SEGMENT DATA

In order to take advantage of the growth opportunities of our WIDIA brand, we implemented a new operating structure at the beginning of fiscal 2017. A key attribute of the new structure is the establishment of the Widia operating segment, which we separated out from our 2016 Industrial segment. In order to better leverage the opportunities in our Widia business, and be more agile and competitive in the marketplace, we are placing higher levels of focus, determination and leadership in this business.

The Company now manages and reports its business in the following three segments: Industrial, Widia 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. None of our reportable operating segments represent the aggregation of two or more operating segments.

Sales to a single customer did not aggregate 4 percent or more of total sales in 2017, 2016 and 2015. Export sales from U.S. operations to unaffiliated customers were $58.6 million, $65.3 million and $71.0 million in 2017, 2016 and 2015, respectively.

INDUSTRIAL The Industrial segment generally serves customers that operate in industrial end markets such as transportation, general engineering, aerospace and defense market sectors, as well as the machine tool industry, delivering high performance metalworking tools for specified purposes. Our customers in these end markets use our products and services in the manufacture of engines, airframes, automobiles, trucks, ships and other various types of industrial equipment. The technology and customization requirements we provide vary by customer, application and industry. Industrial goes to market under the Kennametal® brand through its direct sales force, a network of independent and national chain distributors, integrated supplier channels and via the Internet. Application engineers and technicians are critical to the sales process and directly assist our customers with specified product design, selection, application and support.

WIDIA The Widia segment offers a focused assortment of standard custom metal cutting solutions to general engineering, aerospace, energy and transportation customers. We serve our customers primarily through a network of value added resellers, integrated supplier channels and via the Internet. Widia markets its products under the WIDIA®, WIDIA Hanita® and WIDIA GTD® brands.

INFRASTRUCTURE The Infrastructure segment generally serves customers that operate in the energy and earthworks market sectors that support primary industries such as oil and gas, power generation and chemicals; underground, surface and hard-rock mining; highway construction and road maintenance; and process industries such as food and feed. Our success is determined by our ability to gain an in-depth understanding of our customers’ engineering and development needs, to provide complete system solutions and high-performance capabilities to optimize and add value to their operations. Infrastructure markets its products primarily under the Kennametal® brand and sells through a direct sales force as well as distributors.

Segment data is summarized as follows:



(in thousands)	2017			2016			2015
Sales:
Industrial⁽⁷⁾	$	1,126,309		$	1,098,439		$	1,269,786
Widia ⁽⁷⁾	177,662			170,723			191,958
Infrastructure	754,397			829,274			1,185,451
Total sales	$	2,058,368		$	2,098,436		$	2,647,195

Operating income (loss):
Industrial⁽⁷⁾	$	82,842		$	90,324		$	165,434
Widia ⁽⁷⁾	(9,606		)	(9,081		)	(4,540		)
Infrastructure	40,011			(246,306		)	(509,381		)
Corporate	(303		)	(9,880		)	(9,336		)
Total operating income (loss)	$	112,944		$	(174,943	)	$	(357,823	)

Interest expense	$	28,842		$	27,752		$	31,466
Other expense (income), net	2,227			(4,124		)	(1,674		)
Income (loss) before income taxes	$	81,875		$	(198,571	)	$	(387,615	)

Depreciation and amortization:
Industrial⁽⁷⁾	$	54,269		$	52,523		$	54,237
Widia ⁽⁷⁾	10,728			10,419			9,951
Infrastructure	42,596			54,459			67,413
Corporate	63			65			63
Total depreciation and amortization	$	107,656		$	117,466		$	131,664

Total assets:
Industrial⁽⁷⁾	$	1,103,686		$	1,019,887		$	1,059,278
Widia ⁽⁷⁾	191,626			195,339			199,992
Infrastructure	813,747			849,447			1,279,608
Corporate ⁽⁸⁾	306,437			298,110			304,777
Total assets	$	2,415,496		$	2,362,783		$	2,843,655

Capital expenditures:
Industrial⁽⁷⁾	$	70,281		$	66,467		$	55,301
Widia ⁽⁷⁾	17,853			14,093			9,196
Infrastructure	29,884			30,137			36,442
Total capital expenditures	$	118,018		$	110,697		$	100,939

⁽⁷⁾ Amounts for 2016 and 2015 and as of June 30, 2016 and June 30, 2015 have been restated to reflect the change in reportable operating segments.

⁽⁸⁾ Amounts as of June 30, 2016 and June 30, 2015 have been restated to reflect the adopted of FASB guidance on the presentation of debt issuance costs.

Geographic information for sales, based on country where the sale originated, and assets is as follows:



(in thousands)	2017		2016		2015
Sales:
United States	$	897,326	$	897,399	$	1,176,622
Germany	282,347		334,366		442,009
China	220,561		210,124		246,953
India	84,769		77,934		85,193
Italy	59,967		69,821		85,530
Canada	56,628		55,812		73,912
France	56,231		56,264		59,772
United Kingdom	39,731		50,723		70,600
Other	360,808		345,993		406,604
Total sales	$	2,058,368	$	2,098,436	$	2,647,195

Total assets:
United States ⁽⁸⁾	$	1,075,444	$	1,069,320	$	1,332,720
Germany	347,226		327,679		394,491
China	239,908		233,200		274,774
Switzerland	197,783		189,498		194,139
India	98,602		91,544		97,463
Canada	58,337		57,174		60,492
Italy	48,990		50,352		94,978
United Kingdom	48,729		48,507		71,342
Other	300,477		295,509		323,256
Total assets:	$	2,415,496	$	2,362,783	$	2,843,655

⁽⁸⁾ Amounts as of June 30, 2016 and June 30, 2015 have been restated to reflect the adopted of FASB guidance on the presentation of debt issuance costs.

Approximate sales by end markets as a percentage of consolidated sales are as follows:



	2017		2016		2015
End markets:
General engineering	39	%	38	%	36	%
Transportation	20		21		21
Energy	18		17		19
Earthworks	15		16		17
Aerospace and defense	8		8		7
Total	100	%	100	%	100	%