v3.26.3
Fair Value
 3 Months Ended
Aug. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value

Note 15 – Fair Value

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 – Quoted prices (unadjusted) in active markets for identical assets and liabilities that the reporting entity can assess at the measurement date.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 – Unobservable inputs for the asset or liability, and includes situations where there is little, if any, market activity 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 August 31, 2026, the Company’s assets and liabilities measured at fair value on a recurring basis were as follows:

 

(In millions)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Totals

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments (1)

 

$

-

 

 

$

9.1

 

 

$

-

 

 

$

9.1

 

Total assets

 

$

-

 

 

$

9.1

 

 

$

-

 

 

$

9.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments (1)

 

$

-

 

 

$

10.3

 

 

$

-

 

 

$

10.3

 

Total liabilities

 

$

-

 

 

$

10.3

 

 

$

-

 

 

$

10.3

 

 

 
(1)
The fair value of the Company’s derivative financial instruments is 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 14 – Derivative Financial Instruments and Hedging Activities” for additional information regarding the use of derivative financial instruments.

There were no transfers between Level 1 and Level 2 and no transfers in or out of Level 3 during the three months ended August 31, 2026.

 

At May 31, 2026, the Company’s assets and liabilities measured at fair value on a recurring basis were as follows:

 

(In millions)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Totals

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments (1)

 

$

-

 

 

$

8.6

 

 

$

-

 

 

$

8.6

 

Equity securities (2)

 

 

122.2

 

 

 

-

 

 

 

-

 

 

 

122.2

 

Total assets

 

$

122.2

 

 

$

8.6

 

 

$

-

 

 

$

130.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments (1)

 

$

-

 

 

$

6.1

 

 

$

-

 

 

$

6.1

 

Total liabilities

 

$

-

 

 

$

6.1

 

 

$

-

 

 

$

6.1

 

 

 
(1)
The fair value of the Company’s derivative financial instruments is 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 14 – Derivative Financial Instruments and Hedging Activities” for additional information regarding the use of derivative financial instruments.
(2)
The fair value of the Company’s equity securities is based upon quoted market prices in active markets.

 

Non-Recurring Fair Value Measurements

 

At August 31, 2026, there were no assets measured at fair value on a non-recurring basis on the consolidated balance sheets.

 

At May 31, 2026, the Company’s assets measured at fair value on a non-recurring basis were as follows:

 

(In millions)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Totals

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Long-lived assets, intangible assets, and other assets - Electrical Steel (1)

 

$

-

 

 

$

-

 

 

$

76.8

 

 

$

76.8

 

Long-lived assets held and used - Taylor (2)

 

$

-

 

 

$

-

 

 

$

0.5

 

 

$

0.5

 

Total assets

 

$

-

 

 

$

-

 

 

$

77.3

 

 

$

77.3

 

 

 
(1)
During fiscal 2026, the Company measured the fair values of certain long-lived asset groups and the Electrical Steel reporting unit in connection with the impairment analyses performed. These fair value measurements were classified within Level 3 of the fair value hierarchy because they included significant unobservable inputs. The fair values of the affected long-lived asset groups were determined using a discounted cash flow method, market approach, cost approach, or combination thereof, which included significant unobservable inputs.
(2)
During fiscal 2026, the net book value of certain machinery at the manufacturing facility in Taylor, Michigan was lowered to $0.5 million based on prices for similar assets.

 

The fair value of non-derivative financial instruments, including cash and cash equivalents, receivables, income taxes receivable, other assets, accounts payable, accrued compensation, contributions to employee benefit plans and related taxes, other accrued items, income taxes payable and other liabilities, approximate carrying value due to their short-term nature.

 

The carrying value of the Company's short-term borrowings, consisting of the 2031 Revolving Credit Facility, the ABS Germany Program, ABL USA Facility, and the Austria Bank Loans (and, at May 31, 2026, the 2028 Revolving Credit Facility), approximates fair value due to their variable interest rates and/or short-term nature. See “Note 8 – Debt” for additional information regarding these facilities.

 

The following table provides a summary of the carrying value and estimated fair value of the Company's long-term debt, including current maturities, as of the dates presented:

 

 

 

August 31,

 

 

May 31,

 

(In millions)

 

2026

 

 

2026

 

Carrying Value

 

$

1,665.5

 

 

$

71.4

 

Fair Value, estimated (1)

 

 

1,733.3

 

 

 

71.8

 

 

 
(1)
The estimated fair value of long-term debt, excluding current maturities and variable rate debt, was determined using quoted market prices for the Company's fixed rate debt instruments. These fair value measurements are classified within Level 2 of the fair value hierarchy. For long-term variable rate debt, the carrying amount approximates fair value as the variable rates reset frequently at market rates. For the current maturities of long-term debt for fixed rate debt, the carrying amount approximates fair value due to its short-term nature.

 

Investments Measured at Net Asset Value

 

The Company acquired investments in certain venture capital and growth equity investment funds (the “Kloeckner Funds”) in connection with the Kloeckner Acquisition. The Kloeckner Funds primarily invest in early- and growth-stage technology companies across Germany, Western Europe, and North America. The Kloeckner Funds are closed-end vehicles; none of the Company's interests are redeemable, and the Company receives distributions only as the underlying fund investments are realized or the fund is liquidated. Transfers of the Company's interests in the Kloeckner Funds require the consent of the general partner of each fund. The timing of the liquidation of the underlying assets of the Kloeckner Funds has not been communicated to the Company by the general partners of the funds or announced publicly.

 

Certain investments measured at fair value using the NAV per share as a practical expedient, in accordance with ASC 820, have not been classified within the fair value hierarchy above. For additional information, see “Note 1 – Description of Business and Basis of Presentation.”

 

The following table summarizes these investments at August 31, 2026:

(In millions)

 

Fair Value

 

 

Unfunded Commitments

 

 

Redemption Frequency

 

Redemption Period Notice

Private equity funds

 

$

25.4

 

 

$

3.3

 

 

N/A

 

N/A