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. (“Nisshin”) (10%).

During the fourth quarter of fiscal 2019, we determined our 10% ownership interest in our joint venture in China, Nisshin, was other than temporarily impaired due to current and projected operating losses. As a result, an impairment charge of $4,017,000 was recognized within equity income in our consolidated statement of earnings to write down the investment to its estimated fair value of $3,700,000.

We received distributions from unconsolidated affiliates totaling $161,079,000, $89,787,000, and $102,015,000 in fiscal 2019, fiscal 2018 and fiscal 2017, 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 $121,948,000 and $55,198,000 at May 31, 2019 and 2018, 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:

The amounts presented within the discontinued operations captions in the table above reflect the international operations of our WAVE joint venture, which are being 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. WAVE’s portion of the total sales proceeds is expected to be approximately $90,000,000 ($45,000,000 attributed to Worthington). The transaction is subject to regulatory approvals and other customary closing conditions. During the first quarter of fiscal 2019, the parties agreed to extend the date by which certain competition clearance conditions were to be satisfied per the original purchase agreement. In exchange, Knauf Group irrevocably agreed to fund the purchase price which was received by AWI in two distributions, the first on August 1, 2018, and the balance on September 15, 2018. In September 2018, we received a cash distribution of $35,000,000 from WAVE related to the pending sale of the international operations. We will receive the remaining proceeds at closing, subject to certain adjustments as provided in the purchase agreement, including those related to the economic impact of any required regulatory remedies and a working capital adjustment. Despite receiving a portion of the sales proceeds, there has been no change in control of the international operations of WAVE; therefore, the gain to be realized from this transaction has not been reflected in WAVE’s statement of earnings. The closing is expected to occur by the end of calendar 2019. We also received a one-time special cash distribution of $25,000,000 from WAVE in connection with a financing transaction completed in October 2018.

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.

(in thousands)	2019			2018			2017
Net sales
WAVE	$	379,103		$	360,395		$	334,031
ClarkDietrich		892,758			790,887			711,735
Serviacero Worthington		351,671			315,098			275,315
ArtiFlex		201,526			197,061			208,922
Other		32,753			28,578			17,784
Total net sales	$	1,857,811		$	1,692,019		$	1,547,787

Gross margin (loss)
WAVE	$	205,909		$	201,581		$	190,350
ClarkDietrich		93,947			97,437			128,098
Serviacero Worthington		34,494			32,396			37,080
ArtiFlex		12,928			18,266			22,829
Other		(6,000	)		(6,399	)		(4,313	)
Total gross margin	$	341,278		$	343,281		$	374,044

Operating income (loss)
WAVE	$	166,969		$	158,697		$	158,030
ClarkDietrich		33,384			39,153			68,696
Serviacero Worthington		25,636			24,232			29,975
ArtiFlex		5,524			11,395			15,519
Other		(9,964	)		(10,584	)		(8,407	)
Total operating income	$	221,549		$	222,893		$	263,813

Depreciation and amortization
WAVE	$	3,634		$	3,318		$	2,978
ClarkDietrich		11,600			11,864			12,718
Serviacero Worthington		4,319			3,919			3,862
ArtiFlex		6,055			5,515			5,850
Other		875			749			698
Total depreciation and amortization	$	26,483		$	25,365		$	26,106

Interest expense
WAVE	$	10,547		$	8,365		$	7,182
ClarkDietrich		912			114			20
Serviacero Worthington		493			397			89
ArtiFlex		1,443			1,333			1,429
Other		-			-			-
Total interest expense	$	13,395		$	10,209		$	8,720

Income tax expense (benefit)
WAVE	$	219		$	119		$	2,398
ClarkDietrich		-			-			-
Serviacero Worthington		7,629			5,141			11,740
ArtiFlex		29			208			(2	)
Other		-			-			(2	)
Total income tax expense	$	7,877		$	5,468		$	14,134

Net earnings (loss)
WAVE (1)	$	162,849		$	152,329		$	154,866
ClarkDietrich		34,560			39,138			69,122
Serviacero Worthington		16,155			17,577			18,140
ArtiFlex		4,051			9,854			14,092
Other		(8,383	)		(11,922	)		(5,472	)
Total net earnings	$	209,232		$	206,976		$	250,748

(1)

These net earnings include net income attributable to discontinued operations of $6,830,000, $2,226,000, and $6,775,000 in fiscal 2019, fiscal 2018, and fiscal 2017, respectively, related to the international operations of WAVE being sold. All other amounts presented in the table above exclude the activity of the discontinued operations of WAVE.

At May 31, 2019 and 2018, $46,838,000 and $42,636,000, respectively, of our consolidated retained earnings represented undistributed earnings of our unconsolidated affiliates, net of tax.