Segment Data

12 Months Ended

Jun. 30, 2020

The Company 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. Effective July 1, 2020, the Company combined Industrial and Widia to form one Metal Cutting segment. The Infrastructure segment remains unchanged. Refer to Note 22 for additional information on the fiscal 2021 change in reportable segments.

Sales to a single customer did not aggregate to 5 percent or more of total sales in 2020, 2019 and 2018. Export sales from U.S. operations to unaffiliated customers were $34.0 million, $67.8 million and $72.4 million in 2020, 2019 and 2018, respectively.

INDUSTRIAL The Industrial segment develops and manufactures high performance tooling and metal cutting products and services for diverse end markets, including aerospace and defense, general engineering, energy and transportation. These products include milling, hole making, turning, threading and toolmaking systems used in the manufacture of airframes, aero engines, trucks and automobiles, ships and various types of industrial equipment. We leverage advanced manufacturing capabilities in combination with varying levels of customization to solve our customers’ toughest challenges and deliver improved productivity for a wide range of applications. Industrial goes to market under the Kennametal^® brand through its direct sales force, a network of independent and national 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 Widia offers an assortment of standard and 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 Our Infrastructure segment produces engineered tungsten carbide and ceramic components, earth-cutting tools, and advanced metallurgical powders, primarily for the energy, earthworks and general engineering end markets. These wear-resistant products include compacts, nozzles, frac seats and custom components used in oil and gas and petrochemical industries; rod blanks and abrasive water jet nozzles for general industries; earth cutting tools and systems used in underground mining, trenching and foundation drilling and road milling; tungsten carbide powders for the oil and gas, aerospace and process industries; and ceramics used by the packaging industry for metallization of films and papers. We combine deep metallurgical and engineering expertise with advanced manufacturing capabilities to deliver solutions that drive improved productivity for our customers. Infrastructure markets its products primarily under the Kennametal^® brand and sells through a direct sales force as well as through distributors.

Segment data is summarized as follows:



(in thousands)	2020			2019			2018
Sales:
Industrial	$	1,015,058		$	1,274,499		$	1,292,098
Widia	162,995			197,522			198,568
Infrastructure	707,252			903,213			877,187
Total sales	$	1,885,305		$	2,375,234		$	2,367,853

Operating income (loss):
Industrial	$	35,671		$	220,696		$	176,978
Widia	(34,686		)	2,882			2,919
Infrastructure	23,113			108,480			112,998
Corporate	(1,846		)	(3,208		)	(2,596		)
Total operating income	$	22,252		$	328,850		$	290,299

Interest expense	$	35,154		$	32,994		$	30,081
Other income, net	(14,862		)	(15,379		)	(14,823		)
Income before income taxes	$	1,960		$	311,235		$	275,041

Depreciation and amortization:
Industrial	$	64,366		$	58,373		$	57,261
Widia	10,298			9,390			9,483
Infrastructure	45,176			44,284			41,916
Corporate	20			5			20
Total depreciation and amortization	$	119,860		$	112,052		$	108,680

Segment assets⁽⁴⁾:
Industrial	$	1,291,879		$	1,245,624		$	1,169,610
Widia	160,252			216,633			193,971
Infrastructure	748,424			883,566			864,402
Corporate	837,036			310,446			697,754
Total assets	$	3,037,591		$	2,656,269		$	2,925,737

Capital expenditures:
Industrial	$	182,292		$	145,485		$	112,124
Widia	12,875			22,162			17,445
Infrastructure	48,984			44,696			41,435
Total capital expenditures	$	244,151		$	212,343		$	171,004

⁽⁴⁾ Industrial, Widia and Infrastructure segment assets are principally accounts receivable, less allowance for doubtful accounts; inventories; property, plant and equipment, net; goodwill; other intangible assets, net of accumulated amortization; and operating lease ROU assets. Corporate assets are principally cash and cash equivalents, other current assets, long-term prepaid pension benefit, deferred income taxes and other assets.

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



(in thousands)	2020		2019		2018
Sales:
United States	$	778,054	$	1,014,189	$	970,003
Germany	248,796		314,035		331,893
China	214,364		247,858		271,343
Canada	90,247		108,261		102,139
India	81,366		113,287		102,120
Italy	52,699		68,585		69,049
France	45,817		59,899		62,982
United Kingdom	33,305		44,384		45,714
Other⁽⁴⁾	340,657		404,736		412,610
Total sales	$	1,885,305	$	2,375,234	$	2,367,853

Total long-lived assets:
United States	$	607,222	$	525,713	$	456,678
Germany	210,674		201,714		188,673
China	92,658		78,410		67,462
India	44,673		44,643		31,984
Israel	22,249		24,042		25,831
Canada	20,508		20,435		19,396
Other	40,287		39,938		34,189
Total long-lived assets⁽⁵⁾	$	1,038,271	$	934,895	$	824,213

⁽⁴⁾ Other consists of sales from 27 countries, none of which individually exceed 2 percent of total sales.

⁽⁵⁾Total long-lived assets as of June 30, 2020, 2019 and 2018 include property, plant and equipment, net of $1,038.3 million, $934.9 million and $824.2 million, respectively.

The following table presents Kennametal's revenue disaggregated by segment by geography:



	Industrial			Widia			Infrastructure			Total Kennametal
	2020	2019	2018	2020	2019	2018	2020	2019	2018	2020	2019	2018
Americas	41%	40%	38%	48%	45%	46%	62%	66%	65%	49%	50%	49%
EMEA	38	40	41	27	26	25	18	16	16	30	30	31
Asia Pacific	21	20	21	25	29	29	20	18	19	21	20	20

The following table presents Kennametal's revenue disaggregated by segment by end market:



	Industrial			Widia			Infrastructure			Total Kennametal
	2020	2019	2018	2020	2019	2018	2020	2019	2018	2020	2019	2018
General Engineering	45%	44%	43%	100%	100%	100%	34%	34%	31%	46%	45%	41%
Transportation	32	34	36	—	—	—	—	—	—	17	18	20
Aerospace	14	13	12	—	—	—	—	—	—	7	7	8
Energy	9	9	9	—	—	—	28	33	33	16	17	17
Earthworks	—	—	—	—	—	—	38	33	36	14	13	14