Restructuring and Related Charges

3 Months Ended

Sep. 30, 2014

We are implementing restructuring actions 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.

During the three months ended September 30, 2014, we recognized restructuring and related charges of $7.4 million, of this amount, restructuring charges totaled $1.9 million, of which $0.3 million were charges related to inventory disposals and were recorded in cost of goods sold. Restructuring-related charges of $3.4 million were recorded in cost of goods sold and $2.1 million in operating expense for the three months ended September 30, 2014.

The total pre-tax charges for these 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 $26.5 million have been recorded through September 30, 2014: $18.6 million in Industrial and $7.9 million in Infrastructure.

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, 2014		Expense		Asset Write-Down			Translation			Cash Expenditures			September 30, 2014
Industrial
Severance	$	5,815	$	1,256	$	—		$	(295	)	$	(2,721	)	$	4,055
Facilities	444		85		(85		)	(21		)	(29		)	394
Other	67		14		—			(2		)	(46		)	33
Total Industrial	$	6,326	$	1,355	$	(85	)	$	(318	)	$	(2,796	)	$	4,482

Infrastructure
Severance	$	2,458	$	479	$	—		$	(113	)	$	(1,039	)	$	1,785
Facilities	190		32		(32		)	(8		)	(11		)	171
Other	28		6		—			(1		)	(18		)	15
Total Infrastructure	$	2,676	$	517	$	(32	)	$	(122	)	$	(1,068	)	$	1,971
Total	$	9,002	$	1,872	$	(117	)	$	(440	)	$	(3,864	)	$	6,453

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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