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.}