Investment in Unconsolidated Affiliate

12 Months Ended

May 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

Note C – Investment in Unconsolidated Affiliate

Investments in affiliated companies that we do not control, either through majority ownership or otherwise, are accounted for using the equity method. As of May 31, 2024, the Company owns a noncontrolling interest (50%) in one unconsolidated joint venture, Serviacero Worthington. The Company accounts for its investment in Serviacero Worthington using the equity method of accounting. 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.

We received distributions from Serviacero Worthington totaling $2.0 million in fiscal 2024, $12.5 million in fiscal 2023, and $2.5 million in fiscal 2022.

The following table presents the financial position of Serviacero Worthington accounted for using the equity method as of May 31:


(In millions)	2024		2023
Cash and cash equivalents	$	5.7	$	12.2
Other current assets		274.7		238.2
Noncurrent assets		58.3		58.9
Total assets	$	338.7	$	309.3
Current liabilities	$	64.7	$	70.8
Other noncurrent liabilities		5.2		5.4
Equity		268.8		233.1
Total liabilities and equity	$	338.7	$	309.3

The following table presents summarized financial information for Serviacero Worthington as of, and for the fiscal years ended May 31:


(In millions)	2024		2023			2022
Net sales	$	604.1	$	564.6		$	620.3
Gross margin		70.4		21.5			96.9
Operating income		56.4		10.4			87.3
Depreciation and amortization		4.4		4.0			4.3
Interest expense		-		0.3			0.2
Income tax expense (benefit)		8.4		(3.0	)		25.1
Net earnings		44.8		15.5			59.6

The following table presents the net earnings of Serviacero Worthington attributable to the Company for the fiscal years ended May 31:


(In millions)	2024		2023		2022
Equity in net income of unconsolidated affiliate	$	22.4	$	7.7	$	29.8

At May 31, 2024 and 2023, $56.4 million and $39.6 million, respectively, of our consolidated retained earnings represented undistributed earnings of Serviacero Worthington, net of tax.