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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.