

The following table presents summarized financial information for our four largest unconsolidated affiliates as of, and for the fiscal years ended May 31.  All other unconsolidated affiliates are combined and presented in the Other category, including WSP through March 1, 2016.  On March 1, 2016, the Company obtained effective control over the operations of WSP and, as a result, began consolidating its financial results within those of Steel Processing.

(in thousands)	2018			2017			2016
Net sales
WAVE	$	360,395		$	334,031		$	329,050
ClarkDietrich		790,887			711,735			615,609
Serviacero Worthington		315,098			275,315			260,337
ArtiFlex		197,061			208,922			219,510
Other		28,578			17,784			74,214
Total net sales	$	1,692,019		$	1,547,787		$	1,498,720
Gross margin (loss)
WAVE	$	201,581		$	190,350		$	191,535
ClarkDietrich		97,437			128,098			95,427
Serviacero Worthington		32,396			37,080			15,328
ArtiFlex		18,266			22,829			30,181
Other		(6,399	)		(4,313	)		13,142
Total gross margin	$	343,281		$	374,044		$	345,613
Operating income (loss)
WAVE	$	158,697		$	158,030		$	162,026
ClarkDietrich		39,153			68,696			33,897
Serviacero Worthington		24,232			29,975			11,110
ArtiFlex		11,395			15,519			22,612
Other		(10,584	)		(8,407	)		6,910
Total operating income	$	222,893		$	263,813		$	236,555
Depreciation and amortization
WAVE	$	1,659		$	2,978		$	2,245
ClarkDietrich		11,864			12,718			14,289
Serviacero Worthington		3,919			3,862			3,508
ArtiFlex		5,515			5,850			6,105
Other		749			698			3,081
Total depreciation and amortization	$	23,706		$	26,106		$	29,228
Interest expense (income)
WAVE	$	8,365		$	7,182		$	6,635
ClarkDietrich		114			20			80
Serviacero Worthington		397			89			114
ArtiFlex		1,333			1,429			1,650
Other		(1	)		-			(10	)
Total interest expense	$	10,208		$	8,720		$	8,469
Income tax expense (benefit)
WAVE	$	119		$	2,398		$	(14	)
ClarkDietrich		-			-			-
Serviacero Worthington		5,141			11,740			6,249
ArtiFlex		208			(2	)		289
Other		-			(2	)		53
Total income tax expense	$	5,468		$	14,134		$	6,577
Net earnings (loss)
WAVE (1)	$	152,329		$	154,866		$	164,132
ClarkDietrich		39,138			69,122			58,539
Serviacero Worthington		17,577			18,140			6,246
ArtiFlex		9,854			14,092			20,673
Other		(11,922	)		(5,472	)		8,516
Total net earnings	$	206,976		$	250,748		$	258,106

(1) On November 20, 2017, WAVE agreed to sell its business and operations in Europe and Asia to the Knauf Group, a family-owned manufacturer of building materials headquartered in Germany.  WAVE has classified its businesses to be sold as discontinued operations.  These net earnings include net income attributable to discontinued operations of $2,226,000, $6,775,000, and $8,930,000 in fiscal 2018, fiscal 2017, and fiscal 2016, respectively.  All other amounts presented in the table above exclude the activity of the discontinued operations of WAVE  

At May 31, 2018 and 2017, $42,636,000 and $28,803,000, respectively, of our consolidated retained earnings represented undistributed earnings of our unconsolidated affiliates, net of tax.

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Goodwill and Other Long-Lived Assets

12 Months Ended

May 31, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Long-Lived Assets

Note C – Goodwill and Other Long-Lived Assets

Goodwill

The following table summarizes the changes in the carrying amount of goodwill during fiscal 2018 and fiscal 2017 by reportable business segment:

(in thousands)	Steel Processing		Pressure Cylinders			Engineered Cabs			Other			Total
Balance at May 31, 2016
Goodwill	$	7,045	$	233,371		$	44,933		$	127,245		$	412,594
Accumulated impairment losses		-		-			(44,933	)		(121,594	)		(166,527	)
		7,045		233,371			-			5,651			246,067
Acquisitions and purchase accounting adjustments		854		-			-			-			854
Translation adjustments		-		752			-			-			752
		854		752			-			-			1,606
Balance at May 31, 2017
Goodwill		7,899		234,123			44,933			127,245			414,200
Accumulated impairment losses		-		-			(44,933	)		(121,594	)		(166,527	)
		7,899		234,123			-			5,651			247,673
Acquisitions and purchase accounting adjustments		-		103,437			-			-			103,437
Translation adjustments		-		3,739			-			-			3,739
Impairment losses		-		(4,015	)		-			(5,651	)		(9,666	)
		-		103,161			-			(5,651	)		97,510
Balance at May 31, 2018
Goodwill		7,899		341,299			44,933			127,245			521,376
Accumulated impairment losses		-		(4,015	)		(44,933	)		(127,245	)		(176,193	)
	$	7,899	$	337,284		$	-		$	-		$	345,183

For additional information regarding the Company’s acquisitions, refer to “Note O – Acquisitions.”  Fiscal 2018 impairment charges noted in the table above consisted of $4,015,000 of goodwill allocated to oil & gas equipment assets available for sale and $5,651,000 related to the sale of a 65% stake in WEI on March 31, 2018.  

Other Intangible Assets

Intangible assets with definite lives are amortized on a straight-line basis over their estimated useful lives, which range from one to 20 years.  The following table summarizes other intangible assets by class as of May 31, 2018 and 2017:

	2018				2017
			Accumulated				Accumulated
(in thousands)	Cost		Amortization		Cost		Amortization
Indefinite-lived intangible assets:
Trademarks	$	76,701	$	-	$	14,501	$	-
Total indefinite-lived intangible assets		76,701		-		14,501		-
Definite-lived intangible assets:
Customer relationships	$	173,363	$	57,125	$	96,262	$	45,822
Non-compete agreements		8,669		8,137		9,443		7,751
Technology / know-how		26,411		5,856		21,755		5,607
Other		3,804		3,804		3,954		3,954
Total definite-lived intangible assets		212,247		74,922		131,414		63,134
Total intangible assets	$	288,948	$	74,922	$	145,915	$	63,134

The increase in the carrying value of other intangible assets was primarily driven by the June 2, 2017 acquisition of AMTROL, as disclosed in “Note O – Acquisitions”, partially offset by impairment charges of $11,549,000, $3,849,000 and $1,674,000 related to intangible assets of Worthington Aritas, certain oil & gas equipment asset groups in Pressure Cylinders and WEI, respectively, as further discussed below.

Amortization expense totaled $19,679,000, $13,525,000, and $15,813,000 in fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

Amortization expense for each of the next five fiscal years is estimated to be:

(in thousands)
2019	$	15,308
2020	$	13,299
2021	$	12,539
2022	$	10,858
2023	$	10,221

Impairment of Long-Lived Assets

Fiscal 2018:  During the fourth quarter of fiscal 2018, management committed to plans to sell the Company’s cryogenics business in Turkey, Worthington Aritas, and certain underperforming oil & gas equipment assets within Pressure Cylinders.  As all of the criteria for classification as assets held for sale were met in both instances, the net assets of each asset group have been presented separately as assets held for sale in our consolidated balance sheets.  In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell.  The book value of Worthington Aritas exceeded its estimated fair market value of $9,000,000, resulting in an impairment charge of $42,422,000, consisting of $19,621,000, $11,549,000, and $11,252,000 related to fixed assets, intangible assets, and other assets, respectively.  The impairment charge related to intangible assets was for customer relationships and technological know-how.  The book value of the oil & gas equipment asset group also exceeded its estimated fair market value of $21,000,000, resulting in an impairment charge of $10,497,000, consisting of $4,015,000, $3,849,000, and $2,633,000 related to allocated goodwill, intangible assets, and fixed assets, respectively.  The impairment charge related to intangible assets was for the full write-off of the remaining book value of customer relationships.  In both instances, fair value was determined using observable (Level 2) inputs.

During the second quarter of fiscal 2018, the Company determined that indicators of impairment were present with regard to the goodwill and intangible assets of the former WEI reporting unit.  As a result, these assets were written down to their estimated fair value resulting in an impairment charge of $7,325,000.  During the second quarter of fiscal 2018, the Company also identified the presence of impairment indicators with regard to vacant land at the oil & gas equipment facility in Bremen, Ohio, resulting in an impairment charge of $964,000 to write the vacant land down to its estimated fair value.  

Fiscal 2016:  Due to the decline in oil prices and resulting reduced demand for products, management determined that an impairment indicator was present for the long-lived assets in the oil & gas equipment business within Pressure Cylinders.  The Company had tested the five asset groups in its oil & gas equipment business for impairment during the fourth quarter of fiscal 2015 and again in the first quarter of fiscal 2016.  In each of these tests, the Company’s estimate of the undiscounted future cash flows for each asset group indicated that the carrying amounts were expected to be recovered as of those measurement dates.  

During the second quarter of fiscal 2016, the continued decline of oil prices further reduced the demand for oil & gas equipment products, causing a significant decrease in the long-term cash flow projections of that business.  Based on these revised cash flow projections, the Company determined that long-lived assets of two of the facilities with a combined carrying amount of $59,895,000 were impaired and wrote them down to their estimated fair value of $36,933,000, resulting in an impairment charge of $22,962,000.  Fair value was based on expected future cash flows using Level 3 inputs under Accounting Standard Codification (“ASC”) 820.  The cash flows are those expected to be generated by market participants, discounted at an appropriate rate for the risks inherent in those cash flow projections, or 13%.  

As a result of the impairment of the oil & gas equipment assets noted above, the Company also performed an impairment review of the goodwill of the Pressure Cylinders reporting unit during the second quarter of fiscal 2016.  The Company first assessed the reporting unit structure and determined that it was no longer appropriate to aggregate the oil & gas equipment component with the rest of Pressure Cylinders for purposes of goodwill impairment testing.  This determination was driven by changes in the economic characteristics of the oil & gas equipment business as a result of sustained low oil prices, which indicated that the risk profile and prospects for growth and profitability were no longer similar to the other components of Pressure Cylinders.  In accordance with the applicable accounting guidance, the Company allocated a portion of Pressure Cylinders goodwill totaling $25,982,000 to the Oil & Gas Equipment reporting unit using a relative fair value approach.  A subsequent comparison of the fair values of the Oil & Gas Equipment and the Pressure Cylinders reporting units, determined using discounted cash flows, to their respective carrying values indicated that a step 2 calculation to quantify a potential impairment was not required.  The key assumptions that drive the fair value calculations are projected cash flows and the discount rate.  Prior to the allocation of goodwill, the Company tested the goodwill of the old Pressure Cylinders reporting unit for impairment and determined that fair value exceeded carrying value by a significant amount.

During the first quarter of fiscal 2016, management finalized its plan to close the Engineered Cabs facility in Florence, South Carolina and transfer the majority of the business to the Engineered Cabs facility in Greeneville, Tennessee.  Under the plan, certain machinery and equipment was transferred to the Greeneville facility to support higher volume requirements.  Management reevaluated the recoverability of the remaining assets and determined that long-lived assets with a carrying value of $4,059,000 were impaired.  As a result, these long-lived assets were written down to their estimated fair value of $1,059,000 resulting in an impairment charge of $3,000,000 during the first quarter of fiscal 2016.  The Company ceased production at the Florence facility on September 30, 2015.

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Restructuring and Other Expense (Income), Net

12 Months Ended

May 31, 2018

Restructuring And Related Activities [Abstract]

Restructuring and Other Expense (Income), Net

Note D – Restructuring and Other Expense (Income), Net

We consider restructuring activities to be programs whereby we fundamentally change our operations such as closing and consolidating manufacturing facilities or moving manufacturing of a product to another location.  Restructuring activities may also involve substantial realignment of the management structure of a business unit in response to changing market conditions.

A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other income, net financial statement caption in our consolidated statement of earnings for fiscal 2018, is summarized below:

	Beginning										Ending
(in thousands)	Balance		Expense			Payments			Adjustments		Balance
Early retirement and severance	$	253	$	2,549		$	(1,787	)	$	101	$	1,116
Facility exit and other costs		536		482			(1,018	)		-		-
	$	789		3,031		$	(2,805	)	$	101	$	1,116
Net gain on sale of assets				(10,452	)
Restructuring and other income, net			$	(7,421	)

During fiscal 2018, the following actions were taken related to the Company’s restructuring activities:

• In connection with the acquisition of AMTROL on June 2, 2017, the Company recognized severance expense of $2,365,000 related to corporate management and other positions at AMTROL that were eliminated.

• In connection with the closure of the Company’s stainless steel business, Precision Specialty Metals, Inc. (“PSM”), the Company recognized facility exit costs of $560,000 and a net gain on disposal of assets of $10,595,000 for the sale of the real estate of this business.  Net proceeds were $15,874,000.

• In connection with other non-significant restructuring activities, the Company recognized severance expense of $184,000 and a credit to facility exit costs of $78,000.  The Company also recognized a net loss on disposal of assets of $143,000.

The total liability as of May 31, 2018 is expected to be paid in the next twelve months.

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Contingent Liabilities and Commitments

12 Months Ended

May 31, 2018

Commitments And Contingencies Disclosure [Abstract]

Contingent Liabilities and Commitments

Note E – Contingent Liabilities and Commitments

Legal Proceedings

We are defendants in certain legal actions.  In the opinion of management, the outcome of these actions, which is not clearly determinable at the present time, would not significantly affect our consolidated financial position or future results of operations.  We also believe that environmental issues will not have a material effect on our capital expenditures, consolidated financial position or future results of operations.

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Guarantees

12 Months Ended

May 31, 2018

Guarantees And Product Warranties [Abstract]

Guarantees

Note F – Guarantees

We do not have guarantees that we believe are reasonably likely to have a material current or future effect on our consolidated financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.  However, as of May 31, 2018, we were party to an operating lease for an aircraft in which we have guaranteed a residual value at the termination of the lease.  The maximum obligation under the terms of this guarantee was approximately $8,354,000 at May 31, 2018.  Based on current facts and circumstances, we have estimated the likelihood of payment pursuant to this guarantee is not probable and, therefore, no amounts have been recognized in our consolidated financial statements.

We also had in place $14,493,000 of outstanding stand-by letters of credit issued to third-party service providers at May 31, 2018.  The fair value of these guarantee instruments, based on premiums paid, was not material and no amounts were drawn against them at May 31, 2018.

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Debt and Receivables Securitization

12 Months Ended

May 31, 2018

Debt Disclosure [Abstract]

Debt and Receivables Securitization

Note G – Debt and Receivables Securitization

The following table summarizes our long-term debt and short-term borrowings outstanding at May 31, 2018 and 2017:

(in thousands)	2018			2017
Short-term borrowings	$	-		$	123
4.30% senior notes due August 1, 2032		200,000			-
4.55% senior notes due April 15, 2026		250,000			250,000
4.60% senior notes due August 10, 2024		150,000			150,000
6.50% senior notes due April 15, 2020		150,000			150,000
Term loans		829			30,400
Other		3,899			668
Total debt		754,728			581,191
Unamortized discount and debt issuance costs		(4,360	)		(2,581	)
Total debt, net		750,368			578,610
Less: current maturities and short-term borrowings		1,474			6,814
Total long-term debt	$	748,894		$	571,796

Maturities on long-term debt in the next five fiscal years, and the remaining years thereafter, are as follows:

(in thousands)
2019	$	1,474
2020		151,111
2021		639
2022		656
2023		541
Thereafter		600,307
Total	$	754,728

Long-Term Debt

On September 26, 2014, Worthington Aritas executed a five-year term loan denominated in Euros, with interest at a variable rate based on EURIBOR.  On October 15, 2014, we entered into an interest rate swap to fix the interest rate on 60% of the borrowings outstanding under this facility at 2.015% starting on December 26, 2014.  Borrowings against the facility were used for the construction of a cryogenics manufacturing facility in Turkey.  In anticipation of the planned sale of the Company’s cryogenics business in Turkey, the Company paid off this term loan and settled the derivative instrument for an immaterial loss during the fourth quarter of fiscal 2018.

On July 28, 2017, we issued $200,000,000 aggregate principal amount of senior unsecured notes due August 1, 2032 (the “2032 Notes”).  The 2032 Notes bear interest at a rate of 4.300%.  The 2032 Notes were sold to the public at 99.901% of the principal amount thereof, to yield 4.309% to maturity.  We used a portion of the net proceeds from the offering to repay amounts then outstanding under our multi-year revolving credit facility and amounts then outstanding under our revolving trade accounts receivable securitization facility, both of which are described in more detail below.  We entered into an interest rate swap in June 2017, in anticipation of the issuance of the 2032 Notes.  The interest rate swap had a notional amount of $150,000,000 to hedge the risk of changes in the semi-annual interest rate payments attributable to changes in the benchmark interest rate during the several days leading up to the issuance of the 2032 Notes.  Upon pricing of the 2032 Notes, the derivative instrument was settled resulting in a gain of approximately $3,098,000, which was reflected in AOCI.  Approximately $2,116,000 and $198,000 were allocated to debt issuance costs and the debt discount, respectively.  The debt issuance costs and the debt discount were recorded on the consolidated balance sheet within long-term debt as a contra-liability.  Each will continue to be amortized, through interest expense, in our consolidated statements of earnings over the term of the 2032 Notes.  The unamortized portion of the debt issuance costs and debt discount was $1,998,000 and $187,000, respectively, at May 31, 2018.

On April 15, 2014, we issued $250,000,000 aggregate principal amount of unsecured senior notes due on April 15, 2026 (the “2026 Notes”).  The 2026 Notes bear interest at a rate of 4.55%.  The 2026 Notes were sold to the public at 99.789% of the principal amount thereof, to yield 4.573% to maturity.  We used a portion of the net proceeds from the offering to repay borrowings then outstanding under our revolving credit facilities.  Approximately $3,081,000, $2,279,000 and $528,000 were allocated to the settlement of a derivative contract entered into in anticipation of the issuance of the 2026 Notes, debt issuance costs, and the debt discount, respectively.  The debt issuance costs and debt discount were recorded on the consolidated balance sheets within long-term debt as a contra-liability, and the loss on the derivative contract recorded within AOCI.  Each will continue to be amortized, through interest expense, in our consolidated statements of earnings over the term of the 2026 Notes.  The unamortized portion of the debt issuance costs and debt discount was $1,488,000 and $344,000, respectively, at May 31, 2018 and $1,677,000 and $388,000, respectively at May 31, 2017.

On August 10, 2012, we issued $150,000,000 aggregate principal amount of unsecured senior notes due August 10, 2024 (the “2024 Notes”).  The 2024 Notes bear interest at a rate of 4.60%.  The net proceeds from this issuance were used to repay a portion of the then outstanding borrowings under our revolving credit facilities.  Approximately $80,000 of the aggregate proceeds were allocated to debt issuance costs.  The unamortized portion of the debt issuance costs was $41,000 and $48,000 at May 31, 2018 and 2017, respectively.

On April 27, 2012, we executed a $5,880,000 seven-year term loan that matures on May 1, 2019 and requires monthly payments of $76,350.  The loan bears interest at a rate of 2.49% and is secured by an aircraft that was purchased with its proceeds.  Borrowings outstanding totaled $829,000 and $1,713,000 as of May 31, 2018 and 2017, respectively.

On April 13, 2010, we issued $150,000,000 aggregate principal amount of unsecured senior notes due on April 15, 2020 (the “2020 Notes”).  The 2020 Notes bear interest at a rate of 6.50%.  The 2020 Notes were sold to the public at 99.890% of the principal amount thereof, to yield 6.515% to maturity.  We used the net proceeds from the offering to repay a portion of the then outstanding borrowings under our revolving credit facilities.  Approximately $1,358,000, $1,486,000 and $165,000 were allocated to the settlement of a derivative contract entered into in anticipation of the issuance of the 2020 Notes, debt issuance costs, and the debt discount.  The debt discount and debt issuance costs were recorded on the consolidated balance sheets within long-term debt as a contra-liability, and the loss on the derivative contract within AOCI.  Each will continue to be amortized, through interest expense, in our consolidated statements of earnings over the remaining term of the 2020 Notes.  The unamortized portion of the debt issuance costs and debt discount was $272,000 and $30,000, respectively, at May 31, 2018 and $421,000 and $47,000, respectively at May 31, 2017.

Other Financing Arrangements

We maintain a $50,000,000 revolving trade accounts receivable securitization facility (the “AR Facility”).  On January 16, 2018, the Company amended the terms of the AR Facility, extending the maturity by one year to January 2019 and reducing the borrowing capacity from $100,000,000 to $50,000,000.  Pursuant to the terms of the AR Facility, certain of our subsidiaries sell their accounts receivable without recourse, on a revolving basis, to Worthington Receivables Corporation (“WRC”), a wholly-owned, consolidated, bankruptcy-remote subsidiary.  In turn, WRC may sell without recourse, on a revolving basis, up to $50,000,000 of undivided ownership interests in this pool of accounts receivable to a third-party bank.  We retain an undivided interest in this pool and are subject to risk of loss based on the collectability of the receivables from this retained interest.  Because the amount eligible to be sold excludes receivables more than 90 days past due, receivables offset by an allowance for doubtful accounts due to bankruptcy or other cause, concentrations over certain limits with specific customers and certain reserve amounts, we believe additional risk of loss is minimal.  As of May 31, 2018, no undivided ownership interests in this pool of accounts receivable had been sold.  Facility fees of $383,000, $354,000, and $540,000 were recognized within interest expense during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

We also maintain a $500,000,000 multi-year revolving credit facility (the “Credit Facility”) with a group of lenders.  On February 16, 2018, the Company amended the terms of the Credit Facility, extending the maturity by three years to February 2023. Debt issuance costs of $805,000 were incurred as a result of the renewal.  These costs have been deferred and will be amortized over the life of the Credit Facility to interest expense.  Borrowings under the Credit Facility have maturities of up to one year.  We have the option to borrow at rates equal to an applicable margin over the LIBOR, Prime rate or Overnight Bank Funding rate.  The applicable margin is determined by our credit rating.  There were no borrowings outstanding under the Credit Facility at May 31, 2018.  As discussed in “Note F – Guarantees,” we provided $14,493,000 in letters of credit for third-party beneficiaries as of May 31, 2018.  While not drawn against at May 31, 2018, $13,245,000 of these letters of credit were issued against availability under the Credit Facility, leaving $486,755,000 available at May 31, 2018.

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Comprehensive Income (Loss)

12 Months Ended

May 31, 2018

Equity [Abstract]

Comprehensive Income (Loss)

Note H – Comprehensive Income (Loss)

Other Comprehensive Income (Loss):  The following table summarizes the tax effects of each component of other comprehensive income (loss) for the fiscal years ended May 31:

	2018							2017									2016
(in thousands)	Before-Tax		Tax			Net-of-Tax		Before-Tax			Tax			Net-of-Tax			Before-Tax			Tax			Net-of-Tax
Foreign currency translation	$	12,744	$	-		$	12,744	$	1,342		$	-		$	1,342		$	4,716		$	-		$	4,716
Pension liability adjustment		1,875		(309	)		1,566		3,400			(1,158	)		2,242			(3,233	)		1,175			(2,058	)
Cash flow hedges		1,351		(392	)		959		(4,522	)		1,700			(2,822	)		35,524			(13,316	)		22,208
Other comprehensive income	$	15,970	$	(701	)	$	15,269	$	220		$	542		$	762		$	37,007		$	(12,141	)	$	24,866

Accumulated Other Comprehensive Loss:  The components of the changes in accumulated other comprehensive loss for the fiscal years ended May 31, 2018 and May 31, 2017 were as follows:

										Accumulated
	Foreign			Pension						Other
	Currency			Liability			Cash Flow			Comprehensive
(in thousands)	Translation			Adjustment			Hedges			Loss
Balance at May 31, 2016	$	(18,728	)	$	(17,061	)	$	7,224		$	(28,565	)
Other comprehensive income before reclassifications		1,370			2,841			7,669			11,880
Reclassification adjustments to income (a)		-			559			(12,191	)		(11,632	)
Income taxes		-			(1,158	)		1,700			542
Balance at May 31, 2017	$	(17,358	)	$	(14,819	)	$	4,402		$	(27,775	)
Other comprehensive income before reclassifications		12,371			1,402			14,980			28,753
Reclassification adjustments to income (a)		-			473			(13,629	)		(13,156	)
Reclassification of stranded tax effects		-			(2,818	)		1,117			(1,701	)
Current income tax effect		-			(309	)		(392	)		(701	)
Balance at May 31, 2018	$	(4,987	)	$	(16,071	)	$	6,478		$	(14,580	)

(a) The statement of earnings classification of amounts reclassified to income for cash flow hedges is disclosed in “Note P – Derivative Instruments and Hedging Activities.”

The estimated net amount of the gains in AOCI at May 31, 2018 expected to be reclassified into net earnings within the succeeding twelve months is $5,775,000 (net of tax of $1,751,000).  This amount was computed using the fair value of the cash flow hedges at May 31, 2018, and will change before actual reclassification from other comprehensive income to net earnings during fiscal2018.

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Equity

12 Months Ended

May 31, 2018

Equity [Abstract]

Equity

Note I – Equity

Preferred Shares:  The Worthington Industries, Inc. Amended Articles of Incorporation authorize two classes of preferred shares and their relative voting rights.  The Board of Directors of Worthington Industries, Inc. is empowered to determine the issue prices, dividend rates, amounts payable upon liquidation and other terms of the preferred shares when issued.  No preferred shares are issued or outstanding.

Common Shares:On June 26, 2014, Worthington Industries, Inc. announced that on June 25, 2014, the Board of Directors of Worthington Industries, Inc. authorized the repurchase of up to 10,000,000 of our outstanding common shares.  As of the end of the month of April, 2018 a total of 10,000,000 common shares had been repurchased under this authorization and, no further purchases may be made under this authorization. On September 27, 2017, the Board authorized the repurchase of up to an additional 6,828,855 common shares.  The total number of common shares available for repurchase at May 31, 2018 was 6,500,000.

During fiscal 2018, we repurchased 4,375,000 common shares having an aggregate cost of $204,267,000.  During fiscal 2017, no common shares were repurchased under the then-existing authorization.  During fiscal 2016, we repurchased 3,500,000 common shares having an aggregate cost of $99,847,000 under the then-existing authorization.

Common shares available for repurchase under the authorization currently in effect may be purchased from time to time, with consideration given to the market price of the common shares, the nature of other investment opportunities, cash flows from operations, general economic conditions and other relevant considerations.  Repurchases may be made on the open market or through privately negotiated transactions.

On October 1, 2014, the Company amended its non-qualified deferred compensation plans for employees to require that any portion of a participant’s current account credited to the theoretical common share option, which reflects the fair value of the Company’s common shares with dividends reinvested, and any new contributions credited to the theoretical common share option remain credited to the theoretical common share option until distributed.  For amounts credited to the theoretical common share option, payouts are required to be made in the form of whole common shares of the Company and cash in lieu of fractional common shares.  As a result, we account for the deferred compensation obligation credited to the theoretical common share option within equity.  The amounts recorded in equity totaled $1,218,000 and $1,259,000 during fiscal 2018 and fiscal 2017, respectively.  Prior to October 1, 2014, participant accounts credited to the theoretical common share option were settled in cash and classified as a liability in the Company’s consolidated balance sheets.

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Stock-Based Compensation

12 Months Ended

May 31, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

Note J – Stock-Based Compensation

Under our employee and non-employee director stock-based compensation plans (the “Plans”), we may grant incentive or non-qualified stock options, restricted common shares and performance shares to employees and non-qualified stock options and restricted common shares to non-employee directors.  We classify share-based compensation expense within SG&A expense to correspond with the same financial statement caption as the majority of the cash compensation paid to employees.  A total of 2,958,967 of our common shares were authorized and available for issuance in connection with the stock-based compensation plans in place at May 31, 2018.

We recognized pre-tax stock-based compensation expense of $13,758,000 ($9,482,000 after-tax), $14,349,000 ($9,112,000 after-tax), and $15,836,000 ($10,056,000 after-tax) under the Plans during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  At May 31, 2018, the total unrecognized compensation cost related to non-vested awards was $14,312,000, which will be expensed over the next three fiscal years.

Non-Qualified Stock Options

Stock options may be granted to purchase common shares at not less than 100% of the fair market value of the underlying common shares on the date of the grant.  All outstanding stock options are non-qualified stock options.  The exercise price of all stock options granted has been set at 100% of the fair market value of the underlying common shares on the date of grant.  Generally, stock options granted to employees vest and become exercisable at the rate of (i) 20% per year for options issued before June 30, 2011, and (ii) 33% per year for options issued on or after June 30, 2011, in each case beginning one year from the date of grant, and expire ten years after the date of grant.  Non-qualified stock options granted to non-employee directors vest and become exercisable on the earlier of (a) the first anniversary of the date of grant or (b) the date on which the next annual meeting of shareholders is held following the date of grant for any stock option granted as of the date of an annual meeting of shareholders of Worthington Industries, Inc.  Stock options can be exercised through net-settlement, at the election of the option holder.

U.S. GAAP requires that all share-based awards be recorded as expense in the statement of earnings based on their grant-date fair value.  We calculate the fair value of our non-qualified stock options using the Black-Scholes option pricing model and certain assumptions.  The computation of fair values for all stock options incorporates the following assumptions: expected volatility (based on the historical volatility of our common shares); risk-free interest rate (based on the United States Treasury strip rate for the expected term of the stock options); expected term (based on historical exercise experience); and dividend yield (based on annualized current dividends and an average quoted price of our common shares over the preceding annual period).

The table below sets forth the non-qualified stock options granted during each of the last three fiscal years.  For each grant, the exercise price was equal to the closing market price of the underlying common shares at each respective grant date.  The fair values of these stock options were based on the Black-Scholes option pricing model, calculated at the respective grant dates.  The calculated pre-tax stock-based compensation expense for these stock options, which is after an estimate of forfeitures, will be recognized on a straight-line basis over the respective vesting periods of the stock options.

(in thousands, except per share amounts)	2018		2017		2016
Granted		90		111		154
Weighted average exercise price, per share	$	47.76	$	42.30	$	30.92
Weighted average grant date fair value, per share	$	14.99	$	11.60	$	9.55
Pre-tax stock-based compensation, net of forfeitures	$	1,203	$	1,146	$	1,305

The weighted average fair value of stock options granted in fiscal 2018, fiscal 2017 and fiscal 2016 was based on the following weighted average assumptions:

	2018			2017			2016
Assumptions used:
Dividend yield		1.81	%		2.59	%		2.33	%
Expected volatility		36.65	%		36.86	%		38.40	%
Risk-free interest rate		1.98	%		1.15	%		1.98	%
Expected life (years)		6.0			6.0			6.0

The following tables summarize our stock option activity for the years ended May 31:

	2018					2017					2016
(in thousands, except per share amounts)	Stock Options			Weighted Average Exercise Price		Stock Options			Weighted Average Exercise Price		Stock Options			Weighted Average Exercise Price
Outstanding, beginning of year		2,307		$	20.99		3,306		$	19.01		4,044		$	18.25
Granted		90			47.76		111			42.30		154			30.92
Exercised		(371	)		20.37		(1,076	)		16.90		(874	)		17.22
Forfeited		(7	)		33.02		(34	)		29.95		(18	)		32.25
Outstanding, end of year		2,019			22.26		2,307			20.99		3,306			19.01
Exercisable at end of year		1,800			20.03		2,067			19.17		3,059			17.85

			Weighted
			Average
			Remaining		Aggregate
	Number of		Contractual		Intrinsic
	StockOptions		Life		Value
	(in thousands)		(in years)		(in thousands)
May 31, 2018
Outstanding		2,019		3.59	$	51,858
Exercisable		1,800		3.06	$	50,673
May 31, 2017
Outstanding		2,307		3.95	$	48,509
Exercisable		2,067		3.47	$	47,488
May 31, 2016
Outstanding		3,306		4.33	$	61,178
Exercisable		3,059		4.01	$	60,082

The total intrinsic value of stock options exercised during fiscal 2018 was $5,758,000.  The total amount of cash received from the exercise of stock options during fiscal 2018 was $3,864,000, and the related excess tax benefit realized from share-based payment awards was $4,075,000.

The following table summarizes information about non-vested stock option awards for the year ended May 31, 2018:

				Weighted Average
	Number of			Grant Date
	Stock Options			Fair Value
	(in thousands)			per share
Non-vested, beginning of year		240		$	9.99
Granted		90			14.99
Vested		(104	)		11.06
Forfeited		(7	)		9.59
Non-vested, end of year		219		$	11.55

Service-Based Restricted Common Shares

We have awarded restricted common shares to certain employees and non-employee directors that contain service-based vesting conditions.  Service-based restricted common shares granted to employees cliff vest three years from the date of grant.  Service-based restricted common shares granted to non-employee directors vest under the same parameters as the non-employee stock options discussed above.  All service-based restricted common shares are valued at the closing market price of our common shares on the date of the grant.

The table below sets forth the service-based restricted common shares we granted during each of fiscal 2018, fiscal 2017 and fiscal 2016.  The calculated pre-tax stock-based compensation expense for these restricted common shares will be recognized on a straight-line basis over their respective vesting periods.

(in thousands, except per share amounts)	2018		2017		2016
Granted		176		525		217
Weighted average grant date fair value, per share	$	47.88	$	42.28	$	29.49
Pre-tax stock-based compensation, net of forfeitures	$	7,605	$	19,841	$	5,800

The following tables summarize the activity for our service-based restricted common shares for the years ended May 31:

	2018					2017					2016
(in thousands, except per share amounts)	Restricted Common Shares			Weighted Average Grant Date Fair Value		Restricted Common Shares			Weighted Average Grant Date Fair Value		Restricted Common Shares			Weighted Average Grant Date Fair Value
Outstanding, beginning of year		865		$	39.49		698		$	33.69		635		$	33.65
Granted		176			47.88		525			42.28		217			29.49
Vested		(205	)		40.96		(310	)		31.81		(120	)		24.14
Forfeited		(40	)		41.58		(48	)		38.82		(34	)		34.53
Outstanding, end of year		796			40.80		865			39.49		698			33.69
Weighted average remaining contractual life of
outstanding restricted common shares (in years)		1.21					1.57					1.04
Aggregate intrinsic value of outstanding restricted
common shares	$	38,160				$	36,298				$	26,059
Aggregate intrinsic value of restricted common shares
vested during the year	$	10,330				$	12,840				$	3,527

Market-Based Restricted Common Shares

During fiscal 2015, we granted an aggregate of 50,000 market-based restricted common shares to two key employees under one of our stock-based compensation plans.  Vesting of these restricted common share awards is contingent upon the price of our common shares reaching $60.00 per share and remaining at or above that price for 30 consecutive days during the five-year period following the date of grant and the completion of a five-year service vesting period.  The grant-date fair value of these restricted common shares, as determined by a Monte Carlo simulation model, was $32.06 per share.  The following assumptions were used to determine the grant-date fair value and the derived service period for these market-based restricted common shares:

Dividend yield	1.60	%
Expected volatility	44.00	%
Risk-free interest rate	1.70	%

The calculated pre-tax stock-based compensation expense was determined to be $1,603,000.  In fiscal 2016, 25,000 of these shares were cancelled.  At May 31, 2018, the remaining 25,000 restricted common shares were outstanding.

Performance Shares

We have awarded performance shares to certain key employees that are contingent (i.e., vest) upon achieving corporate targets for cumulative corporate economic value added, earnings per share growth and, in the case of business unit executives, business unit operating income targets for the three-year periods ended or ending May 31, 2018, 2019 and 2020.  These performance share awards will be paid, to the extent earned, in common shares of the Company in the fiscal quarter following the end of the applicable three-year performance period.  The fair value of our performance shares is determined by the closing market prices of the underlying common shares at their respective grant dates and the pre-tax stock-based compensation expense is based on our periodic assessment of the probability of the targets being achieved and our estimate of the number of common shares that will ultimately be issued.

The table below sets forth the performance shares we granted (at target levels) during fiscal 2018, fiscal 2017 and fiscal 2016:

(in thousands, except per share amounts)	2018		2017		2016
Granted		54		67		87
Weighted average grant date fair value, per share	$	50.61	$	44.91	$	31.12
Pre-tax stock-based compensation	$	2,748	$	2,995	$	2,623

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Employee Pension Plans

12 Months Ended

May 31, 2018

Compensation And Retirement Disclosure [Abstract]

Employee Pension Plans

Note K – Employee Pension Plans

We provide retirement benefits to employees mainly through defined contribution retirement plans.  Eligible participants make pre-tax contributions based on elected percentages of eligible compensation, subject to annual addition and other limitations imposed by the Internal Revenue Code and the various plans’ provisions.  Company contributions consist of company matching contributions, annual or monthly employer contributions and discretionary contributions, based on individual plan provisions.

We also have one defined benefit plan, The Gerstenslager Company Bargaining Unit Employees’ Pension Plan (the “Gerstenslager Plan” or “defined benefit plan”).  The Gerstenslager Plan is a non‑contributory pension plan, which covers certain employees based on age and length of service.  Our contributions have complied with ERISA's minimum funding requirements.  Effective May 9, 2011, in connection with the formation of the ArtiFlex joint venture, the Gerstenslager Plan was frozen, which qualified as a curtailment under the applicable accounting guidance.  We did not recognize a gain or loss in connection with the curtailment of the Gerstenslager Plan.

The following table summarizes the components of net periodic pension cost for the defined benefit plan and the defined contribution plans for the years ended May 31:

(in thousands)	2018			2017			2016
Defined benefit plan:
Interest cost	$	1,522		$	1,527		$	1,621
Actuarial (return) loss on plan assets		(1,361	)		(2,224	)		1,154
Net amortization and deferral		(20	)		1,025			(2,664	)
Net periodic pension cost on defined benefit plan		141			328			111
Defined contribution plans		14,972			14,542			13,300
Total retirement plan cost	$	15,113		$	14,870		$	13,411

The following actuarial assumptions were used for our defined benefit plan:

	2018			2017			2016
To determine benefit obligation:
Discount rate		4.02	%		3.94	%		3.75	%
To determine net periodic pension cost:
Discount rate		3.94	%		3.75	%		4.07	%
Expected long-term rate of return		7.00	%		7.00	%		7.00	%
Rate of compensation increase	n/a			n/a			n/a

To calculate the discount rate we used the expected cash flows of the benefit payments and the Citigroup Pension Index.  The Gerstenslager Plan’s expected long-term rate of return in fiscal 2018, fiscal 2017 and fiscal 2016 was based on the actual historical returns adjusted for a change in the frequency of lump-sum settlements upon retirement.  In determining our benefit obligation, we use the actuarial present value of the vested benefits to which each eligible employee is currently entitled, based on the employee’s expected date of separation or retirement.

The following tables provide a reconciliation of the changes in the projected benefit obligation and fair value of plan assets and the funded status of the Gerstenslager Plan as of, and for the fiscal years ended May 31:

(in thousands)	2018			2017
Change in benefit obligation
Benefit obligation, beginning of year	$	39,174		$	41,168
Interest cost		1,522			1,527
Actuarial gain		(1,516	)		(2,459	)
Benefits paid		(1,170	)		(1,062	)
Benefits obligation, end of year	$	38,010		$	39,174
Change in plan assets
Fair value, beginning of year	$	27,022		$	25,566
Actuarial return on plan assets		1,361			2,224
Company contributions		-			294
Benefits paid		(1,171	)		(1,062	)
Fair value, end of year		27,212			27,022
Funded status	$	(10,798	)	$	(12,152	)
Amounts recognized in the consolidated balance sheets consist of:
Other liabilities	$	(10,798	)	$	(12,152	)
Accumulated other comprehensive loss		16,343			17,839
Amounts recognized in accumulated other comprehensive loss consist    of:
Net loss		16,343			17,839
Total	$	16,343		$	17,839

The following table shows other changes in plan assets and benefit obligations recognized in OCI during the fiscal years ended May 31:

(in thousands)	2018		2017
Net actuarial gain	$	1,023	$	2,926
Amortization of net loss		473		559
Total recognized in other comprehensive income	$	1,496	$	3,485
Total recognized in net periodic benefit cost and other comprehensive income	$	1,355	$	3,157

The estimated net loss for the defined benefit plan that will be amortized from AOCI into net periodic pension cost during fiscal 2019 is $441,000.

Pension plan assets are required to be disclosed at fair value in the consolidated financial statements.  Fair value is defined in “Note Q – Fair Value Measurements.”  The pension plan assets’ fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The following table sets forth, by level within the fair value hierarchy, a summary of the defined benefit plan’s assets measured at fair value on a recurring basis at May 31, 2018:

			Quoted		Significant
			Prices		Other		Significant
			in Active		Observable		Unobservable
			Markets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(level 3)
Investment:
Money market funds	$	291	$	291	$	-	$	-
Bond funds		14,887		14,887		-		-
Equity funds		12,034		12,034		-		-
Total	$	27,212	$	27,212	$	-	$	-

The following table sets forth, by level within the fair value hierarchy, a summary of the defined benefit plan’s assets measured at fair value on a recurring basis at May 31, 2017:

			Quoted		Significant
			Prices		Other		Significant
			in Active		Observable		Unobservable
			Markets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(level 3)
Investment:
Money market funds	$	294	$	294	$	-	$	-
Bond funds		14,613		14,613		-		-
Equity funds		12,115		12,115		-		-
Total	$	27,022	$	27,022	$	-	$	-

Fair values of the money market, bond and equity funds held by the defined benefit plan were determined by quoted market prices.

Plan assets for the defined benefit plan consisted principally of the following as of the respective measurement dates:

	May 31,			May 31,
	2018			2017
Asset category:
Equity securities		44	%		45	%
Debt securities		55	%		54	%
Other		1	%		1	%
Total		100	%		100	%

Equity securities include no employer stock.  The investment policy and strategy for the defined benefit plan is: (i) long-term in nature with liquidity requirements that are anticipated to be minimal due to the projected normal retirement date of the average employee and the current average age of participants;  (ii) to earn nominal returns, net of investment fees, equal to or in excess of the defined benefit plan’s liability growth rate; and (iii) to include a diversified asset allocation of domestic and international equities and fixed income investments.  We have already contributed $104,000 in fiscal 2019 and have five contributions planned for fiscal 2019 totaling $876,000.

The following estimated future benefits, which reflect expected future service, as appropriate, are expected to be paid under the defined benefit plan during the fiscal years noted:

(in thousands)
2019	$	1,223
2020	$	1,237
2021	$	1,275
2022	$	1,382
2023	$	1,476
2024-2028	$	9,066

Commercial law requires us to pay severance and service benefits to employees at our Austrian Pressure Cylinders location.  Severance benefits must be paid to all employees hired before December 31, 2002.  Employees hired after that date are covered under a governmental plan that requires us to pay benefits as a percentage of compensation (included in payroll tax withholdings).  Service benefits are based on a percentage of compensation and years of service.  The accrued liability for these unfunded plans was $6,561,000 and $6,149,000 at May 31, 2018 and 2017, respectively, and was included in other liabilities on the consolidated balance sheets.  Net periodic pension cost for these plans was $601,000, $554,000, and $617,000, for fiscal 2018, fiscal 2017 and fiscal 2016, respectively. The assumed salary rate increase was 2.75%, 2.75%, and 2.75% for fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  The discount rate at May 31, 2018, 2017 and 2016 was 1.80%, 1.60%, and 1.75%, respectively.  Each discount rate was based on a published corporate bond rate with a term approximating the estimated benefit payment cash flows and is consistent with European and Austrian regulations.

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Income Taxes

12 Months Ended

May 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Note L – Income Taxes

On December 22, 2017, the TCJA was enacted into federal law. The TCJA significantly revised the U.S. corporate income tax system by lowering the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018. In addition, the TCJA added several new provisions including changes to bonus depreciation, the deduction for executive compensation, a tax on global intangible low-taxed income (“GILTI”), the base erosion anti-abuse tax (“BEAT”) and a deduction for foreign-derived intangible income (“FDII”). Many of these provisions, including the tax on GILTI, the BEAT and the deduction for FDII, do not apply to the Company until June 1, 2018. The Company has elected to account for the tax on GILTI as a period cost and thus has not adjusted any of the deferred tax assets and liabilities of its foreign subsidiaries for the new tax. The two material items that impacted the Company for fiscal 2018 were the reduction in the tax rate and a one-time mandatory deemed repatriation tax imposed on the Company’s unremitted foreign earnings. Due to the Company’s fiscal year, the Company’s fiscal 2018 U.S. federal blended statutory income tax rate is 29.2%. The Company’s U.S. federal statutory income tax rate will be 21.0% starting June 1, 2018.

Consistent with applicable Securities and Exchange Commission guidance in Staff Accounting Bulletin 118 (“SAB118”), the Company has made a reasonable estimate of the one-time mandatory deemed repatriation tax required by the TCJA. As such, the Company recognized a provisional income tax expense of $6.9 million for the one-time mandatory deemed repatriation tax for fiscal 2018.  SAB118 allows companies to use a measurement period, similar to that used in business combinations, to account for the impacts of the TCJA in their consolidated financial statements.  The Company considers key estimates on the deemed repatriation tax to be incomplete due to our continuing analysis of final year-end data and the impact of expected further authoritative guidance and interpretations.  We expect to complete our analysis of the amount recorded within the measurement period of one year from the enactment of the TCJA.

Earnings before income taxes for the three fiscal years ended May 31 include the following components:

(in thousands)	2018		2017		2016
United States based operations	$	177,088	$	266,222	$	180,467
Non – United States based operations		31,982		30,905		36,148
Earnings before income taxes		209,070		297,127		216,615
Less: Net earnings attributable to noncontrolling    interests*		6,056		13,422		13,913
Earnings before income taxes attributable to    controlling interest	$	203,014	$	283,705	$	202,702

* Net earnings attributable to noncontrolling interests are not taxable to Worthington.

Significant components of income tax expense (benefit) for the fiscal years ended May 31 were as follows:

(in thousands)	2018			2017			2016
Current
Federal	$	33,261		$	50,200		$	42,837
State and local		3,292			2,954			2,157
Foreign		9,904			7,593			6,639
		46,457			60,747			51,633
Deferred
Federal		(34,442	)		18,177			7,584
State and local		388			476			934
Foreign		(4,183	)		(210	)		(1,164	)
		(38,237	)		18,443			7,354
	$	8,220		$	79,190		$	58,987

The tax benefit related to the purchase of noncontrolling interest in dHybrid Systems, LLC credited to additional paid-in capital was $539,000 for fiscal 2017.  Tax benefits (expense) related to defined benefit pension liability that were credited to (deducted from) OCI were $(309,000), $(1,158,000), and $1,175,000 for fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  Tax benefits (expenses) related to cash flow hedges that were credited to (deducted from) OCI were $(392,000), $1,700,000, and $(13,316,000) for fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

A reconciliation of the federal statutory corporate income tax rate to total tax provision follows:

	2018			2017			2016
Federal statutory corporate income tax rate		29.2	%		35.0	%		35.0	%
State and local income taxes, net of federal tax benefit		2.3			1.5			1.5
Non-U.S. income taxes at other than federal statutory rate		(1.4	)		(1.4	)		(3.0	)
Qualified production activities deduction		(2.3	)		(1.9	)		(2.2	)
Impact of tax reform (1)		(15.4	)		-			-
Worthington Aritas write down		(4.8	)		-			-
Excess benefit related to share-based payment awards		(2.0	)		(5.7	)		(1.6	)
AMTROL acquisition		(1.9	)		-			-
Other		0.3			0.4			(0.6	)
Effective tax rate attributable to controlling interest		4.0	%		27.9	%		29.1	%

(1) Amount reflects the impact of the re-measurement of the Company’s deferred tax balances at the lower federal statutory corporate income tax rate, net of the mandatory deemed repatriation tax on unremitted foreign earnings.

The above effective tax rate attributable to controlling interest excludes any impact from the inclusion of net earnings attributable to noncontrolling interests in our consolidated statements of earnings. The effective tax rates upon inclusion of net earnings attributable to noncontrolling interests were 3.9%, 26.7% and 27.2% for fiscal 2018, fiscal 2017 and fiscal 2016, respectively. Net earnings attributable to noncontrolling interests are primarily a result of our WSP, Spartan, and TWB consolidated joint ventures and Worthington Aritas through May 23, 2018, which is the date we purchased the remaining 25% ownership interest.  The earnings attributable to the noncontrolling interests in WSP, Spartan and TWB’s U.S. operations do not generate tax expense to Worthington since the investors in WSP, Spartan and TWB’s U.S. operations are taxed directly based on the earnings attributable to them. The tax expense of Worthington Aritas (a foreign corporation), and TWB’s wholly-owned foreign corporations, is reported in our consolidated tax expense.    

Under applicable accounting guidance, a tax benefit may be recognized from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position.  Any tax benefits recognized in our financial statements from such a position were measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

The total amount of unrecognized tax benefits were $2,638,000, $2,975,000, and $2,827,000 as of May 31, 2018, 2017 and 2016, respectively.  The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate attributable to controlling interest was $2,235,000 as of May 31, 2018.  Unrecognized tax benefits are the differences between a tax position taken, or expected to be taken in a tax return, and the benefit recognized for accounting purposes.  Accrued amounts of interest and penalties related to unrecognized tax benefits are recognized as part of income tax expense within our consolidated statements of earnings.  As of May 31, 2018, 2017 and 2016, we had accrued liabilities of $271,000, $307,000 and $538,000, respectively, for interest and penalties related to unrecognized tax benefits.

A tabular reconciliation of unrecognized tax benefits follows:

(In thousands)
Balance at May 31, 2017	$	2,975
Decreases - tax positions taken in prior years		(107	)
Increases - tax positions taken in prior years		81
Increases - current tax positions		12
Settlements		(184	)
Lapse of statutes of limitations		(139	)
Balance at May 31, 2018	$	2,638

Approximately $753,000 of the liability for unrecognized tax benefits is expected to be settled in the next twelve months due to the expiration of statutes of limitations in various tax jurisdictions and as a result of expected settlements with various tax jurisdictions. While it is expected that the amount of unrecognized tax benefits will change in the next twelve months, any change is not expected to have a material impact on our consolidated financial position, results of operations or cash flows.

The following is a summary of the tax years open to examination by major tax jurisdiction:

U.S. Federal –2015 and forward

U.S. State and Local –2013 and forward

Austria – 2013 and forward

Canada –2014 and forward

Mexico – 2013 and forward

Portugal – 2014 and forward

The components of our deferred tax assets and liabilities as of May 31 were as follows:

(in thousands)	2018			2017
Deferred tax assets
Accounts receivable	$	1,455		$	2,157
Inventories		5,004			6,624
Accrued expenses		23,219			30,065
Net operating loss carry forwards		14,201			13,256
Tax credit carry forwards		811			3,206
Stock-based compensation		10,588			17,668
Other		502			205
Total deferred tax assets		55,780			73,181
Valuation allowance for deferred tax assets		(14,006	)		(12,987	)
Net deferred tax assets		41,774			60,194
Deferred tax liabilities
Property, plant and equipment		(74,512	)		(42,599	)
Investment in affiliated companies, principally due to undistributed earnings		(22,918	)		(46,001	)
Derivative contracts		(2,653	)		(1,745	)
Other		(1,879	)		(4,149	)
Total deferred tax liability		(101,962	)		(94,494	)
Net deferred tax liability	$	(60,188	)	$	(34,300	)

At May 31, 2018, we had tax benefits for state net operating loss carry forwards of $9,363,000 that expire from fiscal 2019 to the fiscal year ending May 31, 2038, tax benefits for foreign net operating loss carry forwards of $4,837,000 that expire from fiscal 2019 to the fiscal year ending May 31, 2023, tax benefits for foreign investment tax credit carry forwards of $649,000, that expire in the fiscal year ending May 31, 2025, and tax benefits for foreign income tax credit carry forwards of $162,000, that expire in the fiscal year ending May 31, 2028.

The valuation allowance for deferred tax assets of $14,006,000 at May 31, 2018 is associated primarily with the net operating loss carry forwards.  The valuation allowance includes $9,537,000 for state and $4,469,000 for foreign deferred tax assets.  The majority of the state valuation allowance relates to our facility in Decatur, Alabama. The foreign valuation allowance relates to the Company’s operations in Turkey.  Based on our history of profitability, the scheduled reversal of deferred tax liabilities, and taxable income projections, we have determined that it is more likely than not that the remaining deferred tax assets are otherwise realizable.

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Earnings per Share

12 Months Ended

May 31, 2018

Earnings Per Share [Abstract]

Earnings per Share

Note M – Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the fiscal years ended May 31:

(in thousands, except per share amounts)	2018		2017		2016
Numerator (basic & diluted):
Net earnings attributable to controlling interest - income available to
common shareholders	$	194,794	$	204,515	$	143,715
Denominator:
Denominator for basic earnings per share attributable to controlling
interest - weighted average common shares		60,923		62,443		62,469
Effect of dilutive securities		2,119		2,431		2,286
Denominator for diluted earnings per share attributable to controlling
interest - adjusted weighted average common shares		63,042		64,874		64,755
Basic earnings per share attributable to controlling interest	$	3.20	$	3.28	$	2.30
Diluted earnings per share attributable to controlling interest	$	3.09	$	3.15	$	2.22

Stock options covering 188,504, 100,048, and 326,585 common shares for fiscal 2018, fiscal 2017 and fiscal 2016, respectively, have been excluded from the computation of diluted earnings per share because the effect of their inclusion would have been anti-dilutive for those periods.

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Segment Data

12 Months Ended

May 31, 2018

Segment Reporting [Abstract]

Segment Data

Note N – Segment Data

Our operations are managed principally on a products and services basis and include three reportable business segments: Steel Processing, Pressure Cylinders and Engineered Cabs, each of which is comprised of a similar group of products and services.  Factors used to identify reportable business segments include the nature of the products and services provided by each business, the management reporting structure, similarity of economic characteristics and certain quantitative measures, as prescribed by authoritative guidance.  A discussion of each of our reportable business segments is outlined below.

Effective June 1, 2017, we made certain organizational changes impacting the internal reporting and management structure of Worthington Steelpac Systems, LLC (“Packaging Solutions”).  As a result of these organizational changes, management responsibilities and internal reporting were realigned, moving Packaging Solutions from the Steel Processing operating segment to the Engineered Cabs operating segment.  Previously reported segment information has not been restated to conform to this new presentation and is immaterial for all periods presented.

Steel Processing: The Steel Processing reportable segment consists of the Worthington Steel business unit and includes three consolidated joint ventures: Spartan, TWB and WSP.  Spartan operates a cold-rolled, hot-dipped galvanizing line and TWB operates a laser welded blanking business.  WSP serves primarily as a toll processor for United States Steel Corporation and others.  Its services include slitting, blanking, cutting-to-length, laser blanking, laser welding, tension leveling and warehousing.  Worthington Steel is an intermediate processor of flat-rolled steel.  This operating segment’s processing capabilities include cold reducing, configured blanking, coil fed laser blanking, cutting-to-length, dry-lube, hot-dipped galvanizing, hydrogen annealing, laser welding, pickling, slitting, oscillate slitting, temper rolling, tension leveling, and non-metallic coating, including  acrylic and paint coating. Worthington Steel sells to customers principally in the automotive, aerospace, agricultural, appliance, construction, container, hardware, HVAC, lawn and garden, leisure and recreation, office furniture and office equipment markets. Worthington Steel also toll processes steel for steel mills, large end-users, service centers and other processors.  Toll processing is different from typical steel processing in that the mill, end-user or other party retains title to the steel and has the responsibility for selling the end product.  Steel Processing also includes the results of Packaging Solutions through May 31, 2017.  The percentage of our consolidated net sales generated by Steel Processing was approximately 63%, 69% and 65%, in fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

Pressure Cylinders: The Pressure Cylinders reportable segment consists of the Worthington Cylinders business unit and Worthington Aritas.  Worthington Aritas is a Turkish manufacturer of cryogenic pressure vessels for LNG and other gas storage applications.  During the fourth quarter of fiscal 2018, management committed to a plan to sell the Company’s cryogenics business in Turkey and the net assets of the asset group have been presented separately as assets held for sale in our consolidated balance sheets.  The percentage of our consolidated net sales generated by Pressure Cylinders was approximately 34%, 28% and 30% in fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  We acquired AMTROL on June 2, 2017, which has been included in the Pressure Cylinders reportable segment since that date, and accounted for approximately 7%of our consolidated net sales in fiscal 2018.

Pressure Cylinders manufactures and sells filled and unfilled pressure cylinders, tanks, hand torches, well water and expansion tanks, and oil and gas equipment along with various accessories and related products for diversified end-use market applications.  The following is a description of these markets:

• Industrial Products: This market sector includes high pressure and acetylene cylinders for industrial gases, refrigerant and certain propane gas cylinders, cryogenic equipment, and systems and services for handling liquid gasses, and other specialty products. Cylinders in this market sector are generally sold to gas producers, cylinder exchangers and industrial distributors. Industrial cylinders hold fuel for uses such as cutting, brazing and soldering, semiconductor production, and beverage delivery. Refrigerant gas cylinders are used to hold refrigerant gases for commercial, residential and automotive air conditioning and refrigeration systems.  LPG cylinders hold fuel for barbeque grills, recreational vehicle equipment, residential and light commercial heating systems, industrial forklifts and commercial/residential cooking (the latter, generally outside North America). Cryogenic equipment and systems include LNG systems for marine and mining applications, liquid nitrogen storage freezers and shipping containers for organic specimens in healthcare markets, and tanks, trailers, and regasification plants for liquefied nitrogen, oxygen, argon, hydrogen, and natural gas. Specialty products include a variety of fire suppression and chemical tanks.

• Consumer Products: This market sector includes propane-filled cylinders for torches, camping stoves and other applications, hand held torches and accessories such as solder and brazing rods, and Balloon Time® helium-filled balloon kits, well water tanks and expansion tanks. These products are sold primarily to mass merchandisers and distributors.

• Alternative Fuels: This market sector includes composite and steel cylinders used to hold CNG and hydrogen for automobiles, buses, and light-duty trucks, and to hold propane/autogas for automobiles and light- and medium-duty trucks, as well as CNG fuel systems for heavy duty, refuse and other trucks.

• Oil & Gas Equipment:  This market sector includes steel and fiberglass storage tanks, separation equipment, controls and other products primarily used in the energy markets, including oil and gas and nuclear. This market sector also includes hoists and other marine products which are used principally in shipyard lift systems. This market sector also leverages its manufacturing competencies to produce pressure vessels, atmospheric tanks, controls and various custom machined components for other industrial and agricultural end markets.

Engineered Cabs: The Engineered Cabs reportable segment consists of the Worthington Industries Engineered Cabs business unit, a non-captive designer and manufacturer of high-quality, custom-engineered open and enclosed cabs and operator stations and custom fabrications for heavy mobile equipment used primarily in the agricultural, construction, forestry, military and mining industries.  Engineered Cabs’ product design, engineering support and broad manufacturing capabilities enable it to produce cabs and structures used in products ranging from small utility equipment to large earthmovers.  Engineered Cabs also includes Packaging Solutions, effective June 1, 2017.  Packaging Solutions designs and manufactures reusable custom steel platforms, racks and pallets for supporting, protecting and handling products throughout the shipping process.  For fiscal 2018, fiscal 2017 and fiscal 2016, the percentage of our consolidated net sales generated by the Engineered Cabs operating segment was approximately 3%, 3%, and 4%, respectively.

Other: The Other category includes the former Worthington Energy Innovations operating segment, as it did not meet the quantitative thresholds for separate disclosure prior to disposal of a 65% stake effective March 31, 2018.  Certain income and expense items not allocated to our operating segments are also included in Other, including costs associated with our captive insurance company.  The Other category also includes the results of our former Construction Services operating segment, on a historical basis, through May 31, 2016.

The accounting policies of the reportable business segments and other operating segments are described in “Note A – Summary of Significant Accounting Policies.”  We evaluate operating segment performance based on operating income (loss). Inter-segment sales are not material.

The following table presents summarized financial information for our reportable business segments as of, and for the fiscal years ended, May 31:

(in thousands)	2018			2017			2016
Net sales
Steel Processing	$	2,252,771		$	2,074,869		$	1,843,661
Pressure Cylinders		1,206,183			829,846			844,898
Engineered Cabs		116,631			101,388			121,946
Other		6,035			8,005			9,209
Total net sales	$	3,581,620		$	3,014,108		$	2,819,714
Operating income (loss)
Steel Processing	$	152,690		$	170,481		$	112,001
Pressure Cylinders		23,396			54,098			28,375
Engineered Cabs		(11,305	)		(7,685	)		(19,331	)
Other		(23,171	)		(3,773	)		1,007
Total operating income	$	141,610		$	213,121		$	122,052
Depreciation and amortization
Steel Processing	$	43,331		$	42,861		$	38,523
Pressure Cylinders		46,691			31,052			32,403
Engineered Cabs		5,415			5,197			6,205
Other		7,922			7,683			7,568
Total depreciation and amortization	$	103,359		$	86,793		$	84,699
Impairment of goodwill and long-lived assets
Steel Processing	$	-		$	-		$	-
Pressure Cylinders		53,883			-			22,962
Engineered Cabs		-			-			3,000
Other		7,325			-			-
Total impairment of goodwill and long-lived assets	$	61,208		$	-		$	25,962
Restructuring and other expense (income), net
Steel Processing	$	(10,087	)	$	1,828		$	4,110
Pressure Cylinders		2,365			3,411			392
Engineered Cabs		(78	)		1,219			3,570
Other		379			(47	)		(895	)
Total restructuring and other expense (income), net	$	(7,421	)	$	6,411		$	7,177
Total assets
Steel Processing	$	999,238		$	882,863		$	819,853
Pressure Cylinders		1,147,268			766,611			787,786
Engineered Cabs		66,456			62,141			75,124
Other		408,825			613,729			378,501
Total assets	$	2,621,787		$	2,325,344		$	2,061,264
Capital expenditures
Steel Processing	$	31,966		$	40,775		$	42,063
Pressure Cylinders		32,697			24,798			29,916
Engineered Cabs		2,067			755			6,945
Other		9,358			2,058			18,112
Total capital expenditures	$	76,088		$	68,386		$	97,036

The following table presents net sales by geographic region for the fiscal years ended May 31:

(in thousands)	2018		2017		2016
North America	$	3,275,090	$	2,805,182	$	2,662,196
International		306,530		208,926		157,518
Total	$	3,581,620	$	3,014,108	$	2,819,714

The following table presents property, plant and equipment, net, by geographic region as of May 31:

(in thousands)	2018		2017
North America	$	512,439	$	501,776
International		72,531		68,713
Total	$	584,970	$	570,489

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Acquisitions

12 Months Ended

May 31, 2018

Business Combinations [Abstract]

Acquisitions

Note O – Acquisitions

AMTROL

On June 2, 2017, the Company acquired AMTROL, a leading manufacturer of pressure cylinders and water system tanks with operations in the U.S. and Europe.  The total purchase price was $291,921,000 after adjusting for excess working capital and was funded primarily with cash on hand.  The net assets became part of the Pressure Cylinders operating segment at closing, with the well water and expansion tank operations aligning under the consumer products business and the refrigerant, liquid propane and industrial and specialty gas operations aligning under the industrial products business.  Total acquisition-related expenses were $3,568,000, of which $1,568,000 were incurred during fiscal 2018.

The assets acquired and liabilities assumed were recognized at their acquisition-date fair values, with goodwill representing the excess of the purchase price over the fair value of the net identifiable assets acquired.  In connection with the acquisition, we identified and valued the following identifiable intangible assets:

(in thousands)			Useful Life
Category	Amount		(Years)
Customer relationships	$	90,800	14-17
Trade names		62,200	Indefinite
Technology		13,000	15-16
Total acquired identifiable intangible assets	$	166,000

The purchase price includes the fair values of other assets that were not identifiable, not separately recognizable under accounting rules (e.g. assembled workforce) or of immaterial value.  The purchase price also includes a going-concern element that represents our ability to earn a higher rate of return on this group of assets than would be expected on the separate assets as determined during the valuation process.  This additional investment value resulted in goodwill, which is not expected to be deductible for income tax purposes.

The following table summarized the consideration transferred for the assets of AMTROL and the fair value assigned to the assets acquired and liabilities assumed at the acquisition date:

			Measurement
	Preliminary		Period			Revised
(in thousands)	Valuation		Adjustments			Valuation
Cash	$	6,893	$	-		$	6,893
Accounts receivable		40,212		-			40,212
Inventories		37,249		-			37,249
Prepaid expenses		981		-			981
Other assets		2,550		-			2,550
Intangible assets		166,000		-			166,000
Property, plant and equipment		52,870		-			52,870
Total assets		306,755		-			306,755
Accounts payable		25,945		-			25,945
Accrued liabilities		21,016		-			21,016
Long-term debt including current maturities		2,287		-			2,287
Other accrued items		3,993		1,501			5,494
Deferred income taxes, net		64,495		(966	)		63,529
Net identifiable assets		189,019		(535	)		188,484
Goodwill		102,902		535			103,437
Purchase price	$	291,921	$	-		$	291,921

Operating results of AMTROL have been included in the Company’s consolidated statements of earnings since the date of the acquisition.  During the fiscal year ended May 31, 2018, AMTROL contributed net sales of $265,198,000 and operating income of $18,899,000.  

The following unaudited pro forma information presents consolidated financial information as if AMTROL had been acquired at the beginning of fiscal 2017.  Depreciation and amortization expense included in the pro forma results reflect the acquisition-date fair values assigned to the definite-lived intangible assets and fixed assets of AMTROL assuming a June 1, 2016 acquisition date.  Adjustment has also been made for the acquisition-related costs incurred in each period presented.  Pro forma results for the fiscal year ended May 31, 2018 have also been adjusted to remove the impact of the acquisition-date fair value adjustments to inventories and accrued severance costs related to headcount reductions at AMTROL initiated during the first quarter of fiscal 2018, as discussed in “Note D – Restructuring and Other Expense (Income), Net.”  The pro forma adjustments noted above have been adjusted for the applicable income tax impact.  The pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place as of June 1, 2016

(in thousands, except per share amounts)	2018		2017
Net sales	$	3,581,620	$	3,263,315
Net earnings attributable to controlling interest	$	199,038	$	215,182
Diluted earnings per share attributable to controlling interest	$	3.16	$	3.32

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Derivative Instruments and Hedging Activities

12 Months Ended

May 31, 2018

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Note P – Derivative Instruments and Hedging Activities

We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations. The primary risks managed through the use of derivative instruments include interest rate risk, foreign currency exchange risk and commodity price risk. While certain of our derivative instruments are designated as hedging instruments, we also enter into derivative instruments that are designed to hedge a risk, but are not designated as hedging instruments and therefore do not qualify for hedge accounting. These derivative instruments are adjusted to current fair value through earnings at the end of each period.

Interest Rate Risk Management – We are exposed to the impact of interest rate changes. Our objective is to manage the impact of interest rate changes on cash flows and the market value of our borrowings. We utilize a mix of debt maturities along with both fixed-rate and variable-rate debt to manage changes in interest rates. In addition, we enter into interest rate swaps to further manage our exposure to interest rate variations related to our borrowings and to lower our overall borrowing costs.

Foreign Currency Exchange Risk Management – We conduct business in several major international currencies and are therefore subject to risks associated with changing foreign currency exchange rates. We enter into various contracts that change in value as foreign currency exchange rates change to manage this exposure. Such contracts limit exposure to both favorable and unfavorable currency exchange rate fluctuations. The translation of foreign currencies into United States dollars also subjects us to exposure related to fluctuating currency exchange rates; however, derivative instruments are not used to manage this risk.

Commodity Price Risk Management – We are exposed to changes in the price of certain commodities, including steel, natural gas, zinc and other raw materials, and our utility requirements. Our objective is to reduce earnings and cash flow volatility associated with forecasted purchases and sales of these commodities to allow management to focus its attention on business operations. Accordingly, we enter into derivative contracts to manage the associated price risk.

We are exposed to counterparty credit risk on all of our derivative instruments. Accordingly, we have established and maintain strict counterparty credit guidelines. We have credit support agreements in place with certain counterparties to limit our credit exposure.  These agreements require either party to post cash collateral if its cumulative market position exceeds a predefined liability threshold.  Amounts posted to the margin accounts accrue interest at market rates and are required to be refunded in the period in which the cumulative market position falls below the required threshold.  We do not have significant exposure to any one counterparty and management believes the risk of loss is remote and, in any event, would not be material.

Refer to "Note Q – Fair Value Measurements" for additional information regarding the accounting treatment for our derivative instruments, as well as how fair value is determined.

The following table summarizes the fair value of our derivative instruments and the respective line in which they were recorded in the consolidated balance sheet at May 31, 2018:

	Asset Derivatives			Liability Derivatives
	Balance			Balance
	Sheet	Fair		Sheet	Fair
(in thousands)	Location	Value		Location	Value
Derivatives designated as hedging
instruments:
Commodity contracts	Receivables	$	6,385	Accounts payable	$	-
	Other assets		68	Other liabilities		-
Totals		$	6,453		$	-
Derivatives not designated as hedging
instruments:
Commodity contracts	Receivables	$	4,749	Accounts payable	$	613
	Other assets		221	Other liabilities		158
			4,970			771
Foreign exchange contracts	Receivables		-	Accounts payable		75
Totals		$	4,970		$	846
Total derivative instruments		$	11,423		$	846

The amounts in the table above reflect the fair value of the Company’s derivative contracts on a net basis. Had these amounts been recognized on a gross basis, the impact would have been a $351,000 increase in receivables with a corresponding increase in accounts payable.

The following table summarizes the fair value of our derivative instruments and the respective line in which they were recorded in the consolidated balance sheet at May 31, 2017:

	Asset Derivatives			Liability Derivatives
	Balance			Balance
	Sheet	Fair		Sheet	Fair
(in thousands)	Location	Value		Location	Value
Derivatives designated as hedging
instruments:
Commodity contracts	Receivables	$	7,148	Accounts payable	$	111
	Other assets		6	Other liabilities		159
			7,154			270
Interest rate contracts	Receivables		-	Accounts payable		141
	Other assets		-	Other liabilities		160
			-			301
Totals		$	7,154		$	571
Derivatives not designated as hedging
instruments:
Commodity contracts	Receivables	$	1,110	Accounts payable	$	570
	Other assets		-	Other liabilities		1
			1,110			571
Foreign exchange contracts	Receivables		62	Accounts payable		-
Totals		$	1,172		$	571
Total derivative instruments		$	8,326		$	1,142

The amounts in the table above reflect the fair value of the Company’s derivative contracts on a net basis. Had these amounts been recognized on a gross basis, the impact would have been a $100,000 increase in receivables with a corresponding increase in accounts payable.

Cash Flow Hedges

We enter into derivative instruments to hedge our exposure to changes in cash flows attributable to interest rate and commodity price fluctuations associated with certain forecasted transactions.  These derivative instruments are designated and qualify as cash flow hedges.  Accordingly, the effective portion of the gain or loss on the derivative instrument is reported as a component of OCI and reclassified into earnings in the same line associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings.  The ineffective portion of the gain or loss on the derivative instrument is recognized in earnings immediately.

The following table summarizes our cash flow hedges outstanding at May 31, 2018:

	Notional
(in thousands)	Amount		Maturity Date
Commodity contracts	$	15,276	June 2018 - June 2019

The following table summarizes the gain recognized in OCI and the gain (loss) reclassified from AOCI into earnings for derivative instruments designated as cash flow hedges during fiscal 2018 and fiscal 2017:

							Location of
			Location of				Gain	Gain
			Gain (Loss)	Gain (Loss)			(Ineffective	(Ineffective
	Gain		Reclassified	Reclassified			Portion)	Portion)
	Recognized		from	from			Excluded	Excluded
	in OCI		AOCI	AOCI			from	from
	(Effective		(Effective	(Effective			Effectiveness	Effectiveness
(in thousands)	Portion)		Portion)	Portion)			Testing	Testing
For the fiscal year ended
May 31, 2018:
Interest rate contracts	$	3,363	Interest expense	$	(407	)	Interest expense	$	-
Commodity contracts		11,620	Cost of goods sold		14,034		Cost of goods sold		-
Totals	$	14,983		$	13,627			$	-
For the fiscal year ended
May 31, 2017:
Interest rate contracts	$	26	Interest expense	$	(211	)	Interest expense	$	-
Commodity contracts		7,643	Cost of goods sold		12,402		Cost of goods sold		-
Totals	$	7,669		$	12,191			$	-

The estimated net amount of the gains in AOCI at May 31, 2018 expected to be reclassified into net earnings within the succeeding twelve months is $5,775,000 (net of tax of $1,751,000).  This amount was computed using the fair value of the cash flow hedges at May 31, 2018, and will change before actual reclassification from other comprehensive income to net earnings during fiscal 2019.

Economic (Non-designated) Hedges

We enter into foreign exchange contracts to manage our foreign exchange exposure related to inter-company and financing transactions that do not meet the requirements for hedge accounting treatment.  We also enter into certain commodity contracts that do not qualify for hedge accounting treatment.  Accordingly, these derivative instruments are adjusted to current market value at the end of each period through earnings.

The following table summarizes our economic (non-designated) derivative instruments outstanding at May 31, 2018:

	Notional
(in thousands)	Amount		Maturity Date(s)
Commodity contracts	$	31,814	June 2018 - December 2019
Foreign exchange contracts		10,448	June 2018 - August 2018

The following table summarizes the gain (loss) recognized in earnings for economic (non-designated) derivative financial instruments during fiscal 2018 and fiscal 2017:

		Gain (Loss)
		Recognized in Earnings
		Fiscal Year Ended
	Location of Gain (Loss)	May 31,
(in thousands)	Recognized in Earnings	2018			2017
Commodity contracts	Cost of goods sold	$	6,284		$	3,749
Foreign exchange contracts	Miscellaneous income, net		(264	)		(553	)
Total		$	6,020		$	3,196

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Fair Value Measurements

12 Months Ended

May 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note Q – Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Fair value is an exit price concept that assumes an orderly transaction between willing market participants and is required to be based on assumptions that market participants would use in pricing an asset or a liability.  Current accounting guidance establishes a three-tier fair value hierarchy as a basis for considering such assumptions and for classifying the inputs used in the valuation methodologies.  This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs.  The three levels of inputs used to measure fair values are as follows:

Level 1	–	Observable prices in active markets for identical assets and liabilities.
Level 2	–	Inputs other than quoted prices included within Level 1 that are observable for the assets and liabilities, either directly or indirectly.
Level 3	–	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities.

Recurring Fair Value Measurements

At May 31, 2018, our financial assets and liabilities measured at fair value on a recurring basis were as follows:

			Significant
	Quoted Prices		Other		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Totals
Assets
Derivative contracts (1)	$	-	$	11,423	$	-	$	11,423
Total Assets	$	-	$	11,423	$	-	$	11,423
Liabilities
Derivative contracts (1)	$	-	$	846	$	-	$	846
Total liabilities	$	-	$	846	$	-	$	846

At May 31, 2017, our financial assets and liabilities measured at fair value on a recurring basis were as follows:

			Significant
	Quoted Prices		Other		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Totals
Assets
Derivative contracts (1)	$	-	$	8,326	$	-	$	8,326
Total assets	$	-	$	8,326	$	-	$	8,326
Liabilities
Derivative contracts (1)	$	-	$	1,142	$	-	$	1,142
Contingent consideration obligation (2)		-		-		585		585
Total liabilities	$	-	$	1,142	$	585	$	1,727

(1) The fair value of our derivative contracts was based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities.  Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows.  Refer to “Note P – Derivative Instruments and Hedging Activities” for additional information regarding our use of derivative instruments.

(2) The fair value of the contingent consideration obligation was determined using a probability weighted cash flow approach based on management’s projections of future cash flows of the acquired business.  The fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 measurements.

Non-Recurring Fair Value Measurements

At May 31, 2018, our assets measured at fair value on a non-recurring basis were categorized as follows:

			Significant
	Quoted Prices		Other		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Totals
Assets
Long-lived assets held for sale (1)	$	-	$	30,000	$	-	$	30,000
Total assets	$	-	$	30,000	$	-	$	30,000

(1) During the fourth quarter of fiscal 2018, management committed to a plan to sell the Company’s cryogenics business in Turkey, Worthington Aritas, and certain underperforming oil & gas equipment assets within Pressure Cylinders.  In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell.  The book value of Worthington Aritas exceeded its estimated fair market value of $9,000,000, resulting in an impairment charge of $42,422,000.  The book value of the oil & gas equipment asset group also exceeded its estimated fair market value of $21,000,000, resulting in an impairment charge of $10,497,000.

At May 31, 2017, there were no assets or liabilities measured at fair value on a non-recurring basis on the Company’s consolidated balance sheet.

The non-derivative financial instruments included in the carrying amounts of cash and cash equivalents, receivables, income taxes receivable, other assets, deferred income taxes, accounts payable, short-term borrowings, accrued compensation, contributions to employee benefit plans and related taxes, other accrued expenses, income taxes payable and other liabilities approximate fair value due to their short-term nature.  The fair value of long-term debt, including current maturities, based upon models utilizing primarily market observable (Level 2) inputs and credit risk, was $757,069,000 and $618,059,000 at May 31, 2018 and 2017, respectively.  The carrying amount of long-term debt, including current maturities, was $750,368,000 and $578,487,000 at May 31, 2018 and 2017, respectively.

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Operating Leases

12 Months Ended

May 31, 2018

Leases [Abstract]

Operating Leases

Note R – Operating Leases

We lease certain property and equipment from third parties under non-cancelable operating lease agreements.  Rent expense under operating leases was $16,277,000, $13,519,000 and $14,683,000 in fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  Future minimum lease payments for non-cancelable operating leases having an initial or remaining term in excess of one year at May 31, 2018, were as follows:

(in thousands)
2019	$	11,348
2020		8,839
2021		6,774
2022		5,825
2023		5,097
Thereafter		5,508
Total	$	43,391

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Related Party Transactions

12 Months Ended

May 31, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Note S – Related Party Transactions

We purchase from, and sell to, affiliated companies certain raw materials and services at prevailing market prices.  Net sales to affiliated companies for fiscal 2018, fiscal 2017 and fiscal 2016 totaled $57,382,000, $56,588,000, and $32,496,000, respectively.  Purchases from affiliated companies for fiscal 2018, fiscal 2017 and fiscal 2016 totaled $7,292,000, $7,145,000, and $15,737,000, respectively.  Accounts receivable from affiliated companies were $2,479,000 and $4,616,000 at May 31, 2018 and 2017, respectively.  Accounts payable to affiliated companies were $76,000 at May 31, 2017.

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Quarterly Results of Operations (Unaudited)

12 Months Ended

May 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Quarterly Results of Operations (Unaudited)

Note T – Quarterly Results of Operations (Unaudited)

The following table summarizes the unaudited quarterly consolidated results of operations for fiscal 2018 and fiscal 2017:

(in thousands, except per share)	Three Months Ended
Fiscal 2018	August 31		November 30		February 28		May 31
Net sales	$	848,237	$	871,266	$	841,657	$	1,020,460
Gross margin		132,778		140,079		127,055		162,946
Impairment of goodwill and long-lived assets (1)				8,289		-		52,919
Net earnings		48,074		41,622		78,297		32,857
Net earnings attributable to controlling interest		45,534		39,403		79,087		30,770
Basic earnings per share - controlling interest	$	0.73	$	0.64	$	1.31	$	0.52
Diluted earnings per share - controlling interest	$	0.70	$	0.62	$	1.27	$	0.50
Fiscal 2017	August 31		November 30		February 28		May 31
Net sales	$	737,549	$	727,780	$	703,436	$	845,343
Gross margin		147,282		122,803		110,990		154,830
Net earnings		68,536		49,867		38,951		60,583
Net earnings attributable to controlling interest		65,567		46,565		35,889		56,494
Basic earnings per share - controlling interest	$	1.06	$	0.75	$	0.57	$	0.90
Diluted earnings per share - controlling interest	$	1.02	$	0.72	$	0.55	$	0.87

(1) For additional information regarding the Company’s impairment activity, refer to “Note C – Goodwill and Other Long-Lived Assets.”

The sum of the quarterly earnings per share data presented in the table may not equal the annual results due to rounding and the impact of dilutive securities on the annual versus the quarterly earnings per share calculations.

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Schedule II - Valuation and Qualifying Accounts

12 Months Ended

May 31, 2018

Valuation And Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

WORTHINGTON INDUSTRIES, INC. AND SUBSIDIARIES

SCHEDULE II – VALUATION AND QUALIFYING ACCOUNTS

COL. A.	COL. B.	COL. C.		COL. D.	COL. E.
Description	Balance at Beginning of Period	Additions		Deductions – Describe  (B)	Balance at End of Period
		Charged to Costs and Expenses	Charged to Other Accounts – Describe  (A)

Year Ended May 31, 2018:
Deducted from asset accounts: Allowance for    possible losses on trade accounts receivable	$	3,444,000	$	11,000	$	-	$	2,823,000	$	632,000
Year Ended May 31, 2017:
Deducted from asset accounts: Allowance for    possible losses on trade accounts receivable	$	4,579,000	$	269,000	$	-	$	1,404,000	$	3,444,000
Year Ended May 31, 2016:
Deducted from asset accounts: Allowance for    possible losses on trade accounts receivable	$	3,085,000	$	1,556,000	$	394,000	$	456,000	$	4,579,000

Note A – Miscellaneous amounts.

Note B – Uncollectable accounts charged to the allowance.  For fiscal 2018, the balance also includes $1,215,000 related to Worthington Aritas that was reclassified to assets held for sale.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

May 31, 2018

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Consolidation

Consolidation:  The consolidated financial statements include the accounts of Worthington Industries, Inc. and consolidated subsidiaries (collectively, “we,” “our,” “Worthington,” or the “Company”).  Investments in unconsolidated affiliates are accounted for using the equity method.  Significant intercompany accounts and transactions are eliminated.

The Company owns controlling interests in the following three joint ventures: Spartan Steel Coating, LLC (“Spartan”) (52%), TWB Company, L.L.C. (“TWB”) (55%), and Worthington Specialty Processing (“WSP”) (51%).  These joint ventures are consolidated with the equity owned by the other joint venture members shown as noncontrolling interests in our consolidated balance sheets, and their portions of net earnings and other comprehensive income (loss) (“OCI”) shown as net earnings or comprehensive income attributable to noncontrolling interests in our consolidated statements of earnings and comprehensive income, respectively. On January 1, 2017, the Company acquired the minority membership interest in dHybrid Systems, LLC (“dHybrid”) from the noncontrolling member in a non-cash transaction.  The difference between the fair value of the noncontrolling interest and its carrying value was recorded as a reduction to additional paid-in capital in the amount of $935,000 (net of tax of $539,000).  Effective March 31, 2018, the Company sold its controlling stake in Worthington Energy Innovations, LLC (“WEI”) to the minority member.  There was no impact to net earnings as a result of the transaction as the fair value of the consideration received approximated the net book value of WEI.  On May 23, 2018, the Company acquired the minority ownership interest in Turkey-based Worthington Arıtaş Basınçlı Kaplar Sanayi (“Worthington Aritas”) from the noncontrolling members in a non-cash transaction. The difference between the fair value of the noncontrolling interest and its carrying value was recorded as an increase to additional paid-in-capital in the amount of $924,000.  

Use of Estimates

Use of Estimates:  The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes.  Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents:  We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Inventories

Inventories:  Inventories are valued at the lower cost or net realizable value.  Cost is determined using the first-in, first-out method for all inventories.  The assessment of net realizable value requires the use of significant estimates to determine cost to complete, normal profit margin and the ultimate selling price of the inventory.  We believe our inventories were valued appropriately as of May 31, 2018 and 2017.

Derivative Financial Instruments

Derivative Financial Instruments:We utilize derivative financial instruments to manage exposure to certain risks related to our ongoing operations.  The primary risks managed through the use of derivative instruments include interest rate risk, currency exchange risk and commodity price risk.  All derivative instruments are accounted for using mark-to-market accounting.  The accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, if so, the reason for holding it.  Gains and losses on fair value hedges are recognized in current period earnings in the same line as the underlying hedged item.  The effective portion of gains and losses on cash flow hedges is deferred as a component of accumulated other comprehensive income or loss (“AOCI”) and recognized in earnings at the time the hedged item affects earnings, in the same financial statement caption as the underlying hedged item.  Ineffectiveness of the hedges during the fiscal year ended May 31, 2018 (“fiscal 2018”), the fiscal year ended May 31, 2017 (“fiscal 2017”) and the fiscal year ended May 31, 2016 (“fiscal 2016”) was immaterial. Classification in the consolidated statements of earnings of gains and losses related to derivative instruments that do not qualify for hedge accounting is determined based on the underlying intent of the instruments.  Cash flows related to derivative instruments are generally classified as operating activities in our consolidated statements of cash flows.

In order for hedging relationships to qualify for hedge accounting under current accounting guidance, we formally document each hedging relationship and its risk management objective.  This documentation includes the hedge strategy, the hedging instrument, the hedged item, the nature of the risk being hedged, how hedge effectiveness will be assessed prospectively and retrospectively as well as a description of the method used to measure hedge ineffectiveness.

Derivative instruments are executed only with highly-rated counterparties.  No credit loss is anticipated on existing instruments, and no material credit losses have been experienced to date.  We monitor our positions, as well as the credit ratings of counterparties to those positions.

We discontinue hedge accounting when it is determined that the derivative instrument is no longer effective in offsetting the hedged risk, expires or is sold, is terminated or is no longer designated as a hedging instrument because it is unlikely that a forecasted transaction will occur or we determine that designation of the hedging instrument is no longer appropriate.  In all situations in which hedge accounting is discontinued and the derivative instrument is retained, we continue to carry the derivative instrument at its fair value on the consolidated balance sheet and recognize any subsequent changes in its fair value in net earnings immediately.  When it is probable that a forecasted transaction will not occur, we discontinue hedge accounting and immediately recognize the gains and losses that were accumulated in AOCI.

Refer to “Note P – Derivative Instruments and Hedging Activities” for additional information regarding the consolidated balance sheet location and the risk classification of our derivative instruments.

Risks and Uncertainties

Risks and Uncertainties:  As of May 31, 2018, excluding our joint ventures, we operated 36 manufacturing facilities worldwide, principally in three operating segments, which correspond with our reportable business segments: Steel Processing, Pressure Cylinders, and Engineered Cabs.  We also held equity positions in 9 joint ventures, which operated 49 manufacturing facilities worldwide, as of May 31, 2018.  Our largest end market is the automotive industry, which comprised 37%, 43%, and 42% of consolidated net sales in fiscal 2018, fiscal 2017, and fiscal 2016, respectively.  Our international operations represented 9%, 7%, and 6% of consolidated net sales and 6%, 4%, and 8% of net earnings attributable to controlling interest in fiscal 2018, fiscal 2017, and fiscal 2016, respectively, and 14% and 11% of consolidated net assets as of May 31, 2018 and May 31, 2017, respectively.  As of May 31, 2018, approximately 9% of our consolidated labor force was represented by collective bargaining agreements.  The concentration of credit risks from financial instruments related to the markets we serve is not expected to have a material adverse effect on our consolidated financial position, cash flows or future results of operations.

In fiscal 2018, our largest customer accounted for approximately 8% of our consolidated net sales, and our ten largest customers accounted for approximately 30% of our consolidated net sales.  A significant loss of, or decrease in, business from any of these customers could have an adverse effect on our consolidated net sales and financial results if we were not able to obtain replacement business.  Also, due to consolidation within the industries we serve, including the construction, automotive and retail industries, our sales may be increasingly sensitive to deterioration in the financial condition of, or other adverse developments with respect to, one or more of our largest customers.

Our principal raw material is flat-rolled steel, which we purchase from multiple primary steel producers.  The steel industry as a whole has been cyclical, and at times availability and pricing can be volatile due to a number of factors beyond our control.  This volatility can significantly affect our steel costs.  In an environment of increasing prices for steel and other raw materials, in general, competitive conditions may impact how much of the price increases we can pass on to our customers.  To the extent we are unable to pass on future price increases in our raw materials to our customers, our financial results could be adversely affected.  Also, if steel prices decrease, in general, competitive conditions may impact how quickly we must reduce our prices to our customers, and we could be forced to use higher-priced raw materials to complete orders for which the selling prices have decreased.  Declining steel prices could also require us to write-down the value of our inventories to reflect current market pricing.  Further, the number of suppliers has decreased in recent years due to industry consolidation and the financial difficulties of certain suppliers, and consolidation may continue.  Accordingly, if delivery from a major steel supplier is disrupted, it may be more difficult to obtain an alternative supply than in the past.

Receivables

Receivables:  We review our receivables on an ongoing basis to ensure that they are properly valued and collectible.  This is accomplished through two contra-receivable accounts: returns and allowances and allowance for doubtful accounts.  Returns and allowances are used to record estimates of returns or other allowances resulting from quality, delivery, discounts or other issues affecting the value of receivables.  This account is estimated based on historical trends and current market conditions, with the offset to net sales.  The returns and allowances account decreased approximately $538,000 during fiscal 2018 to $6,199,000.  

The allowance for doubtful accounts is used to record the estimated risk of loss related to the customers’ inability to pay.  This allowance is maintained at a level that we consider appropriate based on factors that affect collectability, such as the financial health of our customers, historical trends of charge-offs and recoveries and current economic and market conditions.  As we monitor our receivables, we identify customers that may have payment problems, and we adjust the allowance accordingly, with the offset to selling, general and administrative (“SG&A”) expense.  Account balances are charged off against the allowance when recovery is considered remote.  The allowance for doubtful accounts decreased approximately $2,812,000 during fiscal 2018 to $632,000.

While we believe our allowance for doubtful accounts is adequate, changes in economic conditions, the financial health of customers and bankruptcy settlements could impact our future earnings.  If the economic environment and market conditions deteriorate, particularly in the automotive and construction end markets where our exposure is greatest, additional reserves may be required.

Property and Depreciation

Property and Depreciation:  Property, plant and equipment are carried at cost and depreciated using the straight-line method.  Buildings and improvements are depreciated over 10 to 40 years and machinery and equipment over 3 to 20 years.  Depreciation expense was $83,680,000, $73,268,000 and $68,886,000 during fiscal 2018, fiscal 2017 and fiscal 2016, respectively.  Accelerated depreciation methods are used for income tax purposes.

Goodwill and Other Long-Lived Assets

Goodwill and Other Long-Lived Assets: We use the purchase method of accounting for all business combinations and recognize amortizable and indefinite-lived intangible assets separately from goodwill.  The acquired assets and assumed liabilities in an acquisition are measured and recognized based on their estimated fair values at the date of acquisition, with goodwill representing the excess of the purchase price over the fair value of the identifiable net assets.  A bargain purchase may occur, wherein the fair value of identifiable net assets exceeds the purchase price, and a gain is then recognized in the amount of that excess. Goodwill and intangible assets with indefinite lives are not amortized, but instead are tested for impairment annually, during the fourth quarter, or more frequently if events or changes in circumstances indicate that impairment may be present.  Application of goodwill impairment testing involves judgment, including but not limited to, the identification of reporting units and estimation of the fair value of each reporting unit.  A reporting unit is defined as an operating segment or one level below an operating segment.  With the exception of Pressure Cylinders, we test goodwill at the operating segment level as we have determined that the characteristics of the reporting units within each operating segment are similar and allow for their aggregation in accordance with the applicable accounting guidance.  For our Pressure Cylinders operating segment, the oil & gas equipment business has been treated as a separate reporting unit since the second quarter of fiscal 2016.

For goodwill and indefinite-lived intangible assets, we test for impairment by completing what is referred to as the “Step 0” analysis which involves evaluating qualitative factors including macroeconomic conditions, industry and market considerations, cost factors, and overall financial performance. If our “Step 0” analysis indicates it is more likely than not that the fair value is less than the carrying amount, we would perform a quantitative impairment test. The quantitative analysis compares the fair value of each reporting unit or indefinite-lived intangible asset to the respective carrying amount, and an impairment loss is recognized in our consolidated statements of earnings equivalent to the excess of the carrying amount over the fair value. Fair value is determined based on discounted cash flows or appraised values, as appropriate.

We review the carrying value of our long-lived assets, including intangible assets with finite useful lives, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable.  Impairment testing involves a comparison of the sum of the undiscounted future cash flows of the asset or asset group to its respective carrying amount.  If the sum of the undiscounted future cash flows exceeds the carrying amount, then no impairment exists.  If the carrying amount exceeds the sum of the undiscounted future cash flows, then a second step is performed to determine the amount of impairment, if any, to be recognized.  The impairment loss recognized is equal to the amount that the carrying value of the asset or asset group exceeds its fair value.  Long-lived assets held for sale are reported at the lower of cost or fair value less costs to sell and are recorded in a single line in the consolidated balance sheets. We classify assets as held for sale if we commit to a plan to sell the assets within one year and actively market the assets in their current condition for a price that is reasonable in comparison to their estimated fair value.

Our impairment testing for both goodwill and other long-lived assets, including intangible assets with finite useful lives, is largely based on cash flow models that require significant judgment and require assumptions about future volume trends, revenue and expense growth rates; and, in addition, external factors such as changes in economic trends and cost of capital.  Significant changes in any of these assumptions could impact the outcomes of the tests performed. See “Note C – Goodwill and Other Long-Lived Assets” for additional details regarding these assets and related impairment testing.

Leases

Leases:  Certain lease agreements contain fluctuating or escalating payments and rent holiday periods.  The related rent expense is recorded on a straight-line basis over the lease term.  Leasehold improvements made by the lessee, whether funded by the lessee or by landlord allowances or incentives, are recorded as leasehold improvement assets and will be amortized over the shorter of the economic life or the lease term.  These incentives are recorded as deferred rent and amortized as reductions in rent expense over the lease term.

Stock-Based Compensation

Stock-Based Compensation:  At May 31, 2018, we had stock-based compensation plans for our employees as well as our non-employee directors as described more fully in “Note J – Stock-Based Compensation.”  All share-based awards, including grants of stock options and restricted common shares, are recorded as expense in the consolidated statements of earnings based on their grant-date fair values.  We estimate forfeitures at the date of grant based on historic experience.

Revenue Recognition

Revenue Recognition:  We recognize revenue upon transfer of title and risk of loss, or in the case of toll processing revenue, upon delivery of the goods, provided evidence of an arrangement exists, pricing is fixed and determinable and the ability to collect is probable.  We provide, through charges to net sales, for returns and allowances based on experience and current customer activities.  We also provide, through charges to net sales, for customer rebates and sales discounts based on specific agreements and recent and anticipated levels of customer activity.  In circumstances where the collection of payment is not probable at the time of shipment, we defer recognition of revenue until payment is collected.

Advertising Expense

Advertising Expense:  Advertising costs are expensed as incurred and included in SG&A expense.  Advertising expense was $15,236,000, $14,822,000, and $13,970,000 for fiscal 2018, fiscal 2017 and fiscal 2016, respectively.

Shipping and Handling Fees and Costs

Shipping and Handling Fees and Costs:  Shipping and handling fees billed to customers are included in net sales.  Shipping and handling costs incurred are included in cost of goods sold.

Environmental Costs

Environmental Costs:  Environmental costs are capitalized if the costs extend the life of the property, increase its capacity, and/or mitigate or prevent contamination from future operations.  Costs related to environmental contamination treatment and cleanup are charged to expense as incurred.

Income Taxes

Income Taxes:  We account for income taxes using the asset and liability method.  The asset and liability method requires the recognition of deferred tax assets and liabilities for expected future tax consequences of temporary differences that currently exist between the tax basis and the financial reporting basis of our assets and liabilities.  In assessing the realizability of deferred tax assets, we consider whether it is more likely than not that all, or a portion, of the deferred tax assets will not be realized.  We provide a valuation allowance for deferred income tax assets when it is more likely than not that a portion of such deferred income tax assets will not be realized.

Tax benefits from uncertain tax positions that are recognized in the consolidated financial statements are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement.

We have reserves for income taxes and associated interest and penalties that may become payable in future years as a result of audits by taxing authorities.  It is our policy to record these in income tax expense.  While we believe the positions taken on previously filed tax returns are appropriate, we have established the tax and interest reserves in recognition that various taxing authorities may challenge our positions.  These reserves are analyzed periodically, and adjustments are made as events occur to warrant adjustment to the reserves, such as lapsing of applicable statutes of limitations, conclusion of tax audits, additional exposure based on current calculations, identification of new issues and release of administrative guidance or court decisions affecting a particular tax issue.

Self-Insurance Reserves

Self-Insurance Reserves:  We are largely self-insured with respect to workers’ compensation, general and automobile liability, property damage, employee medical claims and other potential losses.  In order to reduce risk and better manage our overall loss exposure, we purchase stop-loss insurance that covers individual claims in excess of the deductible amounts.  We maintain reserves for the estimated cost to settle open claims, which includes estimates of legal costs expected to be incurred, as well as an estimate of the cost of claims that have been incurred but not reported.  These estimates are based on actuarial valuations that take into consideration the historical average claim volume, the average cost for settled claims, current trends in claim costs, changes in our business and workforce, general economic factors and other assumptions believed to be reasonable under the circumstances.  The estimated reserves for these liabilities could be affected if future occurrences and claims differ from the assumptions used and historical trends.

Recently Adopted and Issued Accounting Standards

Recently Adopted Accounting Standards:

In July 2015, amended accounting guidance was issued regarding the measurement of inventory.  The amended guidance requires that inventory accounted for under the first-in, first-out (FIFO) or average cost methods be measured at the lower of cost and net realizable value, where net realizable value represents the estimated selling price of inventory in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.  The amended guidance has no impact on inventory accounted for under the last-in, first-out (LIFO) or retail inventory methods.  The Company adopted this amended guidance on a prospective basis effective June 1, 2017.  The adoption of this guidance did not impact our consolidated financial position or results of operations.

In August 2016, amended accounting guidance was issued to clarify the proper cash flow presentation of certain specific types of cash payments and cash receipts.  The Company early adopted this amended guidance on a prospective basis effective June 1, 2017.  The adoption of this guidance did not impact our consolidated statements of cash flows or ongoing financial reporting.

In January 2017, amended accounting guidance was issued to clarify the definition of a business to provide additional guidance to assist in evaluating whether transactions should be accounted for as an acquisition (or disposal) of either an asset or a business.  The Company early adopted this amended guidance on a prospective basis effective September 1, 2017.  The adoption of this guidance did not impact our consolidated financial position or results of operations.

In January 2017, amended accounting guidance was issued to simplify the goodwill impairment calculation, by removing Step 2 of the goodwill impairment test.  Goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of the goodwill.  The Company early adopted this amended guidance on a prospective basis effective September 1, 2017.  The adoption of this guidance did not impact our consolidated financial position or results of operations.

In February 2018, amended guidance was issued that would allow a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act (“TCJA”) signed into law in December 2017.  The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  It is to be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate in the TCJA is recognized.  The Company early adopted this amended guidance in the fourth quarter of fiscal 2018.  As a result, the stranded tax effects in AOCI of $1,701,000, related to various unrealized gains and losses associated with the Company’s hedge instruments and minimum pension liability, were reclassified to retained earnings.

Recently Issued Accounting Standards:  

In May 2014, new accounting guidance was issued that replaces most existing revenue recognition guidance under U.S. GAAP.  The new guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers.  Subsequently, additional guidance was issued on several areas including guidance intended to improve the operability and understandability of the implementation of principal versus agent considerations and clarifications on the identification of performance obligations and implementation of guidance related to licensing.  The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period.  The guidance permits the use of either the retrospective or cumulative effect transition method.  The Company adopted this guidance on June 1, 2018 using the cumulative effect transition method.  Based on our evaluation, which included a review of significant contracts with customers across all revenue streams, it resulted in a change in timing of revenue recognition for the toll processing and oil & gas equipment revenue streams and did not have a material impact on our consolidated financial position or results of operations.  As a result of the adoption of this guidance, the Company will make additional disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers as required by the new guidance.

In February 2016, new accounting guidance was issued that replaces most existing lease accounting guidance under U.S. GAAP.  Among other changes, the new guidance requires that leased assets and liabilities be recognized on the balance sheet by lessees for those leases classified as operating leases under previous guidance.  The new guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  Early adoption is permitted, and the change is to be applied using a modified retrospective approach as of the beginning of the earliest period presented.  We are in the process of evaluating the effect this guidance will have on our consolidated financial position, results of operations and cash flows, and we have not determined the effect of the new guidance on our ongoing financial reporting.  As of May 31, 2018, we have operating leases with $43,400,000 of future minimum lease payments.

In June 2016, amended accounting guidance was issued related to the measurement of credit losses on financial instruments.  The amended guidance changes the impairment model for most financial assets to require measurement and recognition of expected credit losses for financial assets held.  The amended guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.  We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations; however, we do not expect the amended guidance to have a material impact on our ongoing financial reporting.

In October 2016, amended accounting guidance was issued that requires the income tax consequences of an intra-entity transfer of an asset other than inventory to be recognized when the transfer occurs.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and is to be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption.  Early adoption is permitted.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position, results of operations and cash flows.

In November 2016, amended accounting guidance was issued that requires amounts generally described as restricted cash and restricted cash equivalents to be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Early adoption is permitted.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated cash flows.

In March 2017, amended accounting guidance was issued that requires an employer to report the service cost component of pension and postretirement benefits in the same line item as other current employee compensation costs.  Additionally, other components of net benefit cost are to be presented in the income statement separately from the service cost component and outside of income from operations.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and is to be applied retrospectively for the presentation in the income statement and prospectively on and after the effective date for the capitalization of service cost.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position, results of operations and cash flows.

In May 2017, amended accounting guidance was issued to provide guidance about which changes to the terms or conditions of a share-based payment award require application of modification accounting.  The amended guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.  Early adoption is permitted.  We do not expect the adoption of this amended guidance to have a material impact on our consolidated financial position or results of operations.

In August 2017, amended accounting guidance was issued that modifies hedge accounting by making more hedge strategies eligible for hedge accounting, amending presentation and disclosure requirements, and changing how companies assess effectiveness.  The intent is to simplify application of hedge accounting and increase transparency of information about an entity’s risk management activities.  The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years.  It is to be applied using a modified retrospective transition approach for cash flow and net investment hedges existing at the date of adoption.  The presentation and disclosure guidance is only required prospectively.  Early adoption is permitted.  We are in the process of evaluating the effect this guidance will have on our consolidated financial position and results of operations, and have not determined the effect on our ongoing financial reporting.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

May 31, 2018

Accounting Policies [Abstract]

Supplemental Cash Flow Information

Supplemental cash flow information was as follows for the fiscal years ended May 31:

(in thousands)	2018		2017		2016
Interest paid, net of amount capitalized	$	34,839	$	29,826	$	30,431
Income taxes paid, net of refunds	$	44,819	$	55,652	$	50,750

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Investments in Unconsolidated Affiliates (Tables)

12 Months Ended

May 31, 2018

Equity Method Investments And Joint Ventures [Abstract]

Financial Information

The following table presents combined information regarding the financial position of our unconsolidated affiliates accounted for using the equity method as of May 31:

(in thousands)	2018		2017
Cash	$	52,812	$	55,541
Other current assets		590,578		541,746
Current assets for discontinued operations		37,640		17,275
Noncurrent assets		358,927		342,938
Noncurrent assets for discontinued operations		-		18,168
Total assets	$	1,039,957	$	975,668
Current liabilities	$	166,493	$	148,056
Current liabilities for discontinued operations		7,142		8,891
Short-term borrowings		26,599		8,172
Current maturities of long-term debt		23,243		5,827
Long-term debt		259,588		268,711
Other noncurrent liabilities		17,536		20,890
Noncurrent liabilities for discontinued operations		-		490
Equity		539,356		514,631
Total liabilities and equity	$	1,039,957	$	975,668

The following table presents summarized financial information for our four largest unconsolidated affiliates as of, and for the fiscal years ended May 31.  All other unconsolidated affiliates are combined and presented in the Other category, including WSP through March 1, 2016.  On March 1, 2016, the Company obtained effective control over the operations of WSP and, as a result, began consolidating its financial results within those of Steel Processing.

(in thousands)	2018			2017			2016
Net sales
WAVE	$	360,395		$	334,031		$	329,050
ClarkDietrich		790,887			711,735			615,609
Serviacero Worthington		315,098			275,315			260,337
ArtiFlex		197,061			208,922			219,510
Other		28,578			17,784			74,214
Total net sales	$	1,692,019		$	1,547,787		$	1,498,720
Gross margin (loss)
WAVE	$	201,581		$	190,350		$	191,535
ClarkDietrich		97,437			128,098			95,427
Serviacero Worthington		32,396			37,080			15,328
ArtiFlex		18,266			22,829			30,181
Other		(6,399	)		(4,313	)		13,142
Total gross margin	$	343,281		$	374,044		$	345,613
Operating income (loss)
WAVE	$	158,697		$	158,030		$	162,026
ClarkDietrich		39,153			68,696			33,897
Serviacero Worthington		24,232			29,975			11,110
ArtiFlex		11,395			15,519			22,612
Other		(10,584	)		(8,407	)		6,910
Total operating income	$	222,893		$	263,813		$	236,555
Depreciation and amortization
WAVE	$	1,659		$	2,978		$	2,245
ClarkDietrich		11,864			12,718			14,289
Serviacero Worthington		3,919			3,862			3,508
ArtiFlex		5,515			5,850			6,105
Other		749			698			3,081
Total depreciation and amortization	$	23,706		$	26,106		$	29,228
Interest expense (income)
WAVE	$	8,365		$	7,182		$	6,635
ClarkDietrich		114			20			80
Serviacero Worthington		397			89			114
ArtiFlex		1,333			1,429			1,650
Other		(1	)		-			(10	)
Total interest expense	$	10,208		$	8,720		$	8,469
Income tax expense (benefit)
WAVE	$	119		$	2,398		$	(14	)
ClarkDietrich		-			-			-
Serviacero Worthington		5,141			11,740			6,249
ArtiFlex		208			(2	)		289
Other		-			(2	)		53
Total income tax expense	$	5,468		$	14,134		$	6,577
Net earnings (loss)
WAVE (1)	$	152,329		$	154,866		$	164,132
ClarkDietrich		39,138			69,122			58,539
Serviacero Worthington		17,577			18,140			6,246
ArtiFlex		9,854			14,092			20,673
Other		(11,922	)		(5,472	)		8,516
Total net earnings	$	206,976		$	250,748		$	258,106

(1) On November 20, 2017, WAVE agreed to sell its business and operations in Europe and Asia to the Knauf Group, a family-owned manufacturer of building materials headquartered in Germany.  WAVE has classified its businesses to be sold as discontinued operations.  These net earnings include net income attributable to discontinued operations of $2,226,000, $6,775,000, and $8,930,000 in fiscal 2018, fiscal 2017, and fiscal 2016, respectively.  All other amounts presented in the table above exclude the activity of the discontinued operations of WAVE  

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Goodwill and Other Long-Lived Assets (Tables)

12 Months Ended

May 31, 2018

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Changes in Carrying Amount of Goodwill

The following table summarizes the changes in the carrying amount of goodwill during fiscal 2018 and fiscal 2017 by reportable business segment:

(in thousands)	Steel Processing		Pressure Cylinders			Engineered Cabs			Other			Total
Balance at May 31, 2016
Goodwill	$	7,045	$	233,371		$	44,933		$	127,245		$	412,594
Accumulated impairment losses		-		-			(44,933	)		(121,594	)		(166,527	)
		7,045		233,371			-			5,651			246,067
Acquisitions and purchase accounting adjustments		854		-			-			-			854
Translation adjustments		-		752			-			-			752
		854		752			-			-			1,606
Balance at May 31, 2017
Goodwill		7,899		234,123			44,933			127,245			414,200
Accumulated impairment losses		-		-			(44,933	)		(121,594	)		(166,527	)
		7,899		234,123			-			5,651			247,673
Acquisitions and purchase accounting adjustments		-		103,437			-			-			103,437
Translation adjustments		-		3,739			-			-			3,739
Impairment losses		-		(4,015	)		-			(5,651	)		(9,666	)
		-		103,161			-			(5,651	)		97,510
Balance at May 31, 2018
Goodwill		7,899		341,299			44,933			127,245			521,376
Accumulated impairment losses		-		(4,015	)		(44,933	)		(127,245	)		(176,193	)
	$	7,899	$	337,284		$	-		$	-		$	345,183

Summary of Other Intangible Assets by Class

The following table summarizes other intangible assets by class as of May 31, 2018 and 2017:

	2018				2017
			Accumulated				Accumulated
(in thousands)	Cost		Amortization		Cost		Amortization
Indefinite-lived intangible assets:
Trademarks	$	76,701	$	-	$	14,501	$	-
Total indefinite-lived intangible assets		76,701		-		14,501		-
Definite-lived intangible assets:
Customer relationships	$	173,363	$	57,125	$	96,262	$	45,822
Non-compete agreements		8,669		8,137		9,443		7,751
Technology / know-how		26,411		5,856		21,755		5,607
Other		3,804		3,804		3,954		3,954
Total definite-lived intangible assets		212,247		74,922		131,414		63,134
Total intangible assets	$	288,948	$	74,922	$	145,915	$	63,134

Estimated Amortization Expense

Amortization expense for each of the next five fiscal years is estimated to be:

(in thousands)
2019	$	15,308
2020	$	13,299
2021	$	12,539
2022	$	10,858
2023	$	10,221

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Restructuring and Other Expense (Income), Net (Tables)

12 Months Ended

May 31, 2018

Restructuring And Related Activities [Abstract]

Schedule of Progression of Liabilities Associated with Restructuring Activities, Combined with Reconciliation to Restructuring and Other Income, Net

A progression of the liabilities associated with our restructuring activities, combined with a reconciliation to the restructuring and other income, net financial statement caption in our consolidated statement of earnings for fiscal 2018, is summarized below:

	Beginning										Ending
(in thousands)	Balance		Expense			Payments			Adjustments		Balance
Early retirement and severance	$	253	$	2,549		$	(1,787	)	$	101	$	1,116
Facility exit and other costs		536		482			(1,018	)		-		-
	$	789		3,031		$	(2,805	)	$	101	$	1,116
Net gain on sale of assets				(10,452	)
Restructuring and other income, net			$	(7,421	)

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Debt and Receivables Securitization (Tables)

12 Months Ended

May 31, 2018

Debt Disclosure [Abstract]

Summary of Long-term Debt and Short-term Borrowings Outstanding

The following table summarizes our long-term debt and short-term borrowings outstanding at May 31, 2018 and 2017:

(in thousands)	2018			2017
Short-term borrowings	$	-		$	123
4.30% senior notes due August 1, 2032		200,000			-
4.55% senior notes due April 15, 2026		250,000			250,000
4.60% senior notes due August 10, 2024		150,000			150,000
6.50% senior notes due April 15, 2020		150,000			150,000
Term loans		829			30,400
Other		3,899			668
Total debt		754,728			581,191
Unamortized discount and debt issuance costs		(4,360	)		(2,581	)
Total debt, net		750,368			578,610
Less: current maturities and short-term borrowings		1,474			6,814
Total long-term debt	$	748,894		$	571,796

Maturities on Long-term Debt

Maturities on long-term debt in the next five fiscal years, and the remaining years thereafter, are as follows:

(in thousands)
2019	$	1,474
2020		151,111
2021		639
2022		656
2023		541
Thereafter		600,307
Total	$	754,728

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Comprehensive Income (Loss) (Tables)

12 Months Ended

May 31, 2018

Equity [Abstract]

Summary of Tax Effects of Each Component of Other Comprehensive Income (Loss)

Other Comprehensive Income (Loss):  The following table summarizes the tax effects of each component of other comprehensive income (loss) for the fiscal years ended May 31:

	2018							2017									2016
(in thousands)	Before-Tax		Tax			Net-of-Tax		Before-Tax			Tax			Net-of-Tax			Before-Tax			Tax			Net-of-Tax
Foreign currency translation	$	12,744	$	-		$	12,744	$	1,342		$	-		$	1,342		$	4,716		$	-		$	4,716
Pension liability adjustment		1,875		(309	)		1,566		3,400			(1,158	)		2,242			(3,233	)		1,175			(2,058	)
Cash flow hedges		1,351		(392	)		959		(4,522	)		1,700			(2,822	)		35,524			(13,316	)		22,208
Other comprehensive income	$	15,970	$	(701	)	$	15,269	$	220		$	542		$	762		$	37,007		$	(12,141	)	$	24,866

Components of Changes in Accumulated Other Comprehensive Loss

										Accumulated
	Foreign			Pension						Other
	Currency			Liability			Cash Flow			Comprehensive
(in thousands)	Translation			Adjustment			Hedges			Loss
Balance at May 31, 2016	$	(18,728	)	$	(17,061	)	$	7,224		$	(28,565	)
Other comprehensive income before reclassifications		1,370			2,841			7,669			11,880
Reclassification adjustments to income (a)		-			559			(12,191	)		(11,632	)
Income taxes		-			(1,158	)		1,700			542
Balance at May 31, 2017	$	(17,358	)	$	(14,819	)	$	4,402		$	(27,775	)
Other comprehensive income before reclassifications		12,371			1,402			14,980			28,753
Reclassification adjustments to income (a)		-			473			(13,629	)		(13,156	)
Reclassification of stranded tax effects		-			(2,818	)		1,117			(1,701	)
Current income tax effect		-			(309	)		(392	)		(701	)
Balance at May 31, 2018	$	(4,987	)	$	(16,071	)	$	6,478		$	(14,580	)

(a) The statement of earnings classification of amounts reclassified to income for cash flow hedges is disclosed in “Note P – Derivative Instruments and Hedging Activities.”

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Stock-Based Compensation (Tables)

12 Months Ended

May 31, 2018

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Schedule of Non-qualified Stock Options Granted

The table below sets forth the non-qualified stock options granted during each of the last three fiscal years.  For each grant, the exercise price was equal to the closing market price of the underlying common shares at each respective grant date.  The fair values of these stock options were based on the Black-Scholes option pricing model, calculated at the respective grant dates.  The calculated pre-tax stock-based compensation expense for these stock options, which is after an estimate of forfeitures, will be recognized on a straight-line basis over the respective vesting periods of the stock options.

(in thousands, except per share amounts)	2018		2017		2016
Granted		90		111		154
Weighted average exercise price, per share	$	47.76	$	42.30	$	30.92
Weighted average grant date fair value, per share	$	14.99	$	11.60	$	9.55
Pre-tax stock-based compensation, net of forfeitures	$	1,203	$	1,146	$	1,305

Schedule of Assumptions Used to Determine Fair Value of Stock Options

The weighted average fair value of stock options granted in fiscal 2018, fiscal 2017 and fiscal 2016 was based on the following weighted average assumptions:

	2018			2017			2016
Assumptions used:
Dividend yield		1.81	%		2.59	%		2.33	%
Expected volatility		36.65	%		36.86	%		38.40	%
Risk-free interest rate		1.98	%		1.15	%		1.98	%
Expected life (years)		6.0			6.0			6.0

Summary of Stock Option Activity

The following tables summarize our stock option activity for the years ended May 31:

	2018					2017					2016
(in thousands, except per share amounts)	Stock Options			Weighted Average Exercise Price		Stock Options			Weighted Average Exercise Price		Stock Options			Weighted Average Exercise Price
Outstanding, beginning of year		2,307		$	20.99		3,306		$	19.01		4,044		$	18.25
Granted		90			47.76		111			42.30		154			30.92
Exercised		(371	)		20.37		(1,076	)		16.90		(874	)		17.22
Forfeited		(7	)		33.02		(34	)		29.95		(18	)		32.25
Outstanding, end of year		2,019			22.26		2,307			20.99		3,306			19.01
Exercisable at end of year		1,800			20.03		2,067			19.17		3,059			17.85

Schedule of Share-based Compensation, Shares Authorized under Stock Option Plans, by Exercise Price Range

			Weighted
			Average
			Remaining		Aggregate
	Number of		Contractual		Intrinsic
	StockOptions		Life		Value
	(in thousands)		(in years)		(in thousands)
May 31, 2018
Outstanding		2,019		3.59	$	51,858
Exercisable		1,800		3.06	$	50,673
May 31, 2017
Outstanding		2,307		3.95	$	48,509
Exercisable		2,067		3.47	$	47,488
May 31, 2016
Outstanding		3,306		4.33	$	61,178
Exercisable		3,059		4.01	$	60,082

Summary of Non-Vested Stock Option Awards

The following table summarizes information about non-vested stock option awards for the year ended May 31, 2018:

				Weighted Average
	Number of			Grant Date
	Stock Options			Fair Value
	(in thousands)			per share
Non-vested, beginning of year		240		$	9.99
Granted		90			14.99
Vested		(104	)		11.06
Forfeited		(7	)		9.59
Non-vested, end of year		219		$	11.55

Schedule of Service-Based Restricted Common Shares Granted

The table below sets forth the service-based restricted common shares we granted during each of fiscal 2018, fiscal 2017 and fiscal 2016.  The calculated pre-tax stock-based compensation expense for these restricted common shares will be recognized on a straight-line basis over their respective vesting periods.

(in thousands, except per share amounts)	2018		2017		2016
Granted		176		525		217
Weighted average grant date fair value, per share	$	47.88	$	42.28	$	29.49
Pre-tax stock-based compensation, net of forfeitures	$	7,605	$	19,841	$	5,800

Summary of Activity for Service-Based Restricted Common Shares

The following tables summarize the activity for our service-based restricted common shares for the years ended May 31:

	2018					2017					2016
(in thousands, except per share amounts)	Restricted Common Shares			Weighted Average Grant Date Fair Value		Restricted Common Shares			Weighted Average Grant Date Fair Value		Restricted Common Shares			Weighted Average Grant Date Fair Value
Outstanding, beginning of year		865		$	39.49		698		$	33.69		635		$	33.65
Granted		176			47.88		525			42.28		217			29.49
Vested		(205	)		40.96		(310	)		31.81		(120	)		24.14
Forfeited		(40	)		41.58		(48	)		38.82		(34	)		34.53
Outstanding, end of year		796			40.80		865			39.49		698			33.69
Weighted average remaining contractual life of
outstanding restricted common shares (in years)		1.21					1.57					1.04
Aggregate intrinsic value of outstanding restricted
common shares	$	38,160				$	36,298				$	26,059
Aggregate intrinsic value of restricted common shares
vested during the year	$	10,330				$	12,840				$	3,527

Schedule of Assumptions Used to Determine Grant Date Fair Value of Market Based Restricted Common Shares

The following assumptions were used to determine the grant-date fair value and the derived service period for these market-based restricted common shares:

Dividend yield	1.60	%
Expected volatility	44.00	%
Risk-free interest rate	1.70	%

Performance Shares Granted

The table below sets forth the performance shares we granted (at target levels) during fiscal 2018, fiscal 2017 and fiscal 2016:

(in thousands, except per share amounts)	2018		2017		2016
Granted		54		67		87
Weighted average grant date fair value, per share	$	50.61	$	44.91	$	31.12
Pre-tax stock-based compensation	$	2,748	$	2,995	$	2,623

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Employee Pension Plans (Tables)

12 Months Ended

May 31, 2018

Components of Net Periodic Pension Cost for the Defined Benefit Plan and Defined Contribution Plans

The following table summarizes the components of net periodic pension cost for the defined benefit plan and the defined contribution plans for the years ended May 31:

(in thousands)	2018			2017			2016
Defined benefit plan:
Interest cost	$	1,522		$	1,527		$	1,621
Actuarial (return) loss on plan assets		(1,361	)		(2,224	)		1,154
Net amortization and deferral		(20	)		1,025			(2,664	)
Net periodic pension cost on defined benefit plan		141			328			111
Defined contribution plans		14,972			14,542			13,300
Total retirement plan cost	$	15,113		$	14,870		$	13,411

Actuarial Assumptions Used for Defined Benefit Plan

The following actuarial assumptions were used for our defined benefit plan:

	2018			2017			2016
To determine benefit obligation:
Discount rate		4.02	%		3.94	%		3.75	%
To determine net periodic pension cost:
Discount rate		3.94	%		3.75	%		4.07	%
Expected long-term rate of return		7.00	%		7.00	%		7.00	%
Rate of compensation increase	n/a			n/a			n/a

Reconciliation of the Changes in the Projected Benefit Obligation and Fair Value of Plan Assets and the Funded Status of the Gerstenslager Plan

The following tables provide a reconciliation of the changes in the projected benefit obligation and fair value of plan assets and the funded status of the Gerstenslager Plan as of, and for the fiscal years ended May 31:

(in thousands)	2018			2017
Change in benefit obligation
Benefit obligation, beginning of year	$	39,174		$	41,168
Interest cost		1,522			1,527
Actuarial gain		(1,516	)		(2,459	)
Benefits paid		(1,170	)		(1,062	)
Benefits obligation, end of year	$	38,010		$	39,174
Change in plan assets
Fair value, beginning of year	$	27,022		$	25,566
Actuarial return on plan assets		1,361			2,224
Company contributions		-			294
Benefits paid		(1,171	)		(1,062	)
Fair value, end of year		27,212			27,022
Funded status	$	(10,798	)	$	(12,152	)
Amounts recognized in the consolidated balance sheets consist of:
Other liabilities	$	(10,798	)	$	(12,152	)
Accumulated other comprehensive loss		16,343			17,839
Amounts recognized in accumulated other comprehensive loss consist    of:
Net loss		16,343			17,839
Total	$	16,343		$	17,839

Other Changes in Plan Assets And Benefit Obligations Recognized in OCI

The following table shows other changes in plan assets and benefit obligations recognized in OCI during the fiscal years ended May 31:

(in thousands)	2018		2017
Net actuarial gain	$	1,023	$	2,926
Amortization of net loss		473		559
Total recognized in other comprehensive income	$	1,496	$	3,485
Total recognized in net periodic benefit cost and other comprehensive income	$	1,355	$	3,157

Plan Assets for Defined Benefit Plan

Plan assets for the defined benefit plan consisted principally of the following as of the respective measurement dates:

	May 31,			May 31,
	2018			2017
Asset category:
Equity securities		44	%		45	%
Debt securities		55	%		54	%
Other		1	%		1	%
Total		100	%		100	%

Estimated Future Benefits Expected to be Paid

The following estimated future benefits, which reflect expected future service, as appropriate, are expected to be paid under the defined benefit plan during the fiscal years noted:

(in thousands)
2019	$	1,223
2020	$	1,237
2021	$	1,275
2022	$	1,382
2023	$	1,476
2024-2028	$	9,066

Fair Value, Measurements, Recurring

Plan Assets for Defined Benefit Plan

The following table sets forth, by level within the fair value hierarchy, a summary of the defined benefit plan’s assets measured at fair value on a recurring basis at May 31, 2018:

			Quoted		Significant
			Prices		Other		Significant
			in Active		Observable		Unobservable
			Markets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(level 3)
Investment:
Money market funds	$	291	$	291	$	-	$	-
Bond funds		14,887		14,887		-		-
Equity funds		12,034		12,034		-		-
Total	$	27,212	$	27,212	$	-	$	-

The following table sets forth, by level within the fair value hierarchy, a summary of the defined benefit plan’s assets measured at fair value on a recurring basis at May 31, 2017:

			Quoted		Significant
			Prices		Other		Significant
			in Active		Observable		Unobservable
			Markets		Inputs		Inputs
(in thousands)	Fair Value		(Level 1)		(Level 2)		(level 3)
Investment:
Money market funds	$	294	$	294	$	-	$	-
Bond funds		14,613		14,613		-		-
Equity funds		12,115		12,115		-		-
Total	$	27,022	$	27,022	$	-	$	-

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Income Taxes (Tables)

12 Months Ended

May 31, 2018

Income Tax Disclosure [Abstract]

Earnings before Income Taxes

Earnings before income taxes for the three fiscal years ended May 31 include the following components:

(in thousands)	2018		2017		2016
United States based operations	$	177,088	$	266,222	$	180,467
Non – United States based operations		31,982		30,905		36,148
Earnings before income taxes		209,070		297,127		216,615
Less: Net earnings attributable to noncontrolling    interests*		6,056		13,422		13,913
Earnings before income taxes attributable to    controlling interest	$	203,014	$	283,705	$	202,702

* Net earnings attributable to noncontrolling interests are not taxable to Worthington.

Components of Income Tax Expense (Benefit)

Significant components of income tax expense (benefit) for the fiscal years ended May 31 were as follows:

(in thousands)	2018			2017			2016
Current
Federal	$	33,261		$	50,200		$	42,837
State and local		3,292			2,954			2,157
Foreign		9,904			7,593			6,639
		46,457			60,747			51,633
Deferred
Federal		(34,442	)		18,177			7,584
State and local		388			476			934
Foreign		(4,183	)		(210	)		(1,164	)
		(38,237	)		18,443			7,354
	$	8,220		$	79,190		$	58,987

Reconciliation of Federal Statutory Corporate Income Tax Rate to Total Tax Provision

A reconciliation of the federal statutory corporate income tax rate to total tax provision follows:

	2018			2017			2016
Federal statutory corporate income tax rate		29.2	%		35.0	%		35.0	%
State and local income taxes, net of federal tax benefit		2.3			1.5			1.5
Non-U.S. income taxes at other than federal statutory rate		(1.4	)		(1.4	)		(3.0	)
Qualified production activities deduction		(2.3	)		(1.9	)		(2.2	)
Impact of tax reform (1)		(15.4	)		-			-
Worthington Aritas write down		(4.8	)		-			-
Excess benefit related to share-based payment awards		(2.0	)		(5.7	)		(1.6	)
AMTROL acquisition		(1.9	)		-			-
Other		0.3			0.4			(0.6	)
Effective tax rate attributable to controlling interest		4.0	%		27.9	%		29.1	%

(1) Amount reflects the impact of the re-measurement of the Company’s deferred tax balances at the lower federal statutory corporate income tax rate, net of the mandatory deemed repatriation tax on unremitted foreign earnings.

Reconciliation of Unrecognized Tax Benefits

A tabular reconciliation of unrecognized tax benefits follows:

(In thousands)
Balance at May 31, 2017	$	2,975
Decreases - tax positions taken in prior years		(107	)
Increases - tax positions taken in prior years		81
Increases - current tax positions		12
Settlements		(184	)
Lapse of statutes of limitations		(139	)
Balance at May 31, 2018	$	2,638

Summary of Tax Years Open to Examination by Major Tax Jurisdiction

The following is a summary of the tax years open to examination by major tax jurisdiction:

U.S. Federal –2015 and forward

U.S. State and Local –2013 and forward

Austria – 2013 and forward

Canada –2014 and forward

Mexico – 2013 and forward

Portugal – 2014 and forward

Deferred Tax Assets and Liabilities

The components of our deferred tax assets and liabilities as of May 31 were as follows:

(in thousands)	2018			2017
Deferred tax assets
Accounts receivable	$	1,455		$	2,157
Inventories		5,004			6,624
Accrued expenses		23,219			30,065
Net operating loss carry forwards		14,201			13,256
Tax credit carry forwards		811			3,206
Stock-based compensation		10,588			17,668
Other		502			205
Total deferred tax assets		55,780			73,181
Valuation allowance for deferred tax assets		(14,006	)		(12,987	)
Net deferred tax assets		41,774			60,194
Deferred tax liabilities
Property, plant and equipment		(74,512	)		(42,599	)
Investment in affiliated companies, principally due to undistributed earnings		(22,918	)		(46,001	)
Derivative contracts		(2,653	)		(1,745	)
Other		(1,879	)		(4,149	)
Total deferred tax liability		(101,962	)		(94,494	)
Net deferred tax liability	$	(60,188	)	$	(34,300	)

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Earnings per Share (Tables)

12 Months Ended

May 31, 2018

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share for the fiscal years ended May 31:

(in thousands, except per share amounts)	2018		2017		2016
Numerator (basic & diluted):
Net earnings attributable to controlling interest - income available to
common shareholders	$	194,794	$	204,515	$	143,715
Denominator:
Denominator for basic earnings per share attributable to controlling
interest - weighted average common shares		60,923		62,443		62,469
Effect of dilutive securities		2,119		2,431		2,286
Denominator for diluted earnings per share attributable to controlling
interest - adjusted weighted average common shares		63,042		64,874		64,755
Basic earnings per share attributable to controlling interest	$	3.20	$	3.28	$	2.30
Diluted earnings per share attributable to controlling interest	$	3.09	$	3.15	$	2.22

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Segment Data (Tables)

12 Months Ended

May 31, 2018

Segment Reporting [Abstract]

Financial Information for Reportable Segments

The following table presents summarized financial information for our reportable business segments as of, and for the fiscal years ended, May 31:

(in thousands)	2018			2017			2016
Net sales
Steel Processing	$	2,252,771		$	2,074,869		$	1,843,661
Pressure Cylinders		1,206,183			829,846			844,898
Engineered Cabs		116,631			101,388			121,946
Other		6,035			8,005			9,209
Total net sales	$	3,581,620		$	3,014,108		$	2,819,714
Operating income (loss)
Steel Processing	$	152,690		$	170,481		$	112,001
Pressure Cylinders		23,396			54,098			28,375
Engineered Cabs		(11,305	)		(7,685	)		(19,331	)
Other		(23,171	)		(3,773	)		1,007
Total operating income	$	141,610		$	213,121		$	122,052
Depreciation and amortization
Steel Processing	$	43,331		$	42,861		$	38,523
Pressure Cylinders		46,691			31,052			32,403
Engineered Cabs		5,415			5,197			6,205
Other		7,922			7,683			7,568
Total depreciation and amortization	$	103,359		$	86,793		$	84,699
Impairment of goodwill and long-lived assets
Steel Processing	$	-		$	-		$	-
Pressure Cylinders		53,883			-			22,962
Engineered Cabs		-			-			3,000
Other		7,325			-			-
Total impairment of goodwill and long-lived assets	$	61,208		$	-		$	25,962
Restructuring and other expense (income), net
Steel Processing	$	(10,087	)	$	1,828		$	4,110
Pressure Cylinders		2,365			3,411			392
Engineered Cabs		(78	)		1,219			3,570
Other		379			(47	)		(895	)
Total restructuring and other expense (income), net	$	(7,421	)	$	6,411		$	7,177
Total assets
Steel Processing	$	999,238		$	882,863		$	819,853
Pressure Cylinders		1,147,268			766,611			787,786
Engineered Cabs		66,456			62,141			75,124
Other		408,825			613,729			378,501
Total assets	$	2,621,787		$	2,325,344		$	2,061,264
Capital expenditures
Steel Processing	$	31,966		$	40,775		$	42,063
Pressure Cylinders		32,697			24,798			29,916
Engineered Cabs		2,067			755			6,945
Other		9,358			2,058			18,112
Total capital expenditures	$	76,088		$	68,386		$	97,036

Net Sales by Geographic Region

The following table presents net sales by geographic region for the fiscal years ended May 31:

(in thousands)	2018		2017		2016
North America	$	3,275,090	$	2,805,182	$	2,662,196
International		306,530		208,926		157,518
Total	$	3,581,620	$	3,014,108	$	2,819,714

Property, Plant and Equipment, Net by Geographic Region

The following table presents property, plant and equipment, net, by geographic region as of May 31:

(in thousands)	2018		2017
North America	$	512,439	$	501,776
International		72,531		68,713
Total	$	584,970	$	570,489

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Acquisitions (Tables)

12 Months Ended

May 31, 2018

Business Combinations [Abstract]

Schedule of Acquisition of Intangible Assets

In connection with the acquisition, we identified and valued the following identifiable intangible assets:

(in thousands)			Useful Life
Category	Amount		(Years)
Customer relationships	$	90,800	14-17
Trade names		62,200	Indefinite
Technology		13,000	15-16
Total acquired identifiable intangible assets	$	166,000

Schedule of Consideration Transferred for the Assets of Amtrol and the Preliminary Fair Value Assigned to Assets Acquired And Liabilities Assumed

The following table summarized the consideration transferred for the assets of AMTROL and the fair value assigned to the assets acquired and liabilities assumed at the acquisition date:

			Measurement
	Preliminary		Period			Revised
(in thousands)	Valuation		Adjustments			Valuation
Cash	$	6,893	$	-		$	6,893
Accounts receivable		40,212		-			40,212
Inventories		37,249		-			37,249
Prepaid expenses		981		-			981
Other assets		2,550		-			2,550
Intangible assets		166,000		-			166,000
Property, plant and equipment		52,870		-			52,870
Total assets		306,755		-			306,755
Accounts payable		25,945		-			25,945
Accrued liabilities		21,016		-			21,016
Long-term debt including current maturities		2,287		-			2,287
Other accrued items		3,993		1,501			5,494
Deferred income taxes, net		64,495		(966	)		63,529
Net identifiable assets		189,019		(535	)		188,484
Goodwill		102,902		535			103,437
Purchase price	$	291,921	$	-		$	291,921

Summary of Unaudited Pro forma Results

(in thousands, except per share amounts)	2018		2017
Net sales	$	3,581,620	$	3,263,315
Net earnings attributable to controlling interest	$	199,038	$	215,182
Diluted earnings per share attributable to controlling interest	$	3.16	$	3.32

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Derivative Instruments and Hedging Activities (Tables)

12 Months Ended

May 31, 2018

Schedule of Fair Value of Derivative Instruments

The following table summarizes the fair value of our derivative instruments and the respective line in which they were recorded in the consolidated balance sheet at May 31, 2018:

	Asset Derivatives			Liability Derivatives
	Balance			Balance
	Sheet	Fair		Sheet	Fair
(in thousands)	Location	Value		Location	Value
Derivatives designated as hedging
instruments:
Commodity contracts	Receivables	$	6,385	Accounts payable	$	-
	Other assets		68	Other liabilities		-
Totals		$	6,453		$	-
Derivatives not designated as hedging
instruments:
Commodity contracts	Receivables	$	4,749	Accounts payable	$	613
	Other assets		221	Other liabilities		158
			4,970			771
Foreign exchange contracts	Receivables		-	Accounts payable		75
Totals		$	4,970		$	846
Total derivative instruments		$	11,423		$	846

The following table summarizes the fair value of our derivative instruments and the respective line in which they were recorded in the consolidated balance sheet at May 31, 2017:

	Asset Derivatives			Liability Derivatives
	Balance			Balance
	Sheet	Fair		Sheet	Fair
(in thousands)	Location	Value		Location	Value
Derivatives designated as hedging
instruments:
Commodity contracts	Receivables	$	7,148	Accounts payable	$	111
	Other assets		6	Other liabilities		159
			7,154			270
Interest rate contracts	Receivables		-	Accounts payable		141
	Other assets		-	Other liabilities		160
			-			301
Totals		$	7,154		$	571
Derivatives not designated as hedging
instruments:
Commodity contracts	Receivables	$	1,110	Accounts payable	$	570
	Other assets		-	Other liabilities		1
			1,110			571
Foreign exchange contracts	Receivables		62	Accounts payable		-
Totals		$	1,172		$	571
Total derivative instruments		$	8,326		$	1,142

Schedule of Derivatives Designated as Cash Flow Hedging Instruments

The following table summarizes the gain recognized in OCI and the gain (loss) reclassified from AOCI into earnings for derivative instruments designated as cash flow hedges during fiscal 2018 and fiscal 2017:

							Location of
			Location of				Gain	Gain
			Gain (Loss)	Gain (Loss)			(Ineffective	(Ineffective
	Gain		Reclassified	Reclassified			Portion)	Portion)
	Recognized		from	from			Excluded	Excluded
	in OCI		AOCI	AOCI			from	from
	(Effective		(Effective	(Effective			Effectiveness	Effectiveness
(in thousands)	Portion)		Portion)	Portion)			Testing	Testing
For the fiscal year ended
May 31, 2018:
Interest rate contracts	$	3,363	Interest expense	$	(407	)	Interest expense	$	-
Commodity contracts		11,620	Cost of goods sold		14,034		Cost of goods sold		-
Totals	$	14,983		$	13,627			$	-
For the fiscal year ended
May 31, 2017:
Interest rate contracts	$	26	Interest expense	$	(211	)	Interest expense	$	-
Commodity contracts		7,643	Cost of goods sold		12,402		Cost of goods sold		-
Totals	$	7,669		$	12,191			$	-

Schedule of Gain (Loss) Recognized in Earnings for Economic (Non-Designated) Derivative Financial Instruments

The following table summarizes the gain (loss) recognized in earnings for economic (non-designated) derivative financial instruments during fiscal 2018 and fiscal 2017:

		Gain (Loss)
		Recognized in Earnings
		Fiscal Year Ended
	Location of Gain (Loss)	May 31,
(in thousands)	Recognized in Earnings	2018			2017
Commodity contracts	Cost of goods sold	$	6,284		$	3,749
Foreign exchange contracts	Miscellaneous income, net		(264	)		(553	)
Total		$	6,020		$	3,196

Derivatives Not Designated As Hedging Instruments

Schedule of Summary of Derivative Hedges

The following table summarizes our economic (non-designated) derivative instruments outstanding at May 31, 2018:

	Notional
(in thousands)	Amount		Maturity Date(s)
Commodity contracts	$	31,814	June 2018 - December 2019
Foreign exchange contracts		10,448	June 2018 - August 2018

Cash Flow Hedges

Schedule of Summary of Derivative Hedges

The following table summarizes our cash flow hedges outstanding at May 31, 2018:

	Notional
(in thousands)	Amount		Maturity Date
Commodity contracts	$	15,276	June 2018 - June 2019

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Fair Value Measurements (Tables)

12 Months Ended

May 31, 2018

Fair Value Disclosures [Abstract]

Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis

At May 31, 2018, our financial assets and liabilities measured at fair value on a recurring basis were as follows:

			Significant
	Quoted Prices		Other		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Totals
Assets
Derivative contracts (1)	$	-	$	11,423	$	-	$	11,423
Total Assets	$	-	$	11,423	$	-	$	11,423
Liabilities
Derivative contracts (1)	$	-	$	846	$	-	$	846
Total liabilities	$	-	$	846	$	-	$	846

At May 31, 2017, our financial assets and liabilities measured at fair value on a recurring basis were as follows:

			Significant
	Quoted Prices		Other		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Totals
Assets
Derivative contracts (1)	$	-	$	8,326	$	-	$	8,326
Total assets	$	-	$	8,326	$	-	$	8,326
Liabilities
Derivative contracts (1)	$	-	$	1,142	$	-	$	1,142
Contingent consideration obligation (2)		-		-		585		585
Total liabilities	$	-	$	1,142	$	585	$	1,727

(1) The fair value of our derivative contracts was based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities.  Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows.  Refer to “Note P – Derivative Instruments and Hedging Activities” for additional information regarding our use of derivative instruments.

(2) The fair value of the contingent consideration obligation was determined using a probability weighted cash flow approach based on management’s projections of future cash flows of the acquired business.  The fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 measurements.

Assets Measured at Fair Value on Non-Recurring Basis

At May 31, 2018, our assets measured at fair value on a non-recurring basis were categorized as follows:

			Significant
	Quoted Prices		Other		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs
(in thousands)	(Level 1)		(Level 2)		(Level 3)		Totals
Assets
Long-lived assets held for sale (1)	$	-	$	30,000	$	-	$	30,000
Total assets	$	-	$	30,000	$	-	$	30,000

(1) During the fourth quarter of fiscal 2018, management committed to a plan to sell the Company’s cryogenics business in Turkey, Worthington Aritas, and certain underperforming oil & gas equipment assets within Pressure Cylinders.  In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell.  The book value of Worthington Aritas exceeded its estimated fair market value of $9,000,000, resulting in an impairment charge of $42,422,000.  The book value of the oil & gas equipment asset group also exceeded its estimated fair market value of $21,000,000, resulting in an impairment charge of $10,497,000.

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Operating Leases (Tables)

12 Months Ended

May 31, 2018

Leases [Abstract]

Future Minimum Lease Payments for Noncancelable Operating Leases

Future minimum lease payments for non-cancelable operating leases having an initial or remaining term in excess of one year at May 31, 2018, were as follows:

(in thousands)
2019	$	11,348
2020		8,839
2021		6,774
2022		5,825
2023		5,097
Thereafter		5,508
Total	$	43,391

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Quarterly Results of Operations (Unaudited) (Tables)

12 Months Ended

May 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Summary of Unaudited Quarterly Consolidated Results of Operations

The following table summarizes the unaudited quarterly consolidated results of operations for fiscal 2018 and fiscal 2017:

(in thousands, except per share)	Three Months Ended
Fiscal 2018	August 31		November 30		February 28		May 31
Net sales	$	848,237	$	871,266	$	841,657	$	1,020,460
Gross margin		132,778		140,079		127,055		162,946
Impairment of goodwill and long-lived assets (1)				8,289		-		52,919
Net earnings		48,074		41,622		78,297		32,857
Net earnings attributable to controlling interest		45,534		39,403		79,087		30,770
Basic earnings per share - controlling interest	$	0.73	$	0.64	$	1.31	$	0.52
Diluted earnings per share - controlling interest	$	0.70	$	0.62	$	1.27	$	0.50
Fiscal 2017	August 31		November 30		February 28		May 31
Net sales	$	737,549	$	727,780	$	703,436	$	845,343
Gross margin		147,282		122,803		110,990		154,830
Net earnings		68,536		49,867		38,951		60,583
Net earnings attributable to controlling interest		65,567		46,565		35,889		56,494
Basic earnings per share - controlling interest	$	1.06	$	0.75	$	0.57	$	0.90
Diluted earnings per share - controlling interest	$	1.02	$	0.72	$	0.55	$	0.87

(1) For additional information regarding the Company’s impairment activity, refer to “Note C – Goodwill and Other Long-Lived Assets.”

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Summary of Significant Accounting Policies - Additional Information (Detail)			3 Months Ended	12 Months Ended
	May 23, 2018 USD ($)	Jan. 01, 2017 USD ($)	May 31, 2018 USD ($) Entity Facility JointVenture	May 31, 2018 USD ($) Entity Facility Segment JointVenture Customer	May 31, 2017 USD ($)	May 31, 2016 USD ($)
Significant Accounting Policies [Line Items]
Percent of controlling interest by the Company	25.00%
Tax amount related to purchase of noncontrolling interest and its carrying value					$ 539,000
Derivative financial instruments, credit losses				$ 0
Number of manufacturing facilities operated | Facility			36	36
Number of reportable segments | Segment				3
Number of joint ventures | JointVenture			9	9
Returns and allowances increase (decrease)				$ (538,000)
Returns and Allowances			$ 6,199,000	6,199,000
Allowance for doubtful accounts increase (decrease)				(2,812,000)
Receivables, allowances			632,000	632,000	3,444,000
Depreciation Expenses				83,680,000	73,268,000	$ 68,886,000
Advertising Expenses				15,236,000	$ 14,822,000	$ 13,970,000
Reclassification of stranded tax effects			1,701,000	(1,701,000)
Lessee, operating lease, liability, future minimum lease payments			$ 43,400,000	$ 43,400,000
Building and Improvements | Minimum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful life				10 years
Building and Improvements | Maximum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful life				40 years
Machinery and Equipment | Minimum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful life				3 years
Machinery and Equipment | Maximum
Significant Accounting Policies [Line Items]
Property, plant and equipment, estimated useful life				20 years
Largest Customer
Significant Accounting Policies [Line Items]
Number of customers | Customer				10
Sales Revenue, Net | Product Concentration Risk
Significant Accounting Policies [Line Items]
Concentration risk percentage				37.00%	43.00%	42.00%
Sales Revenue, Net | Foreign Operations
Significant Accounting Policies [Line Items]
Concentration risk percentage				9.00%	7.00%	6.00%
Sales Revenue, Net | Customer Concentration Risk | Largest Customer
Significant Accounting Policies [Line Items]
Concentration risk percentage				8.00%
Sales Revenue, Net | Customer Concentration Risk | Ten Largest Customers
Significant Accounting Policies [Line Items]
Concentration risk percentage				30.00%
Net Earnings | Foreign Operations
Significant Accounting Policies [Line Items]
Concentration risk percentage				6.00%	4.00%	8.00%
Net Assets, Geographic Area | Foreign Operations
Significant Accounting Policies [Line Items]
Concentration risk percentage				14.00%	11.00%
Workforce Subject to Collective Bargaining Arrangements | Labor Force Concentration Risk [Member]
Significant Accounting Policies [Line Items]
Concentration risk percentage				9.00%
Joint Venture Transactions
Significant Accounting Policies [Line Items]
Number of joint ventures | Entity			3	3
Number of manufacturing facilities operated | Facility			49	49
Spartan | Joint Venture Transactions
Significant Accounting Policies [Line Items]
Percent of controlling interest by the Company			52.00%	52.00%
TWB | Joint Venture Transactions
Significant Accounting Policies [Line Items]
Percent of controlling interest by the Company			55.00%	55.00%
Worthington Specialty Processing | Joint Venture Transactions
Significant Accounting Policies [Line Items]
Percent of controlling interest by the Company			51.00%	51.00%
DHybrid Systems LLC
Significant Accounting Policies [Line Items]
Purchase of noncontrolling interest and its carrying value					$ (2,888,000)
Tax amount related to purchase of noncontrolling interest and its carrying value		$ 539,000
DHybrid Systems LLC | Additional Paid-in Capital
Significant Accounting Policies [Line Items]
Purchase of noncontrolling interest and its carrying value					$ (935,000)
Worthington Aritas
Significant Accounting Policies [Line Items]
Purchase of noncontrolling interest and its carrying value				$ (1,913,000)
Worthington Aritas | Additional Paid-in Capital
Significant Accounting Policies [Line Items]
Purchase of noncontrolling interest and its carrying value	$ 924,000			$ 924,000

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Supplemental Cash Flow Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Accounting Policies [Abstract]
Interest paid, net of amount capitalized	$ 34,839	$ 29,826	$ 30,431
Income taxes paid, net of refunds	$ 44,819	$ 55,652	$ 50,750

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Investments in Unconsolidated Affiliates - Additional Information (Detail) $ in Thousands	12 Months Ended
	May 31, 2018 USD ($) Entity	May 31, 2017 USD ($)	May 31, 2016 USD ($)
Investments in and Advances to Affiliates [Line Items]
Distributions from unconsolidated affiliates	$ 89,787	$ 102,015	$ 86,513
Distributions in excess of investment in unconsolidated affiliate	$ 55,198	63,038
Number of largest unconsolidated affiliates | Entity	4
Consolidated retained earnings undistributed earnings net of tax	$ 42,636	28,803
ArtiFlex
Investments in and Advances to Affiliates [Line Items]
Percent of ownership interest held in unconsolidated affiliates	50.00%
ClarkDietrich
Investments in and Advances to Affiliates [Line Items]
Percent of ownership interest held in unconsolidated affiliates	25.00%
Samuel Steel Pickling Company
Investments in and Advances to Affiliates [Line Items]
Percent of ownership interest held in unconsolidated affiliates	31.25%
Serviacero Worthington
Investments in and Advances to Affiliates [Line Items]
Percent of ownership interest held in unconsolidated affiliates	50.00%
WAVE
Investments in and Advances to Affiliates [Line Items]
Percent of ownership interest held in unconsolidated affiliates	50.00%
Distributions in excess of investment in unconsolidated affiliate	$ 55,198	$ 63,038
Zhejiang Nisshin Worthington Precision Specialty Steel Co
Investments in and Advances to Affiliates [Line Items]
Percent of ownership interest held in unconsolidated affiliates	10.00%

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Investments in Unconsolidated Affiliates - Schedule of Combined Financial Information for Unconsolidated Affiliates (Detail) - USD ($) $ in Thousands	May 31, 2018	May 31, 2017
Equity Method Investments And Joint Ventures [Abstract]
Cash	$ 52,812	$ 55,541
Other current assets	590,578	541,746
Current assets for discontinued operations	37,640	17,275
Noncurrent assets	358,927	342,938
Noncurrent assets for discontinued operations		18,168
Total assets	1,039,957	975,668
Current liabilities	166,493	148,056
Current liabilities for discontinued operations	7,142	8,891
Short-term borrowings	26,599	8,172
Current maturities of long-term debt	23,243	5,827
Long-term debt	259,588	268,711
Other noncurrent liabilities	17,536	20,890
Noncurrent liabilities for discontinued operations		490
Equity	539,356	514,631
Total liabilities and equity	$ 1,039,957	$ 975,668

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Investments in Unconsolidated Affiliates - Financial Results of Four Largest Unconsolidated Affiliates (Detail) - USD ($) $ in Thousands		12 Months Ended
		May 31, 2018	May 31, 2017	May 31, 2016
Investments in and Advances to Affiliates [Line Items]
Net sales		$ 1,692,019	$ 1,547,787	$ 1,498,720
Gross margin (loss)		343,281	374,044	345,613
Operating income (loss)		222,893	263,813	236,555
Depreciation and amortization		23,706	26,106	29,228
Interest expense (income)		10,208	8,720	8,469
Income tax expense (benefit)		5,468	14,134	6,577
Net earnings (loss)		206,976	250,748	258,106
WAVE
Investments in and Advances to Affiliates [Line Items]
Net sales		360,395	334,031	329,050
Gross margin (loss)		201,581	190,350	191,535
Operating income (loss)		158,697	158,030	162,026
Depreciation and amortization		1,659	2,978	2,245
Interest expense (income)		8,365	7,182	6,635
Income tax expense (benefit)		119	2,398	(14)
Net earnings (loss)	[1]	152,329	154,866	164,132
ClarkDietrich
Investments in and Advances to Affiliates [Line Items]
Net sales		790,887	711,735	615,609
Gross margin (loss)		97,437	128,098	95,427
Operating income (loss)		39,153	68,696	33,897
Depreciation and amortization		11,864	12,718	14,289
Interest expense (income)		114	20	80
Net earnings (loss)		39,138	69,122	58,539
Serviacero Worthington
Investments in and Advances to Affiliates [Line Items]
Net sales		315,098	275,315	260,337
Gross margin (loss)		32,396	37,080	15,328
Operating income (loss)		24,232	29,975	11,110
Depreciation and amortization		3,919	3,862	3,508
Interest expense (income)		397	89	114
Income tax expense (benefit)		5,141	11,740	6,249
Net earnings (loss)		17,577	18,140	6,246
ArtiFlex
Investments in and Advances to Affiliates [Line Items]
Net sales		197,061	208,922	219,510
Gross margin (loss)		18,266	22,829	30,181
Operating income (loss)		11,395	15,519	22,612
Depreciation and amortization		5,515	5,850	6,105
Interest expense (income)		1,333	1,429	1,650
Income tax expense (benefit)		208	(2)	289
Net earnings (loss)		9,854	14,092	20,673
Other [Member]
Investments in and Advances to Affiliates [Line Items]
Net sales		28,578	17,784	74,214
Gross margin (loss)		(6,399)	(4,313)	13,142
Operating income (loss)		(10,584)	(8,407)	6,910
Depreciation and amortization		749	698	3,081
Interest expense (income)		(1)		(10)
Income tax expense (benefit)			(2)	53
Net earnings (loss)		$ (11,922)	$ (5,472)	$ 8,516

[1] On November 20, 2017, WAVE agreed to sell its business and operations in Europe and Asia to the Knauf Group, a family-owned manufacturer of building materials headquartered in Germany. WAVE has classified its businesses to be sold as discontinued operations. These net earnings include net income attributable to discontinued operations of $2,226,000, $6,775,000, and $8,930,000 in fiscal 2018, fiscal 2017, and fiscal 2016, respectively. All other amounts presented in the table above exclude the activity of the discontinued operations of WAVE

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Investments in Unconsolidated Affiliates - Financial Results of Four Largest Unconsolidated Affiliates (Parenthetical) (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
WAVE | Discontinued Operations Held for Sale
Investments in and Advances to Affiliates [Line Items]
Net income attributable to discontinued operations	$ 2,226	$ 6,775	$ 8,930

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Goodwill and Other Long-Lived Assets - Summary of Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Goodwill [Line Items]
Goodwill, gross	$ 521,376	$ 414,200	$ 412,594
Accumulated impairment losses	(176,193)	(166,527)	(166,527)
Goodwill, net	345,183	247,673	246,067
Acquisitions and purchase accounting adjustments	103,437	854
Translation adjustments	3,739	752
Impairment losses	(9,666)
Goodwill, period increase (decrease)	97,510	1,606
Steel Processing
Goodwill [Line Items]
Goodwill, gross	7,899	7,899	7,045
Goodwill, net	7,899	7,899	7,045
Acquisitions and purchase accounting adjustments		854
Goodwill, period increase (decrease)		854
Pressure Cylinders
Goodwill [Line Items]
Goodwill, gross	341,299	234,123	233,371
Accumulated impairment losses	(4,015)
Goodwill, net	337,284	234,123	233,371
Acquisitions and purchase accounting adjustments	103,437
Translation adjustments	3,739	752
Impairment losses	(4,015)
Goodwill, period increase (decrease)	103,161	752
Engineered Cabs
Goodwill [Line Items]
Goodwill, gross	44,933	44,933	44,933
Accumulated impairment losses	(44,933)	(44,933)	(44,933)
Other
Goodwill [Line Items]
Goodwill, gross	127,245	127,245	127,245
Accumulated impairment losses	(127,245)	(121,594)	(121,594)
Goodwill, net		$ 5,651	$ 5,651
Impairment losses	(5,651)
Goodwill, period increase (decrease)	$ (5,651)

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Goodwill and Other Long-Lived Assets - Additional Information (Detail)		3 Months Ended								12 Months Ended
		May 31, 2018 USD ($)		Nov. 30, 2017 USD ($)		May 31, 2016 USD ($) asset_group	Nov. 30, 2015 USD ($) Facility	Aug. 31, 2015 USD ($)	May 31, 2015 asset_group	May 31, 2018 USD ($)	May 31, 2017 USD ($)	May 31, 2016 USD ($)
Goodwill And Other Intangible Assets [Line Items]
Impairment losses										$ 9,666,000
Impairment of goodwill and long-lived assets		$ 52,919,000	[1]	$ 8,289,000	[1]					61,208,000		$ 25,962,000
Amortization expense										19,679,000	$ 13,525,000	15,813,000
Number of asset group tested for impairment | asset_group						5			5
Goodwill		345,183,000				$ 246,067,000				345,183,000	247,673,000	246,067,000
Pressure Cylinders
Goodwill And Other Intangible Assets [Line Items]
Impairment losses										4,015,000
Impairment of goodwill and long-lived assets										53,883,000		22,962,000
Goodwill		337,284,000				$ 233,371,000				337,284,000	$ 234,123,000	233,371,000
Engineered Cabs
Goodwill And Other Intangible Assets [Line Items]
Impairment of goodwill and long-lived assets								$ 3,000,000				$ 3,000,000
Engineered Cabs | Long-lived Assets Held and Used
Goodwill And Other Intangible Assets [Line Items]
Carrying value long-lived assets								4,059,000
Fair Value, Measurements, Nonrecurring
Goodwill And Other Intangible Assets [Line Items]
Fair market value of assets		30,000,000								30,000,000
Fair Value, Measurements, Nonrecurring | Long-lived Assets Held and Used
Goodwill And Other Intangible Assets [Line Items]
Fair market value of assets	[2]	30,000,000								30,000,000
Fair Value, Measurements, Nonrecurring | Engineered Cabs | Long-lived Assets Held and Used
Goodwill And Other Intangible Assets [Line Items]
Fair market value of assets								$ 1,059,000
Oil And Gas Equipment
Goodwill And Other Intangible Assets [Line Items]
Impairment losses		4,015,000
Impairment of goodwill and long-lived assets		10,497,000
Impairment of fixed assets		2,633,000
Impairment of intangible assets		3,849,000
Oil And Gas Equipment | Fair Value, Measurements, Nonrecurring
Goodwill And Other Intangible Assets [Line Items]
Fair market value of assets		21,000,000								21,000,000
Land | Bremen, Ohio
Goodwill And Other Intangible Assets [Line Items]
Impairment of goodwill and long-lived assets				964,000
Worthington Aritas
Goodwill And Other Intangible Assets [Line Items]
Impairment of goodwill and long-lived assets		42,422,000
Impairment of fixed assets		19,621,000
Impairment of intangible assets		11,549,000
Impairment of other assets		11,252,000
Worthington Aritas | Fair Value, Measurements, Nonrecurring
Goodwill And Other Intangible Assets [Line Items]
Fair market value of assets		$ 9,000,000								9,000,000
WEI
Goodwill And Other Intangible Assets [Line Items]
Impairment of goodwill and long-lived assets										$ 1,674,000
Minimum
Goodwill And Other Intangible Assets [Line Items]
Definite-lived intangible assets, estimated useful lives										1 year
Maximum
Goodwill And Other Intangible Assets [Line Items]
Definite-lived intangible assets, estimated useful lives										20 years
Oil and Gas Equipment
Goodwill And Other Intangible Assets [Line Items]
Impairment losses										$ 4,015,000
Oil and Gas Equipment | Pressure Cylinders
Goodwill And Other Intangible Assets [Line Items]
Impairment of goodwill and long-lived assets							$ 22,962,000
Number of equipment facilities | Facility							2
Carrying value long-lived assets							$ 59,895,000
Cash flow projections, discount rate							13.00%
Goodwill							$ 25,982,000
Oil and Gas Equipment | Fair Value, Measurements, Nonrecurring | Pressure Cylinders | Long-lived Assets Held and Used
Goodwill And Other Intangible Assets [Line Items]
Fair market value of assets							$ 36,933,000
WEI Reporting Unit
Goodwill And Other Intangible Assets [Line Items]
Impairment losses										$ 5,651,000
Sale of stake, percentage										65.00%
Impairment of goodwill and long-lived assets				$ 7,325,000

[1] For additional information regarding the Company’s impairment activity, refer to “Note C – Goodwill and Other Long-Lived Assets.”

[2] During the fourth quarter of fiscal 2018, management committed to a plan to sell the Company’s cryogenics business in Turkey, Worthington Aritas, and certain underperforming oil & gas equipment assets within Pressure Cylinders. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell. The book value of Worthington Aritas exceeded its estimated fair market value of $9,000,000, resulting in an impairment charge of $42,422,000. The book value of the oil & gas equipment asset group also exceeded its estimated fair market value of $21,000,000, resulting in an impairment charge of $10,497,000.

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Goodwill and Other Long-Lived Assets - Summary of Other Intangible Assets by Class (Detail) - USD ($) $ in Thousands	May 31, 2018	May 31, 2017
Other Intangible Assets [Line Items]
Indefinite-lived intangibles assets, Cost	$ 76,701	$ 14,501
Definite-lived intangibles assets, Cost	212,247	131,414
Total intangible assets, Cost	288,948	145,915
Definite-lived intangible assets, Accumulated Amortization	74,922	63,134
Trademarks
Other Intangible Assets [Line Items]
Indefinite-lived intangibles assets, Cost	76,701	14,501
Customer relationships
Other Intangible Assets [Line Items]
Definite-lived intangibles assets, Cost	173,363	96,262
Definite-lived intangible assets, Accumulated Amortization	57,125	45,822
Non-compete agreements
Other Intangible Assets [Line Items]
Definite-lived intangibles assets, Cost	8,669	9,443
Definite-lived intangible assets, Accumulated Amortization	8,137	7,751
Technology / know-how
Other Intangible Assets [Line Items]
Definite-lived intangibles assets, Cost	26,411	21,755
Definite-lived intangible assets, Accumulated Amortization	5,856	5,607
Other
Other Intangible Assets [Line Items]
Definite-lived intangibles assets, Cost	3,804	3,954
Definite-lived intangible assets, Accumulated Amortization	$ 3,804	$ 3,954

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Goodwill and Other Long-Lived Assets - Estimated Amortization Expense (Detail) $ in Thousands	May 31, 2018 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
2019	$ 15,308
2020	13,299
2021	12,539
2022	10,858
2023	$ 10,221

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Restructuring and Other Expense (Income), Net - Schedule of Progression of Liabilities Associated with Restructuring Activities, Combined with Reconciliation to Restructuring and Other Income, Net (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Restructuring Cost and Reserve [Line Items]
Beginning Balance	$ 789
Expense	3,031
Payments	(2,805)
Adjustments	101
Ending Balance	1,116	$ 789
Net gain on sale of assets	(10,452)
Restructuring and other income, net	(7,421)	6,411	$ 7,177
Early Retirement And Severance
Restructuring Cost and Reserve [Line Items]
Beginning Balance	253
Expense	2,549
Payments	(1,787)
Adjustments	101
Ending Balance	1,116	253
Facility Exit And Other Costs
Restructuring Cost and Reserve [Line Items]
Beginning Balance	536
Expense	482
Payments	(1,018)
Adjustments	0
Ending Balance	$ 0	$ 536

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Restructuring and Other Expense (Income), Net - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Restructuring Cost and Reserve [Line Items]
Net gain (loss) on sale of assets	$ 10,522	$ (7,951)	$ 12,996
Closure of Precision Specialty Metals, Inc
Restructuring Cost and Reserve [Line Items]
Facility exit costs	560
Net gain (loss) on sale of assets	10,595
Cash proceeds from sale of business	15,874
Other Non-significant Restructuring Activities
Restructuring Cost and Reserve [Line Items]
Severance expense	184
Net gain (loss) on sale of assets	(143)
Facility exit costs credit	78
AMTROL
Restructuring Cost and Reserve [Line Items]
Severance expense	$ 2,365

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Guarantees - Additional Information (Detail)	12 Months Ended
	May 31, 2018 USD ($)
Stand-by Letters of Credit
Guarantor Obligations [Line Items]
Letter of credit amount outstanding	$ 14,493,000
Drawn amount of letter of credit outstanding	0
Operating Lease of Aircraft
Guarantor Obligations [Line Items]
Maximum potential obligation	$ 8,354,000

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Debt and Receivables Securitization - Summary of Long-term Debt and Short-term Borrowings Outstanding (Detail) - USD ($) $ in Thousands	May 31, 2018	May 31, 2017
Debt Instrument [Line Items]
Short-term borrowings		$ 123
Debt	$ 754,728
Total debt	754,728	581,191
Unamortized discount and debt issuance costs	(4,360)	(2,581)
Total debt, net	750,368	578,610
Less: current maturities and short-term borrowings	1,474	6,814
Total long-term debt	748,894	571,796
Short-term borrowings
Debt Instrument [Line Items]
Short-term borrowings		123
4.30% Senior Notes due August 1, 2032
Debt Instrument [Line Items]
Senior notes	200,000
4.55% Senior Notes due April 15, 2026
Debt Instrument [Line Items]
Senior notes	250,000	250,000
4.60% Senior Notes due August 10, 2024
Debt Instrument [Line Items]
Senior notes	150,000	150,000
6.50% Senior Notes due April 15, 2020
Debt Instrument [Line Items]
Senior notes	150,000	150,000
Term Loans
Debt Instrument [Line Items]
Debt	829	30,400
Other Debt
Debt Instrument [Line Items]
Debt	$ 3,899	$ 668

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Debt and Receivables Securitization - Summary of Long-term Debt and Short-term Borrowings Outstanding (Parenthetical) (Detail)		12 Months Ended
	Aug. 10, 2012	May 31, 2018	May 31, 2017	Jul. 28, 2017	Apr. 15, 2014
4.30% Senior Notes due August 1, 2032
Debt Instrument [Line Items]
Debt, interest rate		4.30%	4.30%	4.30%
Debt, maturity date		Aug. 01, 2032	Aug. 01, 2032
4.55% Senior Notes due April 15, 2026
Debt Instrument [Line Items]
Debt, interest rate		4.55%	4.55%		4.55%
Debt, maturity date		Apr. 15, 2026	Apr. 15, 2026
4.60% Senior Notes due August 10, 2024
Debt Instrument [Line Items]
Debt, interest rate	4.60%	4.60%	4.60%
Debt, maturity date	Aug. 10, 2024	Aug. 10, 2024	Aug. 10, 2024
6.50% Senior Notes due April 15, 2020
Debt Instrument [Line Items]
Debt, interest rate		6.50%	6.50%
Debt, maturity date		Apr. 15, 2020	Apr. 15, 2020

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Debt and Receivables Securitization - Maturities on Long-term Debt (Detail) $ in Thousands	May 31, 2018 USD ($)
Debt Disclosure [Abstract]
2019	$ 1,474
2020	151,111
2021	639
2022	656
2023	541
Thereafter	600,307
Total	$ 754,728

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Debt and Receivables Securitization - Additional Information (Detail) - USD ($)								1 Months Ended	12 Months Ended
	Feb. 16, 2018	Jan. 16, 2018	Sep. 26, 2014	Apr. 15, 2014	Aug. 10, 2012	Apr. 27, 2012	Apr. 13, 2010	Jun. 30, 2017	May 31, 2018	May 31, 2017	May 31, 2016	Jan. 15, 2018	Jul. 28, 2017	Oct. 15, 2014
Debt And Receivables Securitization [Line Items]
Remaining borrowing capacity									$ 486,755,000
Interest Rate Swap
Debt And Receivables Securitization [Line Items]
Interest rate swap, interest rate														2.015%
Interest rate swap, start date									Dec. 26, 2014
Line of Credit Facility, Outstanding Borrowing Percentage														60.00%
4.55% Senior Notes due April 15, 2026
Debt And Receivables Securitization [Line Items]
Principal amount				$ 250,000,000
Debt, maturity date									Apr. 15, 2026	Apr. 15, 2026
Debt, interest rate				4.55%					4.55%	4.55%
Price of debt instrument sold to the public as a percentage of principal amount				99.789%
Yield to maturity				4.573%
Unamortized debt discount				$ 528,000					$ 344,000	$ 388,000
Debt issuance cost				2,279,000
Unamortized portion of debt issuance costs									$ 1,488,000	$ 1,677,000
Settlement of hedge interest				$ (3,081,000)
4.30% Senior Notes due August 1, 2032
Debt And Receivables Securitization [Line Items]
Principal amount													$ 200,000,000
Debt, maturity date									Aug. 01, 2032	Aug. 01, 2032
Debt, interest rate									4.30%	4.30%			4.30%
Price of debt instrument sold to the public as a percentage of principal amount													99.901%
Yield to maturity													4.309%
Unamortized debt discount									$ 187,000				$ 198,000
Debt issuance cost													$ 2,116,000
Unamortized portion of debt issuance costs									$ 1,998,000
4.30% Senior Notes due August 1, 2032 | Interest Rate Swap
Debt And Receivables Securitization [Line Items]
Notional Amount								$ 150,000,000
Gain (Loss) Reclassified from Accumulated OCI (Effective Portion)								$ 3,098,000
4.60% Senior Notes due August 10, 2024
Debt And Receivables Securitization [Line Items]
Principal amount					$ 150,000,000
Debt, maturity date					Aug. 10, 2024				Aug. 10, 2024	Aug. 10, 2024
Debt, interest rate					4.60%				4.60%	4.60%
Debt issuance cost					$ 80,000
Unamortized portion of debt issuance costs									$ 41,000	$ 48,000
Term Loan maturing May 1, 2019
Debt And Receivables Securitization [Line Items]
Borrowings outstanding									$ 829,000	1,713,000
Term loan credit facility, term						7 years
Debt, maturity date									May 01, 2019
Debt, interest rate						2.49%
Maximum borrowing capacity						$ 5,880,000
Debt instrument required monthly payments						$ 76,350
6.50% Unsecured Senior Notes due April 15, 2020
Debt And Receivables Securitization [Line Items]
Principal amount							$ 150,000,000
Debt, maturity date									Apr. 15, 2020
Debt, interest rate							6.50%
Price of debt instrument sold to the public as a percentage of principal amount							99.89%
Yield to maturity							6.515%
Unamortized debt discount							$ 165,000		$ 30,000	47,000
Debt issuance cost							1,486,000
Unamortized portion of debt issuance costs									272,000	421,000
Settlement of hedge interest							$ (1,358,000)
Securities Sold under Agreements to Repurchase
Debt And Receivables Securitization [Line Items]
Borrowings outstanding									$ 0
Maximum borrowing capacity		$ 50,000,000										$ 100,000,000
Debt maturity period		1 year
Maturity date		2019-01
Number of days past due trade accounts receivables are ineligible for securitization									90 days
Facility fee									$ 383,000	$ 354,000	$ 540,000
Worthington Aritas
Debt And Receivables Securitization [Line Items]
Term loan credit facility, term			5 years
Unsecured Revolving Credit Facility
Debt And Receivables Securitization [Line Items]
Borrowings outstanding									0
Maximum borrowing capacity									500,000,000
Debt maturity period	3 years
Maturity date	2023-02
Debt issuance costs									$ 805,000
Unsecured Revolving Credit Facility | Maximum
Debt And Receivables Securitization [Line Items]
Debt maturity period									1 year
Stand-by Letters of Credit
Debt And Receivables Securitization [Line Items]
Letter of credit amount outstanding									$ 14,493,000
Drawn amount of letter of credit outstanding									0
Letter of Credit
Debt And Receivables Securitization [Line Items]
Letter of credit amount outstanding									$ 13,245,000

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Comprehensive Income (Loss) - Summary of Tax Effects on Each Component of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Components Of Other Comprehensive Income Loss [Abstract]
Foreign currency translation, before tax	$ 12,744	$ 1,342	$ 4,716
Foreign currency translation, net of tax tax	12,744	1,342	4,716
Pension liability adjustment, before tax	1,875	3,400	(3,233)
Pension liability adjustment, tax	(309)	(1,158)	1,175
Pension liability adjustment, net of tax	1,566	2,242	(2,058)
Cash flow hedges, before tax	1,351	(4,522)	35,524
Cash flow hedges, tax	(392)	1,700	(13,316)
Cash flow hedges, net of tax	959	(2,822)	22,208
Other comprehensive income (loss), before tax	15,970	220	37,007
Other comprehensive income (loss), tax	(701)	542	(12,141)
Other comprehensive income	$ 15,269	$ 762	$ 24,866

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Comprehensive Income (Loss) - Components of Changes in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands		3 Months Ended	12 Months Ended
		May 31, 2018	May 31, 2018	May 31, 2017	May 31, 2016
Accumulated Other Comprehensive Income Loss [Line Items]
Balance			$ 1,073,929	$ 919,846	$ 840,049
Other comprehensive income before reclassifications			28,753	11,880
Reclassification adjustments to income	[1]		(13,156)	(11,632)
Reclassification of stranded tax effects		$ 1,701	(1,701)
Income taxes			(701)	542	(12,141)
Balance		1,036,375	1,036,375	1,073,929	919,846
Foreign Currency Translation
Accumulated Other Comprehensive Income Loss [Line Items]
Balance			(17,358)	(18,728)
Other comprehensive income before reclassifications			12,371	1,370
Balance		(4,987)	(4,987)	(17,358)	(18,728)
Pension Liability Adjustment
Accumulated Other Comprehensive Income Loss [Line Items]
Balance			(14,819)	(17,061)
Other comprehensive income before reclassifications			1,402	2,841
Reclassification adjustments to income	[1]		473	559
Reclassification of stranded tax effects			(2,818)
Income taxes			(309)	(1,158)
Balance		(16,071)	(16,071)	(14,819)	(17,061)
Cash Flow Hedges
Accumulated Other Comprehensive Income Loss [Line Items]
Balance			4,402	7,224
Other comprehensive income before reclassifications			14,980	7,669
Reclassification adjustments to income	[1]		(13,629)	(12,191)
Reclassification of stranded tax effects			1,117
Income taxes			(392)	1,700
Balance		6,478	6,478	4,402	7,224
Accumulated Other Comprehensive Loss, Net of Tax
Accumulated Other Comprehensive Income Loss [Line Items]
Balance			(27,775)	(28,565)	(50,704)
Reclassification of stranded tax effects			(1,701)
Balance		$ (14,580)	$ (14,580)	$ (27,775)	$ (28,565)

[1] The statement of earnings classification of amounts reclassified to income for cash flow hedges is disclosed in “Note P – Derivative Instruments and Hedging Activities.

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Comprehensive Income (Loss) - Additional Information (Detail) $ in Thousands	12 Months Ended
	May 31, 2018 USD ($)
Other Comprehensive Income Loss Net Of Tax Period Increase Decrease [Abstract]
Gains in accumulated other comprehensive income, estimate of time of transfer	12 months
Gains in accumulated other comprehensive income expected to be reclassified into net earnings	$ 5,775
Gains in accumulated other comprehensive income expected to be reclassified into net earnings, tax	$ 1,751

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Equity - Additional Information (Detail) - USD ($) $ in Thousands		12 Months Ended
	Apr. 30, 2018	May 31, 2018	May 31, 2017	May 31, 2016	Sep. 27, 2017	Jun. 25, 2014
Class of Stock [Line Items]
Stock repurchase program additional number of shares authorized to be repurchased		0			6,828,855
Repurchase of common shares		$ 204,267	$ 0	$ 99,847
Purchases and retirement of common shares (in shares)		4,375,000		3,500,000
Deferred compensation obligation credited to common share option		$ 1,218	$ 1,259
Stock repurchase on June 25, 2014
Class of Stock [Line Items]
Common Stock remaining shares authorized for repurchase		6,500,000
Purchases of common shares (in shares)	10,000,000
Maximum | Stock repurchase on June 25, 2014
Class of Stock [Line Items]
Common Stock shares authorized for repurchase						10,000,000

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Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016	May 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock authorized for issuance	2,958,967
Stock based compensation expense, pre tax	$ 13,758	$ 14,349	$ 15,836
Stock based compensation expense, after tax	9,482	9,112	10,056
Unrecognized compensation cost	$ 14,312
Unrecognized compensation cost related to non-vested awards, expense period	3 years
Non-Qualified Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase price percentage of fair market value on the date of grant for stock options	100.00%
Stock options expiration period	10 years
Stock based compensation expense, pre tax	$ 1,203	1,146	1,305
Total intrinsic value of stock options exercised	5,758
Cash received from the exercise of stock options	3,864
Tax benefit realized from share-based payment awards	$ 4,075
Non-Qualified Stock Options | First Anniversary | Issued Before June 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting percentage	20.00%
Non-Qualified Stock Options | First Anniversary | Issued On or After June 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting percentage	33.00%
Non-Qualified Stock Options | Second Anniversary | Issued Before June 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting percentage	20.00%
Non-Qualified Stock Options | Second Anniversary | Issued On or After June 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting percentage	33.00%
Non-Qualified Stock Options | Third Anniversary | Issued Before June 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting percentage	20.00%
Non-Qualified Stock Options | Third Anniversary | Issued On or After June 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting percentage	33.00%
Non-Qualified Stock Options | Fourth Anniversary | Issued Before June 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting percentage	20.00%
Non-Qualified Stock Options | Fifth Anniversary | Issued Before June 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options vesting percentage	20.00%
Non-Qualified Stock Options | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Purchase price percentage of fair market value on the date of grant for stock options	100.00%
Service-Based Restricted Common Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock based compensation expense, pre tax	$ 7,605	$ 19,841	$ 5,800
Service-based restricted common shares granted to employees cliff vesting period	3 years
Restricted common shares, granted	176,000	525,000	217,000
Restricted common shares, fair value per share	$ 47.88	$ 42.28	$ 29.49
Restricted common shares, outstanding	796,000	865,000	698,000	635,000
Market-Based Restricted Common Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted common shares, granted				50,000
Common share awards vesting, minimum price per share				$ 60.00
Common share awards vesting, minimum consecutive days at stated price				30 days
Restricted common shares, fair value per share				$ 32.06
Unrecognized compensation cost				$ 1,603
Restricted common shares, outstanding	25,000
Restricted common shares, cancelled			25,000

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Stock-Based Compensation - Schedule of Non-qualified Stock Options Granted (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	90	111	154
Weighted average exercise price, per share	$ 47.76	$ 42.30	$ 30.92
Weighted average grant date fair value, per share	$ 14.99	$ 11.60	$ 9.55
Stock-based compensation	$ 13,758	$ 14,349	$ 15,836
Non-Qualified Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	$ 1,203	$ 1,146	$ 1,305

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Stock-Based Compensation - Assumptions To Value Stock Options (Detail) - Non-Qualified Stock Options	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	1.81%	2.59%	2.33%
Expected volatility	36.65%	36.86%	38.40%
Risk-free interest rate	1.98%	1.15%	1.98%
Expected life (years)	6 years	6 years	6 years

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Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Stock Options
Outstanding, beginning of year	2,307	3,306	4,044
Granted	90	111	154
Exercised	(371)	(1,076)	(874)
Forfeited	(7)	(34)	(18)
Outstanding, end of year	2,019	2,307	3,306
Exercisable at end of year	1,800	2,067	3,059
Weighted Average Exercise Price
Outstanding, beginning of year	$ 20.99	$ 19.01	$ 18.25
Granted	47.76	42.30	30.92
Exercised	20.37	16.90	17.22
Forfeited	33.02	29.95	32.25
Outstanding, end of year	22.26	20.99	19.01
Exercisable at end of year	$ 20.03	$ 19.17	$ 17.85
Weighted Average Remaining Contractual Life (in years)
Outstanding	3 years 7 months 2 days	3 years 11 months 12 days	4 years 3 months 29 days
Exercisable	3 years 21 days	3 years 5 months 19 days	4 years 3 days
Aggregate intrinsic value
Outstanding	$ 51,858	$ 48,509	$ 61,178
Exercisable	$ 50,673	$ 47,488	$ 60,082

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Stock-Based Compensation - Summary of Non-Vested Stock Option Awards (Detail) - $ / shares shares in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Number of Stock Options
Non-vested, beginning of year	240
Granted	90	111	154
Vested	(104)
Forfeited	(7)
Non-vested, end of year	219	240
Weighted Average Grant Date Fair Value Per Share
Non-vested, beginning of year	$ 9.99
Granted	14.99
Vested	11.06
Forfeited	9.59
Non-vested, end of year	$ 11.55	$ 9.99

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Stock-Based Compensation - Schedule of Service-Based Restricted Common Shares Granted (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation	$ 13,758	$ 14,349	$ 15,836
Service-Based Restricted Common Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	176	525	217
Weighted average grant date fair value, per share	$ 47.88	$ 42.28	$ 29.49
Stock-based compensation	$ 7,605	$ 19,841	$ 5,800

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Stock-Based Compensation - Summary of Activity for Service-Based Restricted Common Shares (Detail) - Service-Based Restricted Common Shares - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Restricted Common Shares
Outstanding, beginning of year	865	698	635
Granted	176	525	217
Vested	(205)	(310)	(120)
Forfeited	(40)	(48)	(34)
Outstanding, end of year	796	865	698
Weighted Average Grant Date Fair Value
Outstanding, beginning of year	$ 39.49	$ 33.69	$ 33.65
Granted	47.88	42.28	29.49
Vested	40.96	31.81	24.14
Forfeited	41.58	38.82	34.53
Outstanding, end of year	$ 40.80	$ 39.49	$ 33.69
Weighted Average Remaining Contractual Life (in years)
Weighted average remaining contractual life of outstanding restricted common shares (in years)	1 year 2 months 15 days	1 year 6 months 25 days	1 year 15 days
Aggregate intrinsic value
Aggregate intrinsic value of outstanding restricted common shares	$ 38,160	$ 36,298	$ 26,059
Aggregate intrinsic value of restricted common shares vested during the year	$ 10,330	$ 12,840	$ 3,527

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Stock-Based Compensation - Schedule of Assumptions Used to Determine Grant Date Fair Value of Market Based Restricted Common Shares (Detail) - Market-Based Restricted Common Shares	12 Months Ended
	May 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield	1.60%
Expected volatility	44.00%
Risk-free interest rate	1.70%

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Stock-Based Compensation - Performance Shares Granted (Detail) - Performance Shares - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	54	67	87
Weighted average grant date fair value, per share	$ 50.61	$ 44.91	$ 31.12
Unrecognized compensation cost	$ 2,748	$ 2,995	$ 2,623

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Employee Pension Plans - Additional Information (Detail)	12 Months Ended
	May 31, 2018 USD ($) DefinedBenefitPlan	May 31, 2017 USD ($)	May 31, 2016 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Estimated net loss	$ 441,000
Description of investment policy and strategy for the defined benefit plan	The investment policy and strategy for the defined benefit plan is: (i) long-term in nature with liquidity requirements that are anticipated to be minimal due to the projected normal retirement date of the average employee and the current average age of participants;
Employer contribution to defined benifit plan in fiscal 2019	$ 104,000
Number of planned contributions in fiscal 2019 | DefinedBenefitPlan	5
Expected employer contribution to defined benefit plan during fiscal 2019	$ 876,000
Net periodic pension costs	$ 141,000	$ 328,000	$ 111,000
Assumed salary rate increase	0.00%	0.00%	0.00%
Discount rate	3.94%	3.75%	4.07%
Austrian Pressure Cylinders
Defined Benefit Plan Disclosure [Line Items]
Accrued liability of unfunded plans included in other liabilities	$ 6,561,000	$ 6,149,000
Net periodic pension costs	$ 601,000	$ 554,000	$ 617,000
Assumed salary rate increase	2.75%	2.75%	2.75%
Discount rate	1.80%	1.60%	1.75%

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Employee Pension Plans - Components of Net Periodic Pension Cost for the Defined Benefit Plan and Defined Contribution Plans (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Compensation And Retirement Disclosure [Abstract]
Interest cost	$ 1,522	$ 1,527	$ 1,621
Actuarial (return) loss on plan assets	(1,361)	(2,224)	1,154
Net amortization and deferral	(20)	1,025	(2,664)
Net periodic pension cost on defined benefit plan	141	328	111
Defined contribution plans	14,972	14,542	13,300
Total retirement plan cost	$ 15,113	$ 14,870	$ 13,411

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Employee Pension Plans - Actuarial Assumptions Used for Defined Benefit Plan (Detail)	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
To determine benefit obligation:
Discount rate	4.02%	3.94%	3.75%
To determine net periodic pension cost:
Discount rate	3.94%	3.75%	4.07%
Expected long-term rate of return	7.00%	7.00%	7.00%
Rate of compensation increase	0.00%	0.00%	0.00%

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Employee Pension Plans - Reconciliation of Changes in Projected Benefit Obligation and Fair Value of Plan Assets and Funded Status of Gerstenslager Plan (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Change in benefit obligation
Benefit obligation, beginning of year	$ 39,174	$ 41,168
Interest cost	1,522	1,527	$ 1,621
Actuarial gain	(1,516)	(2,459)
Benefits paid	(1,170)	(1,062)
Benefits obligation, end of year	38,010	39,174	41,168
Change in plan assets
Fair value, beginning of year	27,022	25,566
Actuarial return on plan assets	1,361	2,224	(1,154)
Company contributions		294
Benefits paid	(1,171)	(1,062)
Fair value, end of year	27,212	27,022	$ 25,566
Funded status	(10,798)	(12,152)
Amounts recognized in accumulated other comprehensive loss consist of:
Net loss	16,343	17,839
Other Liabilities
Amounts recognized in the consolidated balance sheets consist of:
Amounts recognized in the consolidated balance sheets	(10,798)	(12,152)
Amounts recognized in accumulated other comprehensive loss consist of:
Total	(10,798)	(12,152)
Accumulated Other Comprehensive Loss
Amounts recognized in the consolidated balance sheets consist of:
Amounts recognized in the consolidated balance sheets	16,343	17,839
Amounts recognized in accumulated other comprehensive loss consist of:
Total	$ 16,343	$ 17,839

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Employee Pension Plans - Other Changes in Plan Assets And Benefit Obligations Recognized in OCI (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Net actuarial gain	$ 1,023	$ 2,926
Amortization of net loss	473	559
Total recognized in other comprehensive income	1,496	3,485
Total recognized in net periodic benefit cost and other comprehensive income	$ 1,355	$ 3,157

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Employee Pension Plans - Summary of Defined Benefit Plan's Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	May 31, 2018	May 31, 2017	May 31, 2016
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit plan assets fair value	$ 27,212	$ 27,022	$ 25,566
Quoted Prices In Active Markets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit plan assets fair value	27,212	27,022
Money Market Funds
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit plan assets fair value	291	294
Money Market Funds | Quoted Prices In Active Markets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit plan assets fair value	291	294
Bond Funds
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit plan assets fair value	14,887	14,613
Bond Funds | Quoted Prices In Active Markets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit plan assets fair value	14,887	14,613
Equity Funds
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit plan assets fair value	12,034	12,115
Equity Funds | Quoted Prices In Active Markets (Level 1)
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit plan assets fair value	$ 12,034	$ 12,115

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Employee Pension Plans - Plan Assets for Defined Benefit Plan (Detail)	May 31, 2018	May 31, 2017
Asset category
Weighted-average asset allocation	100.00%	100.00%
Equity Securities
Asset category
Weighted-average asset allocation	44.00%	45.00%
Debt Securities
Asset category
Weighted-average asset allocation	55.00%	54.00%
Other securities
Asset category
Weighted-average asset allocation	1.00%	1.00%

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Employee Pension Plans - Estimated Future Benefits Expected to be Paid (Detail) $ in Thousands	May 31, 2018 USD ($)
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
2019	$ 1,223
2020	1,237
2021	1,275
2022	1,382
2023	1,476
2024-2028	$ 9,066

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	5 Months Ended	7 Months Ended	12 Months Ended
	May 31, 2018	Dec. 31, 2017	May 31, 2018	May 31, 2017	May 31, 2016	May 23, 2018
Income Taxes [Line Items]
Federal statutory income tax rate	21.00%	35.00%	29.20%	35.00%	35.00%
Income tax expense			$ 6,900
Tax amount related to purchase of noncontrolling interest and its carrying value				$ 539
Tax benefits (expense) related to defined benefit pension liability credited to other comprehensive income			(309)	(1,158)	$ 1,175
Tax benefits (expenses) related to cash flow hedges credited to (deducted from) other comprehensive income			$ (392)	$ 1,700	$ (13,316)
Effective tax rates upon inclusion of net earnings attributable to noncontrolling interests			3.90%	26.70%	27.20%
Ownership interest percentage						25.00%
Minimum likelihood of tax benefits being recognized upon ultimate settlement	50.00%		50.00%
Total unrecognized tax benefits	$ 2,638		$ 2,638	$ 2,975	$ 2,827
Unrecognized tax benefits if recognized would affect tax rate attributable to controlling interest	2,235		2,235
Interest and penalties related to unrecognized tax benefits	271		271	307	$ 538
Valuation allowance for deferred tax assets	14,006		14,006	$ 12,987
Settlement with Taxing Authority
Income Taxes [Line Items]
Liability for unrecognized tax benefit expected to be settled in the next 12 months	753		753
State and Local Jurisdiction
Income Taxes [Line Items]
Net operating loss carry forwards	9,363		9,363
Valuation allowance for deferred tax assets	9,537		$ 9,537
State and Local Jurisdiction | Earliest Tax Year
Income Taxes [Line Items]
Operating loss carryforwards, expiration date			May 31, 2019
State and Local Jurisdiction | Latest Tax Year
Income Taxes [Line Items]
Operating loss carryforwards, expiration date			May 31, 2038
Non - United States
Income Taxes [Line Items]
Net operating loss carry forwards	4,837		$ 4,837
Tax credit carry forwards	162		$ 162
Tax credit carryforward, expiration date			May 31, 2028
Investment tax credit carry forwards	649		$ 649
Investmrnt tax credit carryforwards, expiration date			May 31, 2025
Valuation allowance for deferred tax assets	$ 4,469		$ 4,469
Non - United States | Earliest Tax Year
Income Taxes [Line Items]
Operating loss carryforwards, expiration date			May 31, 2019
Non - United States | Latest Tax Year
Income Taxes [Line Items]
Operating loss carryforwards, expiration date			May 31, 2023

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Income Taxes - Earnings before Income Taxes (Detail) - USD ($) $ in Thousands		12 Months Ended
		May 31, 2018	May 31, 2017	May 31, 2016
Income Tax Disclosure [Abstract]
United States based operations		$ 177,088	$ 266,222	$ 180,467
Non – United States based operations		31,982	30,905	36,148
Earnings before income taxes		209,070	297,127	216,615
Net earnings attributable to noncontrolling interests	[1]	6,056	13,422	13,913
Earnings before income taxes attributable to controlling interest		$ 203,014	$ 283,705	$ 202,702

[1] Net earnings attributable to noncontrolling interests are not taxable to Worthington.

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Income Taxes - Components of Income Tax Expense (Benefit) (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Current
Federal	$ 33,261	$ 50,200	$ 42,837
State and local	3,292	2,954	2,157
Foreign	9,904	7,593	6,639
Current Income Tax Expense (Benefit), Total	46,457	60,747	51,633
Deferred
Federal	(34,442)	18,177	7,584
State and local	388	476	934
Foreign	(4,183)	(210)	(1,164)
Provision for (benefit from) deferred income taxes	(38,237)	18,443	7,354
Income tax expense	$ 8,220	$ 79,190	$ 58,987

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Income Taxes - Reconciliation of Federal Statutory Corporate Income Tax Rate to Total Tax Provision (Detail)		5 Months Ended	7 Months Ended	12 Months Ended
		May 31, 2018	Dec. 31, 2017	May 31, 2018	May 31, 2017	May 31, 2016
Income Tax Disclosure [Abstract]
Federal statutory income tax rate		21.00%	35.00%	29.20%	35.00%	35.00%
State and local income taxes, net of federal tax benefit				2.30%	1.50%	1.50%
Non-U.S. income taxes at other than federal statutory rate				(1.40%)	(1.40%)	(3.00%)
Qualified production activities deduction				(2.30%)	(1.90%)	(2.20%)
Impact of tax reform	[1]			(15.40%)
Worthington Aritas write down				(4.80%)
Excess benefit related to share-based payment awards				(2.00%)	(5.70%)	(1.60%)
AMTROL acquisition				(1.90%)
Other				0.30%	0.40%	(0.60%)
Effective tax rate attributable to controlling interest				4.00%	27.90%	29.10%

[1] Amount reflects the impact of the re-measurement of the Company’s deferred tax balances at the lower federal statutory corporate income tax rate, net of the mandatory deemed repatriation tax on unremitted foreign earnings.

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Income Taxes - Reconciliation of Unrecognized Tax Benefits (Detail) $ in Thousands	12 Months Ended
	May 31, 2018 USD ($)
Income Tax Disclosure [Abstract]
Beginning Balance	$ 2,975
Decreases - tax positions taken in prior years	(107)
Increases - tax positions taken in prior years	81
Increases - current tax positions	12
Settlements	(184)
Lapse of statutes of limitations	(139)
Ending Balance	$ 2,638

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Income Taxes - Summary of Tax Years Open to Examination by Major Tax Jurisdiction (Detail)	12 Months Ended
	May 31, 2018
State and Local Jurisdiction
Income Tax Examination [Line Items]
Open tax years	2013
U.S. | United States
Income Tax Examination [Line Items]
Open tax years	2015
Federal Ministry of Finance, Austria | Non - United States
Income Tax Examination [Line Items]
Open tax years	2013
Canada Revenue Agency | Non - United States
Income Tax Examination [Line Items]
Open tax years	2014
Mexican Tax Authority | Non - United States
Income Tax Examination [Line Items]
Open tax years	2013
Portugal | Non - United States
Income Tax Examination [Line Items]
Open tax years	2014

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Income Taxes - Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands	May 31, 2018	May 31, 2017
Deferred tax assets
Accounts receivable	$ 1,455	$ 2,157
Inventories	5,004	6,624
Accrued expenses	23,219	30,065
Net operating loss carry forwards	14,201	13,256
Tax credit carry forwards	811	3,206
Stock-based compensation	10,588	17,668
Other	502	205
Total deferred tax assets	55,780	73,181
Valuation allowance for deferred tax assets	(14,006)	(12,987)
Net deferred tax assets	41,774	60,194
Deferred tax liabilities
Property, plant and equipment	(74,512)	(42,599)
Investment in affiliated companies, principally due to undistributed earnings	(22,918)	(46,001)
Derivative contracts	(2,653)	(1,745)
Other	(1,879)	(4,149)
Total deferred tax liability	(101,962)	(94,494)
Net deferred tax liability	$ (60,188)	$ (34,300)

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Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	May 31, 2018	Feb. 28, 2018	Nov. 30, 2017	Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2016	May 31, 2018	May 31, 2017	May 31, 2016
Numerator (basic & diluted):
Net earnings attributable to controlling interest - income available to common shareholders	$ 30,770	$ 79,087	$ 39,403	$ 45,534	$ 56,494	$ 35,889	$ 46,565	$ 65,567	$ 194,794	$ 204,515	$ 143,715
Denominator:
Denominator for basic earnings per share attributable to controlling interest-weighted average common shares									60,923	62,443	62,469
Effect of dilutive securities									2,119	2,431	2,286
Denominator for diluted earnings per share attributable to controlling interest-adjusted weighted average common shares									63,042	64,874	64,755
Basic earnings per share attributable to controlling interest	$ 0.52	$ 1.31	$ 0.64	$ 0.73	$ 0.90	$ 0.57	$ 0.75	$ 1.06	$ 3.20	$ 3.28	$ 2.30
Diluted earnings per share attributable to controlling interest	$ 0.50	$ 1.27	$ 0.62	$ 0.70	$ 0.87	$ 0.55	$ 0.72	$ 1.02	$ 3.09	$ 3.15	$ 2.22

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Earnings Per Share - Additional Information (Detail) - shares	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Earnings Per Share [Abstract]
Shares excluded from computation of diluted earnings per share	188,504	100,048	326,585

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Segment Data - Additional Information (Detail)		12 Months Ended
	Mar. 31, 2018	May 31, 2018 Segment JointVenture	May 31, 2017	May 31, 2016
Segment Reporting Information [Line Items]
Number of reportable segments | Segment		3
Number of joint ventures		9
Sales Revenue, Net | Product Concentration Risk
Segment Reporting Information [Line Items]
Concentration risk percentage		37.00%	43.00%	42.00%
Pressure Cylinders | Sales Revenue, Net | Product Concentration Risk
Segment Reporting Information [Line Items]
Concentration risk percentage		34.00%	28.00%	30.00%
Steel Processing | Sales Revenue, Net | Product Concentration Risk
Segment Reporting Information [Line Items]
Concentration risk percentage		63.00%	69.00%	65.00%
AMTROL | Sales Revenue, Net | Product Concentration Risk
Segment Reporting Information [Line Items]
Concentration risk percentage		7.00%
Engineered Cabs Operating Segment | Sales Revenue, Net | Product Concentration Risk
Segment Reporting Information [Line Items]
Concentration risk percentage		3.00%	3.00%	4.00%
Worthington Cylinders | Operating Segments
Segment Reporting Information [Line Items]
Sale of stock, percentage of ownership before transaction	65.00%
Worthington Steel | Steel Processing
Segment Reporting Information [Line Items]
Number of joint ventures		3

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Segment Data - Financial Information for Reportable Segments (Detail) - USD ($) $ in Thousands	3 Months Ended											12 Months Ended
	May 31, 2018		Feb. 28, 2018	Nov. 30, 2017		Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2016	Aug. 31, 2015	May 31, 2018	May 31, 2017	May 31, 2016
Segment Reporting Information [Line Items]
Net sales	$ 1,020,460		$ 841,657	$ 871,266		$ 848,237	$ 845,343	$ 703,436	$ 727,780	$ 737,549		$ 3,581,620	$ 3,014,108	$ 2,819,714
Operating income (loss)												141,610	213,121	122,052
Depreciation and amortization												103,359	86,793	84,699
Impairment of goodwill and long-lived assets	52,919	[1]		$ 8,289	[1]							61,208		25,962
Restructuring and other expense (income), net												(7,421)	6,411	7,177
Total assets	2,621,787						2,325,344					2,621,787	2,325,344	2,061,264
Total capital expenditures												76,088	68,386	97,036
Steel Processing
Segment Reporting Information [Line Items]
Net sales												2,252,771	2,074,869	1,843,661
Operating income (loss)												152,690	170,481	112,001
Depreciation and amortization												43,331	42,861	38,523
Restructuring and other expense (income), net												(10,087)	1,828	4,110
Total assets	999,238						882,863					999,238	882,863	819,853
Total capital expenditures												31,966	40,775	42,063
Pressure Cylinders
Segment Reporting Information [Line Items]
Net sales												1,206,183	829,846	844,898
Operating income (loss)												23,396	54,098	28,375
Depreciation and amortization												46,691	31,052	32,403
Impairment of goodwill and long-lived assets												53,883		22,962
Restructuring and other expense (income), net												2,365	3,411	392
Total assets	1,147,268						766,611					1,147,268	766,611	787,786
Total capital expenditures												32,697	24,798	29,916
Engineered Cabs
Segment Reporting Information [Line Items]
Net sales												116,631	101,388	121,946
Operating income (loss)												(11,305)	(7,685)	(19,331)
Depreciation and amortization												5,415	5,197	6,205
Impairment of goodwill and long-lived assets											$ 3,000			3,000
Restructuring and other expense (income), net												(78)	1,219	3,570
Total assets	66,456						62,141					66,456	62,141	75,124
Total capital expenditures												2,067	755	6,945
Other
Segment Reporting Information [Line Items]
Net sales												6,035	8,005	9,209
Operating income (loss)												(23,171)	(3,773)	1,007
Depreciation and amortization												7,922	7,683	7,568
Impairment of goodwill and long-lived assets												7,325
Restructuring and other expense (income), net												379	(47)	(895)
Total assets	$ 408,825						$ 613,729					408,825	613,729	378,501
Total capital expenditures												$ 9,358	$ 2,058	$ 18,112

[1] For additional information regarding the Company’s impairment activity, refer to “Note C – Goodwill and Other Long-Lived Assets.”

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Segment Data - Net Sales by Geographic Region (Detail) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	May 31, 2018	Feb. 28, 2018	Nov. 30, 2017	Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2016	May 31, 2018	May 31, 2017	May 31, 2016
Segment Reporting Information [Line Items]
Net sales	$ 1,020,460	$ 841,657	$ 871,266	$ 848,237	$ 845,343	$ 703,436	$ 727,780	$ 737,549	$ 3,581,620	$ 3,014,108	$ 2,819,714
North America
Segment Reporting Information [Line Items]
Net sales									3,275,090	2,805,182	2,662,196
International
Segment Reporting Information [Line Items]
Net sales									$ 306,530	$ 208,926	$ 157,518

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Property, Plant and Equipment, Net by Geographic Region (Detail) - USD ($) $ in Thousands	May 31, 2018	May 31, 2017
Segment Reporting Information [Line Items]
Property, plant and equipment, net	$ 584,970	$ 570,489
North America
Segment Reporting Information [Line Items]
Property, plant and equipment, net	512,439	501,776
International
Segment Reporting Information [Line Items]
Property, plant and equipment, net	$ 72,531	$ 68,713

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Acquisitions - Additional Information (Detail) - AMTROL - USD ($) $ in Thousands		12 Months Ended
	Jun. 02, 2017	May 31, 2018
Business Acquisition [Line Items]
Total consideration for acquired entity	$ 291,921
Acquisition related costs	$ 3,568	$ 1,568
Net sales		265,198
Operating income		$ 18,899

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Acquisitions - Schedule of Acquisition of Identifiable Intangible Assets (Detail) - AMTROL - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	Jun. 02, 2017
Business Acquisition [Line Items]
Total acquired identifiable intangible assets	$ 166,000	$ 166,000
Trade Names
Business Acquisition [Line Items]
Acquired indefinite lived intangible assets	62,200
Customer relationships
Business Acquisition [Line Items]
Acquired finite lived intangible assets	90,800
Technology
Business Acquisition [Line Items]
Acquired finite lived intangible assets	$ 13,000
Minimum | Customer relationships
Business Acquisition [Line Items]
Useful Life (Years)	14 years
Minimum | Technology
Business Acquisition [Line Items]
Useful Life (Years)	15 years
Maximum | Customer relationships
Business Acquisition [Line Items]
Useful Life (Years)	17 years
Maximum | Technology
Business Acquisition [Line Items]
Useful Life (Years)	16 years

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Acquisitions - Schedule of Consideration Transferred and the Preliminary Fair Value Assigned to Assets Acquired And Liabilities Assumed (Detail) - USD ($) $ in Thousands	Jun. 02, 2017	May 31, 2018	May 31, 2017	May 31, 2016
Business Acquisition [Line Items]
Goodwill		$ 345,183	$ 247,673	$ 246,067
AMTROL
Business Acquisition [Line Items]
Cash	$ 6,893
Accounts receivable	40,212
Inventories	37,249
Prepaid expenses	981
Other assets	2,550
Intangible assets	166,000	$ 166,000
Property, plant and equipment	52,870
Total assets	306,755
Accounts payable	25,945
Accrued liabilities	21,016
Long-term debt including current maturities	2,287
Other accrued items	5,494
Deferred income taxes, net	63,529
Net identifiable assets	188,484
Goodwill	103,437
Purchase price	291,921
AMTROL | Preliminary Valuation
Business Acquisition [Line Items]
Cash	6,893
Accounts receivable	40,212
Inventories	37,249
Prepaid expenses	981
Other assets	2,550
Intangible assets	166,000
Property, plant and equipment	52,870
Total assets	306,755
Accounts payable	25,945
Accrued liabilities	21,016
Long-term debt including current maturities	2,287
Other accrued items	3,993
Deferred income taxes, net	64,495
Net identifiable assets	189,019
Goodwill	102,902
Purchase price	291,921
AMTROL | Measurement Period Adjustments
Business Acquisition [Line Items]
Other accrued items	1,501
Deferred income taxes, net	(966)
Net identifiable assets	(535)
Goodwill	$ 535

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Acquisitions - Summary of Unaudited Pro forma Results (Detail) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017
Business Acquisition Pro Forma Information [Abstract]
Net sales	$ 3,581,620	$ 3,263,315
Net earnings attributable to controlling interest	$ 199,038	$ 215,182
Diluted earnings per share attributable to controlling interest	$ 3.16	$ 3.32

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Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017
Derivative Instruments And Hedging Activities Disclosure [Abstract]
Impact to fair value of derivative assets and liabilities as a result of recognition on a net basis	$ 351,000	$ 100,000
Gains in accumulated other comprehensive income expected to be reclassified into net earnings	5,775
Gains in accumulated other comprehensive income expected to be reclassified into net earnings, tax	$ 1,751

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Derivative Instruments and Hedging Activities - Schedule of Fair Value of Derivative Instruments (Detail) - USD ($) $ in Thousands	May 31, 2018	May 31, 2017
Derivative [Line Items]
Asset Derivatives at Fair Value	$ 11,423	$ 8,326
Liability Derivatives at Fair Value	846	1,142
Designated as Hedging Instrument
Derivative [Line Items]
Asset Derivatives at Fair Value	6,453	7,154
Liability Derivatives at Fair Value		571
Designated as Hedging Instrument | Commodity Contracts
Derivative [Line Items]
Asset Derivatives at Fair Value		7,154
Liability Derivatives at Fair Value		270
Designated as Hedging Instrument | Commodity Contracts | Other Liabilities
Derivative [Line Items]
Liability Derivatives at Fair Value		159
Designated as Hedging Instrument | Commodity Contracts | Receivables
Derivative [Line Items]
Asset Derivatives at Fair Value	6,385	7,148
Designated as Hedging Instrument | Commodity Contracts | Other Assets
Derivative [Line Items]
Asset Derivatives at Fair Value	68	6
Designated as Hedging Instrument | Commodity Contracts | Accounts Payable
Derivative [Line Items]
Liability Derivatives at Fair Value		111
Designated as Hedging Instrument | Interest Rate Contracts
Derivative [Line Items]
Liability Derivatives at Fair Value		301
Designated as Hedging Instrument | Interest Rate Contracts | Other Liabilities
Derivative [Line Items]
Liability Derivatives at Fair Value		160
Designated as Hedging Instrument | Interest Rate Contracts | Accounts Payable
Derivative [Line Items]
Liability Derivatives at Fair Value		141
Derivatives Not Designated As Hedging Instruments
Derivative [Line Items]
Asset Derivatives at Fair Value	4,970	1,172
Liability Derivatives at Fair Value	846	571
Derivatives Not Designated As Hedging Instruments | Commodity Contracts
Derivative [Line Items]
Asset Derivatives at Fair Value	4,970	1,110
Liability Derivatives at Fair Value	771	571
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Other Liabilities
Derivative [Line Items]
Liability Derivatives at Fair Value	158	1
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Receivables
Derivative [Line Items]
Asset Derivatives at Fair Value	4,749	1,110
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Other Assets
Derivative [Line Items]
Asset Derivatives at Fair Value	221
Derivatives Not Designated As Hedging Instruments | Commodity Contracts | Accounts Payable
Derivative [Line Items]
Liability Derivatives at Fair Value	613	570
Derivatives Not Designated As Hedging Instruments | Foreign Currency Contracts | Receivables
Derivative [Line Items]
Asset Derivatives at Fair Value		$ 62
Derivatives Not Designated As Hedging Instruments | Foreign Currency Contracts | Accounts Payable
Derivative [Line Items]
Liability Derivatives at Fair Value	$ 75

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Derivative Instruments and Hedging Activities - Schedule of Summary of Derivative Hedges (Detail) $ in Thousands	12 Months Ended
	May 31, 2018 USD ($)
Commodity Contracts | Minimum | Derivatives Not Designated As Hedging Instruments
Derivative [Line Items]
Notional Amount	$ 31,814
Maturity Date	2018-06
Commodity Contracts | Maximum | Derivatives Not Designated As Hedging Instruments
Derivative [Line Items]
Maturity Date	2019-12
Foreign Currency Contracts | Minimum | Derivatives Not Designated As Hedging Instruments
Derivative [Line Items]
Notional Amount	$ 10,448
Maturity Date	2018-06
Foreign Currency Contracts | Maximum | Derivatives Not Designated As Hedging Instruments
Derivative [Line Items]
Maturity Date	2018-08
Cash Flow Hedges | Commodity Contracts | Minimum
Derivative [Line Items]
Notional Amount	$ 15,276
Maturity Date	2018-06
Cash Flow Hedges | Commodity Contracts | Maximum
Derivative [Line Items]
Maturity Date	2019-06

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Derivative Instruments and Hedging Activities - Schedule of Derivatives Designated as Cash Flow Hedging Instruments (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017
Derivative [Line Items]
Gain (Loss) Recognized in OCI (Effective Portion)	$ 14,983	$ 7,669
Gain (Loss) Reclassified from Accumulated OCI (Effective Portion)	13,627	12,191
Commodity Contracts
Derivative [Line Items]
Gain (Loss) Recognized in OCI (Effective Portion)	11,620	7,643
Commodity Contracts | Cost of Sales
Derivative [Line Items]
Gain (Loss) Reclassified from Accumulated OCI (Effective Portion)	14,034	12,402
Interest Rate Contracts
Derivative [Line Items]
Gain (Loss) Recognized in OCI (Effective Portion)	3,363	26
Interest Rate Contracts | Interest Expense
Derivative [Line Items]
Gain (Loss) Reclassified from Accumulated OCI (Effective Portion)	$ (407)	$ (211)

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Derivative Instruments and Hedging Activities - Schedule of Gain (Loss) Recognized in Earnings for Economic (Non-Designated) Derivative Financial Instruments (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017
Derivative [Line Items]
Gain (Loss) Recognized in Earnings	$ 6,020	$ 3,196
Commodity Contracts | Cost of Sales
Derivative [Line Items]
Gain (Loss) Recognized in Earnings	6,284	3,749
Foreign Exchange Contracts | Miscellaneous Income Expense
Derivative [Line Items]
Gain (Loss) Recognized in Earnings	$ (264)	$ (553)

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Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands		May 31, 2018	May 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		$ 11,423	$ 8,326
Liabilities		846	1,727
Derivative Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	[1]	11,423	8,326
Liabilities	[1]	846	1,142
Contingent consideration obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	[2]		585
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets		11,423	8,326
Liabilities		846	1,142
Significant Other Observable Inputs (Level 2) | Derivative Contracts
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	[1]	11,423	8,326
Liabilities	[1]	$ 846	1,142
Significant Unobservable Inputs (Level 3)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities			585
Significant Unobservable Inputs (Level 3) | Contingent consideration obligations
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities	[2]		$ 585

[1] The fair value of our derivative contracts was based on the present value of the expected future cash flows considering the risks involved, including non-performance risk, and using discount rates appropriate for the respective maturities. Market observable, Level 2 inputs are used to determine the present value of the expected future cash flows. Refer to “Note P – Derivative Instruments and Hedging Activities” for additional information regarding our use of derivative instruments.

[2] (2)The fair value of the contingent consideration obligation was determined using a probability weighted cash flow approach based on management’s projections of future cash flows of the acquired business. The fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 measurements.

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Fair Value Measurements - Assets Measured at Fair Value on Non-Recurring Basis (Detail) - Fair Value, Measurements, Nonrecurring $ in Thousands	May 31, 2018 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset measured at fair value on non-recurring basis	$ 30,000
Long-lived Assets Held and Used
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset measured at fair value on non-recurring basis	30,000	[1]
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset measured at fair value on non-recurring basis	30,000
Significant Other Observable Inputs (Level 2) | Long-lived Assets Held and Used
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset measured at fair value on non-recurring basis	$ 30,000	[1]

[1] During the fourth quarter of fiscal 2018, management committed to a plan to sell the Company’s cryogenics business in Turkey, Worthington Aritas, and certain underperforming oil & gas equipment assets within Pressure Cylinders. In accordance with the applicable accounting guidance, the net assets were recorded at the lower of net book value or fair value less costs to sell. The book value of Worthington Aritas exceeded its estimated fair market value of $9,000,000, resulting in an impairment charge of $42,422,000. The book value of the oil & gas equipment asset group also exceeded its estimated fair market value of $21,000,000, resulting in an impairment charge of $10,497,000.

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Fair Value Measurements - Assets Measured at Fair Value on Non-Recurring Basis (Parenthetical) (Detail) - USD ($)	3 Months Ended				12 Months Ended
	May 31, 2018		Nov. 30, 2017	[1]	May 31, 2018	May 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of goodwill and long-lived assets	$ 52,919,000	[1]	$ 8,289,000		$ 61,208,000	$ 25,962,000
Oil And Gas Equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of goodwill and long-lived assets	10,497,000
Worthington Aritas
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Impairment of goodwill and long-lived assets	42,422,000
Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset measured at fair value on non-recurring basis	30,000,000				30,000,000
Fair Value, Measurements, Nonrecurring | Oil And Gas Equipment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset measured at fair value on non-recurring basis	21,000,000				21,000,000
Fair Value, Measurements, Nonrecurring | Worthington Aritas
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset measured at fair value on non-recurring basis	$ 9,000,000				$ 9,000,000

[1] For additional information regarding the Company’s impairment activity, refer to “Note C – Goodwill and Other Long-Lived Assets.”

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Fair Value Measurements - Additional Information (Detail) - USD ($) $ in Thousands	May 31, 2018	May 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt at carrying amount including current maturities	$ 754,728
Long-term Debt
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt at fair value including current maturities	757,069	$ 618,059
Long-term debt at carrying amount including current maturities	$ 750,368	$ 578,487

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Operating Leases - Additional Information (Detail) - USD ($)	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Leases [Abstract]
Operating leases rent expenses	$ 16,277,000	$ 13,519,000	$ 14,683,000

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Future Minimum Lease Payments for Noncancelable Operating Lease (Detail) $ in Thousands	May 31, 2018 USD ($)
Leases [Abstract]
2019	$ 11,348
2020	8,839
2021	6,774
2022	5,825
2023	5,097
Thereafter	5,508
Total	$ 43,391

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Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands	12 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2016
Related Party Transactions [Abstract]
Net sales to affiliates	$ 57,382	$ 56,588	$ 32,496
Purchases from affiliates	7,292	7,145	$ 15,737
Receivables from affiliates	2,479	4,616
Payable to affiliates	$ 0	$ 76

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Quarterly Results of Operations (Unaudited) - Summary of Unaudited Quarterly Consolidated Results of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended										12 Months Ended
	May 31, 2018		Feb. 28, 2018	Nov. 30, 2017		Aug. 31, 2017	May 31, 2017	Feb. 28, 2017	Nov. 30, 2016	Aug. 31, 2016	May 31, 2018	May 31, 2017	May 31, 2016
Quarterly Financial Information Disclosure [Abstract]
Net sales	$ 1,020,460		$ 841,657	$ 871,266		$ 848,237	$ 845,343	$ 703,436	$ 727,780	$ 737,549	$ 3,581,620	$ 3,014,108	$ 2,819,714
Gross margin	162,946		127,055	140,079		132,778	154,830	110,990	122,803	147,282	562,857	535,905	452,593
Impairment of goodwill and long-lived assets	52,919	[1]		8,289	[1]						61,208		25,962
Net earnings	32,857		78,297	41,622		48,074	60,583	38,951	49,867	68,536	200,850	217,937	157,628
Net earnings attributable to controlling interest	$ 30,770		$ 79,087	$ 39,403		$ 45,534	$ 56,494	$ 35,889	$ 46,565	$ 65,567	$ 194,794	$ 204,515	$ 143,715
Earnings per share attributable to controlling interest	$ 0.52		$ 1.31	$ 0.64		$ 0.73	$ 0.90	$ 0.57	$ 0.75	$ 1.06	$ 3.20	$ 3.28	$ 2.30
Earnings per share attributable to controlling interest	$ 0.50		$ 1.27	$ 0.62		$ 0.70	$ 0.87	$ 0.55	$ 0.72	$ 1.02	$ 3.09	$ 3.15	$ 2.22

[1] For additional information regarding the Company’s impairment activity, refer to “Note C – Goodwill and Other Long-Lived Assets.”

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SCHEDULE II - Valuation and Qualifying Accounts (Detail) - Allowance for Doubtful Accounts - USD ($) $ in Thousands		12 Months Ended
		May 31, 2018	May 31, 2017	May 31, 2016
Valuation and Qualifying Accounts Disclosure [Line Items]
Balance at Beginning of Period		$ 3,444	$ 4,579	$ 3,085
Charged to Costs and Expenses		11	269	1,556
Charged to Other Accounts - Describe	[1]			394
Deductions - Describe	[2]	2,823	1,404	456
Balance at End of Period		$ 632	$ 3,444	$ 4,579

[1] Miscellaneous amounts.

[2] Uncollectable accounts charged to the allowance. For fiscal 2018, the balance also includes $1,215,000 related to Worthington Aritas that was reclassified to assets held for sale.

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SCHEDULE II - Valuation and Qualifying Accounts (Parenthetical ) (Detail) $ in Thousands	12 Months Ended
	May 31, 2018 USD ($)
Worthington Aritas
Valuation and Qualifying Accounts Disclosure [Line Items]
Assets held for sale	$ 1,215