WORTHINGTON ENTERPRISES, INC. Fair Value Disclosure
Note R – 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 |
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Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date. |
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Level 2 |
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– |
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Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. |
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Level 3 |
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– |
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Unobservable inputs for the asset or liability and that are significant to the fair value of the assets and liabilities (i.e., allowing for situations in which there is little or no market activity for the asset or liability at the measurement date). |
Recurring Fair Value Measurements
At May 31, 2025, our financial assets and liabilities measured at fair value on a recurring basis were as follows:
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Level 1 |
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Level 2 |
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Level 3 |
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Totals |
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Assets |
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Derivative financial instruments (1) |
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$ |
- |
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$ |
1,042 |
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$ |
- |
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$ |
1,042 |
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Total assets |
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$ |
- |
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$ |
1,042 |
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$ |
- |
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$ |
1,042 |
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Liabilities |
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Derivative financial instruments (1) |
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$ |
- |
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$ |
7,461 |
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$ |
- |
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$ |
7,461 |
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Total liabilities |
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$ |
- |
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$ |
7,461 |
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$ |
- |
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$ |
7,461 |
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At May 31, 2024, our financial assets and liabilities measured at fair value on a recurring basis were as follows:
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Level 1 |
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Level 2 |
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Level 3 |
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Totals |
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Assets |
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Derivative financial instruments (1) |
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$ |
- |
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$ |
920 |
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$ |
- |
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$ |
920 |
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Total assets |
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$ |
- |
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$ |
920 |
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$ |
- |
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$ |
920 |
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Liabilities |
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Derivative financial instruments (1) |
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$ |
- |
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$ |
1,421 |
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$ |
- |
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$ |
1,421 |
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Total liabilities |
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$ |
- |
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$ |
1,421 |
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$ |
- |
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$ |
1,421 |
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Non-Recurring Fair Value Measurements
At May 31, 2025, our assets measured at fair value on a non-recurring basis were categorized as follows:
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Level 1 |
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Level 2 |
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Level 3 |
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Totals |
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Assets |
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Long-lived assets held for use (1) |
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$ |
- |
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$ |
- |
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$ |
9,322 |
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$ |
9,322 |
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Investment in unconsolidated affiliate (2) |
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- |
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- |
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26,225 |
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26,225 |
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Investment in notes receivable (3) |
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- |
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- |
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- |
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- |
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Total assets |
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$ |
- |
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$ |
- |
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$ |
35,547 |
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$ |
35,547 |
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At May 31, 2024, our assets measured at fair value on a non-recurring basis were categorized as follows:
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Level 1 |
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Level 2 |
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Level 3 |
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Totals |
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Assets |
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Investment in unconsolidated affiliate (1) |
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$ |
- |
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$ |
- |
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$ |
31,367 |
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$ |
31,367 |
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Investment in notes receivable (2) |
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- |
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5,000 |
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- |
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5,000 |
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Total assets |
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$ |
- |
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$ |
- |
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$ |
31,367 |
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$ |
31,367 |
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The non-derivative financial instruments included in the carrying amounts of cash and cash equivalents, receivables, income taxes receivable, other assets, deferred income taxes, net, accounts payable, short-term borrowings, accrued compensation, contributions to employee benefit plans and related taxes, other accrued items, 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 $263,547 and $257,866 at May 31, 2025 and 2024, respectively. The carrying amount of long-term debt was $302,868 and $298,133 at May 31, 2025 and 2024, respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Jul 30, 2025 | Showing above |
| 2024 | Jul 30, 2024 | |
| 2023 | Jul 31, 2023 | |
| 2022 | Aug 1, 2022 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.