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. (“Nisshin”) (10%).

During the first quarter of fiscal 2020, we determined our 10% ownership interest in our steel joint venture in China, Nisshin, was other than temporarily impaired due to a decision by the joint venture partners to explore strategic alternatives for the business. As a result, the Company wrote-off its remaining investment, including related currency translation adjustments, resulting in an impairment charge of $4,236,000 within equity in net income of unconsolidated affiliates in our consolidated statement of earnings (loss).

We received distributions from unconsolidated affiliates totaling $29,849,000 during the three months ended August 31, 2019. 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 $123,401,000 at August 31, 2019. In accordance with the applicable accounting guidance, we reclassified the negative investment 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 the investment balance 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 negative investment balance classified as a liability as income immediately.

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

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

	August 31,		May 31,
(in thousands)	2019		2019
Cash	$	40,277	$	37,471
Other current assets		572,241		594,959
Current assets for discontinued operations		34,044		35,793
Noncurrent assets		409,240		360,925
Total assets	$	1,055,802	$	1,029,148

Current liabilities	$	249,803	$	236,781
Current liabilities for discontinued operations		8,733		9,610
Short-term borrowings		18,147		15,162
Current maturities of long-term debt		2,792		33,003
Long-term debt		314,264		321,791
Other noncurrent liabilities		62,028		18,192
Equity		400,035		394,609
Total liabilities and equity	$	1,055,802	$	1,029,148

	Three Months Ended August 31,
(in thousands)	2019		2018
Net sales	$	487,275	$	498,545
Gross margin		101,615		103,812
Operating income		69,405		72,376
Depreciation and amortization		7,089		6,477
Interest expense		3,367		2,925
Income tax expense		1,002		4,525
Net earnings from continuing operations		61,141		64,894
Net earnings from discontinued operations		2,812		1,684
Net earnings		63,953		66,578

The amounts presented within the discontinued operations captions in the tables above reflect the international operations of our WAVE joint venture, which were classified as discontinued operations as of August 31, 2019. On September 30, 2019, these operations were sold as part of a broader transaction between the joint venture partner, Armstrong World Industries, Inc. (“AWI”), and Knauf Group, a family-owned manufacturer of building materials headquartered in Germany. A pre-tax gain of approximately $45,000,000-$50,000,000 is expected to be realized from the transaction, subject to certain post-closing adjustments. Half of the gain will be attributed to Worthington.