Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 31, 2015 | Jan. 29, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | KENNAMETAL INC. | |
Entity Central Index Key | 55,242 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2015 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 79,672,229 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||||
Sales | $ 524,021 | $ 675,631 | $ 1,079,376 | $ 1,370,572 |
Cost of goods sold | 383,215 | 476,173 | 787,345 | 953,015 |
Gross profit | 140,806 | 199,458 | 292,031 | 417,557 |
Operating expense | 123,580 | 137,459 | 252,824 | 285,947 |
Restructuring and asset impairment charges (Notes 8 and 18) | 112,237 | 388,839 | 121,357 | 390,402 |
Loss on divestiture (Note 5) | 133,307 | 0 | 133,307 | 0 |
Amortization of intangibles | 5,638 | 6,931 | 11,886 | 13,959 |
Operating loss | (233,956) | (333,771) | (227,343) | (272,751) |
Interest expense | 6,803 | 7,960 | 13,782 | 16,170 |
Other (income) expense, net | (732) | 2,223 | 353 | 409 |
Loss before income taxes | (240,027) | (343,954) | (241,478) | (289,330) |
(Benefit) provision for income taxes | (71,216) | 43,751 | (66,964) | 58,248 |
Net loss | (168,811) | (387,705) | (174,514) | (347,578) |
Less: Net income attributable to noncontrolling interests | 416 | 597 | 939 | 1,236 |
Net loss attributable to Kennametal | $ (169,227) | $ (388,302) | $ (175,453) | $ (348,814) |
PER SHARE DATA ATTRIBUTABLE TO KENNAMETAL SHAREHOLDERS | ||||
Basic loss per share | $ (2.12) | $ (4.89) | $ (2.20) | $ (4.40) |
Diluted loss per share | (2.12) | (4.89) | (2.20) | (4.40) |
Dividends per share | $ 0.20 | $ 0.18 | $ 0.40 | $ 0.36 |
Basic weighted average shares outstanding | 79,840 | 79,343 | 79,784 | 79,229 |
Diluted weighted average shares outstanding | 79,840 | 79,343 | 79,784 | 79,229 |
CONDENSED CONSOLIDATED STATEME3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (168,811) | $ (387,705) | $ (174,514) | $ (347,578) |
Other comprehensive loss, net of tax [Abstract] | ||||
Unrealized gain on derivatives designated and qualified as cash flow hedges | 277 | 1,206 | 802 | 2,713 |
Reclassification of unrealized (gain) loss on expired derivatives designated and qualified as cash flow hedges | (418) | (35) | (2,184) | 329 |
Unrecognized net pension and other postretirement benefit gain | 1,450 | 1,924 | 2,449 | 5,565 |
Reclassification of net pension and other postretirement benefit loss | 1,203 | 735 | 2,422 | 1,489 |
Foreign currency translation adjustments | (23,639) | (30,209) | (42,488) | (81,722) |
Reclassification of foreign currency translation adjustment loss realized upon sale | 17,028 | 0 | 17,028 | 0 |
Total other comprehensive loss, net of tax | (4,099) | (26,379) | (21,971) | (71,626) |
Total comprehensive loss | (172,910) | (414,084) | (196,485) | (419,204) |
Less: comprehensive loss attributable to noncontrolling interests | (111) | (184) | (128) | (1,037) |
Comprehensive loss attributable to Kennametal Shareholders | $ (172,799) | $ (413,900) | $ (196,357) | $ (418,167) |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Dec. 31, 2015 | Jun. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 138,978 | $ 105,494 |
Accounts receivable, less allowance for doubtful accounts of $11,406 and $13,560, respectively | 333,402 | 445,373 |
Inventories (Note 11) | 477,499 | 575,531 |
Deferred income taxes | 55,722 | 72,449 |
Other current assets | 57,391 | 59,699 |
Total current assets | 1,062,992 | 1,258,546 |
Property, plant and equipment: | ||
Land and buildings | 350,046 | 401,207 |
Machinery and equipment | 1,509,418 | 1,573,597 |
Less accumulated depreciation | (1,139,935) | (1,158,979) |
Property, plant and equipment, net | 719,529 | 815,825 |
Other assets: | ||
Investments in affiliated companies | 2 | 361 |
Goodwill (Note 18) | 297,975 | 417,389 |
Other intangible assets, less accumulated amortization of $104,964 and $153,370, respectively (Note 18) | 216,027 | 286,669 |
Deferred income taxes | 72,927 | 24,091 |
Other | 70,800 | 46,648 |
Total other assets | 657,731 | 775,158 |
Total assets | 2,440,252 | 2,849,529 |
Current liabilities: | ||
Current maturities of long-term debt and capital leases | 5,444 | 8,129 |
Notes payable to banks | 498 | 7,573 |
Accounts payable | 151,597 | 187,381 |
Accrued income taxes | 29,572 | 25,237 |
Accrued expenses | 53,748 | 75,746 |
Other current liabilities | 154,124 | 178,678 |
Total current liabilities | 394,983 | 482,744 |
Long-term debt and capital leases, less current maturities (Note 12) | 700,711 | 735,885 |
Deferred income taxes | 15,310 | 59,744 |
Accrued pension and postretirement benefits | 147,766 | 163,029 |
Accrued income taxes | 2,274 | 3,002 |
Other liabilities | 24,931 | 29,690 |
Total liabilities | $ 1,285,975 | $ 1,474,094 |
Commitments and contingencies | ||
Kennametal Shareholders' Equity: | ||
Preferred stock, no par value; 5,000 shares authorized; none issued | $ 0 | $ 0 |
Capital stock, $1.25 par value; 120,000 shares authorized; 79,670 and 79,375 shares issued, respectively | 99,588 | 99,219 |
Additional paid-in capital | 426,703 | 419,829 |
Retained earnings | 862,984 | 1,070,282 |
Accumulated other comprehensive loss | (264,427) | (243,523) |
Total Kennametal Shareholders' Equity | 1,124,848 | 1,345,807 |
Noncontrolling interests | 29,429 | 29,628 |
Total equity | 1,154,277 | 1,375,435 |
Total liabilities and equity | $ 2,440,252 | $ 2,849,529 |
CONDENSED CONSOLIDATED BALANCE5
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Dec. 31, 2015 | Jun. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 11,406 | $ 13,560 |
Accumulated amortization on other intangible assets | $ 104,964 | $ 153,370 |
Preferred stock, par value | $ 0 | $ 0 |
Preferred stock, shares authorized | 5,000 | 5,000 |
Preferred stock, shares issued | 0 | 0 |
Capital stock, par value | $ 1.25 | $ 1.25 |
Capital stock, shares authorized | 120,000 | 120,000 |
Capital stock, shares issued | 79,670 | 79,375 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
OPERATING ACTIVITIES | ||
Net loss | $ (174,514) | $ (347,578) |
Adjustments for non-cash items: | ||
Depreciation | 50,429 | 53,341 |
Amortization | 11,886 | 13,959 |
Stock-based compensation expense | 10,811 | 13,475 |
Restructuring and asset impairment charges (Notes 8 and 18) | 111,327 | 383,489 |
Deferred income tax provision | (78,742) | (13,824) |
Loss on divestiture (Note 5) | 133,307 | 0 |
Other | (345) | 8,938 |
Changes in certain assets and liabilities: | ||
Accounts receivable | 69,832 | 54,928 |
Inventories | 46,565 | 4,727 |
Accounts Payable and Accrued Liabilities | (44,142) | (74,969) |
Accrued income taxes | (12,390) | 45,596 |
Accrued pension and postretirement benefits | (18,176) | (7,089) |
Other | (1,304) | 329 |
Net cash flow provided by operating activities | 104,544 | 135,322 |
INVESTING ACTIVITIES | ||
Purchases of property, plant and equipment | (61,175) | (54,672) |
Disposals of property, plant and equipment | 4,402 | 978 |
Proceeds from divestiture (Note 5) | 61,100 | 0 |
Other | 814 | (126) |
Net cash flow provided by (used for) investing activities | 5,141 | (53,820) |
FINANCING ACTIVITIES | ||
Net (decrease) increase in notes payable | (6,990) | 15,241 |
Net increase in short-term revolving and other lines of credit | 0 | 8,500 |
Term debt borrowings | 26,173 | 50,727 |
Term debt repayments | (63,726) | (154,547) |
Purchase of capital stock | (167) | (168) |
Dividend reinvestment and the effect of employee benefit and stock plans | 1,473 | 7,891 |
Cash dividends paid to shareholders | (31,845) | (28,451) |
Other | (290) | (4,786) |
Net cash flow used for financing activities | (75,372) | (105,593) |
Effect of exchange rate changes on cash and cash equivalents | (829) | (7,571) |
CASH AND CASH EQUIVALENTS | ||
Net increase (decrease) in cash and cash equivalents | 33,484 | (31,662) |
Cash and cash equivalents, beginning of period | 105,494 | 177,929 |
Cash and cash equivalents, end of period | $ 138,978 | $ 146,267 |
Organization
Organization | 6 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Kennametal Inc. was incorporated in Pennsylvania in 1943. Kennametal Inc. and its subsidiaries (collectively, Kennametal or the Company) are a leading global manufacturer and supplier of tooling, engineered components and advanced materials consumed in production processes. We believe that our reputation for manufacturing excellence, as well as our technological expertise and innovation we deliver in our products and services, helps us to achieve a leading position in our primary markets. End users of our products include metalworking and machinery manufacturers and suppliers across a diverse array of industries, including the aerospace, defense, transportation, machine tool, light machinery and heavy machinery, as well as producers and suppliers in a number of equipment-intensive industries such as coal mining, road construction and quarrying, as well as oil and gas exploration, refining, production and supply. Our end users' applications range from airframes to mining operations, engines to oil wells and turbochargers to processing. We operate two global business segments consisting of Industrial and Infrastructure. |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION The condensed consolidated financial statements, which include our accounts and those of our majority-owned subsidiaries, should be read in conjunction with our 2015 Annual Report on Form 10-K. The condensed consolidated balance sheet as of June 30, 2015 was derived from the audited balance sheet included in our 2015 Annual Report on Form 10-K. These interim statements are unaudited; however, we believe that all adjustments necessary for a fair statement of the results of the interim periods were made and all adjustments are normal recurring adjustments. The results for the six months ended December 31, 2015 and 2014 are not necessarily indicative of the results to be expected for a full fiscal year. Unless otherwise specified, any reference to a “year” is to a fiscal year ended June 30. For example, a reference to 2016 is to the fiscal year ending June 30, 2016 . When used in this Form 10-Q, unless the context requires otherwise, the terms “we,” “our” and “us” refer to Kennametal Inc. and its subsidiaries. |
New Accounting Standards
New Accounting Standards | 6 Months Ended |
Dec. 31, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
NEW ACCOUNTING STANDARDS | NEW ACCOUNTING STANDARDS Adopted In April 2014, the Financial Accounting Standards Board (FASB) issued new guidance on reporting discontinued operations and disclosures of disposals of components of an entity. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Additionally, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income and expenses of discontinued operations. The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. This guidance was effective for Kennametal beginning July 1, 2015. The transaction outlined in Note 5 was evaluated under this guidance. Issued In November 2015, the FASB issued new guidance on balance sheet classification of deferred taxes. The amendments in this Update require that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position, as opposed to the current practice of separating deferred income tax liabilities and assets into current and noncurrent amounts on the balance sheet. This standard is effective for Kennametal beginning July 1, 2017. We are in the process of assessing the impact the adoption of this ASU will have on our condensed consolidated financial statements. |
Supplemental Cash Flow Disclosu
Supplemental Cash Flow Disclosures | 6 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
SUPPLEMENTAL CASH FLOW DISCLOSURES | SUPPLEMENTAL CASH FLOW DISCLOSURES Six Months Ended December 31, (in thousands) 2015 2014 Cash paid during the period for: Interest $ 13,076 $ 16,334 Income taxes 25,735 24,894 Supplemental disclosure of non-cash information: Changes in accounts payable related to purchases of property, plant and equipment 16,400 6,470 |
Divestiture Divestiture
Divestiture Divestiture | 6 Months Ended |
Dec. 31, 2015 | |
Divestiture [Abstract] | |
Mergers, Acquisitions and Dispositions Disclosures [Text Block] | DIVESTITURE During the three months ended December 31, 2015 , Kennametal completed its transaction to sell all of the outstanding capital stock of: Kennametal Extrude Hone LLC and its wholly owned subsidiaries, Kennametal Stellite S.r.l. (Bellusco, Italy), Kennametal Stellite S.p.A. (Milan, Italy), Kennametal Stellite GmbH (Koblenz, Germany); and all of the assets of the businesses of: Tricon (manufacturing operations in Birmingham, Alabama; Chicago, Illinois; and Elko, Nevada), Landis (manufacturing operation in Waynesboro, Pennsylvania); and all of the assets located at the Biel, Switzerland manufacturing facility ("non-core businesses") to Madison Industries for an aggregate price of $61.1 million cash, net of cash sold and working capital settlements. A portion of the transaction proceeds were used to pay down revolver debt with the remaining balance being held as cash on hand. The net book value of these non-core businesses immediately prior to the transaction was $182.5 million , which includes the impact of cumulative translation adjustments. We recognized a pre-tax loss on the sale of $133.3 million during the three months ended December 31, 2015 which included the impact of working capital adjustments and deal costs. Charges of $126.0 million and $7.3 million were recorded in the Infrastructure and Industrial segments, respectively. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | 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. The fair value hierarchy consists of three levels to prioritize the inputs used in valuations, as defined below: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3: Inputs that are unobservable. As of December 31, 2015 , the fair values of the Company’s financial assets and financial liabilities measured at fair value on a recurring basis are categorized as follows: (in thousands) Level 1 Level 2 Level 3 Total Assets: Derivatives (1) $ — $ 799 $ — $ 799 Total assets at fair value $ — $ 799 $ — $ 799 Liabilities: Derivatives (1) $ — $ 75 $ — $ 75 Contingent consideration — — 8,600 8,600 Total liabilities at fair value $ — $ 75 $ 8,600 $ 8,675 As of June 30, 2015 , the fair value of the Company’s financial assets and financial liabilities measured at fair value on a recurring basis are categorized as follows: (in thousands) Level 1 Level 2 Level 3 Total Assets: Derivatives (1) $ — $ 2,678 $ — $ 2,678 Total assets at fair value $ — $ 2,678 $ — $ 2,678 Liabilities: Derivatives (1) $ — $ 44 $ — $ 44 Contingent consideration — — 10,000 10,000 Total liabilities at fair value $ — $ 44 $ 10,000 $ 10,044 (1) Currency derivatives are valued based on observable market spot and forward rates and are classified within Level 2 of the fair value hierarchy. There have been no changes in classification and transfers between levels in the fair value hierarchy in the current period. The fair value of contingent consideration payable that was classified as Level 3 relates to our probability assessments of expected future milestone targets, primarily associated with product delivery, related to a previous acquisition. The contingent consideration is to be paid over the next 12 months and is recorded in other current liabilities in our condensed consolidated balance sheet. The Company reassessed this contingent consideration and determined that an adjustment of $1.4 million to reduce the fair value of the remaining contingent consideration was necessary during the six months ended December 31, 2015 due to a return of inventory to the seller during the period. No other changes in the expected outcome have occurred during the six months ended December 31, 2015 . |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 6 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES As part of our financial risk management program, we use certain derivative financial instruments. We do not enter into derivative transactions for speculative purposes and, therefore, hold no derivative instruments for trading purposes. We account for derivative instruments as a hedge of the related asset, liability, firm commitment or anticipated transaction, when the derivative is specifically designated and qualifies as a hedge of such items. Our objective in managing foreign exchange exposures with derivative instruments is to reduce volatility in cash flow. We measure hedge effectiveness by assessing the changes in the fair value or expected future cash flows of the hedged item. The ineffective portions are recorded in other (income) expense, net. The fair value of derivatives designated and not designated as hedging instruments in the condensed consolidated balance sheet are as follows: (in thousands) December 31, June 30, Derivatives designated as hedging instruments Other current assets - range forward contracts $ 762 $ 2,626 Other assets - range forward contracts 21 — Total derivatives designated as hedging instruments 783 2,626 Derivatives not designated as hedging instruments Other current assets - currency forward contracts 16 52 Other current liabilities - currency forward contracts (75 ) (44 ) Total derivatives not designated as hedging instruments (59 ) 8 Total derivatives $ 724 $ 2,634 Certain currency forward contracts that hedge significant cross-border intercompany loans are considered as other derivatives and therefore do not qualify for hedge accounting. These contracts are recorded at fair value in the condensed consolidated balance sheet, with the offset to other (income) expense, net. Gains related to derivatives not designated as hedging instruments have been recognized as follows: Three Months Ended December 31, Six Months Ended December 31, (in thousands) 2015 2014 2015 2014 Other (income) expense, net - currency forward contracts $ 25 $ (2,273 ) $ 8 $ (7,169 ) CASH FLOW HEDGES Range forward contracts (a transaction where both a put option is purchased and a call option is sold) are designated as cash flow hedges and hedge anticipated cash flows from cross-border intercompany sales of products and services. Gains and losses realized on these contracts at maturity are recorded in accumulated other comprehensive loss and are recognized as a component of other expense (income), net when the underlying sale of products or services is recognized into earnings. The notional amount of the contracts translated into U.S. dollars at December 31, 2015 and June 30, 2015 , was $61.0 million and $53.8 million , respectively. The time value component of the fair value of range forward contracts is excluded from the assessment of hedge effectiveness. Assuming the market rates remain constant with the rates at December 31, 2015 , we expect to recognize into earnings in the next 12 months $0.4 million of income on outstanding derivatives. The following represents gains and losses related to cash flow hedges: Three Months Ended December 31, Six Months Ended December 31, (in thousands) 2015 2014 2015 2014 (Losses) gains recognized in other comprehensive loss, net $ (239 ) $ 1,205 $ 277 $ 2,712 Losses (gains) reclassified from accumulated other comprehensive loss into other (income) expense, net $ 1,122 $ 152 $ (336 ) $ 502 No portion of the gains or losses recognized in earnings was due to ineffectiveness and no amounts were excluded from our effectiveness testing for the six months ended December 31, 2015 and 2014 . |
Restructuring and Related Charg
Restructuring and Related Charges | 6 Months Ended |
Dec. 31, 2015 | |
Restructuring Charges [Abstract] | |
RESTRUCTURING AND RELATED CHARGES | RESTRUCTURING AND RELATED CHARGES Phase 1 We are implementing restructuring actions in conjunction with our Phase 1 restructuring program to achieve synergies across Kennametal as a result of the TMB acquisition by consolidating operations among both organizations, reducing administrative overhead and leveraging the supply chain. These restructuring actions are expected to be completed by the end of fiscal 2016 and are anticipated to be mostly cash expenditures. The total pre-tax charges for Phase 1 programs are expected to be in the range of $55 million to $60 million , which is expected to be approximately 50 percent Industrial and 50 percent Infrastructure. Total restructuring and related charges since inception of $57.9 million have been recorded for these Phase 1 programs through December 31, 2015 : $30.5 million in Industrial, $25.0 million in Infrastructure and $2.4 million in Corporate. Phase 2 We are implementing restructuring actions in conjunction with Phase 2 to streamline the Company's cost structure. These initiatives are expected to enhance operational efficiencies through the rationalization of certain manufacturing facilities as well as other employment and cost reduction programs. These restructuring actions are expected to be completed by December 2018 and are anticipated to be mostly cash expenditures. The total pre-tax charges for Phase 2 programs are expected to be in the range of $90 million to $100 million , which is expected to be approximately 85 percent Industrial and 15 percent Infrastructure. Total restructuring and related charges since inception of $38.1 million have been recorded for these Phase 2 programs through December 31, 2015 : $22.3 million in Industrial, $10.6 million in Infrastructure and $5.2 million in Corporate. Phase 3 We are implementing restructuring actions in conjunction with Phase 3. These initiatives are expected to enhance operational efficiencies through an enterprise-wide cost reduction program as well as the consolidation of certain manufacturing facilities. These restructuring actions are expected to be completed by March 2017 and are anticipated to be mostly cash expenditures. The total pre-tax charges for Phase 3 programs are expected to be in the range of $40 million to $45 million , which is expected to be approximately 50 percent Industrial and 50 percent Infrastructure. Total restructuring and related charges since inception of $5.2 million have been recorded for these Phase 3 programs through December 31, 2015 : $2.0 million in Industrial, $1.6 million in Infrastructure and $1.6 million in Corporate. Combined We have recorded restructuring and related charges of $8.9 million and $12.9 million for the three months ended December 31, 2015 and 2014 , respectively. Of these amounts, restructuring charges totaled $3.5 million and $6.7 million , of which benefits of $0.3 million and $0.1 million were related to inventory and were recorded in cost of goods sold, respectively. Restructuring-related charges of $2.0 million and $2.8 million were recorded in cost of goods sold and $3.4 million and $3.4 million in operating expense for the three months ended December 31, 2015 and 2014 , respectively. We have recorded restructuring and related charges of $24.0 million and $20.4 million for the six months ended December 31, 2015 and 2014 , respectively. Of these amounts, restructuring charges totaled $12.6 million and $8.6 million , of which a benefit of $0.3 million and expense of $0.2 million were related to inventory and were recorded in cost of goods sold, respectively. Restructuring-related charges of $3.6 million and $6.3 million were recorded in cost of goods sold and $7.8 million and $5.5 million in operating expense for the six months ended December 31, 2015 and 2014 , respectively. The restructuring accrual is recorded in other current liabilities in our condensed consolidated balance sheet and the amount attributable to each segment is as follows: (in thousands) June 30, 2015 Expense Asset Write-Down Translation Cash Expenditures December 31, 2015 Industrial Severance $ 13,456 $ 7,383 $ — $ (282 ) $ (12,242 ) $ 8,315 Facilities — 1,002 (998 ) — (4 ) — Other 28 48 — (1 ) (49 ) 26 Total Industrial $ 13,484 $ 8,433 $ (998 ) $ (283 ) $ (12,295 ) $ 8,341 Infrastructure Severance $ 7,173 $ 2,082 $ — $ (80 ) $ (3,453 ) $ 5,722 Facilities 131 2,109 (1,963 ) — (244 ) 33 Other — 13 — — (7 ) 6 Total Infrastructure $ 7,304 $ 4,204 $ (1,963 ) $ (80 ) $ (3,704 ) $ 5,761 Total $ 20,788 $ 12,637 $ (2,961 ) $ (363 ) $ (15,999 ) $ 14,102 (in thousands) June 30, 2014 Expense Asset Write-Down Other (2) Translation Cash Expenditures December 31, 2014 Industrial Severance $ 5,815 $ 3,361 $ — $ — $ (282 ) $ (4,291 ) $ 4,603 Facilities 444 489 (489 ) — (22 ) (389 ) 33 Other 67 21 — — (2 ) (86 ) — Total Industrial $ 6,326 $ 3,871 $ (489 ) $ — $ (306 ) $ (4,766 ) $ 4,636 Infrastructure Severance $ 2,458 $ 4,177 $ — $ (459 ) $ (312 ) $ (4,747 ) $ 1,117 Facilities 190 542 (541 ) — (25 ) (166 ) — Other 28 23 — — (3 ) (48 ) — Total Infrastructure $ 2,676 $ 4,742 $ (541 ) $ (459 ) $ (340 ) $ (4,961 ) $ 1,117 Total $ 9,002 $ 8,613 $ (1,030 ) $ (459 ) $ (646 ) $ (9,727 ) $ 5,753 (2) Special termination benefit charge for one of our U.S.-based benefit pension plans resulting from a plant closure - see Note 10. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Stock Options The assumptions used in our Black-Scholes valuation related to grants made during the six months ended December 31, 2015 and 2014 were as follows: 2015 2014 Risk-free interest rate 1.4 % 1.5 % Expected life (years) (3) 4.5 4.5 Expected volatility (4) 31.0 % 32.5 % Expected dividend yield 2.0 % 1.6 % (3) Expected life is derived from historical experience. (4) Expected volatility is based on the implied historical volatility of our stock. Changes in our stock options for the six months ended December 31, 2015 were as follows: Options Weighted Average Exercise Price Weighted Average Remaining Life (years) Aggregate Intrinsic value (in thousands) Options outstanding, June 30, 2015 2,094,037 $ 36.08 Granted 742,687 30.04 Exercised (38,569 ) 25.02 Lapsed and forfeited (168,666 ) 36.79 Options outstanding, December 31, 2015 2,629,489 $ 34.49 5.5 $ — Options vested and expected to vest, December 31, 2015 2,537,759 $ 34.59 5.3 $ — Options exercisable, December 31, 2015 1,661,984 $ 35.35 3.2 $ — During the six months ended December 31, 2015 and 2014 , compensation expense related to stock options was $1.9 million and $2.8 million , respectively. As of December 31, 2015 , the total unrecognized compensation cost related to options outstanding was $4.4 million and is expected to be recognized over a weighted average period of 2.4 years . Weighted average fair value of options granted during the six months ended December 31, 2015 and 2014 was $6.84 and $10.16 , respectively. Fair value of options vested during the six months ended December 31, 2015 and 2014 was $2.3 million and $6.9 million , respectively. Tax benefits relating to excess stock-based compensation deductions are presented in the condensed consolidated statements of cash flow as financing cash inflows. Tax benefits resulting from stock-based compensation deductions were less than amounts reported for financial reporting purposes by $1.7 million for the six months ended December 31, 2015 and exceeded amounts reported for financial reporting purposes by $1.3 million for the six months ended December 31, 2014 . The amount of cash received from the exercise of capital stock options during the six months ended December 31, 2015 and 2014 was $1.0 million and $6.1 million , respectively. The related tax benefit was immaterial for the six months ended December 31, 2015 and was $1.3 million during the six months ended December 31, 2014 . The total intrinsic value of options exercised was immaterial during the six months ended December 31, 2015 and was $3.4 million during the six months ended December 31, 2014 . Under the provisions of the Kennametal Inc. Stock and Incentive Plan of 2010 as amended and restated on October 22, 2013, plan participants may deliver stock, owned by the holder for at least six months, in payment of the option price and receive credit for the fair market value of the shares on the date of delivery. The fair market value of shares delivered during both the six months ended December 31, 2015 and 2014 was immaterial. Restricted Stock Units – Time Vesting and Performance Vesting Performance vesting restricted stock units are earned pro rata each year if certain performance goals are met over a three -year period and are also subject to a service condition that requires the individual to be employed by the Company at the payment date after the three -year performance period, with the exception of retirement eligible grantees, who upon retirement are entitled to receive payment for any units that have been earned, including a prorated portion in the partially completed fiscal year in which the retirement occurs. Time vesting stock units are valued at the market value of the stock on the grant date. Performance vesting stock units with a market condition are valued using a Monte Carlo model. Changes in our time vesting and performance vesting restricted stock units for the six months ended December 31, 2015 were as follows: Performance Vesting Stock Units Performance Vesting Weighted Average Fair Value Time Vesting Stock Units Time Vesting Weighted Average Fair Value Unvested performance vesting and time vesting restricted stock units, June 30, 2015 101,245 $ 43.00 689,268 $ 41.53 Granted 117,589 31.60 499,162 31.06 Vested — — (276,649 ) 40.92 Performance metric not achieved (42,697 ) 31.60 — — Forfeited (15,703 ) 35.93 (52,148 ) 39.02 Unvested performance vesting and time vesting restricted stock units, December 31, 2015 160,434 $ 35.53 859,633 $ 35.78 During the six months ended December 31, 2015 and 2014 , compensation expense related to time vesting and performance vesting restricted stock units was $8.8 million and $10.6 million , respectively. As of December 31, 2015 , the total unrecognized compensation cost related to unvested time vesting and performance vesting restricted stock units was $18.6 million and is expected to be recognized over a weighted average period of 2.3 years. |
Benefit Plans
Benefit Plans | 6 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
BENEFIT PLANS | BENEFIT PLANS We sponsor several defined benefit pension plans. Additionally, we provide varying levels of postretirement health care and life insurance benefits to some U.S. employees. The table below summarizes the components of net periodic pension (income): Three Months Ended December 31, Six Months Ended December 31, (in thousands) 2015 2014 2015 2014 Service cost $ 1,156 $ 1,384 $ 2,319 $ 2,799 Interest cost 9,438 9,745 18,923 19,681 Expected return on plan assets (14,657 ) (14,900 ) (29,364 ) (29,947 ) Amortization of transition obligation 21 19 42 40 Amortization of prior service credit (104 ) (71 ) (209 ) (141 ) Recognition of actuarial losses 1,815 937 3,648 1,937 Curtailment loss — 358 — 358 Special termination benefit charge 54 459 107 459 Net periodic pension (income) $ (2,277 ) $ (2,069 ) $ (4,534 ) $ (4,814 ) The special termination benefit charge of $0.1 million during the six months ended December 31, 2015 is the result of lump sum payments to several terminated Executive Retirement Plan participants. During the three and six months ended December 31, 2014 we recognized a special termination benefit charge of $0.5 million and a curtailment loss of $0.4 million for one of our U.S.-based defined benefit pension plans resulting from a plant closure. The special termination benefit charge was recognized in restructuring expense. The table below summarizes the components of net periodic other postretirement benefit cost: Three Months Ended December 31, Six Months Ended December 31, (in thousands) 2015 2014 2015 2014 Service cost $ — $ 27 $ — $ 54 Interest cost 210 259 420 519 Amortization of prior service credit (5 ) (28 ) (11 ) (55 ) Recognition of actuarial loss 81 207 162 414 Curtailment gain — (221 ) — (221 ) Net periodic other postretirement benefit cost $ 286 $ 244 $ 571 $ 711 The curtailment gain of $0.2 million recognized during the three and six months ended December 31, 2014 was a result of the plant closure discussed above. |
Inventories
Inventories | 6 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | INVENTORIES We used the last-in, first-out (LIFO) method of valuing inventories for 47 percent and 47 percent of total inventories at December 31, 2015 and June 30, 2015 , respectively. Since inventory valuations under the LIFO method are based on an annual determination of quantities and costs as of June 30 of each year, the interim LIFO valuations are based on our projections of expected year-end inventory levels and costs. Therefore, the interim financial results are subject to any final year-end LIFO inventory adjustments. Inventories consisted of the following: (in thousands) December 31, 2015 June 30, 2015 Finished goods $ 295,609 $ 324,840 Work in process and powder blends 173,360 249,629 Raw materials 70,628 100,881 Inventories at current cost 539,597 675,350 Less: LIFO valuation (62,098 ) (99,819 ) Total inventories $ 477,499 $ 575,531 |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT Our $600 million five-year, multi-currency, revolving credit facility (2011 Credit Agreement) requires us to comply with various restrictive and affirmative covenants, including two financial covenants: a maximum leverage ratio and a minimum consolidated interest coverage ratio (as those terms are defined in the agreement). We were in compliance with all covenants as of December 31, 2015 . We had $5.4 million and $42.8 million of borrowings outstanding under the 2011 Credit Agreement as of December 31, 2015 and June 30, 2015 , respectively. Borrowings under the 2011 Credit Agreement are guaranteed by our significant domestic subsidiaries. The 2011 Credit Agreement matures in April 2018. Fixed rate debt had a fair market value of $692.5 million and $698.0 million at December 31, 2015 and June 30, 2015 , respectively. The Level 2 fair value is determined based on the quoted market price of this debt as of December 31, 2015 and June 30, 2015 , respectively. |
Environmental Matters
Environmental Matters | 6 Months Ended |
Dec. 31, 2015 | |
Environmental Remediation Obligations [Abstract] | |
ENVIRONMENTAL MATTERS | ENVIRONMENTAL MATTERS The operation of our business has exposed us to certain liabilities and compliance costs related to environmental matters. We are involved in various environmental cleanup and remediation activities at certain of our locations. Superfund Sites We are involved as a potentially responsible party (PRP) at various sites designated by the United States Environmental Protection Agency (USEPA) as Superfund sites. For certain of these sites, we have evaluated the claims and potential liabilities and have determined that neither are material, individually or in the aggregate. For certain other sites, proceedings are in the very early stages and have not yet progressed to a point where it is possible to estimate the ultimate cost of remediation, the timing and extent of remedial action that may be required by governmental authorities or the amount of our liability alone or in relation to that of any other PRPs. Other Environmental Matters We establish and maintain reserves for other potential environmental issues. At December 31, 2015 and June 30, 2015 , the balances of these reserves were $12.2 million and $12.6 million . These reserves represent anticipated costs associated with the remediation of these issues. The reserves we have established for environmental liabilities represent our best current estimate of the costs of addressing all identified environmental situations, based on our review of currently available evidence, and taking into consideration our prior experience in remediation and that of other companies, as well as public information released by the USEPA, other governmental agencies and by the PRP groups in which we are participating. Although the reserves currently appear to be sufficient to cover these environmental liabilities, there are uncertainties associated with environmental liabilities, and we can give no assurance that our estimate of any environmental liability will not increase or decrease in the future. The reserved and unreserved liabilities for all environmental concerns could change substantially due to factors such as the nature and extent of contamination, changes in remedial requirements, technological changes, discovery of new information, the financial strength of other PRPs, the identification of new PRPs and the involvement of and direction taken by the government on these matters. We maintain a Corporate Environmental Health and Safety (EHS) Department to monitor compliance with environmental regulations and to oversee remediation activities. In addition, we have designated EHS coordinators who are responsible for each of our global manufacturing facilities. Our financial management team periodically meets with members of the Corporate EHS Department and the Corporate Legal Department to review and evaluate the status of environmental projects and contingencies. On a quarterly basis, we review financial provisions and reserves for environmental contingencies and adjust these reserves when appropriate. |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The effective income tax rates for the three months ended December 31, 2015 and 2014 were 29.7 percent (benefit on a loss) and 12.7 percent (provision on a loss) , respectively. The effective income tax rates for the six months ended December 31, 2015 and 2014 were 27.7 percent (benefit on a loss) and 20.1 percent (provision on a loss) , respectively. The change in both periods was primarily driven by the asset impairment charges recorded in the current and prior year quarters, the tax impact on the sale of certain non-core businesses in the current quarter, lower relative U.S. current year earnings compared with the rest of the world where the tax rates are generally lower and favorable effects of the permanent extension of the credit for increasing research activities contained in the Protecting Americans from Tax Hikes Act of 2015 that was enacted during the current quarter. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE Basic earnings per share is computed using the weighted average number of shares outstanding during the period, while diluted earnings per share is calculated to reflect the potential dilution that would occur related to the issuance of capital stock under stock option grants and restricted stock units. The difference between basic and diluted earnings per share relates solely to the effect of capital stock options and restricted stock units. For the three and six months ended December 31, 2015 and December 31, 2014 , the effect of unexercised capital stock options and unvested restricted stock units was anti-dilutive as a result of a net loss in the periods and therefore has been excluded from diluted shares outstanding as well as from the diluted earnings per share calculation. |
Equity
Equity | 6 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
EQUITY | EQUITY A summary of the changes in the carrying amounts of total equity, Kennametal Shareholders’ equity and equity attributable to noncontrolling interests as of December 31, 2015 and 2014 is as follows: Kennametal Shareholders’ Equity (in thousands) Capital Additional Retained Accumulated Non- Total equity Balance as of June 30, 2015 $ 99,219 $ 419,829 $ 1,070,282 $ (243,523 ) $ 29,628 $ 1,375,435 Net (loss) income — — (175,453 ) — 939 (174,514 ) Other comprehensive loss — — — (20,904 ) (1,067 ) (21,971 ) Dividend reinvestment 8 159 — — — 167 Capital stock issued under employee benefit and stock plans 369 6,874 — — — 7,243 Purchase of capital stock (8 ) (159 ) — — — (167 ) Cash dividends paid — — (31,845 ) — (71 ) (31,916 ) Balance as of December 31, 2015 $ 99,588 $ 426,703 $ 862,984 $ (264,427 ) $ 29,429 $ 1,154,277 Kennametal Shareholders’ Equity (in thousands) Capital stock Additional paid-in capital Retained earnings Accumulated Non- controlling interests Total equity Balance as of June 30, 2014 $ 98,340 $ 395,890 $ 1,501,157 $ (66,131 ) $ 32,352 $ 1,961,608 Net income — — (348,814 ) — 1,236 (347,578 ) Other comprehensive loss — — — (69,352 ) (2,274 ) (71,626 ) Dividend reinvestment 5 163 — — — 168 Capital stock issued under employee benefit and stock plans 592 16,089 — — — 16,681 Purchase of capital stock (5 ) (163 ) — — — (168 ) Cash dividends paid — — (28,451 ) — (47 ) (28,498 ) Balance as of December 31, 2014 $ 98,932 $ 411,979 $ 1,123,892 $ (135,483 ) $ 31,267 $ 1,530,587 The amounts of comprehensive loss attributable to Kennametal Shareholders and noncontrolling interests are disclosed in the condensed consolidated statements of comprehensive income. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 6 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | ACCUMULATED OTHER COMPREHENSIVE LOSS Total accumulated other comprehensive loss (AOCL) consists of net loss and other changes in equity from transactions and other events from sources other than shareholders. It includes postretirement benefit plan adjustments, currency translation adjustments and unrealized gains and losses from derivative instruments designated as cash flow hedges. The components of, and changes in, AOCL were as follows (net of tax) for the three months ended December 31, 2015 (in thousands): Attributable to Kennametal: Postretirement benefit plans Currency translation adjustment Derivatives Total Balance, September 30, 2015 $ (136,575 ) $ (115,619 ) $ (8,662 ) $ (260,856 ) Other comprehensive loss before reclassifications 1,450 (23,111 ) 277 (21,384 ) Amounts reclassified from AOCL 1,203 17,028 (418 ) 17,813 Net current period other comprehensive loss 2,653 (6,083 ) (141 ) (3,571 ) AOCL, December 31, 2015 $ (133,922 ) $ (121,702 ) $ (8,803 ) $ (264,427 ) Attributable to noncontrolling interests: Balance, September 30, 2015 $ — $ (2,797 ) $ — $ (2,797 ) Other comprehensive loss before reclassifications — (528 ) — (528 ) Net current period other comprehensive loss — (528 ) — (528 ) AOCL, December 31, 2015 $ — $ (3,325 ) $ — $ (3,325 ) The components of, and changes in, AOCL were as follows (net of tax) for the six months ended December 31, 2015 (in thousands): Attributable to Kennametal: Postretirement benefit plans Currency translation adjustment Derivatives Total Balance, June 30, 2015 $ (138,793 ) $ (97,309 ) $ (7,421 ) $ (243,523 ) Other comprehensive loss before reclassifications 2,449 (41,421 ) 802 (38,170 ) Amounts reclassified from AOCL 2,422 17,028 (2,184 ) 17,266 Net current period other comprehensive loss 4,871 (24,393 ) (1,382 ) (20,904 ) AOCL, December 31, 2015 $ (133,922 ) $ (121,702 ) $ (8,803 ) $ (264,427 ) Attributable to noncontrolling interests: Balance, June 30, 2015 $ — $ (2,258 ) $ — $ (2,258 ) Other comprehensive loss before reclassifications — (1,067 ) — (1,067 ) Net current period other comprehensive loss — (1,067 ) — (1,067 ) AOCL, December 31, 2015 $ — $ (3,325 ) $ — $ (3,325 ) The components of, and changes in, AOCL were as follows (net of tax) for the three months ended December 31, 2014 (in thousands): Attributable to Kennametal: Postretirement benefit plans Currency translation adjustment Derivatives Total Balance, September 30, 2014 $ (89,347 ) $ (11,210 ) $ (9,329 ) $ (109,886 ) Other comprehensive (loss) income before reclassifications 1,924 (29,427 ) 1,206 (26,297 ) Amounts reclassified from AOCL 735 — (35 ) 700 Net current period other comprehensive (loss) income 2,659 (29,427 ) 1,171 (25,597 ) AOCL, December 31, 2014 $ (86,688 ) $ (40,637 ) $ (8,158 ) $ (135,483 ) Attributable to noncontrolling interests: Balance, September 30, 2014 $ — $ (405 ) $ — $ (405 ) Other comprehensive income before reclassifications — (782 ) — (782 ) Net current period other comprehensive income — (782 ) — (782 ) AOCL, December 31, 2014 $ — $ (1,187 ) $ — $ (1,187 ) The components of, and changes in, AOCL were as follows (net of tax) for the six months ended December 31, 2014 (in thousands): Attributable to Kennametal: Postretirement benefit plans Currency translation adjustment Derivatives Total Balance, June 30, 2014 $ (93,742 ) $ 38,811 $ (11,200 ) $ (66,131 ) Other comprehensive loss before reclassifications 5,565 (79,448 ) 2,713 (71,170 ) Amounts reclassified from AOCL 1,489 — 329 1,818 Net current period other comprehensive loss 7,054 (79,448 ) 3,042 (69,352 ) AOCL, December 31, 2014 $ (86,688 ) $ (40,637 ) $ (8,158 ) $ (135,483 ) Attributable to noncontrolling interests: Balance, June 30, 2014 $ — $ 1,087 $ — $ 1,087 Other comprehensive loss before reclassifications — (2,274 ) — (2,274 ) Net current period other comprehensive loss — (2,274 ) — (2,274 ) AOCL, December 31, 2014 $ — $ (1,187 ) $ — $ (1,187 ) Reclassifications out of AOCL for the three and six months ended December 31, 2015 and 2014 consisted of the following (in thousands): Three Months Ended December 31, Six Months Ended December 31, Details about AOCL components 2015 2014 2015 2014 Affected line item in the Income Statement Gains and losses on cash flow hedges: Forward starting interest rate swaps $ 525 $ 505 $ 1,049 $ 1,010 Interest expense Currency exchange contracts (1,199 ) (562 ) (4,572 ) (474 ) Other (income) expense, net Total before tax (674 ) (57 ) (3,523 ) 536 Tax expense (benefit) 256 22 1,339 (207 ) (Benefit) provision for income taxes Net of tax $ (418 ) $ (35 ) $ (2,184 ) $ 329 Postretirement benefit plans: Amortization of transition obligations $ 21 $ 19 $ 42 $ 40 See note 10 for further details Amortization of prior service credit (109 ) (99 ) (220 ) (196 ) See note 10 for further details Recognition of actuarial losses 1,896 1,144 3,810 2,351 See note 10 for further details Total before taxes 1,808 1,064 3,632 2,195 Tax (benefit) (605 ) (329 ) (1,210 ) (706 ) (Benefit) provision for income taxes Net of tax $ 1,203 $ 735 $ 2,422 $ 1,489 Foreign currency translation adjustments: Released due to divestiture $ 17,028 $ — $ 17,028 $ — Loss on divestiture Total before taxes 17,028 — 17,028 — Tax benefit — — — — (Benefit) provision for income taxes Net of tax $ 17,028 $ — $ 17,028 $ — The amount of income tax allocated to each component of other comprehensive (loss) for the three months ended December 31, 2015 and 2014 : 2015 2014 (in thousands) Pre-tax Tax impact Net of tax Pre-tax Tax impact Net of tax Unrealized gain on derivatives designated and qualified as cash flow hedges $ 447 $ (170 ) $ 277 $ 1,964 $ (758 ) $ 1,206 Reclassification of unrealized gain on expired derivatives designated and qualified as cash flow hedges (674 ) 256 (418 ) (57 ) 22 (35 ) Unrecognized net pension and other postretirement benefit gain 1,949 (499 ) 1,450 2,608 (684 ) 1,924 Reclassification of net pension and other postretirement benefit loss 1,808 (605 ) 1,203 1,064 (329 ) 735 Foreign currency translation adjustments (24,643 ) 1,004 (23,639 ) (31,675 ) 1,466 (30,209 ) Reclassification of foreign currency translation adjustment loss realized upon sale 17,028 — 17,028 — — — Other comprehensive (loss) $ (4,085 ) $ (14 ) $ (4,099 ) $ (26,096 ) $ (283 ) $ (26,379 ) The amount of income tax allocated to each component of other comprehensive (loss) for the six months ended December 31, 2015 and 2014 : 2015 2014 (in thousands) Pre-tax Tax impact Net of tax Pre-tax Tax impact Net of tax Unrealized gain on derivatives designated and qualified as cash flow hedges $ 1,294 $ (492 ) $ 802 $ 4,419 $ (1,706 ) $ 2,713 Reclassification of unrealized (gain) loss on expired derivatives designated and qualified as cash flow hedges (3,523 ) 1,339 (2,184 ) 536 (207 ) 329 Unrecognized net pension and other postretirement benefit gain 3,216 (767 ) 2,449 7,586 (2,021 ) 5,565 Reclassification of net pension and other postretirement benefit loss 3,632 (1,210 ) 2,422 2,195 (706 ) 1,489 Foreign currency translation adjustments (43,548 ) 1,060 (42,488 ) (86,519 ) 4,797 (81,722 ) Reclassification of foreign currency translation adjustment loss realized upon sale 17,028 — 17,028 — — — Other comprehensive (loss) $ (21,901 ) $ (70 ) $ (21,971 ) $ (71,783 ) $ 157 $ (71,626 ) |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill represents the excess of cost over the fair value of the net assets of acquired companies. Goodwill and other intangible assets with indefinite lives are tested at least annually for impairment. We perform our annual impairment tests during the June quarter in connection with our annual planning process, unless there are impairment indicators based on the results of an ongoing cumulative qualitative assessment that warrant a test prior to that. We evaluate the recoverability of goodwill for each of our reporting units by comparing the fair value of each reporting unit with its carrying value. The fair values of our reporting units are determined using a combination of a discounted cash flow analysis and market multiples based upon historical and projected financial information. We apply our best judgment when assessing the reasonableness of the financial projections used to determine the fair value of each reporting unit. We evaluate the recoverability of indefinite-lived intangible assets using a discounted cash flow analysis based on projected financial information. This evaluation is sensitive to changes in market interest rates and other external factors. Identifiable assets with finite lives are reviewed for impairment when events or circumstances indicate that the carrying value may not be recoverable. 2016 December Quarter Impairment Charge Late in the December quarter of fiscal 2016, the Company experienced a further unexpected deterioration in customer demand in many of its end markets and certain geographies. Industrial production indices in the US and China have declined, as well as further reductions in mining and oil and gas activity. In view of these declines and the significant impact on our near term financial forecasts as well as a significant and sustained decline in the Company’s stock price, we determined an interim impairment test of our goodwill and other long-lived assets of our Industrial and Infrastructure reporting units was required. As a result of this interim test, we recorded a preliminary non-cash pre-tax impairment charge during the three months ended December 31, 2015 of $106.1 million in the Infrastructure segment, of which $105.7 million was for goodwill and $0.4 million was for an indefinite-lived trademark intangible asset. We also recorded a preliminary non-cash pre-tax impairment charge during the three months ended December 31, 2015 of $2.3 million in the Industrial segment for an indefinite-lived trademark intangible asset. These impairment charges are recorded in restructuring and asset impairment charges in our condensed consolidated statements of income. There is $298.0 million of goodwill at the Industrial reporting unit. The fair value exceeds the carrying value by approximately 70 percent , a decrease of approximately 20 percentage points from the fiscal 2015 annual impairment valuation. The Infrastructure reporting unit goodwill impairment charge is preliminary and subject to finalization of fair values related to intangibles and property, plant and equipment, which we expect to complete in the third quarter of fiscal 2016. The Infrastructure segment has no remaining goodwill recorded. During the December quarter, we also performed a preliminary review of our identifiable assets with finite lives and preliminarily determined that the assets were not impaired. This review is subject to finalization using consistent assumptions as used in our aforementioned 2016 December quarter goodwill impairment valuation, which we expect to complete in the third quarter of fiscal 2016. Divestiture Impact on Goodwill and Other Intangible Assets During the three months ended December 31, 2015 , we completed the sale of non-core businesses, see Note 5. As a result of this transaction, goodwill decreased by $1.1 million and $6.5 million in our Industrial and Infrastructure segments, respectively. These decreases are recorded in the loss on divestiture account in our condensed consolidated statements of income. 2015 December Quarter Impairment Charge As previously disclosed, we recorded a non-cash pre-tax impairment charge during the three months ended December 31, 2014 of $376.5 million in the Infrastructure segment, of which $375.0 million was for goodwill and $1.5 million was for an indefinite-lived trademark intangible asset. The further acceleration or extended persistence of the current downturn in the global end markets could have a further negative impact on our business and financial performance. We cannot provide assurance that we will achieve all of the anticipated benefits from restructuring actions we have taken and will continue to take. If we are unable to effectively restructure our operations in the light of evolving market conditions, it could have a material adverse effect on our business, financial condition, results of operations and cash flows. We are currently exploring strategic alternatives for one of our non-core Infrastructure businesses. The estimated net book value of the business is approximately $40 million as of December 31, 2015 . As the strategic direction has not yet been determined for this business, the business is classified as held and used, and the Company cannot determine if additional impairment charges will be incurred. A summary of the carrying amount of goodwill attributable to each segment, as well as the changes in such, is as follows: (in thousands) Industrial Infrastructure Total Gross goodwill $ 455,371 $ 640,360 $ 1,095,731 Accumulated impairment losses (150,842 ) (527,500 ) (678,342 ) Balance as of June 30, 2015 $ 304,529 $ 112,860 $ 417,389 Activity for the six months ended December 31, 2015: Divestiture (1,075 ) (6,461 ) (7,536 ) Translation (5,479 ) (688 ) (6,167 ) Change in gross goodwill (6,554 ) (7,149 ) (13,703 ) Impairment charges — (105,711 ) (105,711 ) Gross goodwill 448,817 633,211 1,082,028 Accumulated impairment losses (150,842 ) (633,211 ) (784,053 ) Balance as of December 31, 2015 $ 297,975 $ — $ 297,975 The components of our other intangible assets were as follows: Estimated Useful Life (in years) December 31, 2015 June 30, 2015 (in thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Contract-based 3 to 15 $ 7,164 $ (6,538 ) $ 8,523 $ (6,990 ) Technology-based and other 4 to 20 47,116 (25,945 ) 52,820 (29,723 ) Customer-related 10 to 21 205,566 (60,263 ) 275,796 (90,141 ) Unpatented technology 10 to 30 31,934 (4,128 ) 59,449 (14,426 ) Trademarks 5 to 20 12,644 (8,090 ) 18,575 (12,090 ) Trademarks Indefinite 16,567 — 24,876 — Total $ 320,991 $ (104,964 ) $ 440,039 $ (153,370 ) As previously mentioned, during the three months ended December 31, 2015 , we recorded $2.3 million and $0.4 million of impairment charges in the Industrial and Infrastructure segments, respectively, for indefinite-lived trademark intangible assets as a result of our interim impairment analysis. The divestiture of non-core businesses completed during the six months ended December 31, 2015 resulted in a reduction of $30.0 million in Customer-related, $15.4 million in Unpatented technology, $5.0 million in Indefinite-lived Trademarks, $1.1 million in Definite-lived Trademarks, $0.8 million in Technology-based and other and $0.5 million in Contract-based. During the three months ended December 31, 2014 , an impairment of $10.5 million was recorded for a contract-based technology intangible asset that was part of the Infrastructure segment, resulting in a non-cash impairment charge of $5.5 million and a reduction in a liability of $5.0 million . As previously mentioned, we recorded a $1.5 million impairment for an indefinite-lived trademark intangible asset as a result of our impairment test of our Infrastructure segment. During the six months ended December 31, 2015 and 2014 , we recorded amortization expense of $11.9 million and $14.0 million , respectively, related to our other intangible assets. |
Segment Data
Segment Data | 6 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
SEGMENT DATA | SEGMENT DATA Kennametal delivers productivity to customers seeking peak performance in demanding environments by providing innovative custom and standard wear-resistant solutions. To provide these solutions, we harness our knowledge of advanced materials and application development with a commitment to environmental sustainability. Our product offering includes a wide selection of standard and customized technologies for metalworking, such as sophisticated metalcutting tools, tooling systems and services, as well as advanced, high-performance materials, such as cemented tungsten carbide products, super alloys, coatings and investment castings to address customer demands. We offer these products through a variety of channels to meet customer-specified needs. The Company manages and reports its business in the following two segments: Industrial and Infrastructure. The Company's reportable operating segments have been determined in accordance with the Company's internal management structure, which is organized based on operating activities, the manner in which we organize segments for making operating decisions and assessing performance and the availability of separate financial results. We do not allocate certain corporate expenses related to executive retirement plans, the Company’s Board of Directors and strategic initiatives, as well as certain other costs and report them in Corporate. Neither of our two reportable operating segments represent the aggregation of two or more operating segments. The Industrial segment generally serves customers that operate in industrial end markets such as transportation, general engineering and aerospace and defense. The customers in these end markets manufacture engines, airframes, automobiles, trucks, ships and various types of industrial equipment. The technology and customization requirements for customers we serve vary by customer, application and industry. The value we deliver to our Industrial segment customers centers on our application expertise and our diverse offering of products and services. The Infrastructure segment generally serves customers that operate in the earthworks and energy sectors who support primary industries such as oil and gas, power generation, underground, surface and hard-rock mining, highway construction and road maintenance. Generally, we rely on customer intimacy to serve this segment. By gaining an in-depth understanding of our customers’ engineering and development needs, we are able to offer complete system solutions and high-performance capabilities to optimize and add value to their operations. Our sales and operating income (loss) by segment are as follows: Three Months Ended December 31, Six Months Ended December 31, (in thousands) 2015 2014 2015 2014 Sales: Industrial $ 310,883 $ 371,557 $ 624,217 $ 749,415 Infrastructure 213,138 304,074 455,159 621,157 Total sales $ 524,021 $ 675,631 $ 1,079,376 $ 1,370,572 Operating income (loss): Industrial (5) $ 7,360 $ 41,795 $ 27,109 $ 85,812 Infrastructure (5) (237,738 ) (371,920 ) (246,166 ) (352,699 ) Corporate (3,578 ) (3,646 ) (8,286 ) (5,864 ) Total operating loss (233,956 ) (333,771 ) (227,343 ) (272,751 ) Interest expense 6,803 7,960 13,782 16,170 Other (income) expense, net (732 ) 2,223 353 409 Loss from continuing operations before income taxes $ (240,027 ) $ (343,954 ) $ (241,478 ) $ (289,330 ) (5) See Note 5 regarding Industrial and Infrastructure segment losses on divestiture. See Note 18 regarding impairment charges for Infrastructure goodwill and for Industrial and Infrastructure other intangible assets. |
Subsequent Events Subsequent Ev
Subsequent Events Subsequent Events | 6 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 20. SUBSEQUENT EVENTS On February 3, 2016, we appointed Ronald M. DeFeo to serve as President and Chief Executive Officer of the Company, succeeding Donald A. Nolan who left the Company on February 3, 2016 and was previously the Company’s President and Chief Executive Officer. Mr. DeFeo will continue to serve as a member of the Board of Directors. |
Supplemental Cash Flow Disclo27
Supplemental Cash Flow Disclosures (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Disclosures | Six Months Ended December 31, (in thousands) 2015 2014 Cash paid during the period for: Interest $ 13,076 $ 16,334 Income taxes 25,735 24,894 Supplemental disclosure of non-cash information: Changes in accounts payable related to purchases of property, plant and equipment 16,400 6,470 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Financial instruments at fair value on recurring basis | As of December 31, 2015 , the fair values of the Company’s financial assets and financial liabilities measured at fair value on a recurring basis are categorized as follows: (in thousands) Level 1 Level 2 Level 3 Total Assets: Derivatives (1) $ — $ 799 $ — $ 799 Total assets at fair value $ — $ 799 $ — $ 799 Liabilities: Derivatives (1) $ — $ 75 $ — $ 75 Contingent consideration — — 8,600 8,600 Total liabilities at fair value $ — $ 75 $ 8,600 $ 8,675 As of June 30, 2015 , the fair value of the Company’s financial assets and financial liabilities measured at fair value on a recurring basis are categorized as follows: (in thousands) Level 1 Level 2 Level 3 Total Assets: Derivatives (1) $ — $ 2,678 $ — $ 2,678 Total assets at fair value $ — $ 2,678 $ — $ 2,678 Liabilities: Derivatives (1) $ — $ 44 $ — $ 44 Contingent consideration — — 10,000 10,000 Total liabilities at fair value $ — $ 44 $ 10,000 $ 10,044 (1) Currency derivatives are valued based on observable market spot and forward rates and are classified within Level 2 of the fair value hierarchy. |
Derivative Instruments and He29
Derivative Instruments and Hedging Activities (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Fair value of derivatives | The fair value of derivatives designated and not designated as hedging instruments in the condensed consolidated balance sheet are as follows: (in thousands) December 31, June 30, Derivatives designated as hedging instruments Other current assets - range forward contracts $ 762 $ 2,626 Other assets - range forward contracts 21 — Total derivatives designated as hedging instruments 783 2,626 Derivatives not designated as hedging instruments Other current assets - currency forward contracts 16 52 Other current liabilities - currency forward contracts (75 ) (44 ) Total derivatives not designated as hedging instruments (59 ) 8 Total derivatives $ 724 $ 2,634 |
(Gains) losses related to derivatives not designated as hedging instruments | Gains related to derivatives not designated as hedging instruments have been recognized as follows: Three Months Ended December 31, Six Months Ended December 31, (in thousands) 2015 2014 2015 2014 Other (income) expense, net - currency forward contracts $ 25 $ (2,273 ) $ 8 $ (7,169 ) |
Gains and losses related to cash flow hedges | The following represents gains and losses related to cash flow hedges: Three Months Ended December 31, Six Months Ended December 31, (in thousands) 2015 2014 2015 2014 (Losses) gains recognized in other comprehensive loss, net $ (239 ) $ 1,205 $ 277 $ 2,712 Losses (gains) reclassified from accumulated other comprehensive loss into other (income) expense, net $ 1,122 $ 152 $ (336 ) $ 502 |
Restructuring (Tables)
Restructuring (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Restructuring Charges [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | The restructuring accrual is recorded in other current liabilities in our condensed consolidated balance sheet and the amount attributable to each segment is as follows: (in thousands) June 30, 2015 Expense Asset Write-Down Translation Cash Expenditures December 31, 2015 Industrial Severance $ 13,456 $ 7,383 $ — $ (282 ) $ (12,242 ) $ 8,315 Facilities — 1,002 (998 ) — (4 ) — Other 28 48 — (1 ) (49 ) 26 Total Industrial $ 13,484 $ 8,433 $ (998 ) $ (283 ) $ (12,295 ) $ 8,341 Infrastructure Severance $ 7,173 $ 2,082 $ — $ (80 ) $ (3,453 ) $ 5,722 Facilities 131 2,109 (1,963 ) — (244 ) 33 Other — 13 — — (7 ) 6 Total Infrastructure $ 7,304 $ 4,204 $ (1,963 ) $ (80 ) $ (3,704 ) $ 5,761 Total $ 20,788 $ 12,637 $ (2,961 ) $ (363 ) $ (15,999 ) $ 14,102 (in thousands) June 30, 2014 Expense Asset Write-Down Other (2) Translation Cash Expenditures December 31, 2014 Industrial Severance $ 5,815 $ 3,361 $ — $ — $ (282 ) $ (4,291 ) $ 4,603 Facilities 444 489 (489 ) — (22 ) (389 ) 33 Other 67 21 — — (2 ) (86 ) — Total Industrial $ 6,326 $ 3,871 $ (489 ) $ — $ (306 ) $ (4,766 ) $ 4,636 Infrastructure Severance $ 2,458 $ 4,177 $ — $ (459 ) $ (312 ) $ (4,747 ) $ 1,117 Facilities 190 542 (541 ) — (25 ) (166 ) — Other 28 23 — — (3 ) (48 ) — Total Infrastructure $ 2,676 $ 4,742 $ (541 ) $ (459 ) $ (340 ) $ (4,961 ) $ 1,117 Total $ 9,002 $ 8,613 $ (1,030 ) $ (459 ) $ (646 ) $ (9,727 ) $ 5,753 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Assumptions used in our Black-Scholes valuation | The assumptions used in our Black-Scholes valuation related to grants made during the six months ended December 31, 2015 and 2014 were as follows: 2015 2014 Risk-free interest rate 1.4 % 1.5 % Expected life (years) (3) 4.5 4.5 Expected volatility (4) 31.0 % 32.5 % Expected dividend yield 2.0 % 1.6 % (3) Expected life is derived from historical experience. (4) Expected volatility is based on the implied historical volatility of our stock. |
Changes in stock options | Changes in our stock options for the six months ended December 31, 2015 were as follows: Options Weighted Average Exercise Price Weighted Average Remaining Life (years) Aggregate Intrinsic value (in thousands) Options outstanding, June 30, 2015 2,094,037 $ 36.08 Granted 742,687 30.04 Exercised (38,569 ) 25.02 Lapsed and forfeited (168,666 ) 36.79 Options outstanding, December 31, 2015 2,629,489 $ 34.49 5.5 $ — Options vested and expected to vest, December 31, 2015 2,537,759 $ 34.59 5.3 $ — Options exercisable, December 31, 2015 1,661,984 $ 35.35 3.2 $ — |
Changes in time vesting and performance vesting restricted stock units | Changes in our time vesting and performance vesting restricted stock units for the six months ended December 31, 2015 were as follows: Performance Vesting Stock Units Performance Vesting Weighted Average Fair Value Time Vesting Stock Units Time Vesting Weighted Average Fair Value Unvested performance vesting and time vesting restricted stock units, June 30, 2015 101,245 $ 43.00 689,268 $ 41.53 Granted 117,589 31.60 499,162 31.06 Vested — — (276,649 ) 40.92 Performance metric not achieved (42,697 ) 31.60 — — Forfeited (15,703 ) 35.93 (52,148 ) 39.02 Unvested performance vesting and time vesting restricted stock units, December 31, 2015 160,434 $ 35.53 859,633 $ 35.78 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Net periodic pension (income) | The table below summarizes the components of net periodic pension (income): Three Months Ended December 31, Six Months Ended December 31, (in thousands) 2015 2014 2015 2014 Service cost $ 1,156 $ 1,384 $ 2,319 $ 2,799 Interest cost 9,438 9,745 18,923 19,681 Expected return on plan assets (14,657 ) (14,900 ) (29,364 ) (29,947 ) Amortization of transition obligation 21 19 42 40 Amortization of prior service credit (104 ) (71 ) (209 ) (141 ) Recognition of actuarial losses 1,815 937 3,648 1,937 Curtailment loss — 358 — 358 Special termination benefit charge 54 459 107 459 Net periodic pension (income) $ (2,277 ) $ (2,069 ) $ (4,534 ) $ (4,814 ) |
Other Postretirement Benefit Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Net periodic pension (income) | The table below summarizes the components of net periodic other postretirement benefit cost: Three Months Ended December 31, Six Months Ended December 31, (in thousands) 2015 2014 2015 2014 Service cost $ — $ 27 $ — $ 54 Interest cost 210 259 420 519 Amortization of prior service credit (5 ) (28 ) (11 ) (55 ) Recognition of actuarial loss 81 207 162 414 Curtailment gain — (221 ) — (221 ) Net periodic other postretirement benefit cost $ 286 $ 244 $ 571 $ 711 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories consisted of the following: (in thousands) December 31, 2015 June 30, 2015 Finished goods $ 295,609 $ 324,840 Work in process and powder blends 173,360 249,629 Raw materials 70,628 100,881 Inventories at current cost 539,597 675,350 Less: LIFO valuation (62,098 ) (99,819 ) Total inventories $ 477,499 $ 575,531 |
Equity (Tables)
Equity (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Summary of the changes in the carrying amounts of total equity, Kennametal shareholders' equity and equity attributable to noncontrolling interests | A summary of the changes in the carrying amounts of total equity, Kennametal Shareholders’ equity and equity attributable to noncontrolling interests as of December 31, 2015 and 2014 is as follows: Kennametal Shareholders’ Equity (in thousands) Capital Additional Retained Accumulated Non- Total equity Balance as of June 30, 2015 $ 99,219 $ 419,829 $ 1,070,282 $ (243,523 ) $ 29,628 $ 1,375,435 Net (loss) income — — (175,453 ) — 939 (174,514 ) Other comprehensive loss — — — (20,904 ) (1,067 ) (21,971 ) Dividend reinvestment 8 159 — — — 167 Capital stock issued under employee benefit and stock plans 369 6,874 — — — 7,243 Purchase of capital stock (8 ) (159 ) — — — (167 ) Cash dividends paid — — (31,845 ) — (71 ) (31,916 ) Balance as of December 31, 2015 $ 99,588 $ 426,703 $ 862,984 $ (264,427 ) $ 29,429 $ 1,154,277 Kennametal Shareholders’ Equity (in thousands) Capital stock Additional paid-in capital Retained earnings Accumulated Non- controlling interests Total equity Balance as of June 30, 2014 $ 98,340 $ 395,890 $ 1,501,157 $ (66,131 ) $ 32,352 $ 1,961,608 Net income — — (348,814 ) — 1,236 (347,578 ) Other comprehensive loss — — — (69,352 ) (2,274 ) (71,626 ) Dividend reinvestment 5 163 — — — 168 Capital stock issued under employee benefit and stock plans 592 16,089 — — — 16,681 Purchase of capital stock (5 ) (163 ) — — — (168 ) Cash dividends paid — — (28,451 ) — (47 ) (28,498 ) Balance as of December 31, 2014 $ 98,932 $ 411,979 $ 1,123,892 $ (135,483 ) $ 31,267 $ 1,530,587 |
Accumulated Other Comprehensi35
Accumulated Other Comprehensive (Loss) Income (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Components of, and changes in accumulated other comprehensive loss | The components of, and changes in, AOCL were as follows (net of tax) for the three months ended December 31, 2015 (in thousands): Attributable to Kennametal: Postretirement benefit plans Currency translation adjustment Derivatives Total Balance, September 30, 2015 $ (136,575 ) $ (115,619 ) $ (8,662 ) $ (260,856 ) Other comprehensive loss before reclassifications 1,450 (23,111 ) 277 (21,384 ) Amounts reclassified from AOCL 1,203 17,028 (418 ) 17,813 Net current period other comprehensive loss 2,653 (6,083 ) (141 ) (3,571 ) AOCL, December 31, 2015 $ (133,922 ) $ (121,702 ) $ (8,803 ) $ (264,427 ) Attributable to noncontrolling interests: Balance, September 30, 2015 $ — $ (2,797 ) $ — $ (2,797 ) Other comprehensive loss before reclassifications — (528 ) — (528 ) Net current period other comprehensive loss — (528 ) — (528 ) AOCL, December 31, 2015 $ — $ (3,325 ) $ — $ (3,325 ) The components of, and changes in, AOCL were as follows (net of tax) for the six months ended December 31, 2015 (in thousands): Attributable to Kennametal: Postretirement benefit plans Currency translation adjustment Derivatives Total Balance, June 30, 2015 $ (138,793 ) $ (97,309 ) $ (7,421 ) $ (243,523 ) Other comprehensive loss before reclassifications 2,449 (41,421 ) 802 (38,170 ) Amounts reclassified from AOCL 2,422 17,028 (2,184 ) 17,266 Net current period other comprehensive loss 4,871 (24,393 ) (1,382 ) (20,904 ) AOCL, December 31, 2015 $ (133,922 ) $ (121,702 ) $ (8,803 ) $ (264,427 ) Attributable to noncontrolling interests: Balance, June 30, 2015 $ — $ (2,258 ) $ — $ (2,258 ) Other comprehensive loss before reclassifications — (1,067 ) — (1,067 ) Net current period other comprehensive loss — (1,067 ) — (1,067 ) AOCL, December 31, 2015 $ — $ (3,325 ) $ — $ (3,325 ) The components of, and changes in, AOCL were as follows (net of tax) for the three months ended December 31, 2014 (in thousands): Attributable to Kennametal: Postretirement benefit plans Currency translation adjustment Derivatives Total Balance, September 30, 2014 $ (89,347 ) $ (11,210 ) $ (9,329 ) $ (109,886 ) Other comprehensive (loss) income before reclassifications 1,924 (29,427 ) 1,206 (26,297 ) Amounts reclassified from AOCL 735 — (35 ) 700 Net current period other comprehensive (loss) income 2,659 (29,427 ) 1,171 (25,597 ) AOCL, December 31, 2014 $ (86,688 ) $ (40,637 ) $ (8,158 ) $ (135,483 ) Attributable to noncontrolling interests: Balance, September 30, 2014 $ — $ (405 ) $ — $ (405 ) Other comprehensive income before reclassifications — (782 ) — (782 ) Net current period other comprehensive income — (782 ) — (782 ) AOCL, December 31, 2014 $ — $ (1,187 ) $ — $ (1,187 ) The components of, and changes in, AOCL were as follows (net of tax) for the six months ended December 31, 2014 (in thousands): Attributable to Kennametal: Postretirement benefit plans Currency translation adjustment Derivatives Total Balance, June 30, 2014 $ (93,742 ) $ 38,811 $ (11,200 ) $ (66,131 ) Other comprehensive loss before reclassifications 5,565 (79,448 ) 2,713 (71,170 ) Amounts reclassified from AOCL 1,489 — 329 1,818 Net current period other comprehensive loss 7,054 (79,448 ) 3,042 (69,352 ) AOCL, December 31, 2014 $ (86,688 ) $ (40,637 ) $ (8,158 ) $ (135,483 ) Attributable to noncontrolling interests: Balance, June 30, 2014 $ — $ 1,087 $ — $ 1,087 Other comprehensive loss before reclassifications — (2,274 ) — (2,274 ) Net current period other comprehensive loss — (2,274 ) — (2,274 ) AOCL, December 31, 2014 $ — $ (1,187 ) $ — $ (1,187 ) |
Reclassification out of Accumulated Other Comprehensive Loss | Reclassifications out of AOCL for the three and six months ended December 31, 2015 and 2014 consisted of the following (in thousands): Three Months Ended December 31, Six Months Ended December 31, Details about AOCL components 2015 2014 2015 2014 Affected line item in the Income Statement Gains and losses on cash flow hedges: Forward starting interest rate swaps $ 525 $ 505 $ 1,049 $ 1,010 Interest expense Currency exchange contracts (1,199 ) (562 ) (4,572 ) (474 ) Other (income) expense, net Total before tax (674 ) (57 ) (3,523 ) 536 Tax expense (benefit) 256 22 1,339 (207 ) (Benefit) provision for income taxes Net of tax $ (418 ) $ (35 ) $ (2,184 ) $ 329 Postretirement benefit plans: Amortization of transition obligations $ 21 $ 19 $ 42 $ 40 See note 10 for further details Amortization of prior service credit (109 ) (99 ) (220 ) (196 ) See note 10 for further details Recognition of actuarial losses 1,896 1,144 3,810 2,351 See note 10 for further details Total before taxes 1,808 1,064 3,632 2,195 Tax (benefit) (605 ) (329 ) (1,210 ) (706 ) (Benefit) provision for income taxes Net of tax $ 1,203 $ 735 $ 2,422 $ 1,489 Foreign currency translation adjustments: Released due to divestiture $ 17,028 $ — $ 17,028 $ — Loss on divestiture Total before taxes 17,028 — 17,028 — Tax benefit — — — — (Benefit) provision for income taxes Net of tax $ 17,028 $ — $ 17,028 $ — |
Income Tax Allocated to Each Component of Other Comprehensive Income [Table Text Block] | The amount of income tax allocated to each component of other comprehensive (loss) for the three months ended December 31, 2015 and 2014 : 2015 2014 (in thousands) Pre-tax Tax impact Net of tax Pre-tax Tax impact Net of tax Unrealized gain on derivatives designated and qualified as cash flow hedges $ 447 $ (170 ) $ 277 $ 1,964 $ (758 ) $ 1,206 Reclassification of unrealized gain on expired derivatives designated and qualified as cash flow hedges (674 ) 256 (418 ) (57 ) 22 (35 ) Unrecognized net pension and other postretirement benefit gain 1,949 (499 ) 1,450 2,608 (684 ) 1,924 Reclassification of net pension and other postretirement benefit loss 1,808 (605 ) 1,203 1,064 (329 ) 735 Foreign currency translation adjustments (24,643 ) 1,004 (23,639 ) (31,675 ) 1,466 (30,209 ) Reclassification of foreign currency translation adjustment loss realized upon sale 17,028 — 17,028 — — — Other comprehensive (loss) $ (4,085 ) $ (14 ) $ (4,099 ) $ (26,096 ) $ (283 ) $ (26,379 ) The amount of income tax allocated to each component of other comprehensive (loss) for the six months ended December 31, 2015 and 2014 : 2015 2014 (in thousands) Pre-tax Tax impact Net of tax Pre-tax Tax impact Net of tax Unrealized gain on derivatives designated and qualified as cash flow hedges $ 1,294 $ (492 ) $ 802 $ 4,419 $ (1,706 ) $ 2,713 Reclassification of unrealized (gain) loss on expired derivatives designated and qualified as cash flow hedges (3,523 ) 1,339 (2,184 ) 536 (207 ) 329 Unrecognized net pension and other postretirement benefit gain 3,216 (767 ) 2,449 7,586 (2,021 ) 5,565 Reclassification of net pension and other postretirement benefit loss 3,632 (1,210 ) 2,422 2,195 (706 ) 1,489 Foreign currency translation adjustments (43,548 ) 1,060 (42,488 ) (86,519 ) 4,797 (81,722 ) Reclassification of foreign currency translation adjustment loss realized upon sale 17,028 — 17,028 — — — Other comprehensive (loss) $ (21,901 ) $ (70 ) $ (21,971 ) $ (71,783 ) $ 157 $ (71,626 ) |
Goodwill and Other Intangible36
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
The carrying amount of goodwill | A summary of the carrying amount of goodwill attributable to each segment, as well as the changes in such, is as follows: (in thousands) Industrial Infrastructure Total Gross goodwill $ 455,371 $ 640,360 $ 1,095,731 Accumulated impairment losses (150,842 ) (527,500 ) (678,342 ) Balance as of June 30, 2015 $ 304,529 $ 112,860 $ 417,389 Activity for the six months ended December 31, 2015: Divestiture (1,075 ) (6,461 ) (7,536 ) Translation (5,479 ) (688 ) (6,167 ) Change in gross goodwill (6,554 ) (7,149 ) (13,703 ) Impairment charges — (105,711 ) (105,711 ) Gross goodwill 448,817 633,211 1,082,028 Accumulated impairment losses (150,842 ) (633,211 ) (784,053 ) Balance as of December 31, 2015 $ 297,975 $ — $ 297,975 |
The components of intangible assets | The components of our other intangible assets were as follows: Estimated Useful Life (in years) December 31, 2015 June 30, 2015 (in thousands) Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Contract-based 3 to 15 $ 7,164 $ (6,538 ) $ 8,523 $ (6,990 ) Technology-based and other 4 to 20 47,116 (25,945 ) 52,820 (29,723 ) Customer-related 10 to 21 205,566 (60,263 ) 275,796 (90,141 ) Unpatented technology 10 to 30 31,934 (4,128 ) 59,449 (14,426 ) Trademarks 5 to 20 12,644 (8,090 ) 18,575 (12,090 ) Trademarks Indefinite 16,567 — 24,876 — Total $ 320,991 $ (104,964 ) $ 440,039 $ (153,370 ) |
Segment Data (Tables)
Segment Data (Tables) | 6 Months Ended |
Dec. 31, 2015 | |
Segment Reporting [Abstract] | |
Sales and operating income (loss) by segment and segment assets | Our sales and operating income (loss) by segment are as follows: Three Months Ended December 31, Six Months Ended December 31, (in thousands) 2015 2014 2015 2014 Sales: Industrial $ 310,883 $ 371,557 $ 624,217 $ 749,415 Infrastructure 213,138 304,074 455,159 621,157 Total sales $ 524,021 $ 675,631 $ 1,079,376 $ 1,370,572 Operating income (loss): Industrial (5) $ 7,360 $ 41,795 $ 27,109 $ 85,812 Infrastructure (5) (237,738 ) (371,920 ) (246,166 ) (352,699 ) Corporate (3,578 ) (3,646 ) (8,286 ) (5,864 ) Total operating loss (233,956 ) (333,771 ) (227,343 ) (272,751 ) Interest expense 6,803 7,960 13,782 16,170 Other (income) expense, net (732 ) 2,223 353 409 Loss from continuing operations before income taxes $ (240,027 ) $ (343,954 ) $ (241,478 ) $ (289,330 ) (5) See Note 5 regarding Industrial and Infrastructure segment losses on divestiture. See Note 18 regarding impairment charges for Infrastructure goodwill and for Industrial and Infrastructure other intangible assets. |
Supplemental Cash Flow Disclo38
Supplemental Cash Flow Disclosures (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Cash paid during the period for: | ||
Interest | $ 13,076 | $ 16,334 |
Income taxes | 25,735 | 24,894 |
Change in accounts payable related to property, plant, and equipment | $ 16,400 | $ 6,470 |
Divestiture Divestiture (Detail
Divestiture Divestiture (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Nov. 30, 2015 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Proceeds from Divestiture of Businesses, Net of Cash Divested | $ 61,100 | $ 0 | |||
Loss on divestiture | $ (133,307) | $ 0 | $ (133,307) | $ 0 | |
Non-Core Businesses Sold to Madison Industries [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Net Book Value | $ 182,500 | ||||
Infrastructure [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss on divestiture | (126,049) | ||||
Industrial [Member] | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Loss on divestiture | $ (7,258) |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Jun. 30, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives Assets | $ 799 | $ 2,678 |
Total assets at fair value | 799 | 2,678 |
Derivatives Liabilities | 75 | 44 |
Contingent Consideration | 8,600 | 10,000 |
Total liabilities at fair value | 8,675 | 10,044 |
Fair Value, Measurements, Recurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives Assets | 799 | 2,678 |
Total assets at fair value | 799 | 2,678 |
Derivatives Liabilities | 75 | 44 |
Total liabilities at fair value | 75 | 44 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent Consideration | 8,600 | 10,000 |
Total liabilities at fair value | $ 8,600 | $ 10,000 |
Fair Value Measurments - Contin
Fair Value Measurments - Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Dec. 31, 2015 | Dec. 31, 2015 | |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Period Over which Contingent Consideration is Payable | 12 months | |
Emura [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, Fair Value Adjustment | $ 1,400 |
Derivative Instruments and He42
Derivative Instruments and Hedging Activities - Fair Value of Derivatives Designated and Not Designated as Hedging Instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Jun. 30, 2015 |
Fair value of derivatives | ||
Derivative, Fair Value, Net | $ 724 | $ 2,634 |
Designated as Hedging Instrument [Member] | ||
Fair value of derivatives | ||
Derivative, Fair Value, Net | 783 | 2,626 |
Not Designated as Hedging Instrument [Member] | ||
Fair value of derivatives | ||
Derivative, Fair Value, Net | (59) | 8 |
Range Forward Contracts [Member] | Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||
Fair value of derivatives | ||
Derivative assets designated as hedging instruments | 762 | 2,626 |
Range Forward Contracts [Member] | Designated as Hedging Instrument [Member] | Other Assets [Member] | ||
Fair value of derivatives | ||
Derivative assets designated as hedging instruments | 21 | 0 |
Currency Forward Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Current Assets [Member] | ||
Fair value of derivatives | ||
Derivative assets designated as hedging instruments | 16 | 52 |
Currency Forward Contracts [Member] | Not Designated as Hedging Instrument [Member] | Other Current Liabilities [Member] | ||
Fair value of derivatives | ||
Derivative liabilities designated as hedging instruments | $ (75) | $ (44) |
Derivative Instruments and He43
Derivative Instruments and Hedging Activities - Gains and Losses Related to Derivatives Not Designated as Hedging Instruments and to Cash Flow Hedges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Currency Forward Contracts [Member] | Other Expense Income Net [Member] | Not Designated as Hedging Instrument [Member] | ||||
Derivative Instruments, (Gain) Loss Recognized in Income, Net | ||||
Other (income) expense, net - currency forward contracts | $ 25 | $ (2,273) | $ 8 | $ (7,169) |
Range Forward Contracts [Member] | Cash flow hedging [Member] | ||||
(Gains) losses related to cash flow hedges | ||||
(Losses) gains recognized in other comprehensive loss, net | (239) | 1,205 | 277 | 2,712 |
Losses (gains) reclassified from accumulated other comprehensive loss into other (income) expense, net | $ 1,122 | $ 152 | $ (336) | $ 502 |
Derivative Instruments and He44
Derivative Instruments and Hedging Activities (Details Textual) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | |
Derivative Instruments and Hedging Activities (Textual) [Abstract] | |||
Recognize loss on outstanding derivatives in the next 12 months | $ 0.4 | ||
Gains or losses recognized in earnings due to ineffectiveness and excluded from effectiveness testing | 0 | $ 0 | |
Cash Flow Hedging [Member] | |||
Derivatives, Fair Value [Line Items] | |||
Derivative, Notional Amount | $ 61 | $ 53.8 |
Restructuring and Related Cha45
Restructuring and Related Charges - Restructuring Accrual (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Reserve [Abstract] | ||||
Beginning Balance | $ 20,788 | $ 9,002 | ||
Restructuring Charges | $ 3,517 | $ 6,741 | 12,637 | 8,613 |
Asset Write-Down | (2,961) | (1,030) | ||
Other | (459) | |||
Translation | (363) | (646) | ||
Cash Expenditures | (15,999) | (9,727) | ||
Ending Balance | 14,102 | 5,753 | 14,102 | 5,753 |
Industrial [Member] | ||||
Restructuring Reserve [Abstract] | ||||
Beginning Balance | 13,484 | 6,326 | ||
Restructuring Charges | 8,433 | 3,871 | ||
Asset Write-Down | (998) | (489) | ||
Other | 0 | |||
Translation | (283) | (306) | ||
Cash Expenditures | (12,295) | (4,766) | ||
Ending Balance | 8,341 | 4,636 | 8,341 | 4,636 |
Industrial [Member] | Severance [Member] | ||||
Restructuring Reserve [Abstract] | ||||
Beginning Balance | 13,456 | 5,815 | ||
Restructuring Charges | 7,383 | 3,361 | ||
Asset Write-Down | 0 | 0 | ||
Other | 0 | |||
Translation | (282) | (282) | ||
Cash Expenditures | 12,242 | 4,291 | ||
Ending Balance | 8,315 | 4,603 | 8,315 | 4,603 |
Industrial [Member] | Facilities [Member] | ||||
Restructuring Reserve [Abstract] | ||||
Beginning Balance | 0 | 444 | ||
Restructuring Charges | 1,002 | 489 | ||
Asset Write-Down | (998) | (489) | ||
Other | 0 | |||
Translation | 0 | (22) | ||
Cash Expenditures | 4 | 389 | ||
Ending Balance | 0 | 33 | 0 | 33 |
Industrial [Member] | Other [Member] | ||||
Restructuring Reserve [Abstract] | ||||
Beginning Balance | 28 | 67 | ||
Restructuring Charges | 48 | 21 | ||
Asset Write-Down | 0 | 0 | ||
Other | 0 | |||
Translation | (1) | (2) | ||
Cash Expenditures | 49 | 86 | ||
Ending Balance | 26 | 0 | 26 | 0 |
Infrastructure [Member] | ||||
Restructuring Reserve [Abstract] | ||||
Beginning Balance | 7,304 | 2,676 | ||
Restructuring Charges | 4,204 | 4,742 | ||
Asset Write-Down | (1,963) | (541) | ||
Other | (459) | |||
Translation | (80) | (340) | ||
Cash Expenditures | (3,704) | (4,961) | ||
Ending Balance | 5,761 | 1,117 | 5,761 | 1,117 |
Infrastructure [Member] | Severance [Member] | ||||
Restructuring Reserve [Abstract] | ||||
Beginning Balance | 7,173 | 2,458 | ||
Restructuring Charges | 2,082 | 4,177 | ||
Asset Write-Down | 0 | 0 | ||
Other | (459) | |||
Translation | (80) | (312) | ||
Cash Expenditures | 3,453 | 4,747 | ||
Ending Balance | 5,722 | 1,117 | 5,722 | 1,117 |
Infrastructure [Member] | Facilities [Member] | ||||
Restructuring Reserve [Abstract] | ||||
Beginning Balance | 131 | 190 | ||
Restructuring Charges | 2,109 | 542 | ||
Asset Write-Down | (1,963) | (541) | ||
Other | 0 | |||
Translation | 0 | (25) | ||
Cash Expenditures | 244 | 166 | ||
Ending Balance | 33 | 0 | 33 | 0 |
Infrastructure [Member] | Other [Member] | ||||
Restructuring Reserve [Abstract] | ||||
Beginning Balance | 0 | 28 | ||
Restructuring Charges | 13 | 23 | ||
Asset Write-Down | 0 | 0 | ||
Other | 0 | |||
Translation | 0 | (3) | ||
Cash Expenditures | 7 | 48 | ||
Ending Balance | $ 6 | $ 0 | $ 6 | $ 0 |
Restructuring and Related Cha46
Restructuring and Related Charges - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Incurred Cost | $ 8,872 | $ 12,931 | $ 23,974 | $ 20,381 |
Restructuring Charges | 3,517 | 6,741 | 12,637 | 8,613 |
Restructuring Charges Related to Inventory Disposals | (264) | (98) | (264) | 211 |
Industrial [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 8,433 | 3,871 | ||
Infrastructure [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Charges | 4,204 | 4,742 | ||
Phase 1 [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Cost Incurred to Date | 57,875 | 57,875 | ||
Phase 1 [Member] | Minimum [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost | 55,000 | 55,000 | ||
Phase 1 [Member] | Maximum [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost | $ 60,000 | $ 60,000 | ||
Phase 1 [Member] | Industrial [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost Percent | 50.00% | 50.00% | ||
Restructuring and Related Cost, Cost Incurred to Date | $ 30,450 | $ 30,450 | ||
Phase 1 [Member] | Infrastructure [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost Percent | 50.00% | 50.00% | ||
Restructuring and Related Cost, Cost Incurred to Date | $ 24,999 | $ 24,999 | ||
Phase 1 [Member] | Corporate Segment [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Cost Incurred to Date | 2,426 | 2,426 | ||
Phase 2 [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Cost Incurred to Date | 38,080 | 38,080 | ||
Phase 2 [Member] | Minimum [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost | 90,000 | 90,000 | ||
Phase 2 [Member] | Maximum [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost | $ 100,000 | $ 100,000 | ||
Phase 2 [Member] | Industrial [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost Percent | 85.00% | 85.00% | ||
Restructuring and Related Cost, Cost Incurred to Date | $ 22,326 | $ 22,326 | ||
Phase 2 [Member] | Infrastructure [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost Percent | 15.00% | 15.00% | ||
Restructuring and Related Cost, Cost Incurred to Date | $ 10,550 | $ 10,550 | ||
Phase 2 [Member] | Corporate Segment [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Cost Incurred to Date | 5,204 | 5,204 | ||
Phase 3 [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Cost Incurred to Date | 5,234 | 5,234 | ||
Phase 3 [Member] | Minimum [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost | 40,000 | 40,000 | ||
Phase 3 [Member] | Maximum [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost | $ 45,000 | $ 45,000 | ||
Phase 3 [Member] | Industrial [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost Percent | 50.00% | 50.00% | ||
Restructuring and Related Cost, Cost Incurred to Date | $ 1,985 | $ 1,985 | ||
Phase 3 [Member] | Infrastructure [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost Percent | 50.00% | 50.00% | ||
Restructuring and Related Cost, Cost Incurred to Date | $ 1,636 | $ 1,636 | ||
Phase 3 [Member] | Corporate Segment [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Cost Incurred to Date | 1,613 | 1,613 | ||
Cost of Sales [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Related Charges Recorded in Cost of Goods Sold | 1,950 | 2,775 | 3,567 | 6,250 |
Operating Expense [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring Related Charges Recorded in Cost of Goods Sold | $ 3,405 | $ 3,415 | $ 7,770 | $ 5,518 |
Stock-Based Compensation - Gran
Stock-Based Compensation - Grants Valuation Assumptions (Details) - Stock Option [Member] | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | ||
Assumptions used in valuation of stock options | |||
Risk-free interest rate | 1.40% | 1.50% | |
Expected life | [1] | 4 years 6 months | 4 years 6 months |
Expected volatility | [2] | 31.00% | 32.50% |
Expected dividend yield | 2.00% | 1.60% | |
[1] | Expected life is derived from historical experience. | ||
[2] | Expected volatility is based on the implied historical volatility of our stock. |
Stock-Based Compensation - Chan
Stock-Based Compensation - Changes in Stock Options (Details) | 6 Months Ended |
Dec. 31, 2015USD ($)$ / sharesshares | |
Changes in stock options | |
Options outstanding, June 30, 2015 | shares | 2,094,037 |
Options, Granted | shares | 742,687 |
Options, Exercised | shares | (38,569) |
Options, Lapsed and Forfeited | shares | (168,666) |
Options outstanding, December 31, 2015 | shares | 2,629,489 |
Options vested and expected to vest, December 31, 2015 | shares | 2,537,759 |
Options exercisable, December 31, 2015 | shares | 1,661,984 |
Weighted Average Exercise Price, Options outstanding, June 30, 2015 | $ / shares | $ 36.08 |
Weighted Average Exercise Price, Granted | $ / shares | 30.04 |
Weighted Average Exercise Price, Exercised | $ / shares | 25.02 |
Weighted Average Exercise Price, Lapsed and Forfeited | $ / shares | 36.79 |
Weighted Average Exercise Price, Options outstanding, December 31, 2015 | $ / shares | 34.49 |
Weighted Average Exercise Price, Option vested and expected to vest, December 31, 2015 | $ / shares | 34.59 |
Weighted Average Exercise Price, Options exercisable, December 31, 2015 | $ / shares | $ 35.35 |
Weighted Average Remaining Life, Options outstanding, December 31, 2015 | 5 years 6 months |
Weighted Average Remaining Life, Options vested and expected to vest, December 31, 2015 | 5 years 3 months 18 days |
Weighted Average Remaining Life, Options exercisable, December 31, 2015 | 3 years 2 months 12 days |
Aggregate Intrinsic value, Options outstanding, December 31, 2015 | $ | $ 0 |
Aggregate Intrinsic Value, Options vested and expected to vest, December 31, 2015 | $ | 0 |
Aggregate Intrinsic Value, Options exercisable, December 31, 2015 | $ | $ 0 |
Stock-Based Compensation - Ch49
Stock-Based Compensation - Changes in Restricted Stock Units (Details) | 6 Months Ended |
Dec. 31, 2015$ / sharesshares | |
Restricted Stock Units - Performance Vesting [Member] | |
Changes in restricted stock awards | |
Unvested restricted stock awards, June 30, 2015, Shares | shares | 101,245 |
Granted, Shares | shares | 117,589 |
Vested, Shares | shares | 0 |
Performance Metric Not Achieved, Shares | shares | (42,697) |
Forfeited, Shares | shares | (15,703) |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares | $ 35.93 |
Unvested restricted stock awards, December 31, 2015 | shares | 160,434 |
Weighted Average Fair Value, Unvested restricted stock awards, June 30, 2015 | $ / shares | $ 43 |
Weighted Average Fair Value, Granted | $ / shares | 31.60 |
Weighted Average Fair Value, Vested | $ / shares | 0 |
Weighted Average Fair Value, Performance Metric Not Achieved | $ / shares | 31.60 |
Weighted Average Fair Value, Unvested restricted stock awards, December 31, 2015 | $ / shares | $ 35.53 |
Restricted Stock Units - Time Vesting [Member] | |
Changes in restricted stock awards | |
Unvested restricted stock awards, June 30, 2015, Shares | shares | 689,268 |
Granted, Shares | shares | 499,162 |
Vested, Shares | shares | (276,649) |
Forfeited, Shares | shares | (52,148) |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value | $ / shares | $ 39.02 |
Unvested restricted stock awards, December 31, 2015 | shares | 859,633 |
Weighted Average Fair Value, Unvested restricted stock awards, June 30, 2015 | $ / shares | $ 41.53 |
Weighted Average Fair Value, Granted | $ / shares | 31.06 |
Weighted Average Fair Value, Vested | $ / shares | 40.92 |
Weighted Average Fair Value, Unvested restricted stock awards, December 31, 2015 | $ / shares | $ 35.78 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Stock-Based Compensation (Additional Textual) [Abstract] | ||
Maximum period of achievement of performance goals to earn performance units | 3 years | |
Minimum performance period of individual required to earn performance units | 3 years | |
Stock Option [Member] | ||
Stock-Based Compensation (Textual) [Abstract] | ||
Compensation expense related to stock option | $ 1.9 | $ 2.8 |
Unrecognized compensation cost | $ 4.4 | |
Unrecognized compensation costs, weighted average period | 2 years 4 months 25 days | |
Weighted average fair value of options granted | $ 6.84 | $ 10.16 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value | $ 2.3 | $ 6.9 |
Tax benefits resulting from stock-based compensation deductions (less than) in excess of amounts reported for financial reporting purposes | (1.7) | (1.3) |
Cash received from the exercise of capital stock option | 1 | 6.1 |
Tax benefit from the exercise of capital stock option | 1.3 | |
Total Intrinsic value of options exercised | 3.4 | |
Restricted Stock Units - Time Vesting Performance Vesting [Member] | ||
Stock-Based Compensation (Textual) [Abstract] | ||
Compensation expense related to stock option | 8.8 | $ 10.6 |
Unrecognized compensation cost | $ 18.6 | |
Unrecognized compensation costs, weighted average period | 2 years 3 months |
Benefit Plans - Components of N
Benefit Plans - Components of Net Periodic Pension Income (Details) - Pension plans contribution [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net periodic pension (income) | ||||
Service cost | $ 1,156 | $ 1,384 | $ 2,319 | $ 2,799 |
Interest cost | 9,438 | 9,745 | 18,923 | 19,681 |
Expected return on plan assets | (14,657) | (14,900) | (29,364) | (29,947) |
Amortization of transition obligation | 21 | 19 | 42 | 40 |
Amortization of prior service credit | (104) | (71) | (209) | (141) |
Recognition of actuarial losses | 1,815 | 937 | 3,648 | 1,937 |
Curtailment Gain | 0 | 358 | 0 | 358 |
Special Termination Benefits Charge | 54 | 459 | 107 | 459 |
Net periodic pension (income) | $ (2,277) | $ (2,069) | $ (4,534) | $ (4,814) |
Benefit Plans - Components of52
Benefit Plans - Components of Net Periodic Other Postretirement Benefit Cost (Details) - Other postretirement benefit plans [Member] - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Net periodic other postretirement benefit costs | ||||
Service cost | $ 0 | $ 27 | $ 0 | $ 54 |
Interest cost | 210 | 259 | 420 | 519 |
Amortization of prior service credit | (5) | (28) | (11) | (55) |
Recognition of actuarial loss (gains) | 81 | 207 | 162 | 414 |
Curtailment Gain | 0 | (221) | 0 | (221) |
Net periodic other postretirement benefit cost | $ 286 | $ 244 | $ 571 | $ 711 |
Benefit Plans Benefit Plans - N
Benefit Plans Benefit Plans - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Pension Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Special Termination Benefits Charge | $ 54 | $ 459 | $ 107 | $ 459 |
Curtailment Gain | 0 | 358 | 0 | 358 |
Other Postretirement Benefit Plan [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Curtailment Gain | $ 0 | $ (221) | $ 0 | $ (221) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Jun. 30, 2015 |
Inventories | ||
Finished goods | $ 295,609 | $ 324,840 |
Work in process and powder blends | 173,360 | 249,629 |
Raw materials | 70,628 | 100,881 |
Inventories at current cost | 539,597 | 675,350 |
Less: LIFO valuation | (62,098) | (99,819) |
Total inventories | $ 477,499 | $ 575,531 |
Inventories (Textual) [Abstract] | ||
Percentage of inventories valued by using LIFO method | 47.00% | 47.00% |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Jun. 30, 2015 | Oct. 21, 2011 |
Long-Term Debt (Additional Textual) [Abstract] | |||
Fixed rate at fair market value | $ 692.5 | $ 698 | |
2011 Credit Agreement [Member] | |||
Long-Term Debt (Textual) [Abstract] | |||
Borrowing outstanding under 2011 Credit Agreement | $ 5.4 | $ 42.8 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 600 |
Environmental Matters (Details)
Environmental Matters (Details) - USD ($) $ in Millions | Dec. 31, 2015 | Jun. 30, 2015 |
Environmental Remediation Obligations [Abstract] | ||
Reserves for Environmental Costs | $ 12.2 | $ 12.6 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax (Textual) [Abstract] | ||||
Effective tax rate | 29.70% | (12.70%) | 27.70% | (20.10%) |
Equity (Details)
Equity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Beginning Balance | $ 1,375,435 | $ 1,961,608 | ||
Net loss | $ (168,811) | $ (387,705) | (174,514) | (347,578) |
Other comprehensive loss | (4,099) | (26,379) | (21,971) | (71,626) |
Dividend reinvestment | 167 | 168 | ||
Capital stock issued under employee benefit and stock plans | 7,243 | 16,681 | ||
Purchase of capital stock | (167) | (168) | ||
Cash dividends paid | (31,916) | (28,498) | ||
Ending Balance | 1,154,277 | 1,530,587 | 1,154,277 | 1,530,587 |
Capital stock [Member] | ||||
Beginning Balance | 99,219 | 98,340 | ||
Dividend reinvestment | 8 | 5 | ||
Capital stock issued under employee benefit and stock plans | 369 | 592 | ||
Purchase of capital stock | (8) | (5) | ||
Ending Balance | 99,588 | 98,932 | 99,588 | 98,932 |
Additional paid-in capital [Member] | ||||
Beginning Balance | 419,829 | 395,890 | ||
Dividend reinvestment | 159 | 163 | ||
Capital stock issued under employee benefit and stock plans | 6,874 | 16,089 | ||
Purchase of capital stock | (159) | (163) | ||
Ending Balance | 426,703 | 411,979 | 426,703 | 411,979 |
Retained earnings [Member] | ||||
Beginning Balance | 1,070,282 | 1,501,157 | ||
Net loss | (175,453) | (348,814) | ||
Cash dividends paid | (31,845) | (28,451) | ||
Ending Balance | 862,984 | 1,123,892 | 862,984 | 1,123,892 |
Accumulated other comprehensive (loss) income [Member] | ||||
Beginning Balance | (243,523) | (66,131) | ||
Other comprehensive loss | (20,904) | (69,352) | ||
Ending Balance | (264,427) | (135,483) | (264,427) | (135,483) |
Non-controlling interest [Member] | ||||
Beginning Balance | 29,628 | 32,352 | ||
Net loss | 939 | 1,236 | ||
Other comprehensive loss | (1,067) | (2,274) | ||
Cash dividends paid | (71) | (47) | ||
Ending Balance | $ 29,429 | $ 31,267 | $ 29,429 | $ 31,267 |
Accumulated Other Comprehensi59
Accumulated Other Comprehensive (Loss) Income - Components of and Changes in Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accumulated Other Comprehensive (Loss) Income [Line Items] | ||||
Accumulated Other Comprehensive (Loss) Income, Net of Tax | $ (260,856) | $ (109,886) | $ (243,523) | $ (66,131) |
Other comprehensive (loss) income before reclassifications | (21,384) | (26,297) | (38,170) | (71,170) |
Amounts reclassified from accumulated other comprehensive loss | 17,813 | 700 | 17,266 | 1,818 |
Net current period other comprehensive (loss) income | (3,571) | (25,597) | (20,904) | (69,352) |
Accumulated Other Comprehensive (Loss) Income, Net of Tax | (264,427) | (135,483) | (264,427) | (135,483) |
Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive (Loss) Income [Line Items] | ||||
Accumulated Other Comprehensive (Loss) Income, Net of Tax | (136,575) | (89,347) | (138,793) | (93,742) |
Other comprehensive (loss) income before reclassifications | 1,450 | 1,924 | 2,449 | 5,565 |
Amounts reclassified from accumulated other comprehensive loss | 1,203 | 735 | 2,422 | 1,489 |
Net current period other comprehensive (loss) income | 2,653 | 2,659 | 4,871 | 7,054 |
Accumulated Other Comprehensive (Loss) Income, Net of Tax | (133,922) | (86,688) | (133,922) | (86,688) |
Accumulated Currency Translation Adjustment [Member] | ||||
Accumulated Other Comprehensive (Loss) Income [Line Items] | ||||
Accumulated Other Comprehensive (Loss) Income, Net of Tax | (115,619) | (11,210) | (97,309) | 38,811 |
Other comprehensive (loss) income before reclassifications | (23,111) | (29,427) | (41,421) | (79,448) |
Amounts reclassified from accumulated other comprehensive loss | 17,028 | 17,028 | ||
Net current period other comprehensive (loss) income | (6,083) | (29,427) | (24,393) | (79,448) |
Accumulated Other Comprehensive (Loss) Income, Net of Tax | (121,702) | (40,637) | (121,702) | (40,637) |
Accumulated Net (Loss) Gain from Designated or Qualifying Cash Flow Hedges [Member] | ||||
Accumulated Other Comprehensive (Loss) Income [Line Items] | ||||
Accumulated Other Comprehensive (Loss) Income, Net of Tax | (8,662) | (9,329) | (7,421) | (11,200) |
Other comprehensive (loss) income before reclassifications | 277 | 1,206 | 802 | 2,713 |
Amounts reclassified from accumulated other comprehensive loss | (418) | (35) | (2,184) | 329 |
Net current period other comprehensive (loss) income | (141) | 1,171 | (1,382) | 3,042 |
Accumulated Other Comprehensive (Loss) Income, Net of Tax | (8,803) | (8,158) | (8,803) | (8,158) |
Noncontrolling Interest [Member] | ||||
Accumulated Other Comprehensive (Loss) Income [Line Items] | ||||
Accumulated Other Comprehensive (Loss) Income, Net of Tax | (2,797) | (405) | (2,258) | 1,087 |
Other comprehensive (loss) income before reclassifications | (528) | (782) | (1,067) | (2,274) |
Net current period other comprehensive (loss) income | (528) | (782) | (1,067) | (2,274) |
Accumulated Other Comprehensive (Loss) Income, Net of Tax | (3,325) | (1,187) | (3,325) | (1,187) |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Accumulated Other Comprehensive (Loss) Income [Line Items] | ||||
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | 1,808 | 1,064 | 3,632 | 2,195 |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Accumulated Currency Translation Adjustment [Member] | ||||
Accumulated Other Comprehensive (Loss) Income [Line Items] | ||||
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | 17,028 | 0 | 17,028 | 0 |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Accumulated Net (Loss) Gain from Designated or Qualifying Cash Flow Hedges [Member] | ||||
Accumulated Other Comprehensive (Loss) Income [Line Items] | ||||
Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest | $ (674) | $ (57) | $ (3,523) | $ 536 |
Accumulated Other Comprehensi60
Accumulated Other Comprehensive (Loss) Income - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Loss [Line Items] | ||||
Currency exchange contracts | $ 732 | $ (2,223) | $ (353) | $ (409) |
Recognition of actuarial losses | 1,808 | 1,064 | 3,632 | 2,195 |
Foreign currency translation reclassification adjustment, released due to divestiture | (17,028) | 0 | (17,028) | 0 |
(Benefit) provision for income taxes | 71,216 | (43,751) | 66,964 | (58,248) |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Accumulated Net (Loss) Gain from Designated or Qualifying Cash Flow Hedges [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Loss [Line Items] | ||||
Total before tax | (674) | (57) | (3,523) | 536 |
(Benefit) provision for income taxes | 256 | 22 | 1,339 | (207) |
Net of tax | (418) | (35) | (2,184) | 329 |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Accumulated Defined Benefit Plans Adjustment [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Loss [Line Items] | ||||
Amortization of transition obligations | 21 | 19 | 42 | 40 |
Amortization of prior service credit | (109) | (99) | (220) | (196) |
Recognition of actuarial losses | 1,896 | 1,144 | 3,810 | 2,351 |
Total before tax | 1,808 | 1,064 | 3,632 | 2,195 |
(Benefit) provision for income taxes | (605) | (329) | (1,210) | (706) |
Net of tax | 1,203 | 735 | 2,422 | 1,489 |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Accumulated Currency Translation Adjustment [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Loss [Line Items] | ||||
Foreign currency translation reclassification adjustment, released due to divestiture | 17,028 | 0 | 17,028 | 0 |
Total before tax | 17,028 | 0 | 17,028 | 0 |
(Benefit) provision for income taxes | 0 | 0 | 0 | 0 |
Net of tax | 17,028 | 0 | 17,028 | 0 |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Forward Starting Interest Rate Swap Contracts [Member] | Accumulated Net (Loss) Gain from Designated or Qualifying Cash Flow Hedges [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Loss [Line Items] | ||||
Forward starting interest rate swaps | 525 | 505 | 1,049 | 1,010 |
Reclassification out of Accumulated Other Comprehensive Loss [Member] | Currency Forward Contracts [Member] | Accumulated Net (Loss) Gain from Designated or Qualifying Cash Flow Hedges [Member] | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Loss [Line Items] | ||||
Currency exchange contracts | $ (1,199) | $ (562) | $ (4,572) | $ (474) |
Accumulated Other Comprehensi61
Accumulated Other Comprehensive (Loss) Income Other Comprehensive Income - Income Tax Allocated to Each Component (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Other Comprehensive Income - Income Tax Allocated to Each Component [Abstract] | ||||
Unrealized gain on derivatives designated and qualified as cash flow hedges, before tax | $ 447 | $ 1,964 | $ 1,294 | $ 4,419 |
Unrealized gain on derivatives designated and qualified as cash flow hedges, tax | (170) | (758) | (492) | (1,706) |
Unrealized gain on derivatives designated and qualified as cash flow hedges, net of tax | 277 | 1,206 | 802 | 2,713 |
Reclassification of unrealized (gain) loss on expired derivatives designated and qualified as cash flow hedges, before tax | (674) | (57) | (3,523) | 536 |
Reclassification of unrealized (gain) loss on expired derivatives designated and qualified as cash flow hedges, tax | 256 | 22 | 1,339 | (207) |
Reclassification of unrealized (gain) loss on expired derivatives designated and qualified as cash flow hedges, net of tax | (418) | (35) | (2,184) | 329 |
Unrecognized net pension and other postretirement benefit gain, before tax | 1,949 | 2,608 | 3,216 | 7,586 |
Unrecognized net pension and other postretirement benefit gain, tax | (499) | (684) | (767) | (2,021) |
Unrecognized net pension and other postretirement benefit gain, net of tax | 1,450 | 1,924 | 2,449 | 5,565 |
Reclassification of net pension and other postretirement benefit loss, before tax | 1,808 | 1,064 | 3,632 | 2,195 |
Reclassification of net pension and other postretirement benefit loss, tax | (605) | (329) | (1,210) | (706) |
Reclassification of net pension and other postretirement benefit loss, net of tax | 1,203 | 735 | 2,422 | 1,489 |
Foreign currency translation adjustment, before tax | (24,643) | (31,675) | (43,548) | (86,519) |
Foreign currency translation adjustment, tax | 1,004 | 1,466 | 1,060 | 4,797 |
Foreign currency translation adjustment, net of tax | (23,639) | (30,209) | (42,488) | (81,722) |
Reclassification of foreign currency translation adjustment loss realized upon sale, before Tax | 17,028 | 0 | 17,028 | 0 |
Reclassification of foreign currency translation adjustment loss realized upon sale, Tax | 0 | 0 | 0 | 0 |
Reclassification of foreign currency translation adjustment loss realized upon sale, net of tax | 17,028 | 0 | 17,028 | 0 |
Other comprehensive (loss), before tax | (4,085) | (26,096) | (21,901) | (71,783) |
Other comprehensive (loss), tax | (14) | (283) | (70) | 157 |
Other comprehensive (loss), net of tax | $ (4,099) | $ (26,379) | $ (21,971) | $ (71,626) |
Goodwill and Other Intangible62
Goodwill and Other Intangible Assets - Carrying Amount of Goodwill Attributable to Each Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2015 | Jun. 30, 2015 | |
Goodwill [Roll Forward] | |||
Goodwill | $ 1,082,028 | $ 1,095,731 | |
Accumulated impairment losses | (784,053) | (678,342) | |
Goodwill, Beginning Balance | 417,389 | ||
Translation | (6,167) | ||
Change in goodwill | (13,703) | ||
Goodwill, Written off Related to Sale of Business Unit | (7,536) | ||
Goodwill, Impairment Loss | $ (375,000) | (105,711) | |
Goodwill, Ending Balance | 297,975 | ||
Industrial [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill | 448,817 | 455,371 | |
Accumulated impairment losses | (150,842) | (150,842) | |
Goodwill, Beginning Balance | 304,529 | ||
Translation | (5,479) | ||
Change in goodwill | (6,554) | ||
Goodwill, Written off Related to Sale of Business Unit | (1,075) | ||
Goodwill, Impairment Loss | 0 | ||
Goodwill, Ending Balance | 297,975 | ||
Infrastructure [Member] | |||
Goodwill [Roll Forward] | |||
Goodwill | 633,211 | 640,360 | |
Accumulated impairment losses | (633,211) | $ (527,500) | |
Goodwill, Beginning Balance | 112,860 | ||
Translation | (688) | ||
Change in goodwill | (7,149) | ||
Goodwill, Written off Related to Sale of Business Unit | (6,461) | ||
Goodwill, Impairment Loss | (105,711) | ||
Goodwill, Ending Balance | $ 0 |
Goodwill and Other Intangible63
Goodwill and Other Intangible Assets - Components of Other Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 31, 2015 | Jun. 30, 2015 | |
The components of intangible assets | ||
Accumulated amortization | $ (104,964) | $ (153,370) |
Intangible Assets, Gross (Excluding Goodwill) | 320,991 | 440,039 |
Trademarks [Member] | ||
The components of intangible assets | ||
Gross carrying amount, Indefinite | 16,567 | 24,876 |
Contract-based [Member] | ||
The components of intangible assets | ||
Gross carrying amount, finite | 7,164 | 8,523 |
Accumulated amortization | (6,538) | (6,990) |
Technology-based and other [Member] | ||
The components of intangible assets | ||
Gross carrying amount, finite | 47,116 | 52,820 |
Accumulated amortization | (25,945) | (29,723) |
Customer-related [Member] | ||
The components of intangible assets | ||
Gross carrying amount, finite | 205,566 | 275,796 |
Accumulated amortization | (60,263) | (90,141) |
Unpatented technology [Member] | ||
The components of intangible assets | ||
Gross carrying amount, finite | 31,934 | 59,449 |
Accumulated amortization | (4,128) | (14,426) |
Trademarks [Member] | ||
The components of intangible assets | ||
Gross carrying amount, finite | 12,644 | 18,575 |
Accumulated amortization | $ (8,090) | $ (12,090) |
Minimum [Member] | Contract-based [Member] | ||
The components of intangible assets | ||
Useful life related to technology-based intangible assets | 3 years | |
Minimum [Member] | Technology-based and other [Member] | ||
The components of intangible assets | ||
Useful life related to technology-based intangible assets | 4 years | |
Minimum [Member] | Customer-related [Member] | ||
The components of intangible assets | ||
Useful life related to technology-based intangible assets | 10 years | |
Minimum [Member] | Unpatented technology [Member] | ||
The components of intangible assets | ||
Useful life related to technology-based intangible assets | 10 years | |
Minimum [Member] | Trademarks [Member] | ||
The components of intangible assets | ||
Useful life related to technology-based intangible assets | 5 years | |
Maximum [Member] | Contract-based [Member] | ||
The components of intangible assets | ||
Useful life related to technology-based intangible assets | 15 years | |
Maximum [Member] | Technology-based and other [Member] | ||
The components of intangible assets | ||
Useful life related to technology-based intangible assets | 20 years | |
Maximum [Member] | Customer-related [Member] | ||
The components of intangible assets | ||
Useful life related to technology-based intangible assets | 21 years | |
Maximum [Member] | Unpatented technology [Member] | ||
The components of intangible assets | ||
Useful life related to technology-based intangible assets | 30 years | |
Maximum [Member] | Trademarks [Member] | ||
The components of intangible assets | ||
Useful life related to technology-based intangible assets | 20 years |
Goodwill and Other Intangible64
Goodwill and Other Intangible Assets (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Jun. 30, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Asset Impairment Charges | $ 376,500 | |||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Goodwill, Impairment Loss | (375,000) | $ (105,711) | ||||
Goodwill | $ 297,975 | 297,975 | $ 297,975 | $ 417,389 | ||
Goodwill, Written off Related to Sale of Business Unit | 7,536 | |||||
Amortization expense for intangible assets | 5,638 | 6,931 | 11,886 | $ 13,959 | ||
Percentage point increase (decrease) of fair value of reporting unit in excess of carrying amount. | (20.00%) | |||||
Infrastructure [Member] | ||||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Goodwill, Impairment Loss | (105,711) | |||||
Goodwill | 0 | 0 | $ 0 | 112,860 | ||
Goodwill, Written off Related to Sale of Business Unit | 6,461 | |||||
Infrastructure [Member] | Infrastructure Technology Asset [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Intangible Asset Write-Down | 10,500 | |||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Impairment of Intangible Assets (Excluding Goodwill) | 5,500 | |||||
Reduction of Liability | 5,000 | |||||
Infrastructure [Member] | Portfolio of Businesses for Strategic Alternatives [Member] | ||||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Net Book Value | 40,000 | 40,000 | 40,000 | |||
Industrial [Member] | ||||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Goodwill, Impairment Loss | 0 | |||||
Goodwill | $ 297,975 | 297,975 | $ 297,975 | $ 304,529 | ||
Goodwill, Written off Related to Sale of Business Unit | $ 1,075 | |||||
Reporting Unit, Percentage of Fair Value in Excess of Carrying Amount | 70.00% | 70.00% | 70.00% | |||
December Charges [Member] | Infrastructure [Member] | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Goodwill and Intangible Asset Impairment | $ 106,100 | |||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Goodwill, Impairment Loss | (105,700) | |||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | 400 | |||||
December Charges [Member] | Industrial [Member] | ||||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Impairment of Intangible Assets, Indefinite-lived (Excluding Goodwill) | $ 2,300 | |||||
Trademarks [Member] | ||||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Indefinite-lived Intangible Assets, Written off Related to Sale of Business Unit | $ 5,000 | |||||
Customer-related [Member] | ||||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Finite-lived Intangible Assets, Written off Related to Sale of Business Unit | 30,000 | |||||
Unpatented Technology [Member] | ||||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Finite-lived Intangible Assets, Written off Related to Sale of Business Unit | 15,400 | |||||
Trademarks [Member] | ||||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Finite-lived Intangible Assets, Written off Related to Sale of Business Unit | 1,100 | |||||
Technology-Based and other [Member] | ||||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Finite-lived Intangible Assets, Written off Related to Sale of Business Unit | 800 | |||||
Contractual Rights [Member] | ||||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Finite-lived Intangible Assets, Written off Related to Sale of Business Unit | $ 500 | |||||
Infrastructure Indefinite-Lived Trademark Asset [Member] | Infrastructure [Member] | ||||||
Goodwill and Other Intangible Assets (Additional Textual) [Abstract] | ||||||
Impairment of Intangible Assets (Excluding Goodwill) | $ 1,500 |
Segment Data - Sales and Operat
Segment Data - Sales and Operating Income (Loss) by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
External sales: | ||||
Total sales | $ 524,021 | $ 675,631 | $ 1,079,376 | $ 1,370,572 |
Operating income (loss): | ||||
Total operating loss | (233,956) | (333,771) | (227,343) | (272,751) |
Interest expense | 6,803 | 7,960 | 13,782 | 16,170 |
Other (income) expense, net | (732) | 2,223 | 353 | 409 |
Loss from continuing operations before income taxes | (240,027) | (343,954) | (241,478) | (289,330) |
Industrial [Member] | ||||
External sales: | ||||
Total sales | 310,883 | 371,557 | 624,217 | 749,415 |
Operating income (loss): | ||||
Total operating loss | 7,360 | 41,795 | 27,109 | 85,812 |
Infrastructure [Member] | ||||
External sales: | ||||
Total sales | 213,138 | 304,074 | 455,159 | 621,157 |
Operating income (loss): | ||||
Total operating loss | (237,738) | (371,920) | (246,166) | (352,699) |
Corporate [Member] | ||||
Operating income (loss): | ||||
Total operating loss | $ (3,578) | $ (3,646) | $ (8,286) | $ (5,864) |