10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2016

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number    0-3279

KIMBALL INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Indiana	35-0514506
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)
1600 Royal Street, Jasper, Indiana	47549-1001
(Address of principal executive offices)	(Zip Code)

(812) 482-1600

Registrant’s telephone number, including area code

Not Applicable

Former name, former address and former fiscal year, if changed since last report

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  

Yes  x    No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  x   No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o                                                                                       Accelerated filer  x

Non-accelerated filer  o (Do not check if a smaller reporting company)            Smaller reporting company  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

Yes  o    No  x

The number of shares outstanding of the Registrant’s common stock as of April 20, 2016 was:

Class A Common Stock - 297,799 shares

Class B Common Stock - 37,154,654 shares

KIMBALL INTERNATIONAL, INC.

FORM 10-Q

INDEX

		Page No.
PART I    FINANCIAL INFORMATION
	Item 1. Financial Statements
	Condensed Consolidated Balance Sheets         - March 31, 2016 (Unaudited) and June 30, 2015	3
	Condensed Consolidated Statements of Income (Unaudited)         - Three and Nine Months Ended March 31, 2016 and 2015	4
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)         - Three and Nine Months Ended March 31, 2016 and 2015	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)         - Nine Months Ended March 31, 2016 and 2015	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	28
	Item 4. Controls and Procedures	28
PART II    OTHER INFORMATION
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	29
	Item 6. Exhibits	30
SIGNATURES		31
EXHIBIT INDEX		32

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

KIMBALL INTERNATIONAL, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in Thousands, Except for Share and Per Share Data)

	(Unaudited)
	March 31, 2016			June 30, 2015
ASSETS
Current Assets:
Cash and cash equivalents	$	43,848		$	34,661
Receivables, net of allowances of $1,408 and $1,522, respectively	41,570			55,710
Inventories	40,717			37,634
Prepaid expenses and other current assets	24,143			23,548
Total current assets	150,278			151,553
Property and Equipment, net of accumulated depreciation of $200,086 and $197,500, respectively	96,234			97,163
Intangible Assets, net of accumulated amortization of $35,968 and $35,447, respectively	3,014			2,669
Other Assets	15,679			14,744
Total Assets	$	265,205		$	266,129
LIABILITIES AND SHARE OWNERS’ EQUITY
Current Liabilities:
Current maturities of long-term debt	$	29		$	27
Accounts payable	35,158			41,170
Customer deposits	19,734			18,618
Dividends payable	2,116			1,921
Accrued expenses	46,681			45,425
Total current liabilities	103,718			107,161
Other Liabilities:
Long-term debt, less current maturities	214			241
Other	16,784			17,222
Total other liabilities	16,998			17,463
Share Owners’ Equity:
Common stock-par value $0.05 per share:
Class A - Shares authorized: 50,000,000                Shares issued: 298,000 and 386,000, respectively	15			19
Class B - Shares authorized: 100,000,000                Shares issued: 42,727,000 and 42,639,000, respectively	2,136			2,132
Additional paid-in capital	3,545			3,445
Retained earnings	200,903			194,372
Accumulated other comprehensive income	1,312			1,229
Less: Treasury stock, at cost, 5,586,000 shares and 5,111,000 shares, respectively	(63,422		)	(59,692		)
Total Share Owners’ Equity	144,489			141,505
Total Liabilities and Share Owners’ Equity	$	265,205		$	266,129

See Notes to Condensed Consolidated Financial Statements

3

KIMBALL INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in Thousands, Except for Per Share Data)

	(Unaudited)						(Unaudited)
	Three Months Ended						Nine Months Ended
	March 31						March 31
	2016			2015			2016			2015
Net Sales	$	150,038		$	145,943		$	470,426		$	441,807
Cost of Sales	104,219			101,936			320,257			304,021
Gross Profit	45,819			44,007			150,169			137,786
Selling and Administrative Expenses	38,763			38,508			120,170			125,435
Restructuring Expense	2,761			388			5,961			3,723
Operating Income	4,295			5,111			24,038			8,628
Other Income (Expense):
Interest income	104			61			220			151
Interest expense	(6		)	(6		)	(17		)	(18		)
Non-operating income (expense), net	51			290			(437		)	140
Other income (expense), net	149			345			(234		)	273
Income from Continuing Operations Before Taxes on Income	4,444			5,456			23,804			8,901
Provision for Income Taxes	1,687			574			8,923			2,503
Income from Continuing Operations	$	2,757		$	4,882		$	14,881		$	6,398
Income from Discontinued Operations, Net of Tax	—			—			—			9,157
Net Income	$	2,757		$	4,882		$	14,881		$	15,555
Earnings Per Share of Common Stock:
Basic Earnings Per Share from Continuing Operations:	$	0.07					$	0.40
Class A				$	0.12					$	0.14
Class B				$	0.13					$	0.17
Diluted Earnings Per Share from Continuing Operations:	$	0.07					$	0.39
Class A				$	0.12					$	0.14
Class B				$	0.13					$	0.17
Basic Earnings Per Share:	$	0.07					$	0.40
Class A				$	0.12					$	0.38
Class B				$	0.13					$	0.40
Diluted Earnings Per Share:	$	0.07					$	0.39
Class A				$	0.12					$	0.37
Class B				$	0.13					$	0.40
Dividends Per Share of Common Stock:	$	0.055					$	0.165
Class A				$	0.050					$	0.145
Class B				$	0.050					$	0.150
Average Number of Shares Outstanding:
Class A and B Common Stock:
Basic	37,439			38,747			37,458			38,773
Diluted	37,707			39,115			37,869			39,102

See Notes to Condensed Consolidated Financial Statements

See Exhibit 11 Computation of Earnings Per Share for explanatory notes.

4

KIMBALL INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in Thousands)

	Three Months Ended									Three Months Ended
	March 31, 2016									March 31, 2015
(Unaudited)	Pre-tax			Tax			Net of Tax			Pre-tax			Tax			Net of Tax
Net income							$	2,757								$	4,882
Other comprehensive income (loss):
Postemployment severance actuarial change	$	185		$	(73	)	$	112		$	45		$	(17	)	$	28
Reclassification to (earnings) loss:
Amortization of prior service costs	—			—			—			41			(16		)	25
Amortization of actuarial change	(112		)	44			(68		)	(69		)	27			(42		)
Other comprehensive income (loss)	$	73		$	(29	)	$	44		$	17		$	(6	)	$	11
Total comprehensive income							$	2,801								$	4,893

	Nine Months Ended									Nine Months Ended
	March 31, 2016									March 31, 2015
(Unaudited)	Pre-tax			Tax			Net of Tax			Pre-tax			Tax			Net of Tax
Net income							$	14,881								$	15,555
Other comprehensive income (loss):
Foreign currency translation adjustments	$	—		$	—		$	—		$	(6,070	)	$	—		$	(6,070	)
Postemployment severance actuarial change	468			(183		)	285			698			(277		)	421
Derivative gain	—			—			—			2,513			(416		)	2,097
Reclassification to (earnings) loss:
Derivatives	—			—			—			(1,484		)	291			(1,193		)
Amortization of prior service costs	—			—			—			177			(70		)	107
Amortization of actuarial change	(331		)	129			(202		)	(146		)	58			(88		)
Other comprehensive income (loss)	$	137		$	(54	)	$	83		$	(4,312	)	$	(414	)	$	(4,726	)
Total comprehensive income							$	14,964								$	10,829

See Notes to Condensed Consolidated Financial Statements

5

KIMBALL INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in Thousands)

	(Unaudited)
	Nine Months Ended
	March 31
	2016			2015
Cash Flows From Operating Activities:
Net income	$	14,881		$	15,555
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	11,149			16,527
Loss on sales of assets	121			916
Restructuring and asset impairment charges	99			930
Deferred income tax and other deferred charges	1,434			(1,434		)
Stock-based compensation	4,177			5,217
Excess tax benefits from stock-based compensation	(301		)	(1,157		)
Other, net	65			1,220
Change in operating assets and liabilities:
Receivables	14,286			(4,292		)
Inventories	(3,083		)	(18,969		)
Prepaid expenses and other current assets	(3,588		)	(6,122		)
Accounts payable	(2,709		)	5,566
Customer deposits	1,116			2,883
Accrued expenses	2,134			(4,819		)
Net cash provided by operating activities	39,781			12,021
Cash Flows From Investing Activities:
Capital expenditures	(12,232		)	(24,095		)
Proceeds from sales of assets	138			2,302
Purchases of capitalized software	(924		)	(1,178		)
Other, net	(681		)	(176		)
Net cash used for investing activities	(13,699		)	(23,147		)
Cash Flows From Financing Activities:
Transfer of cash and cash equivalents to Kimball Electronics, Inc.	—			(63,006		)
Net change in capital leases and long-term debt	(25		)	(22		)
Dividends paid to Share Owners	(6,019		)	(5,729		)
Repurchases of common stock	(9,665		)	(2,828		)
Excess tax benefits from stock-based compensation	301			1,157
Repurchase of employee shares for tax withholding	(1,487		)	(3,842		)
Net cash used for financing activities	(16,895		)	(74,270		)
Effect of Exchange Rate Change on Cash and Cash Equivalents	—			(1,260		)
Net Increase (Decrease) in Cash and Cash Equivalents	9,187			(86,656		)
Cash and Cash Equivalents at Beginning of Period	34,661			136,624
Cash and Cash Equivalents at End of Period	$	43,848		$	49,968
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Income taxes	$	6,505		$	11,908
Interest expense	$	17		$	30

See Notes to Condensed Consolidated Financial Statements

6

KIMBALL INTERNATIONAL, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Kimball International, Inc. (the “Company,” “Kimball,” “we,” “us,” or “our”) have been prepared in accordance with the instructions to Form 10-Q. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe that the disclosures are adequate to make the information presented not misleading. Intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial statements for the interim periods. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim period or for the entire fiscal year. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in our latest annual report on Form 10-K.

Note 2. Spin-Off Transaction

On October 31, 2014 (“Distribution Date”), we completed the spin-off of our Electronic Manufacturing Services (“EMS”) segment by distributing the related shares of Kimball Electronics, Inc. (“Kimball Electronics”), on a pro rata basis, to the Company’s Share Owners of record as of October 22, 2014. After the Distribution Date, the Company does not beneficially own any Kimball Electronics shares and Kimball Electronics is an independent publicly traded company. Kimball International, Inc. trades on the NASDAQ under the ticker symbol “KBAL” and Kimball Electronics, Inc. trades on the NASDAQ under the ticker symbol “KE”.

The EMS segment was reclassified to discontinued operations in the Condensed Consolidated Statements of Income. The following table summarizes the results of the discontinued operations for the nine months ended March 31, 2015. Discontinued operations did not have an impact on the financial results of fiscal year 2016 or the three months ended March 31, 2015.

	Nine Months Ended
	March 31
(Amounts in Thousands, Except Per Share Data)	2015
Net Sales	$	275,551
Income Before Taxes on Income	$	13,098
Provision for Income Taxes	$	3,941
Income from Discontinued Operations, Net of Tax	$	9,157
Income From Discontinued Operations per Diluted Share	$	0.23

Note 3. Recent Accounting Pronouncements and Supplemental Information

Recent Accounting Pronouncements:

In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance on simplifying the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as the classification on the statement of cash flows. The guidance is effective for our first quarter of fiscal year 2018 with early adoption permitted. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements.

In February 2016, the FASB issued guidance that revises the accounting for leases. The guidance is intended to improve financial reporting of leasing transactions by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. Leases will continue to be classified as either operating or finance leases, with the classification affecting the pattern of expense recognition in the statement of income. The guidance will also require additional disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The

7

guidance is effective for our first quarter of fiscal year 2020 with early adoption permitted, and is required to be applied using a modified retrospective approach to each prior reporting period. We have not yet determined the effect of this guidance on our consolidated financial statements.

In January 2016, the FASB issued guidance which is intended to improve the recognition and measurement of financial instruments. The guidance revises an entity’s accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The guidance also amends certain disclosure requirements associated with the fair value of financial instruments. The guidance is effective prospectively for our first quarter of fiscal year 2019 financial statements with early adoption allowed on certain provisions. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements.

In November 2015, the FASB issued guidance on simplifying the balance sheet classification of deferred taxes. The guidance requires the classification of deferred tax assets and liabilities as noncurrent in a classified balance sheet. The current requirement that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected by this update. The guidance is effective for our first quarter of fiscal year 2018 financial statements with early adoption permitted, and allows for the use of either a prospective or retrospective transition method. We plan to early adopt using the prospective transition method for our fiscal year ending June 30, 2016, and will reclassify any current deferred tax assets or liabilities to noncurrent in our consolidated financial position.

In July 2015, the FASB issued guidance on simplifying the measurement of inventory which applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Inventory within the scope of this update is required to be measured at the lower of cost or net realizable value, which is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The guidance does not impact inventory measured on a last-in, first-out (“LIFO”) basis. The standards update is effective prospectively for our first quarter fiscal year 2018 financial statements with early adoption permitted. We do not expect the adoption to have a material effect on our consolidated financial statements.

In April 2015, the FASB issued guidance that requires debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability and further clarification guidance allows the cost of securing a revolving line of credit to be recorded as a deferred asset regardless of whether a balance is outstanding. This guidance is effective for our first quarter fiscal year 2017 financial statements. We currently comply with this method therefore the adoption will not have a material effect on our consolidated financial statements.

In April 2015, the FASB issued guidance on customer’s accounting for cloud computing fees and provided criteria for customers in a cloud computing arrangement to use to determine whether the arrangement includes a license of software.  The guidance clarifies that a software license included in a cloud computing arrangement should be accounted for consistent with the acquisition of other software licenses, whereas a cloud computing arrangement that does not include a software license should be accounted for as a service contract. The guidance is effective for our first quarter of fiscal year 2017 financial statements, and allows for the use of either a prospective or retrospective transition method. We plan to adopt using the prospective transition method for our first quarter of fiscal year 2017, and we do not expect the adoption to have a material effect on our consolidated financial statements.

In June 2014, the FASB provided explicit guidance on how to account for share-based payments granted to employees in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The guidance will be applied prospectively for our first quarter fiscal year 2017 financial statements.  We do not expect the adoption to have a material effect on our consolidated financial statements.

In May 2014, the FASB issued guidance on the recognition of revenue from contracts with customers. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. To achieve this core principle, the guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance addresses several areas including transfer of control, contracts with multiple performance obligations, and costs to obtain and fulfill contracts. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2015, the FASB decided to defer the effective date for this new revenue standard by one year, which will make the guidance effective for our first quarter fiscal year 2019 financial statements using either of two acceptable adoption methods: (i) retrospective adoption to each prior reporting period presented with the option to elect certain practical expedients; or (ii) adoption with the cumulative effect of initially applying the guidance recognized at the date of initial application and providing certain additional disclosures. In March 2016, the FASB issued

8

additional guidance which further clarifies assessing whether an entity is a principal or an agent in a revenue transaction, and impacts whether an entity reports revenue on a gross or net basis. In April 2016, the FASB issued additional guidance that addresses identifying performance obligations and implementing licensing guidance. The amendments have the same effective date and transition requirements as the new revenue standard. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements.

In April 2014, the FASB issued guidance on reporting discontinued operations and disclosures of disposals of components of an entity. Under the new guidance, a disposal that represents a strategic shift that has or will have a major effect on an entity’s operations and financial results is a discontinued operation. The new guidance requires expanded disclosures that will provide more information about the assets, liabilities, income, and expenses of discontinued operations, and also requires disclosures of significant disposals that do not qualify for discontinued operations reporting. The guidance was effective prospectively for disposals or components of our business classified as held for sale beginning in our first quarter of fiscal year 2016. The adoption did not have a material effect on our consolidated financial statements.

Notes Receivable and Trade Accounts Receivable:

Notes receivable and trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. We determine on a case-by-case basis the cessation of accruing interest, the resumption of accruing interest, the method of recording payments received on nonaccrual receivables, and the delinquency status for our limited number of notes receivable.

Our policy for estimating the allowance for credit losses on trade accounts receivable and notes receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to determine the final allowance for credit losses on the trade accounts receivable and notes receivable. Trade accounts receivable and notes receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Our limited amount of notes receivable allows management to monitor the risks, credit quality indicators, collectability, and probability of impairment on an individual basis. Adjustments to the allowance for credit losses are recorded in selling and administrative expenses. Customary terms require payment within 30 days, with terms beyond 30 days being considered extended.

Income Taxes:

In determining the quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which we operate. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur.

Our 38.0% effective tax rate for the third quarter of fiscal year 2016 did not include any material unusual items. The third quarter fiscal year 2015 effective tax rate of 10.5% was favorably impacted by $1.1 million of releases of income tax reserves upon the expiration of statutes of limitation and $0.4 million of tax accrual adjustments.

Our effective tax rate for the first nine months of fiscal year 2016 of 37.5% did not include any material unusual items. Our effective tax rate for the first nine months of fiscal year 2015 of 28.1% was favorably impacted by $1.1 million of releases of income tax reserves upon the expiration of statutes of limitation and $0.4 million of tax accrual adjustments, which were partially offset by a $0.4 million adjustment to deferred taxes as our combined state tax rate is lower post spin-off.

Non-operating Income (Expense), net:

The non-operating income (expense), net line item includes the impact of such items as fair value adjustments on Supplemental Employee Retirement Plan (“SERP”) investments, foreign currency rate movements, non-production rent income, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain (loss) on SERP investments is offset by a change in the SERP liability that is recognized in selling and administrative expenses.

9

Components of the Non-operating income (expense), net line, from continuing operations were:

	Three Months Ended						Nine Months Ended
	March 31						March 31
(Amounts in Thousands)	2016			2015			2016			2015
Foreign Currency Gain (Loss)	$	28		$	2		$	(12	)	$	(40	)
Gain (Loss) on Supplemental Employee Retirement Plan Investments	108			353			(170		)	519
Other	(85		)	(65		)	(255		)	(339		)
Non-operating income (expense), net	$	51		$	290		$	(437	)	$	140

Note 4. Inventories

Inventory components were as follows:

(Amounts in Thousands)	March 31, 2016			June 30, 2015
Finished products	$	27,480		$	26,634
Work-in-process	1,486			1,952
Raw materials	25,117			23,201
Total FIFO inventory	54,083			51,787
LIFO reserve	(13,366		)	(14,153		)
Total inventory	$	40,717		$	37,634

For interim reporting, LIFO inventories are computed based on quantities as of the end of the quarter and interim changes in price levels. Changes in quantities and price levels are reflected in the interim financial statements in the period in which they occur, except in cases where LIFO inventory liquidations are expected to be reinstated by fiscal year end. The earnings impact of LIFO inventory liquidations during the three and nine-month periods ended March 31, 2016 and 2015 was immaterial.

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Note 5. Accumulated Other Comprehensive Income

During the three months ended March 31, 2016 and 2015 the changes in the balances of each component of Accumulated Other Comprehensive Income, net of tax, were as follows:

Accumulated Other Comprehensive Income	Postemployment Benefits
(Amounts in Thousands)	Prior Service Costs			Net Actuarial Gain (Loss)			Accumulated Other Comprehensive Income
Balance at December 31, 2015	$	—		$	1,268		$	1,268
Other comprehensive income (loss) before reclassifications	—			112			112
Reclassification to (earnings) loss	—			(68		)	(68		)
Net current-period other comprehensive income (loss)	—			44			44
Balance at March 31, 2016	$	—		$	1,312		$	1,312
Balance at December 31, 2014	$	(30	)	$	1,212		$	1,182
Other comprehensive income (loss) before reclassifications	—			28			28
Reclassification to (earnings) loss	25			(42		)	(17		)
Net current-period other comprehensive income (loss)	25			(14		)	11
Balance at March 31, 2015	$	(5	)	$	1,198		$	1,193

During the nine months ended March 31, 2016 and 2015, the changes in the balances of each component of Accumulated Other Comprehensive Income, net of tax, were as follows:

Accumulated Other Comprehensive Income							Postemployment Benefits
(Amounts in Thousands)	Foreign Currency Translation Adjustments			Derivative Gain (Loss)			Prior Service Costs			Net Actuarial Gain (Loss)			Accumulated Other Comprehensive Income
Balance at June 30, 2015	$	—		$	—		$	—		$	1,229		$	1,229
Other comprehensive income (loss) before reclassifications	—			—			—			285			285
Reclassification to (earnings) loss	—			—			—			(202		)	(202		)
Net current-period other comprehensive income (loss)	—			—			—			83			83
Balance at March 31, 2016	$	—		$	—		$	—		$	1,312		$	1,312
Balance at June 30, 2014	$	4,909		$	(3,411	)	$	(120	)	$	1,062		$	2,440
Other comprehensive income (loss) before reclassifications	(6,070		)	2,097			—			421			(3,552		)
Reclassification to (earnings) loss	—			(1,193		)	107			(88		)	(1,174		)
Distribution of Kimball Electronics, Inc.	1,161			2,507			8			(197		)	3,479
Net current-period other comprehensive income (loss)	(4,909		)	3,411			115			136			(1,247		)
Balance at March 31, 2015	$	—		$	—		$	(5	)	$	1,198		$	1,193

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The following reclassifications were made from Accumulated Other Comprehensive Income to the Condensed Consolidated Statements of Income:

Reclassifications from Accumulated Other Comprehensive Income	Three Months Ended						Nine Months Ended						Affected Line Item in the Condensed Consolidated Statements of Income
	March 31,						March 31,
(Amounts in Thousands)	2016			2015			2016			2015
Derivative Gain (1)	$	—		$	—		$	—		$	1,193		Income (Loss) from Discontinued Operations, Net of Tax
Postemployment Benefits:
Amortization of Prior Service Costs (2)	$	—		$	(26	)	$	—		$	(106	)	Cost of Sales
	—			(15		)	—			(58		)	Selling and Administrative Expenses
	—			16			—			65			Benefit (Provision) for Income Taxes
	—			(25		)	—			(99		)	Income (Loss) from Continuing Operations
	$	—		$	—		$	—		$	(8	)	Income (Loss) from Discontinued Operations, Net of Tax
Amortization of Actuarial Gain (2)	$	71		$	38		$	214		$	68		Cost of Sales
	41			31			117			65			Selling and Administrative Expenses
	(44		)	(27		)	(129		)	(52		)	Benefit (Provision) for Income Taxes
	68			42			202			81			Income (Loss) from Continuing Operations
	$	—		$	—		$	—		$	7		Income (Loss) from Discontinued Operations, Net of Tax
Total Reclassifications for the Period	$	68		$	17		$	202		$	(18	)	Income (Loss) from Continuing Operations
	—			—			—			1,192			Income (Loss) from Discontinued Operations, Net of Tax
	$	68		$	17		$	202		$	1,174		Net Income (Loss)

Amounts in parentheses indicate reductions to income.

(1) See Note 9 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.

(2) See Note 11 - Postemployment Benefits of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.

Note 6. Commitments and Contingent Liabilities

Standby letters of credit are issued to third-party suppliers, lessors, and insurance institutions and can only be drawn upon in the event of Kimball’s failure to pay its obligations to a beneficiary. As of March 31, 2016, we had a maximum financial exposure from unused standby letters of credit totaling $1.0 million. We are not aware of circumstances that would require us to perform under any of these arrangements and believe that the resolution of any claims that might arise in the future, either individually or

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in the aggregate, would not materially affect our consolidated financial statements. Accordingly, no liability has been recorded as of March 31, 2016 with respect to the standby letters of credit. Kimball also enters into commercial letters of credit to facilitate payments to vendors and from customers.

We estimate product warranty liability at the time of sale based on historical repair or replacement cost trends in conjunction with the length of the warranty offered. Management refines the warranty liability in cases where specific warranty issues become known.

Changes in the product warranty accrual for the nine months ended March 31, 2016 and 2015 were as follows:

	Nine Months Ended
	March 31
(Amounts in Thousands)	2016			2015
Product Warranty Liability at the beginning of the period	$	2,264		$	3,221
Additions to warranty accrual (including changes in estimates)	982			625
Settlements made (in cash or in kind)	(785		)	(564		)
Distribution of Kimball Electronics, Inc.	—			(910		)
Product Warranty Liability at the end of the period	$	2,461		$	2,372

Note 7. Restructuring Expense

We recognized pre-tax restructuring expense of $2.8 million and $6.0 million in the three and nine months ended March 31, 2016, respectively, and recognized $0.4 million and $3.7 million of restructuring expense in the three and nine months ended March 31, 2015. We utilize available market prices and management estimates to determine the fair value of impaired fixed assets. Restructuring charges are included in the Restructuring Expense line item on the Company’s Condensed Consolidated Statements of Income.

Capacity Utilization Restructuring Plan:

In November 2014, we announced a capacity utilization restructuring plan which includes the consolidation of our metal fabrication production from an operation located in Post Falls, Idaho, into existing production facilities in Indiana, and the reduction of our Company plane fleet from two jets to one.

As of March 31, 2016, we are in the final stages of consolidating the Idaho operation into Indiana facilities. The transfer of work has involved the start-up of metal fabrication capabilities in a Company-owned facility, along with the transfer of certain assembly operations into two additional Company-owned facilities, all located in southern Indiana. The manufacturing capacity realignment has been carefully managed to mitigate customer disruptions. We expect to incur approximately $0.8 million for future capital investments as we finalize the restructuring activities. The Post Falls, Idaho facility is being prepared for sale.

The reduction of our plane fleet from two jets to one reduced our cost structure while aligning the plane fleet size with our needs following the spin-off of Kimball Electronics on October 31, 2014. Previously, one of our jets was used primarily for the successful strategy of transporting customers to visit our showrooms, offices, research and development center, and manufacturing locations, while the remaining jet was used primarily for management travel. The plane used primarily for management travel was sold in the third quarter of fiscal year 2015. The sale of the plane resulted in a $0.2 million pre-tax gain in the third quarter of fiscal year 2015 which partially offset the impairment charge of $1.1 million recorded in the second quarter of fiscal year 2015. As a result of the aircraft fleet reduction, we began realizing the annual pre-tax savings of $0.8 million. In regards to the remaining jet, we believe that our location in rural Jasper, Indiana and the location of our manufacturing locations in small towns away from major metropolitan areas necessitates the need for the remaining jet to efficiently transport customers.

We will continue to incur ongoing building maintenance costs such as property taxes, insurance, and utilities until the facility is sold. Exclusive of these ongoing building maintenance costs, we currently estimate that the pre-tax restructuring charges will be approximately $11.7 million with $11.3 million recorded since the plan was announced with the remainder expected to be incurred over the remaining anticipated transition period. The restructuring charges are expected to consist of approximately $4.8 million of transition and other employee costs, $5.8 million of plant closure and other exit costs, and $1.1 million of non-cash asset impairment. Approximately 91% of the total cost estimate is expected to be cash expense.

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Summary of Restructuring Plan:
	Accrued June 30, 2015		Nine Months Ended March 31, 2016									Total Charges Incurred Since Plan Announcement		Total Expected Plan Costs(2)
(Amounts in Thousands)			Amounts Charged Cash		Amounts Charged  Non-cash		Amounts Utilized/ Cash Paid			Accrued March 31, 2016 (1)
Capacity Realignment and Post Falls, Idaho Exit
Transition and Other Employee Costs	$	2,613	$	1,934	$	—	$	(1,086	)	$	3,461	$	4,591	$	4,615
Asset Write-downs	—		—		99		(99		)	—		230		230
Plant Closure and Other Exit Costs	—		3,928		—		(3,683		)	245		5,384		5,815
Total	$	2,613	$	5,862	$	99	$	(4,868	)	$	3,706	$	10,205	$	10,660
Plane Fleet Reduction
Transition and Other Employee Costs	$	—	$	—	$	—	$	—		$	—	$	224	$	224
Asset Write-downs	—		—		—		—			—		822		822
Total	$	—	$	—	$	—	$	—		$	—	$	1,046	$	1,046
Total Restructuring Plan	$	2,613	$	5,862	$	99	$	(4,868	)	$	3,706	$	11,251	$	11,706

(1) The accrued restructuring balance at March 31, 2016 is recorded in current liabilities.

(2) Excludes ongoing building maintenance costs such as property taxes, insurance, and utilities that will be incurred until the facility is sold. These costs will be included in the Restructuring line on the Condensed Consolidated Statements of Income as they are incurred.

Note 8. Fair Value

Kimball categorizes assets and liabilities measured at fair value into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas level 3 generally requires significant management judgment. The three levels are defined as follows:

• Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

• Level 2: Observable inputs other than those included in level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

• Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

Our policy is to recognize transfers between these levels as of the end of each quarterly reporting period. There were no transfers between these levels during the nine months ended March 31, 2016. There were also no changes in the inputs or valuation techniques used to measure fair values compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2015.

We invested $0.5 million in non-marketable equity securities of a privately-held company during the quarter ended March 31, 2016. This investment is classified as a level 3 financial asset, as explained in the Financial Instruments Not Carried At Fair Value section below. No other purchases or sales of level 3 assets occurred during the three and nine months ended March 31, 2016.

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Financial Instruments Recognized at Fair Value:

The following methods and assumptions were used to measure fair value:

Financial Instrument	Level	Valuation Technique/Inputs Used
Cash Equivalents	1	Market - Quoted market prices
Trading securities: Mutual funds held in nonqualified SERP	1	Market - Quoted market prices

Recurring Fair Value Measurements:

As of March 31, 2016 and June 30, 2015, the fair values of level 1 financial assets that are measured at fair value on a recurring basis using the market approach were as follows:

(Amounts in Thousands)	March 31, 2016		June 30, 2015
Cash equivalents	$	38,848	$	23,414
Trading Securities: Mutual funds in nonqualified SERP	10,025		10,353
Total assets at fair value	$	48,873	$	33,767

The nonqualified supplemental employee retirement plan (“SERP”) assets consist primarily of equity funds, balanced funds, target date funds, a bond fund, and a money market fund. The SERP investment assets are offset by a SERP liability which represents Kimball’s obligation to distribute SERP funds to participants. See Note 10 - Investments of Notes to Condensed Consolidated Financial Statements for further information regarding the SERP.

Financial Instruments Not Carried At Fair Value:

Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following:

Financial Instrument	Level	Valuation Technique/Inputs Used
Notes receivable	2	Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account the customer’s non-performance risk
Non-marketable equity securities (cost-method investments, which carry shares at cost except in the event of impairment)	3	Cost Method, with Impairment Recognized Using a Market-Based Valuation Technique - See the explanation below the table regarding the method used to periodically estimate the fair value of cost-method investments.
Long-term debt (carried at amortized cost)	3	Income - Price estimated using a discounted cash flow analysis based on quoted long-term debt market rates, taking into account Kimball’s non-performance risk

Investments in non-marketable equity securities are accounted for using the cost method because Kimball does not have the ability to exercise significant influence over the operating and financial policies of the investee. On a periodic basis, but no less frequently than quarterly, these investments are assessed for impairment when there are events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. If a significant adverse effect on the fair value of the investment were to occur and was deemed to be other-than-temporary, the fair value of the investment would be estimated, and the amount by which the carrying value of the cost-method investment exceeds its fair value would be recorded as an impairment loss.

The carrying value of our cash deposit accounts, trade accounts receivable, trade accounts payable, and dividends payable approximates fair value due to the relatively short maturity and immaterial non-performance risk.

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Note 9. Derivative Instruments

Foreign Exchange Contracts:

Our former EMS segment, classified as discontinued operations, operated internationally and was therefore exposed to foreign currency exchange rate fluctuations in the normal course of business. The primary means of managing this exposure was to utilize natural hedges, such as aligning currencies used in the supply chain with the sale currency. To the extent natural hedging techniques did not fully offset currency risk, derivative instruments were used with the objective of reducing the residual exposure to certain foreign currency rate movements. Factors considered in the decision to hedge an underlying market exposure included the materiality of the risk, the volatility of the market, the duration of the hedge, the degree to which the underlying exposure was committed to, and the availability, effectiveness, and cost of derivative instruments. Derivative instruments were only utilized for risk management purposes and were not used for speculative or trading purposes.

Forward contracts designated as cash flow hedges were used to protect against foreign currency exchange rate risks inherent in forecasted transactions denominated in a foreign currency. Foreign exchange contracts were also used to hedge against foreign currency exchange rate risks related to intercompany balances denominated in currencies other than the functional currencies. In limited cases due to unexpected changes in forecasted transactions, cash flow hedges may have ceased to meet the criteria to be designated as cash flow hedges. Depending on the type of exposure hedged, either a derivative contract in the opposite position of the undesignated hedge may have been purchased or the hedge may have been retained until it matured if the hedge had continued to provide an adequate offset in earnings against the currency revaluation impact of foreign currency denominated liabilities.

When derivatives were settled with the counterparty, the derivative asset or liability was relieved and cash flow was impacted for the net settlement. For derivative instruments that met the criteria of hedging instruments under FASB guidance, the effective portions of the gain or loss on the derivative instrument were initially recorded net of related tax effect in Accumulated Other Comprehensive Income, a component of Share Owners’ Equity, and were subsequently reclassified into earnings in the period or periods during which the hedged transaction was recognized in earnings. The gain or loss associated with derivative instruments that were not designated as hedging instruments or that ceased to meet the criteria for hedging under FASB guidance was recognized in earnings.

After the spin-off of the EMS segment on October 31, 2014, we held no derivative instruments. See the Condensed Consolidated Statements of Comprehensive Income for the changes in deferred derivative gains and losses. Information on the location and amounts of derivative gains and losses in the Condensed Consolidated Statements of Income are presented below.

The Effect of Derivative Instruments on Other Comprehensive Income (Loss)

	Three Months Ended				Nine Months Ended
	March 31				March 31
(Amounts in Thousands)	2016		2015		2016		2015
Amount of Pre-Tax Gain Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion):
Foreign exchange contracts	$	—	$	—	$	—	$	2,513

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The Effect of Derivative Instruments on Condensed Consolidated Statements of Income

		Three Months Ended				Nine Months Ended
(Amounts in Thousands)		March 31				March 31
Derivatives in Cash Flow Hedging Relationships	Location of Gain or (Loss)	2016		2015		2016		2015
Amount of Pre-Tax Gain Reclassified from Accumulated OCI into Income (Effective Portion):
Foreign exchange contracts	Income from Discontinued Operations, Net of Tax	$	—	$	—	$	—	$	1,484
Derivatives Not Designated as Hedging Instruments
Amount of Pre-Tax Gain Recognized in Income on Derivatives:
Foreign exchange contracts	Income from Discontinued Operations, Net of Tax	$	—	$	—	$	—	$	740
Total Derivative Pre-Tax Gain Recognized in Income		$	—	$	—	$	—	$	2,224

Note 10. Investments

Supplemental Employee Retirement Plan Investments:

Kimball maintains a self-directed supplemental employee retirement plan (“SERP”) in which executive employees are eligible to participate. The SERP utilizes a rabbi trust, and therefore assets in the SERP portfolio are subject to creditor claims in the event of bankruptcy. Kimball recognizes SERP investment assets on the Condensed Consolidated Balance Sheets at current fair value. A SERP liability of the same amount is recorded on the Condensed Consolidated Balance Sheets representing an obligation to distribute SERP funds to participants. The SERP investment assets are classified as trading, and accordingly, realized and unrealized gains and losses are recognized in income in the Other Income (Expense) category. Adjustments made to revalue the SERP liability are also recognized in income as selling and administrative expenses and offset valuation adjustments on SERP investment assets. Net unrealized holding losses from continuing operations for the nine months ended March 31, 2016 and 2015 were, in thousands, $550 and $121, respectively.

SERP asset and liability balances were as follows:

(Amounts in Thousands)	March 31, 2016		June 30, 2015
SERP investments - current asset	$	634	$	1,276
SERP investments - other long-term asset	9,391		9,077
Total SERP investments	$	10,025	$	10,353
SERP obligation - current liability	$	634	$	1,276
SERP obligation - other long-term liability	9,391		9,077
Total SERP obligation	$	10,025	$	10,353

Non-marketable equity securities:

We invested $0.5 million in non-marketable equity securities of a privately-held company during the quarter ended March 31, 2016. The securities were valued at $0.5 million at March 31, 2016, and are included in the Other Assets line of the Condensed Consolidated Balance Sheets. See Note 8 - Fair Value of Notes to Condensed Consolidated Financial Statements for more information on the valuation of these securities. The investment does not rise to the level of a material variable interest or a controlling interest in the privately-held company which would require consolidation.

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Note 11. Postemployment Benefits

Kimball’s domestic employees participate in severance plans. These plans cover domestic employees and provide severance benefits to eligible employees meeting the plans’ qualifications, primarily involuntary termination without cause. In connection with the spin-off, the Company transferred the post-employment obligation for EMS employees to Kimball Electronics.

The components of net periodic postemployment benefit cost applicable to our severance plans were as follows:

	Three Months Ended						Nine Months Ended
	March 31						March 31
(Amounts in Thousands)	2016			2015			2016			2015
Service cost	$	122		$	131		$	366		$	521
Interest cost	19			21			58			77
Amortization of prior service costs	—			41			—			177
Amortization of actuarial income	(112		)	(69		)	(331		)	(146		)
Net periodic benefit cost — Total cost	$	29		$	124		$	93		$	629
Less: Discontinued operations	—			—			—			81
Net periodic benefit cost — Continuing operations	$	29		$	124		$	93		$	548

The benefit cost in the above table includes only normal recurring levels of severance activity, as estimated using an actuarial method. Unusual or non-recurring severance actions are not estimable using actuarial methods and are expensed in accordance with the applicable U.S. GAAP.

Note 12. Stock Compensation Plan

During fiscal year 2016, the following stock compensation was awarded to officers, key employees, and members of the Board of Directors. All awards were granted under the Amended and Restated 2003 Stock Option and Incentive Plan. For more information on stock compensation awards, refer to our Annual Report on Form 10-K for the fiscal year ended June 30, 2015.

Type of Award	Quarter Awarded	Shares or Units	Grant Date Fair Value (5)
Annual Performance Shares (1)	1st Quarter	111,695		$12.12
Relative Total Shareholder ReturnAwards (2)	1st Quarter	36,093		$15.10
Restricted Share Units (3)	1st Quarter	93,232	$11.58 - $12.32
Unrestricted Shares (4)	1st Quarter	5,304		$11.31
Unrestricted Shares (4)	2nd Quarter	2,443		$12.29
Unrestricted Shares (Director Compensation) (4)	2nd Quarter	6,587		$12.04
Unrestricted Shares (Director Compensation) (4)	3rd Quarter	15,248		$9.65

(1) Annual performance shares were awarded to officers and other key employees. The number of annual performance shares to be issued will be dependent upon operating income performance, with a percentage payout up to a maximum of 200% of the target number set forth above. Annual performance shares vest after one year.

(2) Performance units were awarded to key officers under the Company’s Relative Total Shareholder Return program. Vesting occurs at June 30, 2018. Participants will earn from 0% to 200% of the target award depending upon how the compound annual growth rate of Kimball International common stock ranks within the peer group at the end of the performance period.

(3) Restricted share units were awarded to officers and key employees. Vesting occurs at June 30, 2016, June 30, 2017, and June 30, 2018. Upon vesting, the outstanding number of restricted share units and the value of dividends accumulated over the vesting period are converted to shares of common stock.

(4) Unrestricted shares were awarded to key employees as consideration for service to the Company. Other unrestricted shares were awarded to non-employee members of the Board of Directors as compensation for director’s fees which are expensed over the period that directors earn the compensation. Unrestricted shares do not have vesting periods, holding periods, restrictions on sale, or other restrictions.

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(5) The grant date fair value of annual performance shares is based on the stock price at the date of the award, reduced by the present value of dividends normally paid over the vesting period which are not payable on outstanding annual performance share awards. The grant date fair value of the Relative Total Shareholder Return awards was calculated using a Monte Carlo simulation. This valuation technique includes estimating the movement of stock prices and the effects of volatility, interest rates, and dividends. The grant date fair value of the restricted share units and unrestricted shares was based on the stock price at the date of the award.

Note 13. Variable Interest Entities

Kimball’s involvement with variable interest entities (“VIEs”) is limited to situations in which we are not the primary beneficiary as we lack the power to direct the activities that most significantly impact the VIE’s economic performance. Thus, consolidation is not required. Our involvement with VIEs consists of an investment in non-marketable equity securities of a privately-held company during the third quarter of fiscal year 2016 and a note receivable related to the sale of an Indiana facility.

The non-marketable equity securities were valued at $0.5 million at March 31, 2016, and are included in the Other Assets line of the Condensed Consolidated Balance Sheets. For more information related to our investment in the privately-held company, see Note 8 - Fair Value of Notes to Condensed Consolidated Financial Statements.

The carrying value of the note receivable related to the sale of an Indiana facility, net of a $0.5 million allowance, was $0.8 million as of March 31, 2016. As of June 30, 2015, the carrying value of the note receivable, net of a $0.5 million allowance, was $0.9 million. For both periods, the short-term portion of the carrying value was included on the Receivables line and the long-term portion of the carrying value was included on the Other Assets line of our Condensed Consolidated Balance Sheets.

We have no obligation to provide additional funding to the VIEs, and thus our exposure and risk of loss related to the VIEs is limited to the carrying value of the investment and notes receivable. Financial support provided by Kimball to the VIEs was limited to the items discussed above during the quarter ended March 31, 2016.

Note 14. Credit Quality and Allowance for Credit Losses of Notes Receivable

Kimball monitors credit quality and associated risks of notes receivable on an individual basis based on criteria such as financial stability of the party and collection experience in conjunction with general economic and market conditions. We hold collateral for the note receivable from the sale of an Indiana facility thereby mitigating the risk of loss. As of March 31, 2016 and June 30, 2015, Kimball had no material past due outstanding notes receivable.

	As of March 31, 2016						As of June 30, 2015
(Amounts in Thousands)	Unpaid Balance		Related Allowance		Receivable Net of Allowance		Unpaid Balance		Related Allowance		Receivable Net of Allowance
Note Receivable from Sale of Indiana Facility	$	1,313	$	489	$	824	$	1,347	$	489	$	858
Other Notes Receivable	373		140		233		439		149		290
Total	$	1,686	$	629	$	1,057	$	1,786	$	638	$	1,148

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Business Overview

Kimball International, Inc. (the “Company,” “Kimball,” “we,” “us,” or “our”) creates design driven, innovative furnishings sold through our family of brands: Kimball Office, National Office Furniture, and Kimball Hospitality. Our diverse portfolio offers solutions for the workplace, learning, healing, and hospitality environments.  Dedicated to our Guiding Principles, our values and integrity are evidenced by public recognition as a highly trusted company and an employer of choice. “We Build Success” by establishing long-term relationships with customers, employees, suppliers, share owners and the communities in which we operate.

We closely monitor key indicators for the markets in which we compete. In relation to the office furniture industry, the Business and Institutional Furniture Manufacturer Association (“BIFMA”) forecast (by IHS as of February 2016) projects a year-over-year

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increase of 3.9% for calendar year 2016. The forecast for two of the leading indicators for the hospitality furniture market (January 2016 PwC Hospitality Directions U.S. report) include an increase in occupancy rates of less than 1% and an increase in RevPAR (Revenue Per Available Room) of 5.5% for calendar year 2016.

We expect to continue to invest in capital expenditures prudently, particularly for projects, including potential acquisitions, that would enhance our capabilities and diversification while providing an opportunity for growth and improved profitability. We have a strong focus on cost control and closely monitor market changes and our liquidity in order to proactively adjust our operating costs, discretionary capital spending, and dividend levels as needed. Managing working capital in conjunction with fluctuating demand levels is likewise key. In addition, a long-standing component of our profit sharing incentive bonus plan is that it is linked to our worldwide and business unit performance which is designed to adjust compensation expense as profits change.

We continue to maintain a strong balance sheet. Our short-term liquidity available, represented as cash and cash equivalents plus the unused amount of our credit facility, was $72.8 million at March 31, 2016.

In addition to the above discussion, management currently considers the following events, trends, and uncertainties to be most important to understanding our financial condition and operating performance:

• Successful execution of the Company’s restructuring plan is critical to the Company’s future performance. The success of the restructuring initiatives is dependent on accomplishing the plan in a timely and effective manner. A critical component of the restructuring initiatives is the transfer of production among facilities which will result in some manufacturing inefficiencies and excess working capital during the transition period. The Company’s restructuring plan is discussed below.

• We continue to focus on mitigating the impact of select raw material commodity pricing pressures.

• Due to the contract and project nature of the furniture markets, fluctuation in the demand for our products and variation in the gross margin on those projects is inherent to our business. Effective management of our manufacturing capacity is and will continue to be critical to our success. See below for further details regarding current sales and open order trends.

• We continue to see volatility in order rates in both the hospitality and office furniture markets which in turn can impact our operating results.

• Globalization continues to reshape not only the markets in which we operate but also our key customers and competitors. In addition, demand for shorter lead times on a portion of our hospitality orders allows us to utilize available manufacturing capacity in the U.S., and we continue to reduce lead times with the remainder of our supply base in order to achieve our customers’ requests. We also continually evaluate the optimal location of production facilities and suppliers, particularly for hospitality furniture, in order to provide products to our customers most efficiently and at the lowest cost.

• Current global economic uncertainties including the challenges in China’s economy, distressed oil prices, and volatility in financial markets may pose a threat to our future growth if companies reduce capital spending in response to the sustained volatility and uncertainty.

• Employees throughout our business operations are an integral part of our ability to compete successfully, and the stability of the management team is critical to long-term Share Owner value. Our career development and succession planning processes help to maintain stability in management.

Spin-Off of Kimball Electronics reported as Discontinued Operations

On October 31, 2014 (“Distribution Date”), we completed the previously announced spin-off of our Electronic Manufacturing Services (“EMS”) segment by distributing the related shares of Kimball Electronics, Inc. (“Kimball Electronics”), on a pro rata basis, to the Company’s Share Owners of record as of October 22, 2014. After the Distribution Date, the Company does not beneficially own any Kimball Electronics shares and Kimball Electronics is an independent publicly traded company. Kimball International, Inc. trades on the NASDAQ under the ticker symbol “KBAL” and Kimball Electronics, Inc. trades on the NASDAQ under the ticker symbol “KE”.

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The EMS business was reclassified to discontinued operations. Discontinued operations did not have an impact on the financial results of fiscal year-to-date 2016 or the third quarter of fiscal year 2015. Financial results of the discontinued operations for the fiscal year 2015 year-to-date period were as follows:

	Nine Months Ended
	March 31
(Amounts in Thousands, Except Per Share Data)	2015
Net Sales of Discontinued Operations	$	275,551
Income from Discontinued Operations, Net of Tax	$	9,157
Income From Discontinued Operations per Diluted Share	$	0.23

As a result of the October 30, 2014 stock unification, all distinctions between Class A common stock and Class B common stock were eliminated so that all shares of Class B common stock are equivalent to shares of Class A common stock with respect to all matters, including without limitation, dividend payments and voting rights. Therefore, beginning in fiscal year 2016 the earnings per share calculation includes all common stock in a single calculation. Unless the context otherwise indicates, reference to earnings per share for periods prior to fiscal year 2016 reflects the earnings per Class B diluted share as has historically been reported.

Financial Overview

	At or for the Three Months Ended								For the Nine Months Ended
	March 31								March 31
(Amounts in Millions)	2016			2015			% Change		2016			2015			% Change
Net Sales	$	150.0		$	145.9		3	%	$	470.4		$	441.8		6	%
Gross Profit	45.8			44.0			4	%	150.2			137.8			9	%
Selling and Administrative Expenses	38.8			38.5			1	%	120.2			125.4			(4	%)
Restructuring Expense	2.8			0.4					6.0			3.7
Operating Income	4.3			5.1			(16	%)	24.0			8.6			179	%
Operating Income %	2.9		%	3.5		%			5.1		%	2.0		%
Adjusted Operating Income *	$	7.1		$	5.7		23	%	$	30.0		$	15.4		94	%
Adjusted Operating Income % *	4.7		%	3.9		%			6.4		%	3.5		%
Income from Continuing Operations	$	2.8		$	4.9		(44	%)	$	14.9		$	6.4		133	%
Adjusted Income from Continuing Operations *	4.4			5.3			(16	%)	18.5			11.8			58	%
Diluted Earnings Per Share from Continuing Operations	$	0.07		$	0.13				$	0.39		$	0.17
Adjusted Diluted Earnings Per Share from Continuing Operations *	$	0.12		$	0.14				$	0.49		$	0.30
Open Orders	$	121.3		$	104.5		16	%

* Items indicated represent Non-GAAP measurements. See “Reconciliation of Non-GAAP Financial Measures” below.

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Net Sales by End Market Vertical
	Three Months Ended						Nine Months Ended
	March 31						March 31
(Amounts in Millions)	2016		2015		% Change		2016		2015		% Change
Commercial	$	50.2	$	49.8	1	%	$	154.0	$	151.6	2	%
Education	7.6		7.9		(4	%)	30.6		28.5		7	%
Finance	14.0		13.1		7	%	48.4		42.0		15	%
Government	22.1		18.6		19	%	74.4		73.1		2	%
Healthcare	23.2		14.5		60	%	58.1		43.9		32	%
Hospitality	32.9		42.0		(22	%)	104.9		102.7		2	%
Total Net Sales	$	150.0	$	145.9	3	%	$	470.4	$	441.8	6	%

The following operating results discussions are based on income from continuing operations and therefore exclude all income statement activity of the discontinued operations.

Third quarter fiscal year 2016 consolidated net sales were $150.0 million compared to third quarter fiscal year 2015 net sales of $145.9 million, or a 3% increase. The positive impact of price increases and to a lesser extent increased volume drove the net sales increase. Our healthcare vertical market sales benefited from strengthening relationships with purchasing organizations and product solutions specific to healthcare settings. The increase in sales to the government vertical market was primarily driven by several federal government projects. Variability in sales of our hospitality vertical market products is typical due to sporadic timing of sizable projects. Our third quarter of fiscal year 2016 includes fewer sizable custom hospitality projects than the third quarter of fiscal year 2015.

Net sales for the nine-month period ended March 31, 2016 of $470.4 million increased 6% from net sales of $441.8 million for the same period of the prior fiscal year on increased sales in each one of our vertical markets. Our healthcare vertical market sales benefited from strengthening relationships with purchasing organizations and product solutions specific to healthcare settings. Our finance vertical market sales increase was the result of our investment in building product solutions applicable specifically to the needs of the changing workplace environment within financial institutions. Our education vertical market sales increased as we are more aggressively pursuing opportunities in this area. Each of our vertical market sales levels can fluctuate depending on the mix of projects in a given period.

Open orders at March 31, 2016 increased 16% when compared to the open order level as of March 31, 2015 as demand for both office furniture and hospitality furniture remained strong. Open orders at a point in time may not be indicative of future sales trends.

In the third quarter of fiscal year 2016 we recorded income from continuing operations of $2.8 million and diluted earnings per share of $0.07, inclusive of $1.7 million, or $0.05 per diluted share, of after-tax restructuring charges. In the third quarter of fiscal year 2015 we recorded income from continuing operations of $4.9 million and earnings per diluted share of $0.13, inclusive of $0.2 million, or $0.01 per diluted share, of after-tax restructuring charges, and $0.2 million, or less than $0.01 cent per diluted share, of incremental after-tax costs related to the spin-off of our EMS segment. Excluding these nonrecurring costs, our adjusted income from continuing operations for the third quarter of fiscal year 2016 was $4.4 million, or $0.12 per diluted share, compared to adjusted income from continuing operations for the third quarter of fiscal year 2015 of $5.3 million, or $0.14 per diluted share.

In the first nine months of fiscal year 2016 we recorded income from continuing operations of $14.9 million and diluted earnings per share of $0.39, inclusive of $3.6 million, or $0.10 per diluted share, of after-tax restructuring charges. In the first nine months of fiscal year 2015 we recorded income from continuing operations of $6.4 million and diluted earnings per share of $0.17, inclusive of $2.3 million, or $0.05 per diluted share, of after-tax restructuring charges, and $3.1 million, or $0.08 per diluted share, of incremental after-tax costs related to the spin-off of our EMS segment. Excluding these nonrecurring costs, our adjusted income from continuing operations for the first nine months of fiscal year 2016 improved to $18.5 million, or $0.49 per diluted share, compared to adjusted income from continuing operations for the first nine months of fiscal year 2015 of $11.8 million, or $0.30 per diluted share.

The aforementioned income from continuing operations figures for both the third quarter and year to date fiscal 2015 periods were favorably impacted by $1.1 million of releases of income tax reserves upon the expiration of statutes of limitation which did not repeat in fiscal year 2016.

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Gross profit as a percent of net sales increased 0.3 of a percentage point in the third quarter of fiscal year 2016 compared to the third quarter of fiscal year 2015. The favorable impact of price increases, a favorable shift in sales mix to higher margin product, the benefit of leverage gained on higher sales volumes, and lower outbound freight were partially offset by increased labor and overhead costs. The increased labor and overhead costs were partially driven by higher employee healthcare expenses during the third quarter of fiscal year 2016 and inefficiencies related to the transfer of production from the Idaho manufacturing facility to our other manufacturing facilities.

Gross profit as a percent of net sales increased 0.7 of a percentage point in the first nine months of fiscal year 2016 compared to the first nine months of fiscal year 2015. The favorable impact of price increases and lower discounting, the benefit of leverage gained on higher sales volumes, a favorable shift in sales mix to lower margin product, lower outbound freight, and higher warehousing and handling expenses related to higher inventory levels. In addition, labor productivity improvements at select units were more than offset by labor inefficiencies related to the transfer of production from the Idaho manufacturing facility to our other manufacturing facilities and higher employee healthcare expenses.

As a percent of net sales, selling and administrative expenses in the third quarter and first nine months of fiscal year 2016 compared to the third quarter and first nine months of fiscal year 2015 decreased 0.6 of a percentage point and 2.9 percentage points, respectively, due to the increased sales volumes. In absolute dollars, selling and administrative expenses in the third quarter of fiscal year 2016 compared to the third quarter of fiscal year 2015 increased 0.7%. In absolute dollars, selling and administrative expenses in the first nine months of fiscal year 2016 compared to the same period of fiscal year 2015 decreased $5.3 million or 4.2% primarily due to spin-off expenses of $3.1 million incurred in the prior year year-to-date period and due to the retirement of key executives as of the spin-off date.

In November 2014, we approved a capacity utilization restructuring plan which includes the consolidation of our metal fabrication production from an operation located in Post Falls, Idaho, into existing production facilities in Indiana, and the reduction of our Company plane fleet from two jets to one. The jet was sold in the third quarter of fiscal year 2015, and as a result of the aircraft fleet reduction, we began realizing the expected pre-tax annual savings of $0.8 million. The remaining jet is primarily used for transporting customers to visit our showrooms, offices, research and development center, and manufacturing locations. The consolidation of our metal fabrication production is expected to be complete by June 30, 2016, and we anticipate the improvement of customer delivery, supply chain dynamics, and reduction of transportation costs to generate pre-tax savings of approximately $5 million per year thereafter. We recognized pre-tax restructuring expense related to continuing operations of $2.8 million and $6.0 million in the three and nine months ended March 31, 2016, respectively, and recognized $0.4 million and $3.7 million pre-tax restructuring expense in the three and nine months ended March 31, 2015, respectively. See Note 7 - Restructuring Expense of Notes to Condensed Consolidated Financial Statements for further information on restructuring.

Other Income (Expense) consisted of the following:

	Three Months Ended						Nine Months Ended
	March 31						March 31
(Amounts in Thousands)	2016			2015			2016			2015
Interest Income	$	104		$	61		$	220		$	151
Interest Expense	(6		)	(6		)	(17		)	(18		)
Foreign Currency Gain (Loss)	28			2			(12		)	(40		)
Gain (Loss) on Supplemental Employee Retirement Plan Investments	108			353			(170		)	519
Other	(85		)	(65		)	(255		)	(339		)
Other Income (Expense), net	$	149		$	345		$	(234	)	$	273

Our effective tax rate for the first nine months of fiscal year 2016 was 37.5% and did not include any material unusual items. Our effective tax rate for the first nine months of fiscal year 2015 of 28.1% was favorably impacted by $1.1 million of releases of income tax reserves upon the expiration of statutes of limitation and $0.4 million of tax accrual adjustments which both decreased our fiscal 2015 year-to-date tax expense and effective tax rate and were partially offset by a $0.4 million adjustment to deferred taxes as our combined state tax rate is lower post spin-off.

Comparing the balance sheet as of March 31, 2016 to June 30, 2015, our accounts receivable balance decline was driven by lower sales volumes and variation in shipment levels in the months prior to March 31, 2016 and June 30, 2015.

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Liquidity and Capital Resources

Our cash and cash equivalents position increased to $43.8 million at March 31, 2016 from $34.7 million at June 30, 2015, primarily due to positive cash flows from operations as discussed below.

Working capital at March 31, 2016 was $46.6 million compared to working capital of $44.4 million at June 30, 2015. The current ratio was 1.4 at both March 31, 2016 and June 30, 2015.

Kimball’s short-term liquidity available, represented as cash and cash equivalents plus the unused amount of our credit facility, totaled $72.8 million at March 31, 2016. We had no short-term borrowings outstanding as of March 31, 2016 or June 30, 2015.

Cash Flows

Cash management was centralized prior to the spin-off, thus cash flows prior to the October 31, 2014 spin-off date include Kimball Electronics cash flows. Cash flows from discontinued operations are combined with cash flows from continuing operations within each cash flow statement category on the Company’s Condensed Consolidated Statements of Cash Flows.

The following table reflects the major categories of cash flows for the first nine months of fiscal years 2016 and 2015.

	Nine Months Ended
	March 31
(Amounts in millions)	2016			2015
Net cash provided by operating activities	$	39,781		$	12,021
Net cash used for investing activities	$	(13,699	)	$	(23,147	)
Net cash used for financing activities	$	(16,895	)	$	(74,270	)

Cash Flows from Operating Activities

For the first nine months of fiscal year 2016 net cash provided by operating activities was $39.8 million and for the first nine months of fiscal year 2015 net cash provided by operating activities was $12.0 million. Changes in working capital balances provided $8.2 million of cash in the first nine months of fiscal year 2016 and used $25.8 million in the first nine months of fiscal year 2015.

The $8.2 million of cash provided by changes in working capital balances in the first nine months of fiscal year 2016 was primarily driven by a decline in our accounts receivable balance due to lower sales volumes and variation in shipment levels in the months prior to March 31, 2016 and June 30, 2015. The $25.8 million usage of cash from changes in working capital balances in the first nine months of fiscal year 2015 was primarily driven by increases in our inventory balance. Approximately half of the $19.0 million usage of cash for inventory was driven by increased inventory levels in our furniture operations while the remainder was related to inventory fluctuations of the discontinued EMS business prior to the spin date.

Our measure of accounts receivable performance, also referred to as Days Sales Outstanding (“DSO”), for the nine-month periods ended March 31, 2016 and March 31, 2015 was approximately 28 days and approximately 30 days, respectively. For the pre-spin periods the amount is estimated on a continuing operations basis. We define DSO as the average of monthly trade accounts and notes receivable divided by an average day’s net sales. Our Production Days Supply on Hand (“PDSOH”) of inventory measure for the nine-month period endedMarch 31, 2016 increased to approximately 53 days from approximately 44 days from the nine-month period endedMarch 31, 2015. The PDSOH increase was driven by increased inventory levels throughout the nine months ended March 31, 2016 to support growth, customer lead time requirements, and the manufacturing consolidation plan. For the pre-spin periods the amount is estimated on a continuing operations basis. We define PDSOH as the average of the monthly gross inventory divided by an average day’s cost of sales.

Cash Flows from Investing Activities

During the first nine months of fiscal years 2016 and 2015, we reinvested $13.2 million and $25.3 million, respectively, into capital investments for the future. The capital investments during the first nine months of the current year were primarily for manufacturing equipment such as an automated finish technology upgrade and equipment related to the transition of metal fabrication capabilities to Indiana facilities and various facility improvements. The capital investments during the first nine months of the prior year were primarily for improvements to a sales and marketing facility which showcases product in a working environment, improvements to showrooms and manufacturing facilities, and manufacturing equipment in our continuing furniture business and to a lesser extent for manufacturing equipment in our discontinued EMS business prior to spin-off.

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Cash Flows from Financing Activities

Kimball paid dividends of $6.0 million and $5.7 million in the nine-month periods ended March 31, 2016 and March 31, 2015, respectively. Consistent with our historical dividend policy, the Company’s Board of Directors evaluates the appropriate dividend payment on a quarterly basis. During the first nine months of fiscal year 2016, we repurchased shares pursuant to a previously announced stock repurchase program which drove cash outflow of $9.7 million. During the first nine months of fiscal year 2015, Kimball transferred $63.0 million of cash to Kimball Electronics in conjunction with the spin-off.

Credit Facility

We maintain a $30 million credit facility with a maturity date of October 2019 that allows for both issuances of letters of credit and cash borrowings. This facility provides an option to increase the amount available for borrowing to $55 million at our request, subject to the consent of the participating banks. At both March 31, 2016 and June 30, 2015, we had no short-term borrowings outstanding. At March 31, 2016, we had $1.0 million in letters of credit outstanding, which reduced our borrowing capacity on the credit facility.

The credit facility requires us to comply with certain debt covenants, the most significant of which are the adjusted leverage ratio and the fixed charge coverage ratio. The adjusted leverage ratio is defined as (a) consolidated total indebtedness minus unencumbered U.S. cash on hand in the U.S. in excess of $15,000,000 to (b) consolidated EBITDA, determined as of the end of each of its fiscal quarters for the then most recently ended four fiscal quarters, to not be greater than 3.0 to 1.0. The fixed charge coverage ratio is defined as (a) the sum of (i) consolidated EBITDA, minus (ii) 50% of depreciation expense, minus (iii) taxes paid, minus (iv) dividends and distributions paid, to (b) the sum of (i) scheduled principal payments on indebtedness due and/or paid, plus (ii) interest expense, calculated on a consolidated basis in accordance with GAAP, determined as of the end of each of its fiscal quarters for the trailing four fiscal quarters then ending, to not be less than 1.10 to 1.00.

We were in compliance with all debt covenants of the credit facility during the nine-month period ended March 31, 2016.

The table below compares the adjusted leverage ratio and fixed charge coverage ratio with the limits specified in the credit agreement.

	At or For the Period Ended		Limit As Specified in
Covenant	March 31, 2016		Credit Agreement	Excess
Adjusted Leverage Ratio	(0.50	)	3.00	3.50
Fixed Charge Coverage Ratio	1,214.73		1.10	1,213.63

Future Liquidity

We believe our principal sources of liquidity from available funds on hand, cash generated from operations, and the availability of borrowing under our credit facility will be sufficient to fund future dividends and meet our working capital and other operating needs for at least the next 12 months. We may continue to repurchase shares if conditions are favorable. We also expect to continue to invest in capital expenditures prudently, particularly for projects, including potential acquisitions, that would enhance our capabilities and diversification while providing an opportunity for growth and improved profitability.

Our ability to generate cash from operations to meet our liquidity obligations could be adversely affected in the future by factors such as general economic and market conditions, lack of availability of raw material components in the supply chain, a decline in demand for our services, loss of key contract customers, and other unforeseen circumstances. In particular, should demand for our products decrease significantly over the next 12 months, the available cash provided by operations could be adversely impacted.

Non-GAAP Financial Measures

This item contains non-GAAP financial measures. A non-GAAP financial measure is a numerical measure of a company’s financial performance that excludes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with Generally Accepted Accounting Principles (“GAAP”) in the United States in the statement of income, statement of comprehensive income, balance sheet, or statement of cash flows of the Company. The non-GAAP financial measures used within this item include (1) operating income excluding spin-off expenses and restructuring charges; (2) income from continuing operations excluding spin-off expenses and restructuring charges; and (3) diluted earnings per share from continuing operations excluding spin-off expenses and restructuring charges. Reconciliations of the reported GAAP numbers to

25

these non-GAAP financial measures are included in the table below. Management believes it is useful for investors to understand how its core operations performed without spin-off expenses and costs incurred in executing its restructuring plans. Excluding these amounts allows investors to meaningfully trend, analyze, and benchmark the performance of the Company’s core operations. Many of the Company’s internal performance measures that management uses to make certain operating decisions exclude these charges to enable meaningful trending of core operating metrics.

Reconciliation of Non-GAAP Financial Measures
(Amounts in Thousands, Except for Per Share Data)
	Three Months Ended				Nine Months Ended
	March 31				March 31
	2016		2015		2016		2015
Operating Income	$	4,295	$	5,111	$	24,038	$	8,628
Add: Pre-tax Spin-off Expenses	—		226		—		3,096
Add: Pre-tax Restructuring Charges	2,761		388		5,961		3,723
Adjusted Operating Income	$	7,056	$	5,725	$	29,999	$	15,447
Income from Continuing Operations	$	2,757	$	4,882	$	14,881	$	6,398
Add: After-tax Spin-off Expenses	—		155		—		3,086
Add: After-tax Restructuring Charges	1,688		236		3,643		2,275
Adjusted Income from Continuing Operations	$	4,445	$	5,273	$	18,524	$	11,759
Diluted Earnings Per Share from Continuing Operations	$	0.07	$	0.13	$	0.39	$	0.17
Add: Impact of Spin-off Expenses	0.00		0.00		0.00		0.08
Add: Impact of Restructuring Charges	0.05		0.01		0.10		0.05
Adjusted Diluted Earnings Per Share from Continuing Operations	$	0.12	$	0.14	$	0.49	$	0.30

Fair Value

During the third quarter of fiscal year 2016, no financial instruments were affected by a lack of market liquidity. For level 1 financial assets, readily available market pricing was used to value the financial instruments. Kimball also holds non-marketable equity securities of a privately-held company, classified as a level 3 financial asset. The investment in non-marketable equity securities is accounted for as a cost-method investment which carries the securities at cost, except in the event of impairment.

See Note 8 - Fair Value of Notes to Condensed Consolidated Financial Statements for additional information.

Contractual Obligations

There have been no material changes outside the ordinary course of business to Kimball’s summary of contractual obligations under the caption, “Contractual Obligations” in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2015.

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Off-Balance Sheet Arrangements

Our off-balance sheet arrangements are limited to standby letters of credit, two performance bonds, and operating leases entered into in the normal course of business. These arrangements do not have a material current effect and are not reasonably likely to have a material future effect on our financial condition, results of operations, liquidity, capital expenditures, or capital resources. See Note 6 - Commitments and Contingent Liabilities of Notes to Condensed Consolidated Financial Statements for more information on standby letters of credit. We do not have material exposures to trading activities of non-exchange traded contracts.

The preceding statements are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Certain factors could cause actual results to differ materially from forward-looking statements.

Critical Accounting Policies

Kimball’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. These principles require the use of estimates and assumptions that affect amounts reported and disclosed in the condensed consolidated financial statements and related notes. Actual results could differ from these estimates and assumptions. Management uses its best judgment in the assumptions used to value these estimates, which are based on current facts and circumstances, prior experience, and other assumptions that are believed to be reasonable. Management believes the following critical accounting policies reflect the more significant judgments and estimates used in preparation of our condensed consolidated financial statements and are the policies that are most critical in the portrayal of our financial position and results of operations. Management has discussed these critical accounting policies and estimates with the Audit Committee of the Company’s Board of Directors and with the Company’s independent registered public accounting firm.

Revenue recognition — We recognize revenue when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, and collectability is reasonably assured. Delivery is not considered to have occurred until the title and the risk of loss passes to the customer according to the terms of the contract. Title and risk of loss are transferred upon shipment to or receipt at our customers’ locations, or in limited circumstances, as determined by other specific sales terms of the transaction. Shipping and handling fees billed to customers are recorded as sales while the related shipping and handling costs are included in cost of goods sold. We recognize sales net of applicable sales tax.

• Sales returns and allowances — Based on estimated product returns and price concessions, a reserve for returns and allowances is recorded at the time of the sales, resulting in a reduction of revenue. These estimates may change over time causing the provisions to be adjusted accordingly. At both March 31, 2016 and June 30, 2015, the reserve for returns and allowances was $0.8 million. The returns and allowances reserve approximated 1% to 2% of gross trade receivables during the two-year period preceding March 31, 2016.

• Allowance for doubtful accounts — Our estimate for the allowance for credit losses on trade accounts receivable and notes receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to determine the final allowance for credit losses on the trade accounts receivable and notes receivable. The allowance for doubtful accounts at March 31, 2016 and June 30, 2015 was $1.1 million and $1.0 million, respectively. During the two-year period preceding March 31, 2016, this reserve approximated 1% of gross trade accounts receivable prior to the spin-off, and approximated 2% to 4% of post-spin gross trade accounts receivable.

Self-insurance reserves — We are self-insured up to certain limits for auto and general liability, workers’ compensation, and certain employee health benefits such as medical, short-term disability, and dental with the related liabilities included in the accompanying financial statements. Our policy is to estimate reserves based upon a number of factors including known claims, estimated incurred but not reported claims, and other analyses, which are based on historical information along with certain assumptions about future events. Changes in assumptions for such matters as increased medical costs and changes in actual experience could cause these estimates to change and reserve levels to be adjusted accordingly. At March 31, 2016 and June 30, 2015, our accrued liabilities for self-insurance exposure were $3.1 million and $2.8 million, respectively.

Taxes — Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. These assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to reverse. We evaluate the recoverability of our deferred tax assets each quarter by assessing the likelihood of future taxable income and available tax planning strategies that could be implemented to realize our deferred tax assets. If recovery is not likely, we provide a valuation allowance based on our best estimate of future taxable

27

income in the various taxing jurisdictions and the amount of deferred taxes ultimately realizable. Future events could change management’s assessment.

We operate within multiple taxing jurisdictions and are subject to tax audits in these jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve. However, we believe we have made adequate provision for income and other taxes for all years that are subject to audit. As tax positions are effectively settled, the tax provision will be adjusted accordingly. The liability for uncertain income tax and other tax positions, including accrued interest and penalties on those positions, was $2.9 million at both March 31, 2016 and June 30, 2015.

New Accounting Standards

See Note 3 - Recent Accounting Pronouncements and Supplemental Information of Notes to Condensed Consolidated Financial Statements for information regarding New Accounting Standards.

Forward-Looking Statements

Certain statements contained within this document are considered forward-looking under the Private Securities Litigation Reform Act of 1995. The statements may be identified by the use of words such as “believes,” “anticipates,” “expects,” “intends,” “plans,” “projects,” “estimates,” “forecasts,” “seeks,” “likely,” “future,” “may,” “might,” “should,” “would,” “will,” and similar expressions. These forward-looking statements are subject to risks and uncertainties including, but not limited to, the successful completion of the restructuring plan, adverse changes in the global economic conditions, increased global competition, significant reduction in customer order patterns, loss of key customers or suppliers, financial stability of key customers and suppliers, relationships with strategic customers and product distributors, availability or cost of raw materials and components, increased competitive pricing pressures reflecting excess industry capacities, changes in the regulatory environment, or similar unforeseen events. Additional cautionary statements regarding other risk factors that could have an effect on the future performance of Kimball are contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2015.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to market risks from the information disclosed in Item 7A “Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2015.

Item 4. Controls and Procedures

(a)Evaluation of disclosure controls and procedures.

Kimball maintains controls and procedures designed to ensure that information required to be disclosed in the reports that are filed or submitted under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Based upon their evaluation of those controls and procedures performed as of March 31, 2016, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective.

(b)Changes in internal control over financial reporting.

There have been no changes in Kimball’s internal control over financial reporting that occurred during the quarter ended March 31, 2016 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

A share repurchase program authorized by the Board of Directors was announced on October 16, 2007. The program allows for the repurchase of up to two million shares of common stock and will remain in effect until all shares authorized have been repurchased. On August 11, 2015 an additional two million shares of common stock were authorized by the Board of Directors for repurchase. Kimball did not repurchase any shares under the repurchase program during the third quarter of fiscal year 2016. At March 31, 2016, 2.3 million shares remained available under the repurchase program.

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Item 6. Exhibits

Exhibits (numbered in accordance with Item 601 of Regulation S-K)

3(a) Amended and restated Articles of Incorporation of the Company (Incorporated by reference to Exhibit 3(a) to the Company’s Form 10-K for the fiscal year ended June 30, 2012)

3(b) Restated By-laws of the Company (Incorporated by reference to Exhibit 3(b) to the Company’s Form 8-K dated April 26, 2016)

11 Computation of Earnings Per Share

31.1 Certification filed by Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification filed by Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification furnished by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification furnished by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	KIMBALL INTERNATIONAL, INC.
By:	/s/ ROBERT F. SCHNEIDER
	Robert F. Schneider Chief Executive Officer
	May 4, 2016
By:	/s/ MICHELLE R. SCHROEDER
	Michelle R. Schroeder Vice President, Chief Financial Officer
	May 4, 2016

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Kimball International, Inc.

Exhibit Index

Exhibit No.	Description
3(a)	Amended and restated Articles of Incorporation of the Company (Incorporated by reference to Exhibit 3(a) to the Company’s Form 10-K for the fiscal year ended June 30, 2012)
3(b)	Restated By-laws of the Company (Incorporated by reference to Exhibit 3(b) to the Company’s Form 8-K dated April 26, 2016)
11	Computation of Earnings Per Share
31.1	Certification filed by Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification filed by Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification furnished by the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification furnished by the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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EX-11

Exhibit 11

KIMBALL INTERNATIONAL, INC.

COMPUTATION OF EARNINGS PER SHARE

As a result of the October 30, 2014 stock unification, all distinctions between Class A common stock and Class B common stock were eliminated so that all shares of Class B common stock are equal to shares of Class A common stock with respect to all matters, including without limitation, dividend payments and voting rights. Therefore, beginning in fiscal year 2016 the earnings per share calculation includes all common stock in a single calculation.

EARNINGS PER SHARE FROM CONTINUING OPERATIONS

(Unaudited)	Three Months Ended				Three Months Ended
(Amounts in Thousands, Except for Per Share Data)	March 31, 2016				March 31, 2015
					Class A			Class B			Total
Basic Earnings Per Share from Continuing Operations:
Dividends Declared		$	2,072		$	43		$	1,896		$	1,939
Undistributed Earnings		685			79			2,864			2,943
Income from Continuing Operations		$	2,757		$	122		$	4,760		$	4,882
Average Basic Shares Outstanding		37,439			1,046			37,701			38,747
Basic Earnings Per Share from Continuing Operations		$	0.07		$	0.12		$	0.13
Diluted Earnings Per Share from Continuing Operations:
Dividends Declared and Assumed Dividends on Dilutive Shares		$	2,086		$	43		$	1,915		$	1,958
Undistributed Earnings		671			78			2,846			2,924
Income from Continuing Operations		$	2,757		$	121		$	4,761		$	4,882
Average Diluted Shares Outstanding		37,707			1,046			38,069			39,115
Diluted Earnings Per Share from Continuing Operations		$	0.07		$	0.12		$	0.13
Reconciliation of Basic and Diluted EPS from Continuing Operations Calculations:
Income from Continuing Operations Used for Basic EPS Calculation		$	2,757		$	122		$	4,760		$	4,882
Assumed Dividends Payable on Dilutive Shares		14			—			19			19
Increase (Reduction) in Undistributed Earnings (Loss) - allocated based on Class A and Class B shares		(14		)	(1		)	(18		)	(19		)
Income from Continuing Operations Used for Diluted EPS Calculation		$	2,757		$	121		$	4,761		$	4,882
Average Shares Outstanding for Basic EPS Calculation		37,439			1,046			37,701			38,747
Dilutive Effect of Average Outstanding Compensation Awards		268			—			368			368
Average Shares Outstanding for Diluted EPS Calculation		37,707			1,046			38,069			39,115

(Unaudited)	Nine Months Ended				Nine Months Ended
(Amounts in Thousands, Except for Per Share Data)	March 31, 2016				March 31, 2015
					Class A			Class B			Total
Basic Earnings Per Share from Continuing Operations:
Dividends Declared		$	6,214		$	517		$	5,276		$	5,793
Undistributed Earnings		8,667			64			541			605
Income from Continuing Operations		$	14,881		$	581		$	5,817		$	6,398
Average Basic Shares Outstanding		37,458			4,110			34,663			38,773
Basic Earnings Per Share from Continuing Operations		$	0.40		$	0.14		$	0.17
Diluted Earnings Per Share from Continuing Operations:
Dividends Declared and Assumed Dividends on Dilutive Shares		$	6,282		$	517		$	5,325		$	5,842
Undistributed Earnings		8,599			58			498			556
Income from Continuing Operations		$	14,881		$	575		$	5,823		$	6,398
Average Diluted Shares Outstanding		37,869			4,110			34,992			39,102
Diluted Earnings Per Share from Continuing Operations		$	0.39		$	0.14		$	0.17
Reconciliation of Basic and Diluted EPS from Continuing Operations Calculations:
Income from Continuing Operations Used for Basic EPS Calculation		$	14,881		$	581		$	5,817		$	6,398
Assumed Dividends Payable on Dilutive Shares		68			—			49			49
Increase (Reduction) in Undistributed Earnings (Loss) - allocated based on Class A and Class B shares		(68		)	(6		)	(43		)	(49		)
Income from Continuing Operations Used for Diluted EPS Calculation		$	14,881		$	575		$	5,823		$	6,398
Average Shares Outstanding for Basic EPS Calculation		37,458			4,110			34,663			38,773
Dilutive Effect of Average Outstanding Compensation Awards		411			—			329			329
Average Shares Outstanding for Diluted EPS Calculation		37,869			4,110			34,992			39,102

EARNINGS PER SHARE FROM DISCONTINUED OPERATIONS

(Unaudited)	Three Months Ended			Three Months Ended
	March 31, 2016			March 31, 2015
				Class A		Class B
Basic Earnings Per Share		$	0.00	$	0.00	$	0.00
Diluted Earnings Per Share		$	0.00	$	0.00	$	0.00
	Nine Months Ended			Nine Months Ended
	March 31, 2016			March 31, 2015
				Class A		Class B
Basic Earnings Per Share		$	0.00	$	0.24	$	0.23
Diluted Earnings Per Share		$	0.00	$	0.23	$	0.23

EARNINGS PER SHARE (INCLUDING DISCONTINUED OPERATIONS)

(Unaudited)	Three Months Ended			Three Months Ended
(Amounts in Thousands, Except for Per Share Data)	March 31, 2016			March 31, 2015
				Class A		Class B		Total
Basic Earnings Per Share:
Dividends Declared		$	2,072	$	43	$	1,896	$	1,939
Undistributed Earnings		685		79		2,864		2,943
Net Income		$	2,757	$	122	$	4,760	$	4,882
Average Basic Shares Outstanding		37,439		1,046		37,701		38,747
Basic Earnings Per Share		$	0.07	$	0.12	$	0.13
Diluted Earnings Per Share:
Dividends Declared and Assumed Dividends on Dilutive Shares		$	2,086	$	43	$	1,915	$	1,958
Undistributed Earnings		671		78		2,846		2,924
Net Income		$	2,757	$	121	$	4,761	$	4,882
Average Diluted Shares Outstanding		37,707		1,046		38,069		39,115
Diluted Earnings Per Share		$	0.07	$	0.12	$	0.13

(Unaudited)	Nine Months Ended			Nine Months Ended
(Amounts in Thousands, Except for Per Share Data)	March 31, 2016			March 31, 2015
				Class A		Class B		Total
Basic Earnings Per Share:
Dividends Declared		$	6,214	$	517	$	5,276	$	5,793
Undistributed Earnings		8,667		1,035		8,727		9,762
Net Income		$	14,881	$	1,552	$	14,003	$	15,555
Average Basic Shares Outstanding		37,458		4,110		34,663		38,773
Basic Earnings Per Share		$	0.40	$	0.38	$	0.40
Diluted Earnings Per Share:
Dividends Declared and Assumed Dividends on Dilutive Shares		$	6,282	$	517	$	5,325	$	5,842
Undistributed Earnings		8,599		1,021		8,692		9,713
Net Income		$	14,881	$	1,538	$	14,017	$	15,555
Average Diluted Shares Outstanding		37,869		4,110		34,992		39,102
Diluted Earnings Per Share		$	0.39	$	0.37	$	0.40

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULE 13a-14(a)/15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Robert F. Schneider, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Kimball International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 4, 2016
		/s/ ROBERT F. SCHNEIDER
		ROBERT F. SCHNEIDER Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULE 13a-14(a)/15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michelle R. Schroeder, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Kimball International, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 4, 2016
		/s/ MICHELLE R. SCHROEDER
		MICHELLE R. SCHROEDER Vice President, Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Kimball International, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert F. Schneider, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 4, 2016
		/s/ ROBERT F. SCHNEIDER
		ROBERT F. SCHNEIDER Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Kimball International, Inc. (the “Company”) on Form 10-Q for the period ending March 31, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michelle R. Schroeder, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 4, 2016
		/s/ MICHELLE R. SCHROEDER
		MICHELLE R. SCHROEDER Vice President, Chief Financial Officer

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Document and Entity Information Document - shares	9 Months Ended
	Mar. 31, 2016	Apr. 20, 2016
Document Information
Entity Registrant Name	KIMBALL INTERNATIONAL INC
Entity Central Index Key	0000055772
Current Fiscal Year End Date	--06-30
Entity Filer Category	Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3
Amendment Flag	false
Class A Common Stock
Document Information
Entity Common Stock, Shares Outstanding		297,799
Class B Common Stock
Document Information
Entity Common Stock, Shares Outstanding		37,154,654

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Jun. 30, 2015
Current Assets:
Cash and cash equivalents	$ 43,848	$ 34,661
Receivables, net of allowances of $1,408 and $1,522, respectively	41,570	55,710
Inventories	40,717	37,634
Prepaid expenses and other current assets	24,143	23,548
Total current assets	150,278	151,553
Property and Equipment, net of accumulated depreciation of $200,086 and $197,500, respectively	96,234	97,163
Intangible Assets, net of accumulated amortization of $35,968 and $35,447, respectively	3,014	2,669
Other Assets	15,679	14,744
Total Assets	265,205	266,129
Current Liabilities:
Current maturities of long-term debt	29	27
Accounts payable	35,158	41,170
Customer deposits	19,734	18,618
Dividends payable	2,116	1,921
Accrued expenses	46,681	45,425
Total current liabilities	103,718	107,161
Other Liabilities:
Long-term debt, less current maturities	214	241
Other	16,784	17,222
Total other liabilities	16,998	17,463
Common stock-par value $0.05 per share:
Additional paid-in capital	3,545	3,445
Retained earnings	200,903	194,372
Accumulated other comprehensive income	1,312	1,229
Less: Treasury stock, at cost, 5,586,000 shares and 5,111,000 shares, respectively	(63,422)	(59,692)
Total Share Owners’ Equity	144,489	141,505
Total Liabilities and Share Owners’ Equity	265,205	266,129
Class A Common Stock
Common stock-par value $0.05 per share:
Common Stock	15	19
Class B Common Stock
Common stock-par value $0.05 per share:
Common Stock	$ 2,136	$ 2,132

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Condensed Consolidated Balance Sheets Parentheticals - USD ($) $ in Thousands	Mar. 31, 2016	Jun. 30, 2015
ASSETS
Accounts and Notes Receivable Allowances	$ 1,408	$ 1,522
Property and Equipment Accumulated Depreciation	200,086	197,500
Intangible Assets Accumulated Amortization	$ 35,968	$ 35,447
Class A Common Stock
Share Owners' Equity
Common Stock, Par Value Per Share	$ 0.05	$ 0.05
Common Stock, Shares Authorized	50,000,000	50,000,000
Common Stock, Shares, Issued	298,000	386,000
Class B Common Stock
Share Owners' Equity
Common Stock, Par Value Per Share	$ 0.05	$ 0.05
Common Stock, Shares Authorized	100,000,000	100,000,000
Common Stock, Shares, Issued	42,727,000	42,639,000
Treasury Stock, Shares	5,586,000	5,111,000

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Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Net Sales	$ 150,038	$ 145,943	$ 470,426	$ 441,807
Cost of Sales	104,219	101,936	320,257	304,021
Gross Profit	45,819	44,007	150,169	137,786
Selling and Administrative Expenses	38,763	38,508	120,170	125,435
Restructuring Expense	2,761	388	5,961	3,723
Operating Income	4,295	5,111	24,038	8,628
Other Income (Expense):
Interest income	104	61	220	151
Interest expense	(6)	(6)	(17)	(18)
Non-operating income (expense), net	51	290	(437)	140
Other income (expense), net	149	345	(234)	273
Income from Continuing Operations Before Taxes on Income	4,444	5,456	23,804	8,901
Provision for Income Taxes	1,687	574	8,923	2,503
Income from Continuing Operations	2,757	4,882	14,881	6,398
Income from Discontinued Operations, Net of Tax	0	0	0	9,157
Net Income	$ 2,757	$ 4,882	$ 14,881	$ 15,555
Basic Earnings Per Share:
Income (Loss) from Continuing Operations, Per Basic Share	$ 0.07		$ 0.40
Earnings (Loss) Per Share, Basic	0.07		0.40
Diluted Earnings Per Share:
Income (Loss) from Continuing Operations, Per Diluted Share	0.07		0.39
Earnings (Loss) Per Share, Diluted	0.07		0.39
Dividends Per Share of Common Stock:
Dividends Per Share of Common Stock, Declared	$ 0.055		$ 0.165
Average Number of Shares Outstanding:
Average Number of Shares Outstanding, Basic	37,439	38,747	37,458	38,773
Average Number of Shares Outstanding, Diluted	37,707	39,115	37,869	39,102
Class A Common Stock
Basic Earnings Per Share:
Income (Loss) from Continuing Operations, Per Basic Share		$ 0.12		$ 0.14
Earnings (Loss) Per Share, Basic		0.12		0.38
Diluted Earnings Per Share:
Income (Loss) from Continuing Operations, Per Diluted Share		0.12		0.14
Earnings (Loss) Per Share, Diluted		0.12		0.37
Dividends Per Share of Common Stock:
Dividends Per Share of Common Stock, Declared		0.050		0.145
Class B Common Stock
Basic Earnings Per Share:
Income (Loss) from Continuing Operations, Per Basic Share		0.13		0.17
Earnings (Loss) Per Share, Basic		0.13		0.40
Diluted Earnings Per Share:
Income (Loss) from Continuing Operations, Per Diluted Share		0.13		0.17
Earnings (Loss) Per Share, Diluted		0.13		0.40
Dividends Per Share of Common Stock:
Dividends Per Share of Common Stock, Declared		$ 0.050		$ 0.150

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Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Net income	$ 2,757	$ 4,882	$ 14,881	$ 15,555
Other comprehensive income (loss):
Foreign currency translation adjustments, Pre-tax			0	(6,070)
Foreign currency translation adjustments, Tax			0	0
Foreign currency translation adjustments, Net of Tax			0	(6,070)
Postemployment severance actuarial change, Pre-tax	185	45	468	698
Postemployment severance actuarial change, Tax	(73)	(17)	(183)	(277)
Postemployment severance actuarial change, Net of Tax	112	28	285	421
Derivative gain (loss), Pre-tax			0	2,513
Derivative gain (loss), Tax			0	(416)
Derivative gain (loss), Net of Tax			0	2,097
Reclassification to (earnings) loss:
Derivatives, Reclassification to (earnings) loss, Pre-tax			0	(1,484)
Derivatives, Reclassification to (earnings) loss, Tax			0	291
Derivatives, Reclassification to (earnings) loss, Net of Tax			0	(1,193)
Amortization of prior service cost, Pre-tax	0	41	0	177
Amortization of prior service cost, Tax	0	(16)	0	(70)
Amortization of prior service cost, Net of Tax	0	25	0	107
Amortization of actuarial change, Pre-tax	(112)	(69)	(331)	(146)
Amortization of actuarial change, Tax	44	27	129	58
Amortization of actuarial change, Net of Tax	(68)	(42)	(202)	(88)
Other comprehensive income (loss), Pre-tax	73	17	137	(4,312)
Other comprehensive income (loss), Tax	(29)	(6)	(54)	(414)
Other comprehensive income (loss), Net of Tax	44	11	83	(4,726)
Total comprehensive income (loss)	$ 2,801	$ 4,893	$ 14,964	$ 10,829

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Cash Flows From Operating Activities:
Net income	$ 14,881	$ 15,555
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	11,149	16,527
Loss on sales of assets	121	916
Restructuring and asset impairment charges	99	930
Deferred income tax and other deferred charges	1,434	(1,434)
Stock-based compensation	4,177	5,217
Excess tax benefits from stock-based compensation	(301)	(1,157)
Other, net	65	1,220
Change in operating assets and liabilities:
Receivables	14,286	(4,292)
Inventories	(3,083)	(18,969)
Prepaid expenses and other current assets	(3,588)	(6,122)
Accounts payable	(2,709)	5,566
Customer deposits	1,116	2,883
Accrued expenses	2,134	(4,819)
Net cash provided by operating activities	39,781	12,021
Cash Flows From Investing Activities:
Capital expenditures	(12,232)	(24,095)
Proceeds from sales of assets	138	2,302
Purchases of capitalized software	(924)	(1,178)
Other, net	(681)	(176)
Net cash used for investing activities	(13,699)	(23,147)
Cash Flows From Financing Activities:
Transfer of cash and cash equivalents to Kimball Electronics, Inc.	0	(63,006)
Net change in capital leases and long-term debt	(25)	(22)
Dividends paid to Share Owners	(6,019)	(5,729)
Repurchases of common stock	(9,665)	(2,828)
Excess tax benefits from stock-based compensation	301	1,157
Repurchase of employee shares for tax withholding	(1,487)	(3,842)
Net cash used for financing activities	(16,895)	(74,270)
Effect of Exchange Rate Change on Cash and Cash Equivalents	0	(1,260)
Net Increase (Decrease) in Cash and Cash Equivalents	9,187	(86,656)
Cash and Cash Equivalents at Beginning of Period	34,661	136,624
Cash and Cash Equivalents at End of Period	43,848	49,968
Cash paid during the period for:
Income taxes	6,505	11,908
Interest expense	$ 17	$ 30

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Note 1. Basis of Presentation

9 Months Ended

Mar. 31, 2016

Basis of Presentation [Abstract]

Business Description and Basis of Presentation

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Kimball International, Inc. (the “Company,” “Kimball,” “we,” “us,” or “our”) have been prepared in accordance with the instructions to Form 10-Q. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe that the disclosures are adequate to make the information presented not misleading. Intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial statements for the interim periods. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim period or for the entire fiscal year. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in our latest annual report on Form 10-K.

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Note 2. Spin-Off Transaction

9 Months Ended

Mar. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

Spin-Off Transaction

On October 31, 2014 (“Distribution Date”), we completed the spin-off of our Electronic Manufacturing Services (“EMS”) segment by distributing the related shares of Kimball Electronics, Inc. (“Kimball Electronics”), on a pro rata basis, to the Company’s Share Owners of record as of October 22, 2014. After the Distribution Date, the Company does not beneficially own any Kimball Electronics shares and Kimball Electronics is an independent publicly traded company. Kimball International, Inc. trades on the NASDAQ under the ticker symbol “KBAL” and Kimball Electronics, Inc. trades on the NASDAQ under the ticker symbol “KE”.

The EMS segment was reclassified to discontinued operations in the Condensed Consolidated Statements of Income. The following table summarizes the results of the discontinued operations for the nine months ended March 31, 2015. Discontinued operations did not have an impact on the financial results of fiscal year 2016 or the three months ended March 31, 2015.

	Nine Months Ended
	March 31
(Amounts in Thousands, Except Per Share Data)	2015
Net Sales	$	275,551
Income Before Taxes on Income	$	13,098
Provision for Income Taxes	$	3,941
Income from Discontinued Operations, Net of Tax	$	9,157
Income From Discontinued Operations per Diluted Share	$	0.23

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Note 3. Recent Accounting Pronouncements and Supplemental Information

9 Months Ended

Mar. 31, 2016

Recent Accounting Pronouncements and Supplemental Information [Abstract]

Recent Accounting Pronouncements and Supplemental Information

Recent Accounting Pronouncements:

In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance on simplifying the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as the classification on the statement of cash flows. The guidance is effective for our first quarter of fiscal year 2018 with early adoption permitted. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements.

In February 2016, the FASB issued guidance that revises the accounting for leases. The guidance is intended to improve financial reporting of leasing transactions by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. Leases will continue to be classified as either operating or finance leases, with the classification affecting the pattern of expense recognition in the statement of income. The guidance will also require additional disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for our first quarter of fiscal year 2020 with early adoption permitted, and is required to be applied using a modified retrospective approach to each prior reporting period. We have not yet determined the effect of this guidance on our consolidated financial statements.

In January 2016, the FASB issued guidance which is intended to improve the recognition and measurement of financial instruments. The guidance revises an entity’s accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The guidance also amends certain disclosure requirements associated with the fair value of financial instruments. The guidance is effective prospectively for our first quarter of fiscal year 2019 financial statements with early adoption allowed on certain provisions. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements.

In November 2015, the FASB issued guidance on simplifying the balance sheet classification of deferred taxes. The guidance requires the classification of deferred tax assets and liabilities as noncurrent in a classified balance sheet. The current requirement that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected by this update. The guidance is effective for our first quarter of fiscal year 2018 financial statements with early adoption permitted, and allows for the use of either a prospective or retrospective transition method. We plan to early adopt using the prospective transition method for our fiscal year ending June 30, 2016, and will reclassify any current deferred tax assets or liabilities to noncurrent in our consolidated financial position.

In July 2015, the FASB issued guidance on simplifying the measurement of inventory which applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Inventory within the scope of this update is required to be measured at the lower of cost or net realizable value, which is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The guidance does not impact inventory measured on a last-in, first-out (“LIFO”) basis. The standards update is effective prospectively for our first quarter fiscal year 2018 financial statements with early adoption permitted. We do not expect the adoption to have a material effect on our consolidated financial statements.

In April 2015, the FASB issued guidance that requires debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability and further clarification guidance allows the cost of securing a revolving line of credit to be recorded as a deferred asset regardless of whether a balance is outstanding. This guidance is effective for our first quarter fiscal year 2017 financial statements. We currently comply with this method therefore the adoption will not have a material effect on our consolidated financial statements.

In April 2015, the FASB issued guidance on customer’s accounting for cloud computing fees and provided criteria for customers in a cloud computing arrangement to use to determine whether the arrangement includes a license of software.  The guidance clarifies that a software license included in a cloud computing arrangement should be accounted for consistent with the acquisition of other software licenses, whereas a cloud computing arrangement that does not include a software license should be accounted for as a service contract. The guidance is effective for our first quarter of fiscal year 2017 financial statements, and allows for the use of either a prospective or retrospective transition method. We plan to adopt using the prospective transition method for our first quarter of fiscal year 2017, and we do not expect the adoption to have a material effect on our consolidated financial statements.

In June 2014, the FASB provided explicit guidance on how to account for share-based payments granted to employees in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The guidance will be applied prospectively for our first quarter fiscal year 2017 financial statements.  We do not expect the adoption to have a material effect on our consolidated financial statements.

In May 2014, the FASB issued guidance on the recognition of revenue from contracts with customers. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. To achieve this core principle, the guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance addresses several areas including transfer of control, contracts with multiple performance obligations, and costs to obtain and fulfill contracts. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2015, the FASB decided to defer the effective date for this new revenue standard by one year, which will make the guidance effective for our first quarter fiscal year 2019 financial statements using either of two acceptable adoption methods: (i) retrospective adoption to each prior reporting period presented with the option to elect certain practical expedients; or (ii) adoption with the cumulative effect of initially applying the guidance recognized at the date of initial application and providing certain additional disclosures. In March 2016, the FASB issued additional guidance which further clarifies assessing whether an entity is a principal or an agent in a revenue transaction, and impacts whether an entity reports revenue on a gross or net basis. In April 2016, the FASB issued additional guidance that addresses identifying performance obligations and implementing licensing guidance. The amendments have the same effective date and transition requirements as the new revenue standard. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements.

In April 2014, the FASB issued guidance on reporting discontinued operations and disclosures of disposals of components of an entity. Under the new guidance, a disposal that represents a strategic shift that has or will have a major effect on an entity’s operations and financial results is a discontinued operation. The new guidance requires expanded disclosures that will provide more information about the assets, liabilities, income, and expenses of discontinued operations, and also requires disclosures of significant disposals that do not qualify for discontinued operations reporting. The guidance was effective prospectively for disposals or components of our business classified as held for sale beginning in our first quarter of fiscal year 2016. The adoption did not have a material effect on our consolidated financial statements.

Notes Receivable and Trade Accounts Receivable:

Notes receivable and trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. We determine on a case-by-case basis the cessation of accruing interest, the resumption of accruing interest, the method of recording payments received on nonaccrual receivables, and the delinquency status for our limited number of notes receivable.

Our policy for estimating the allowance for credit losses on trade accounts receivable and notes receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to determine the final allowance for credit losses on the trade accounts receivable and notes receivable. Trade accounts receivable and notes receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Our limited amount of notes receivable allows management to monitor the risks, credit quality indicators, collectability, and probability of impairment on an individual basis. Adjustments to the allowance for credit losses are recorded in selling and administrative expenses. Customary terms require payment within 30 days, with terms beyond 30 days being considered extended.

Income Taxes:

In determining the quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which we operate. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur.

Our 38.0% effective tax rate for the third quarter of fiscal year 2016 did not include any material unusual items. The third quarter fiscal year 2015 effective tax rate of 10.5% was favorably impacted by $1.1 million of releases of income tax reserves upon the expiration of statutes of limitation and $0.4 million of tax accrual adjustments.

Our effective tax rate for the first nine months of fiscal year 2016 of 37.5% did not include any material unusual items. Our effective tax rate for the first nine months of fiscal year 2015 of 28.1% was favorably impacted by $1.1 million of releases of income tax reserves upon the expiration of statutes of limitation and $0.4 million of tax accrual adjustments, which were partially offset by a $0.4 million adjustment to deferred taxes as our combined state tax rate is lower post spin-off.

Non-operating Income (Expense), net:

The non-operating income (expense), net line item includes the impact of such items as fair value adjustments on Supplemental Employee Retirement Plan (“SERP”) investments, foreign currency rate movements, non-production rent income, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain (loss) on SERP investments is offset by a change in the SERP liability that is recognized in selling and administrative expenses.

Components of the Non-operating income (expense), net line, from continuing operations were:

	Three Months Ended						Nine Months Ended
	March 31						March 31
(Amounts in Thousands)	2016			2015			2016			2015
Foreign Currency Gain (Loss)	$	28		$	2		$	(12	)	$	(40	)
Gain (Loss) on Supplemental Employee Retirement Plan Investments	108			353			(170		)	519
Other	(85		)	(65		)	(255		)	(339		)
Non-operating income (expense), net	$	51		$	290		$	(437	)	$	140

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Note 4. Inventories

9 Months Ended

Mar. 31, 2016

Inventories [Abstract]

Inventory Disclosure

Inventories

Inventory components were as follows:

(Amounts in Thousands)	March 31, 2016			June 30, 2015
Finished products	$	27,480		$	26,634
Work-in-process	1,486			1,952
Raw materials	25,117			23,201
Total FIFO inventory	54,083			51,787
LIFO reserve	(13,366		)	(14,153		)
Total inventory	$	40,717		$	37,634

For interim reporting, LIFO inventories are computed based on quantities as of the end of the quarter and interim changes in price levels. Changes in quantities and price levels are reflected in the interim financial statements in the period in which they occur, except in cases where LIFO inventory liquidations are expected to be reinstated by fiscal year end. The earnings impact of LIFO inventory liquidations during the three and nine-month periods ended March 31, 2016 and 2015 was immaterial.

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Note 5. Accumulated Other Comprehensive Income

9 Months Ended

Mar. 31, 2016

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Comprehensive Income (Loss)

Accumulated Other Comprehensive Income

During the three months ended March 31, 2016 and 2015 the changes in the balances of each component of Accumulated Other Comprehensive Income, net of tax, were as follows:

Accumulated Other Comprehensive Income	Postemployment Benefits
(Amounts in Thousands)	Prior Service Costs			Net Actuarial Gain (Loss)			Accumulated Other Comprehensive Income
Balance at December 31, 2015	$	—		$	1,268		$	1,268
Other comprehensive income (loss) before reclassifications	—			112			112
Reclassification to (earnings) loss	—			(68		)	(68		)
Net current-period other comprehensive income (loss)	—			44			44
Balance at March 31, 2016	$	—		$	1,312		$	1,312
Balance at December 31, 2014	$	(30	)	$	1,212		$	1,182
Other comprehensive income (loss) before reclassifications	—			28			28
Reclassification to (earnings) loss	25			(42		)	(17		)
Net current-period other comprehensive income (loss)	25			(14		)	11
Balance at March 31, 2015	$	(5	)	$	1,198		$	1,193

During the nine months ended March 31, 2016 and 2015, the changes in the balances of each component of Accumulated Other Comprehensive Income, net of tax, were as follows:

Accumulated Other Comprehensive Income							Postemployment Benefits
(Amounts in Thousands)	Foreign Currency Translation Adjustments			Derivative Gain (Loss)			Prior Service Costs			Net Actuarial Gain (Loss)			Accumulated Other Comprehensive Income
Balance at June 30, 2015	$	—		$	—		$	—		$	1,229		$	1,229
Other comprehensive income (loss) before reclassifications	—			—			—			285			285
Reclassification to (earnings) loss	—			—			—			(202		)	(202		)
Net current-period other comprehensive income (loss)	—			—			—			83			83
Balance at March 31, 2016	$	—		$	—		$	—		$	1,312		$	1,312
Balance at June 30, 2014	$	4,909		$	(3,411	)	$	(120	)	$	1,062		$	2,440
Other comprehensive income (loss) before reclassifications	(6,070		)	2,097			—			421			(3,552		)
Reclassification to (earnings) loss	—			(1,193		)	107			(88		)	(1,174		)
Distribution of Kimball Electronics, Inc.	1,161			2,507			8			(197		)	3,479
Net current-period other comprehensive income (loss)	(4,909		)	3,411			115			136			(1,247		)
Balance at March 31, 2015	$	—		$	—		$	(5	)	$	1,198		$	1,193

The following reclassifications were made from Accumulated Other Comprehensive Income to the Condensed Consolidated Statements of Income:

Reclassifications from Accumulated Other Comprehensive Income	Three Months Ended						Nine Months Ended						Affected Line Item in the Condensed Consolidated Statements of Income
	March 31,						March 31,
(Amounts in Thousands)	2016			2015			2016			2015
Derivative Gain (1)	$	—		$	—		$	—		$	1,193		Income (Loss) from Discontinued Operations, Net of Tax
Postemployment Benefits:
Amortization of Prior Service Costs (2)	$	—		$	(26	)	$	—		$	(106	)	Cost of Sales
	—			(15		)	—			(58		)	Selling and Administrative Expenses
	—			16			—			65			Benefit (Provision) for Income Taxes
	—			(25		)	—			(99		)	Income (Loss) from Continuing Operations
	$	—		$	—		$	—		$	(8	)	Income (Loss) from Discontinued Operations, Net of Tax
Amortization of Actuarial Gain (2)	$	71		$	38		$	214		$	68		Cost of Sales
	41			31			117			65			Selling and Administrative Expenses
	(44		)	(27		)	(129		)	(52		)	Benefit (Provision) for Income Taxes
	68			42			202			81			Income (Loss) from Continuing Operations
	$	—		$	—		$	—		$	7		Income (Loss) from Discontinued Operations, Net of Tax
Total Reclassifications for the Period	$	68		$	17		$	202		$	(18	)	Income (Loss) from Continuing Operations
	—			—			—			1,192			Income (Loss) from Discontinued Operations, Net of Tax
	$	68		$	17		$	202		$	1,174		Net Income (Loss)

Amounts in parentheses indicate reductions to income.

(1) See Note 9 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.

(2) See Note 11 - Postemployment Benefits of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.

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Note 6. Commitments and Contingent Liabilities

9 Months Ended

Mar. 31, 2016

Commitments and Contingent Liabilities [Abstract]

Commitments and Contingencies Disclosure

Commitments and Contingent Liabilities

Standby letters of credit are issued to third-party suppliers, lessors, and insurance institutions and can only be drawn upon in the event of Kimball’s failure to pay its obligations to a beneficiary. As of March 31, 2016, we had a maximum financial exposure from unused standby letters of credit totaling $1.0 million. We are not aware of circumstances that would require us to perform under any of these arrangements and believe that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect our consolidated financial statements. Accordingly, no liability has been recorded as of March 31, 2016 with respect to the standby letters of credit. Kimball also enters into commercial letters of credit to facilitate payments to vendors and from customers.

We estimate product warranty liability at the time of sale based on historical repair or replacement cost trends in conjunction with the length of the warranty offered. Management refines the warranty liability in cases where specific warranty issues become known.

Changes in the product warranty accrual for the nine months ended March 31, 2016 and 2015 were as follows:

	Nine Months Ended
	March 31
(Amounts in Thousands)	2016			2015
Product Warranty Liability at the beginning of the period	$	2,264		$	3,221
Additions to warranty accrual (including changes in estimates)	982			625
Settlements made (in cash or in kind)	(785		)	(564		)
Distribution of Kimball Electronics, Inc.	—			(910		)
Product Warranty Liability at the end of the period	$	2,461		$	2,372

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Note 7. Restructuring Expense

9 Months Ended

Mar. 31, 2016

Restructuring Expense [Abstract]

Restructuring and Related Activities Disclosure

Restructuring Expense

We recognized pre-tax restructuring expense of $2.8 million and $6.0 million in the three and nine months ended March 31, 2016, respectively, and recognized $0.4 million and $3.7 million of restructuring expense in the three and nine months ended March 31, 2015. We utilize available market prices and management estimates to determine the fair value of impaired fixed assets. Restructuring charges are included in the Restructuring Expense line item on the Company’s Condensed Consolidated Statements of Income.

Capacity Utilization Restructuring Plan:

In November 2014, we announced a capacity utilization restructuring plan which includes the consolidation of our metal fabrication production from an operation located in Post Falls, Idaho, into existing production facilities in Indiana, and the reduction of our Company plane fleet from two jets to one.

As of March 31, 2016, we are in the final stages of consolidating the Idaho operation into Indiana facilities. The transfer of work has involved the start-up of metal fabrication capabilities in a Company-owned facility, along with the transfer of certain assembly operations into two additional Company-owned facilities, all located in southern Indiana. The manufacturing capacity realignment has been carefully managed to mitigate customer disruptions. We expect to incur approximately $0.8 million for future capital investments as we finalize the restructuring activities. The Post Falls, Idaho facility is being prepared for sale.

The reduction of our plane fleet from two jets to one reduced our cost structure while aligning the plane fleet size with our needs following the spin-off of Kimball Electronics on October 31, 2014. Previously, one of our jets was used primarily for the successful strategy of transporting customers to visit our showrooms, offices, research and development center, and manufacturing locations, while the remaining jet was used primarily for management travel. The plane used primarily for management travel was sold in the third quarter of fiscal year 2015. The sale of the plane resulted in a $0.2 million pre-tax gain in the third quarter of fiscal year 2015 which partially offset the impairment charge of $1.1 million recorded in the second quarter of fiscal year 2015. As a result of the aircraft fleet reduction, we began realizing the annual pre-tax savings of $0.8 million. In regards to the remaining jet, we believe that our location in rural Jasper, Indiana and the location of our manufacturing locations in small towns away from major metropolitan areas necessitates the need for the remaining jet to efficiently transport customers.

We will continue to incur ongoing building maintenance costs such as property taxes, insurance, and utilities until the facility is sold. Exclusive of these ongoing building maintenance costs, we currently estimate that the pre-tax restructuring charges will be approximately $11.7 million with $11.3 million recorded since the plan was announced with the remainder expected to be incurred over the remaining anticipated transition period. The restructuring charges are expected to consist of approximately $4.8 million of transition and other employee costs, $5.8 million of plant closure and other exit costs, and $1.1 million of non-cash asset impairment. Approximately 91% of the total cost estimate is expected to be cash expense.

Summary of Restructuring Plan:
	Accrued June 30, 2015		Nine Months Ended March 31, 2016									Total Charges Incurred Since Plan Announcement		Total Expected Plan Costs(2)
(Amounts in Thousands)			Amounts Charged Cash		Amounts Charged  Non-cash		Amounts Utilized/ Cash Paid			Accrued March 31, 2016 (1)
Capacity Realignment and Post Falls, Idaho Exit
Transition and Other Employee Costs	$	2,613	$	1,934	$	—	$	(1,086	)	$	3,461	$	4,591	$	4,615
Asset Write-downs	—		—		99		(99		)	—		230		230
Plant Closure and Other Exit Costs	—		3,928		—		(3,683		)	245		5,384		5,815
Total	$	2,613	$	5,862	$	99	$	(4,868	)	$	3,706	$	10,205	$	10,660
Plane Fleet Reduction
Transition and Other Employee Costs	$	—	$	—	$	—	$	—		$	—	$	224	$	224
Asset Write-downs	—		—		—		—			—		822		822
Total	$	—	$	—	$	—	$	—		$	—	$	1,046	$	1,046
Total Restructuring Plan	$	2,613	$	5,862	$	99	$	(4,868	)	$	3,706	$	11,251	$	11,706

(1) The accrued restructuring balance at March 31, 2016 is recorded in current liabilities.

(2) Excludes ongoing building maintenance costs such as property taxes, insurance, and utilities that will be incurred until the facility is sold. These costs will be included in the Restructuring line on the Condensed Consolidated Statements of Income as they are incurred.

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Note 8. Fair Value

9 Months Ended

Mar. 31, 2016

Fair Value [Abstract]

Fair Value Disclosures

Fair Value

Kimball categorizes assets and liabilities measured at fair value into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas level 3 generally requires significant management judgment. The three levels are defined as follows:

• Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

• Level 2: Observable inputs other than those included in level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

• Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

Our policy is to recognize transfers between these levels as of the end of each quarterly reporting period. There were no transfers between these levels during the nine months ended March 31, 2016. There were also no changes in the inputs or valuation techniques used to measure fair values compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2015.

We invested $0.5 million in non-marketable equity securities of a privately-held company during the quarter ended March 31, 2016. This investment is classified as a level 3 financial asset, as explained in the Financial Instruments Not Carried At Fair Value section below. No other purchases or sales of level 3 assets occurred during the three and nine months ended March 31, 2016.

Financial Instruments Recognized at Fair Value:

The following methods and assumptions were used to measure fair value:

Financial Instrument	Level	Valuation Technique/Inputs Used
Cash Equivalents	1	Market - Quoted market prices
Trading securities: Mutual funds held in nonqualified SERP	1	Market - Quoted market prices

Recurring Fair Value Measurements:

As of March 31, 2016 and June 30, 2015, the fair values of level 1 financial assets that are measured at fair value on a recurring basis using the market approach were as follows:

(Amounts in Thousands)	March 31, 2016		June 30, 2015
Cash equivalents	$	38,848	$	23,414
Trading Securities: Mutual funds in nonqualified SERP	10,025		10,353
Total assets at fair value	$	48,873	$	33,767

The nonqualified supplemental employee retirement plan (“SERP”) assets consist primarily of equity funds, balanced funds, target date funds, a bond fund, and a money market fund. The SERP investment assets are offset by a SERP liability which represents Kimball’s obligation to distribute SERP funds to participants. See Note 10 - Investments of Notes to Condensed Consolidated Financial Statements for further information regarding the SERP.

Financial Instruments Not Carried At Fair Value:

Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following:

Financial Instrument	Level	Valuation Technique/Inputs Used
Notes receivable	2	Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account the customer’s non-performance risk
Non-marketable equity securities (cost-method investments, which carry shares at cost except in the event of impairment)	3	Cost Method, with Impairment Recognized Using a Market-Based Valuation Technique - See the explanation below the table regarding the method used to periodically estimate the fair value of cost-method investments.
Long-term debt (carried at amortized cost)	3	Income - Price estimated using a discounted cash flow analysis based on quoted long-term debt market rates, taking into account Kimball’s non-performance risk

Investments in non-marketable equity securities are accounted for using the cost method because Kimball does not have the ability to exercise significant influence over the operating and financial policies of the investee. On a periodic basis, but no less frequently than quarterly, these investments are assessed for impairment when there are events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. If a significant adverse effect on the fair value of the investment were to occur and was deemed to be other-than-temporary, the fair value of the investment would be estimated, and the amount by which the carrying value of the cost-method investment exceeds its fair value would be recorded as an impairment loss.

The carrying value of our cash deposit accounts, trade accounts receivable, trade accounts payable, and dividends payable approximates fair value due to the relatively short maturity and immaterial non-performance risk.

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Note 9. Derivative Instruments

9 Months Ended

Mar. 31, 2016

Derivative Instruments [Abstract]

Derivative Instruments and Hedging Activities Disclosure

Derivative Instruments

Foreign Exchange Contracts:

Our former EMS segment, classified as discontinued operations, operated internationally and was therefore exposed to foreign currency exchange rate fluctuations in the normal course of business. The primary means of managing this exposure was to utilize natural hedges, such as aligning currencies used in the supply chain with the sale currency. To the extent natural hedging techniques did not fully offset currency risk, derivative instruments were used with the objective of reducing the residual exposure to certain foreign currency rate movements. Factors considered in the decision to hedge an underlying market exposure included the materiality of the risk, the volatility of the market, the duration of the hedge, the degree to which the underlying exposure was committed to, and the availability, effectiveness, and cost of derivative instruments. Derivative instruments were only utilized for risk management purposes and were not used for speculative or trading purposes.

Forward contracts designated as cash flow hedges were used to protect against foreign currency exchange rate risks inherent in forecasted transactions denominated in a foreign currency. Foreign exchange contracts were also used to hedge against foreign currency exchange rate risks related to intercompany balances denominated in currencies other than the functional currencies. In limited cases due to unexpected changes in forecasted transactions, cash flow hedges may have ceased to meet the criteria to be designated as cash flow hedges. Depending on the type of exposure hedged, either a derivative contract in the opposite position of the undesignated hedge may have been purchased or the hedge may have been retained until it matured if the hedge had continued to provide an adequate offset in earnings against the currency revaluation impact of foreign currency denominated liabilities.

When derivatives were settled with the counterparty, the derivative asset or liability was relieved and cash flow was impacted for the net settlement. For derivative instruments that met the criteria of hedging instruments under FASB guidance, the effective portions of the gain or loss on the derivative instrument were initially recorded net of related tax effect in Accumulated Other Comprehensive Income, a component of Share Owners’ Equity, and were subsequently reclassified into earnings in the period or periods during which the hedged transaction was recognized in earnings. The gain or loss associated with derivative instruments that were not designated as hedging instruments or that ceased to meet the criteria for hedging under FASB guidance was recognized in earnings.

After the spin-off of the EMS segment on October 31, 2014, we held no derivative instruments. See the Condensed Consolidated Statements of Comprehensive Income for the changes in deferred derivative gains and losses. Information on the location and amounts of derivative gains and losses in the Condensed Consolidated Statements of Income are presented below.

The Effect of Derivative Instruments on Other Comprehensive Income (Loss)

	Three Months Ended				Nine Months Ended
	March 31				March 31
(Amounts in Thousands)	2016		2015		2016		2015
Amount of Pre-Tax Gain Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion):
Foreign exchange contracts	$	—	$	—	$	—	$	2,513

The Effect of Derivative Instruments on Condensed Consolidated Statements of Income

		Three Months Ended				Nine Months Ended
(Amounts in Thousands)		March 31				March 31
Derivatives in Cash Flow Hedging Relationships	Location of Gain or (Loss)	2016		2015		2016		2015
Amount of Pre-Tax Gain Reclassified from Accumulated OCI into Income (Effective Portion):
Foreign exchange contracts	Income from Discontinued Operations, Net of Tax	$	—	$	—	$	—	$	1,484
Derivatives Not Designated as Hedging Instruments
Amount of Pre-Tax Gain Recognized in Income on Derivatives:
Foreign exchange contracts	Income from Discontinued Operations, Net of Tax	$	—	$	—	$	—	$	740
Total Derivative Pre-Tax Gain Recognized in Income		$	—	$	—	$	—	$	2,224

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Note 10. Investments

9 Months Ended

Mar. 31, 2016

Investments [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure

Investments

Supplemental Employee Retirement Plan Investments:

Kimball maintains a self-directed supplemental employee retirement plan (“SERP”) in which executive employees are eligible to participate. The SERP utilizes a rabbi trust, and therefore assets in the SERP portfolio are subject to creditor claims in the event of bankruptcy. Kimball recognizes SERP investment assets on the Condensed Consolidated Balance Sheets at current fair value. A SERP liability of the same amount is recorded on the Condensed Consolidated Balance Sheets representing an obligation to distribute SERP funds to participants. The SERP investment assets are classified as trading, and accordingly, realized and unrealized gains and losses are recognized in income in the Other Income (Expense) category. Adjustments made to revalue the SERP liability are also recognized in income as selling and administrative expenses and offset valuation adjustments on SERP investment assets. Net unrealized holding losses from continuing operations for the nine months ended March 31, 2016 and 2015 were, in thousands, $550 and $121, respectively.

SERP asset and liability balances were as follows:

(Amounts in Thousands)	March 31, 2016		June 30, 2015
SERP investments - current asset	$	634	$	1,276
SERP investments - other long-term asset	9,391		9,077
Total SERP investments	$	10,025	$	10,353
SERP obligation - current liability	$	634	$	1,276
SERP obligation - other long-term liability	9,391		9,077
Total SERP obligation	$	10,025	$	10,353

Non-marketable equity securities:

We invested $0.5 million in non-marketable equity securities of a privately-held company during the quarter ended March 31, 2016. The securities were valued at $0.5 million at March 31, 2016, and are included in the Other Assets line of the Condensed Consolidated Balance Sheets. See Note 8 - Fair Value of Notes to Condensed Consolidated Financial Statements for more information on the valuation of these securities. The investment does not rise to the level of a material variable interest or a controlling interest in the privately-held company which would require consolidation.

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Note 11. Postemployment Benefits

9 Months Ended

Mar. 31, 2016

Postemployment Benefits [Abstract]

Postemployment Benefits Disclosure

Postemployment Benefits

Kimball’s domestic employees participate in severance plans. These plans cover domestic employees and provide severance benefits to eligible employees meeting the plans’ qualifications, primarily involuntary termination without cause. In connection with the spin-off, the Company transferred the post-employment obligation for EMS employees to Kimball Electronics.

The components of net periodic postemployment benefit cost applicable to our severance plans were as follows:

	Three Months Ended						Nine Months Ended
	March 31						March 31
(Amounts in Thousands)	2016			2015			2016			2015
Service cost	$	122		$	131		$	366		$	521
Interest cost	19			21			58			77
Amortization of prior service costs	—			41			—			177
Amortization of actuarial income	(112		)	(69		)	(331		)	(146		)
Net periodic benefit cost — Total cost	$	29		$	124		$	93		$	629
Less: Discontinued operations	—			—			—			81
Net periodic benefit cost — Continuing operations	$	29		$	124		$	93		$	548

The benefit cost in the above table includes only normal recurring levels of severance activity, as estimated using an actuarial method. Unusual or non-recurring severance actions are not estimable using actuarial methods and are expensed in accordance with the applicable U.S. GAAP.

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Note 12. Stock Compensation Plan

9 Months Ended

Mar. 31, 2016

Stock Compensation Plan [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments

Stock Compensation Plan

During fiscal year 2016, the following stock compensation was awarded to officers, key employees, and members of the Board of Directors. All awards were granted under the Amended and Restated 2003 Stock Option and Incentive Plan. For more information on stock compensation awards, refer to our Annual Report on Form 10-K for the fiscal year ended June 30, 2015.

Type of Award	Quarter Awarded	Shares or Units	Grant Date Fair Value (5)
Annual Performance Shares (1)	1st Quarter	111,695		$12.12
Relative Total Shareholder ReturnAwards (2)	1st Quarter	36,093		$15.10
Restricted Share Units (3)	1st Quarter	93,232	$11.58 - $12.32
Unrestricted Shares (4)	1st Quarter	5,304		$11.31
Unrestricted Shares (4)	2nd Quarter	2,443		$12.29
Unrestricted Shares (Director Compensation) (4)	2nd Quarter	6,587		$12.04
Unrestricted Shares (Director Compensation) (4)	3rd Quarter	15,248		$9.65

(1) Annual performance shares were awarded to officers and other key employees. The number of annual performance shares to be issued will be dependent upon operating income performance, with a percentage payout up to a maximum of 200% of the target number set forth above. Annual performance shares vest after one year.

(2) Performance units were awarded to key officers under the Company’s Relative Total Shareholder Return program. Vesting occurs at June 30, 2018. Participants will earn from 0% to 200% of the target award depending upon how the compound annual growth rate of Kimball International common stock ranks within the peer group at the end of the performance period.

(3) Restricted share units were awarded to officers and key employees. Vesting occurs at June 30, 2016, June 30, 2017, and June 30, 2018. Upon vesting, the outstanding number of restricted share units and the value of dividends accumulated over the vesting period are converted to shares of common stock.

(4) Unrestricted shares were awarded to key employees as consideration for service to the Company. Other unrestricted shares were awarded to non-employee members of the Board of Directors as compensation for director’s fees which are expensed over the period that directors earn the compensation. Unrestricted shares do not have vesting periods, holding periods, restrictions on sale, or other restrictions.

(5) The grant date fair value of annual performance shares is based on the stock price at the date of the award, reduced by the present value of dividends normally paid over the vesting period which are not payable on outstanding annual performance share awards. The grant date fair value of the Relative Total Shareholder Return awards was calculated using a Monte Carlo simulation. This valuation technique includes estimating the movement of stock prices and the effects of volatility, interest rates, and dividends. The grant date fair value of the restricted share units and unrestricted shares was based on the stock price at the date of the award.

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Note 13. Variable Interest Entities

9 Months Ended

Mar. 31, 2016

Variable Interest Entities [Abstract]

Variable Interest Entities

Variable Interest Entities

Kimball’s involvement with variable interest entities (“VIEs”) is limited to situations in which we are not the primary beneficiary as we lack the power to direct the activities that most significantly impact the VIE’s economic performance. Thus, consolidation is not required. Our involvement with VIEs consists of an investment in non-marketable equity securities of a privately-held company during the third quarter of fiscal year 2016 and a note receivable related to the sale of an Indiana facility.

The non-marketable equity securities were valued at $0.5 million at March 31, 2016, and are included in the Other Assets line of the Condensed Consolidated Balance Sheets. For more information related to our investment in the privately-held company, see Note 8 - Fair Value of Notes to Condensed Consolidated Financial Statements.

The carrying value of the note receivable related to the sale of an Indiana facility, net of a $0.5 million allowance, was $0.8 million as of March 31, 2016. As of June 30, 2015, the carrying value of the note receivable, net of a $0.5 million allowance, was $0.9 million. For both periods, the short-term portion of the carrying value was included on the Receivables line and the long-term portion of the carrying value was included on the Other Assets line of our Condensed Consolidated Balance Sheets.

We have no obligation to provide additional funding to the VIEs, and thus our exposure and risk of loss related to the VIEs is limited to the carrying value of the investment and notes receivable. Financial support provided by Kimball to the VIEs was limited to the items discussed above during the quarter ended March 31, 2016.

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Note 14. Credit Quality and Allowance for Credit Losses of Notes Receivable

9 Months Ended

Mar. 31, 2016

Credit Quality and Allowance for Credit Losses of Notes Receivable [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure

Credit Quality and Allowance for Credit Losses of Notes Receivable

Kimball monitors credit quality and associated risks of notes receivable on an individual basis based on criteria such as financial stability of the party and collection experience in conjunction with general economic and market conditions. We hold collateral for the note receivable from the sale of an Indiana facility thereby mitigating the risk of loss. As of March 31, 2016 and June 30, 2015, Kimball had no material past due outstanding notes receivable.

	As of March 31, 2016						As of June 30, 2015
(Amounts in Thousands)	Unpaid Balance		Related Allowance		Receivable Net of Allowance		Unpaid Balance		Related Allowance		Receivable Net of Allowance
Note Receivable from Sale of Indiana Facility	$	1,313	$	489	$	824	$	1,347	$	489	$	858
Other Notes Receivable	373		140		233		439		149		290
Total	$	1,686	$	629	$	1,057	$	1,786	$	638	$	1,148

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Note 1. Basis of Presentation (Policies)

9 Months Ended

Mar. 31, 2016

Basis of Presentation [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Kimball International, Inc. (the “Company,” “Kimball,” “we,” “us,” or “our”) have been prepared in accordance with the instructions to Form 10-Q. As such, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe that the disclosures are adequate to make the information presented not misleading. Intercompany transactions and balances have been eliminated. Management believes the financial statements include all adjustments (consisting only of normal recurring adjustments) considered necessary to present fairly the financial statements for the interim periods. The results of operations for the interim periods shown in this report are not necessarily indicative of results for any future interim period or for the entire fiscal year. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in our latest annual report on Form 10-K.

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Note 3. Recent Accounting Pronouncements and Supplemental Information (Policies)

9 Months Ended

Mar. 31, 2016

Recent Accounting Pronouncements and Supplemental Information [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements:

In March 2016, the Financial Accounting Standards Board (“FASB”) issued guidance on simplifying the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as the classification on the statement of cash flows. The guidance is effective for our first quarter of fiscal year 2018 with early adoption permitted. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements.

In February 2016, the FASB issued guidance that revises the accounting for leases. The guidance is intended to improve financial reporting of leasing transactions by requiring lessees to record right-of-use assets and corresponding lease liabilities on the balance sheet. Leases will continue to be classified as either operating or finance leases, with the classification affecting the pattern of expense recognition in the statement of income. The guidance will also require additional disclosures to help investors and other financial statement users better understand the amount, timing, and uncertainty of cash flows arising from leases. The guidance is effective for our first quarter of fiscal year 2020 with early adoption permitted, and is required to be applied using a modified retrospective approach to each prior reporting period. We have not yet determined the effect of this guidance on our consolidated financial statements.

In January 2016, the FASB issued guidance which is intended to improve the recognition and measurement of financial instruments. The guidance revises an entity’s accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. The guidance also amends certain disclosure requirements associated with the fair value of financial instruments. The guidance is effective prospectively for our first quarter of fiscal year 2019 financial statements with early adoption allowed on certain provisions. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements.

In November 2015, the FASB issued guidance on simplifying the balance sheet classification of deferred taxes. The guidance requires the classification of deferred tax assets and liabilities as noncurrent in a classified balance sheet. The current requirement that deferred tax assets and liabilities of a tax-paying component of an entity be offset and presented as a single amount is not affected by this update. The guidance is effective for our first quarter of fiscal year 2018 financial statements with early adoption permitted, and allows for the use of either a prospective or retrospective transition method. We plan to early adopt using the prospective transition method for our fiscal year ending June 30, 2016, and will reclassify any current deferred tax assets or liabilities to noncurrent in our consolidated financial position.

In July 2015, the FASB issued guidance on simplifying the measurement of inventory which applies to inventory that is measured using first-in, first-out (“FIFO”) or average cost. Inventory within the scope of this update is required to be measured at the lower of cost or net realizable value, which is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion, disposal, and transportation. The guidance does not impact inventory measured on a last-in, first-out (“LIFO”) basis. The standards update is effective prospectively for our first quarter fiscal year 2018 financial statements with early adoption permitted. We do not expect the adoption to have a material effect on our consolidated financial statements.

In April 2015, the FASB issued guidance that requires debt issuance costs be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability and further clarification guidance allows the cost of securing a revolving line of credit to be recorded as a deferred asset regardless of whether a balance is outstanding. This guidance is effective for our first quarter fiscal year 2017 financial statements. We currently comply with this method therefore the adoption will not have a material effect on our consolidated financial statements.

In April 2015, the FASB issued guidance on customer’s accounting for cloud computing fees and provided criteria for customers in a cloud computing arrangement to use to determine whether the arrangement includes a license of software.  The guidance clarifies that a software license included in a cloud computing arrangement should be accounted for consistent with the acquisition of other software licenses, whereas a cloud computing arrangement that does not include a software license should be accounted for as a service contract. The guidance is effective for our first quarter of fiscal year 2017 financial statements, and allows for the use of either a prospective or retrospective transition method. We plan to adopt using the prospective transition method for our first quarter of fiscal year 2017, and we do not expect the adoption to have a material effect on our consolidated financial statements.

In June 2014, the FASB provided explicit guidance on how to account for share-based payments granted to employees in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The guidance will be applied prospectively for our first quarter fiscal year 2017 financial statements.  We do not expect the adoption to have a material effect on our consolidated financial statements.

In May 2014, the FASB issued guidance on the recognition of revenue from contracts with customers. The core principle of the guidance is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those goods or services. To achieve this core principle, the guidance provides a five-step analysis of transactions to determine when and how revenue is recognized. The guidance addresses several areas including transfer of control, contracts with multiple performance obligations, and costs to obtain and fulfill contracts. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. In July 2015, the FASB decided to defer the effective date for this new revenue standard by one year, which will make the guidance effective for our first quarter fiscal year 2019 financial statements using either of two acceptable adoption methods: (i) retrospective adoption to each prior reporting period presented with the option to elect certain practical expedients; or (ii) adoption with the cumulative effect of initially applying the guidance recognized at the date of initial application and providing certain additional disclosures. In March 2016, the FASB issued additional guidance which further clarifies assessing whether an entity is a principal or an agent in a revenue transaction, and impacts whether an entity reports revenue on a gross or net basis. In April 2016, the FASB issued additional guidance that addresses identifying performance obligations and implementing licensing guidance. The amendments have the same effective date and transition requirements as the new revenue standard. We have not yet selected a transition method nor determined the effect of this guidance on our consolidated financial statements.

In April 2014, the FASB issued guidance on reporting discontinued operations and disclosures of disposals of components of an entity. Under the new guidance, a disposal that represents a strategic shift that has or will have a major effect on an entity’s operations and financial results is a discontinued operation. The new guidance requires expanded disclosures that will provide more information about the assets, liabilities, income, and expenses of discontinued operations, and also requires disclosures of significant disposals that do not qualify for discontinued operations reporting. The guidance was effective prospectively for disposals or components of our business classified as held for sale beginning in our first quarter of fiscal year 2016. The adoption did not have a material effect on our consolidated financial statements.

Notes Receivables and Trade Accounts Receivable

Notes Receivable and Trade Accounts Receivable:

Notes receivable and trade accounts receivable are recorded per the terms of the agreement or sale, and accrued interest is recognized when earned. We determine on a case-by-case basis the cessation of accruing interest, the resumption of accruing interest, the method of recording payments received on nonaccrual receivables, and the delinquency status for our limited number of notes receivable.

Our policy for estimating the allowance for credit losses on trade accounts receivable and notes receivable includes analysis of such items as aging, credit worthiness, payment history, and historical bad debt experience. Management uses these specific analyses in conjunction with an evaluation of the general economic and market conditions to determine the final allowance for credit losses on the trade accounts receivable and notes receivable. Trade accounts receivable and notes receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. Our limited amount of notes receivable allows management to monitor the risks, credit quality indicators, collectability, and probability of impairment on an individual basis. Adjustments to the allowance for credit losses are recorded in selling and administrative expenses. Customary terms require payment within 30 days, with terms beyond 30 days being considered extended.

Income Taxes

Income Taxes:

In determining the quarterly provision for income taxes, we use an estimated annual effective tax rate which is based on expected annual income, statutory tax rates, and available tax planning opportunities in the various jurisdictions in which we operate. Unusual or infrequently occurring items are separately recognized in the quarter in which they occur.

Non-operating Income and Expense, net

Non-operating Income (Expense), net:

The non-operating income (expense), net line item includes the impact of such items as fair value adjustments on Supplemental Employee Retirement Plan (“SERP”) investments, foreign currency rate movements, non-production rent income, bank charges, and other miscellaneous non-operating income and expense items that are not directly related to operations. The gain (loss) on SERP investments is offset by a change in the SERP liability that is recognized in selling and administrative expenses.

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Note 4. Inventories (Policies)

9 Months Ended

Mar. 31, 2016

Inventories [Abstract]

Inventory

For interim reporting, LIFO inventories are computed based on quantities as of the end of the quarter and interim changes in price levels. Changes in quantities and price levels are reflected in the interim financial statements in the period in which they occur, except in cases where LIFO inventory liquidations are expected to be reinstated by fiscal year end.

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Note 6. Commitments and Contingent Liabilities (Policies)

9 Months Ended

Mar. 31, 2016

Commitments and Contingent Liabilities [Abstract]

Product Warranties

We estimate product warranty liability at the time of sale based on historical repair or replacement cost trends in conjunction with the length of the warranty offered. Management refines the warranty liability in cases where specific warranty issues become known.

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Note 7. Restructuring Expense Restructuring Expense (Policies)

9 Months Ended

Mar. 31, 2016

Accounting Policies [Abstract]

Costs Associated with Exit or Disposal Activities or Restructurings, Policy

We utilize available market prices and management estimates to determine the fair value of impaired fixed assets. Restructuring charges are included in the Restructuring Expense line item on the Company’s Condensed Consolidated Statements of Income.

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Note 8. Fair Value (Policies)

9 Months Ended

Mar. 31, 2016

Fair Value [Abstract]

Fair Value

Kimball categorizes assets and liabilities measured at fair value into three levels based upon the assumptions (inputs) used to price the assets or liabilities. Level 1 provides the most reliable measure of fair value, whereas level 3 generally requires significant management judgment. The three levels are defined as follows:

• Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities.

• Level 2: Observable inputs other than those included in level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets.

• Level 3: Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

Our policy is to recognize transfers between these levels as of the end of each quarterly reporting period. There were no transfers between these levels during the nine months ended March 31, 2016. There were also no changes in the inputs or valuation techniques used to measure fair values compared to those disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30, 2015.

Fair Value of Financial Instruments Policy Continued

Financial Instruments Recognized at Fair Value:

The following methods and assumptions were used to measure fair value:

Financial Instrument	Level	Valuation Technique/Inputs Used
Cash Equivalents	1	Market - Quoted market prices
Trading securities: Mutual funds held in nonqualified SERP	1	Market - Quoted market prices

Fair Value of Financial Instruments Not Carried at Fair Value

Financial Instruments Not Carried At Fair Value:

Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following:

Financial Instrument	Level	Valuation Technique/Inputs Used
Notes receivable	2	Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account the customer’s non-performance risk
Non-marketable equity securities (cost-method investments, which carry shares at cost except in the event of impairment)	3	Cost Method, with Impairment Recognized Using a Market-Based Valuation Technique - See the explanation below the table regarding the method used to periodically estimate the fair value of cost-method investments.
Long-term debt (carried at amortized cost)	3	Income - Price estimated using a discounted cash flow analysis based on quoted long-term debt market rates, taking into account Kimball’s non-performance risk

Investments in non-marketable equity securities are accounted for using the cost method because Kimball does not have the ability to exercise significant influence over the operating and financial policies of the investee. On a periodic basis, but no less frequently than quarterly, these investments are assessed for impairment when there are events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. If a significant adverse effect on the fair value of the investment were to occur and was deemed to be other-than-temporary, the fair value of the investment would be estimated, and the amount by which the carrying value of the cost-method investment exceeds its fair value would be recorded as an impairment loss.

The carrying value of our cash deposit accounts, trade accounts receivable, trade accounts payable, and dividends payable approximates fair value due to the relatively short maturity and immaterial non-performance risk.

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Note 9. Derivative Instruments (Policies)

9 Months Ended

Mar. 31, 2016

Derivative Instruments [Abstract]

Derivatives, Hedge Discontinuances

In limited cases due to unexpected changes in forecasted transactions, cash flow hedges may have ceased to meet the criteria to be designated as cash flow hedges. Depending on the type of exposure hedged, either a derivative contract in the opposite position of the undesignated hedge may have been purchased or the hedge may have been retained until it matured if the hedge had continued to provide an adequate offset in earnings against the currency revaluation impact of foreign currency denominated liabilities.

Derivatives, Reporting of Derivative Activity

When derivatives were settled with the counterparty, the derivative asset or liability was relieved and cash flow was impacted for the net settlement. For derivative instruments that met the criteria of hedging instruments under FASB guidance, the effective portions of the gain or loss on the derivative instrument were initially recorded net of related tax effect in Accumulated Other Comprehensive Income, a component of Share Owners’ Equity, and were subsequently reclassified into earnings in the period or periods during which the hedged transaction was recognized in earnings. The gain or loss associated with derivative instruments that were not designated as hedging instruments or that ceased to meet the criteria for hedging under FASB guidance was recognized in earnings.

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Note 12. Stock Compensation Plan Stock Compensation Plan (Policies)

9 Months Ended

Mar. 31, 2016

Stock Compensation Plan [Abstract]

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

The grant date fair value of annual performance shares is based on the stock price at the date of the award, reduced by the present value of dividends normally paid over the vesting period which are not payable on outstanding annual performance share awards. The grant date fair value of the Relative Total Shareholder Return awards was calculated using a Monte Carlo simulation. This valuation technique includes estimating the movement of stock prices and the effects of volatility, interest rates, and dividends. The grant date fair value of the restricted share units and unrestricted shares was based on the stock price at the date of the award.

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Note 2. Spin-Off Transaction (Tables)

9 Months Ended

Mar. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]

The EMS segment was reclassified to discontinued operations in the Condensed Consolidated Statements of Income. The following table summarizes the results of the discontinued operations for the nine months ended March 31, 2015. Discontinued operations did not have an impact on the financial results of fiscal year 2016 or the three months ended March 31, 2015.

	Nine Months Ended
	March 31
(Amounts in Thousands, Except Per Share Data)	2015
Net Sales	$	275,551
Income Before Taxes on Income	$	13,098
Provision for Income Taxes	$	3,941
Income from Discontinued Operations, Net of Tax	$	9,157
Income From Discontinued Operations per Diluted Share	$	0.23

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Note 3. Recent Accounting Pronouncements and Supplemental Information (Tables)

9 Months Ended

Mar. 31, 2016

Recent Accounting Pronouncements and Supplemental Information [Abstract]

Components of Non-operating income (expense), net

Components of the Non-operating income (expense), net line, from continuing operations were:

	Three Months Ended						Nine Months Ended
	March 31						March 31
(Amounts in Thousands)	2016			2015			2016			2015
Foreign Currency Gain (Loss)	$	28		$	2		$	(12	)	$	(40	)
Gain (Loss) on Supplemental Employee Retirement Plan Investments	108			353			(170		)	519
Other	(85		)	(65		)	(255		)	(339		)
Non-operating income (expense), net	$	51		$	290		$	(437	)	$	140

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Note 4. Inventories (Tables)

9 Months Ended

Mar. 31, 2016

Inventories [Abstract]

Schedule of Inventory, Current

Inventory components were as follows:

(Amounts in Thousands)	March 31, 2016			June 30, 2015
Finished products	$	27,480		$	26,634
Work-in-process	1,486			1,952
Raw materials	25,117			23,201
Total FIFO inventory	54,083			51,787
LIFO reserve	(13,366		)	(14,153		)
Total inventory	$	40,717		$	37,634

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Note 5. Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Mar. 31, 2016

Accumulated Other Comprehensive Income (Loss) [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

During the three months ended March 31, 2016 and 2015 the changes in the balances of each component of Accumulated Other Comprehensive Income, net of tax, were as follows:

Accumulated Other Comprehensive Income	Postemployment Benefits
(Amounts in Thousands)	Prior Service Costs			Net Actuarial Gain (Loss)			Accumulated Other Comprehensive Income
Balance at December 31, 2015	$	—		$	1,268		$	1,268
Other comprehensive income (loss) before reclassifications	—			112			112
Reclassification to (earnings) loss	—			(68		)	(68		)
Net current-period other comprehensive income (loss)	—			44			44
Balance at March 31, 2016	$	—		$	1,312		$	1,312
Balance at December 31, 2014	$	(30	)	$	1,212		$	1,182
Other comprehensive income (loss) before reclassifications	—			28			28
Reclassification to (earnings) loss	25			(42		)	(17		)
Net current-period other comprehensive income (loss)	25			(14		)	11
Balance at March 31, 2015	$	(5	)	$	1,198		$	1,193

During the nine months ended March 31, 2016 and 2015, the changes in the balances of each component of Accumulated Other Comprehensive Income, net of tax, were as follows:

Accumulated Other Comprehensive Income							Postemployment Benefits
(Amounts in Thousands)	Foreign Currency Translation Adjustments			Derivative Gain (Loss)			Prior Service Costs			Net Actuarial Gain (Loss)			Accumulated Other Comprehensive Income
Balance at June 30, 2015	$	—		$	—		$	—		$	1,229		$	1,229
Other comprehensive income (loss) before reclassifications	—			—			—			285			285
Reclassification to (earnings) loss	—			—			—			(202		)	(202		)
Net current-period other comprehensive income (loss)	—			—			—			83			83
Balance at March 31, 2016	$	—		$	—		$	—		$	1,312		$	1,312
Balance at June 30, 2014	$	4,909		$	(3,411	)	$	(120	)	$	1,062		$	2,440
Other comprehensive income (loss) before reclassifications	(6,070		)	2,097			—			421			(3,552		)
Reclassification to (earnings) loss	—			(1,193		)	107			(88		)	(1,174		)
Distribution of Kimball Electronics, Inc.	1,161			2,507			8			(197		)	3,479
Net current-period other comprehensive income (loss)	(4,909		)	3,411			115			136			(1,247		)
Balance at March 31, 2015	$	—		$	—		$	(5	)	$	1,198		$	1,193

Reclassification out of Accumulated Other Comprehensive Income (Loss)

The following reclassifications were made from Accumulated Other Comprehensive Income to the Condensed Consolidated Statements of Income:

Reclassifications from Accumulated Other Comprehensive Income	Three Months Ended						Nine Months Ended						Affected Line Item in the Condensed Consolidated Statements of Income
	March 31,						March 31,
(Amounts in Thousands)	2016			2015			2016			2015
Derivative Gain (1)	$	—		$	—		$	—		$	1,193		Income (Loss) from Discontinued Operations, Net of Tax
Postemployment Benefits:
Amortization of Prior Service Costs (2)	$	—		$	(26	)	$	—		$	(106	)	Cost of Sales
	—			(15		)	—			(58		)	Selling and Administrative Expenses
	—			16			—			65			Benefit (Provision) for Income Taxes
	—			(25		)	—			(99		)	Income (Loss) from Continuing Operations
	$	—		$	—		$	—		$	(8	)	Income (Loss) from Discontinued Operations, Net of Tax
Amortization of Actuarial Gain (2)	$	71		$	38		$	214		$	68		Cost of Sales
	41			31			117			65			Selling and Administrative Expenses
	(44		)	(27		)	(129		)	(52		)	Benefit (Provision) for Income Taxes
	68			42			202			81			Income (Loss) from Continuing Operations
	$	—		$	—		$	—		$	7		Income (Loss) from Discontinued Operations, Net of Tax
Total Reclassifications for the Period	$	68		$	17		$	202		$	(18	)	Income (Loss) from Continuing Operations
	—			—			—			1,192			Income (Loss) from Discontinued Operations, Net of Tax
	$	68		$	17		$	202		$	1,174		Net Income (Loss)

Amounts in parentheses indicate reductions to income.

(1) See Note 9 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.

(2) See Note 11 - Postemployment Benefits of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.

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Note 6. Commitments and Contingent Liabilities (Tables)

9 Months Ended

Mar. 31, 2016

Commitments and Contingent Liabilities [Abstract]

Schedule of Product Warranty Liability

Changes in the product warranty accrual for the nine months ended March 31, 2016 and 2015 were as follows:

	Nine Months Ended
	March 31
(Amounts in Thousands)	2016			2015
Product Warranty Liability at the beginning of the period	$	2,264		$	3,221
Additions to warranty accrual (including changes in estimates)	982			625
Settlements made (in cash or in kind)	(785		)	(564		)
Distribution of Kimball Electronics, Inc.	—			(910		)
Product Warranty Liability at the end of the period	$	2,461		$	2,372

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Note 7. Restructuring Expense (Tables)

9 Months Ended

Mar. 31, 2016

Restructuring Expense [Abstract]

Restructuring and Related Costs [Table Text Block]

Summary of Restructuring Plan:
	Accrued June 30, 2015		Nine Months Ended March 31, 2016									Total Charges Incurred Since Plan Announcement		Total Expected Plan Costs(2)
(Amounts in Thousands)			Amounts Charged Cash		Amounts Charged  Non-cash		Amounts Utilized/ Cash Paid			Accrued March 31, 2016 (1)
Capacity Realignment and Post Falls, Idaho Exit
Transition and Other Employee Costs	$	2,613	$	1,934	$	—	$	(1,086	)	$	3,461	$	4,591	$	4,615
Asset Write-downs	—		—		99		(99		)	—		230		230
Plant Closure and Other Exit Costs	—		3,928		—		(3,683		)	245		5,384		5,815
Total	$	2,613	$	5,862	$	99	$	(4,868	)	$	3,706	$	10,205	$	10,660
Plane Fleet Reduction
Transition and Other Employee Costs	$	—	$	—	$	—	$	—		$	—	$	224	$	224
Asset Write-downs	—		—		—		—			—		822		822
Total	$	—	$	—	$	—	$	—		$	—	$	1,046	$	1,046
Total Restructuring Plan	$	2,613	$	5,862	$	99	$	(4,868	)	$	3,706	$	11,251	$	11,706

(1) The accrued restructuring balance at March 31, 2016 is recorded in current liabilities.

(2) Excludes ongoing building maintenance costs such as property taxes, insurance, and utilities that will be incurred until the facility is sold. These costs will be included in the Restructuring line on the Condensed Consolidated Statements of Income as they are incurred.

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Note 8. Fair Value (Tables)

9 Months Ended

Mar. 31, 2016

Fair Value [Abstract]

Fair Value Measurements, Recurring, Valuation Techniques

The following methods and assumptions were used to measure fair value:

Financial Instrument	Level	Valuation Technique/Inputs Used
Cash Equivalents	1	Market - Quoted market prices
Trading securities: Mutual funds held in nonqualified SERP	1	Market - Quoted market prices

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

As of March 31, 2016 and June 30, 2015, the fair values of level 1 financial assets that are measured at fair value on a recurring basis using the market approach were as follows:

(Amounts in Thousands)	March 31, 2016		June 30, 2015
Cash equivalents	$	38,848	$	23,414
Trading Securities: Mutual funds in nonqualified SERP	10,025		10,353
Total assets at fair value	$	48,873	$	33,767

Fair Value Measurements, Recurring and Nonrecurring, Valuation Techniques

Financial instruments that are not reflected in the Condensed Consolidated Balance Sheets at fair value that have carrying amounts which approximate fair value include the following:

Financial Instrument	Level	Valuation Technique/Inputs Used
Notes receivable	2	Market - Price approximated based on the assumed collection of receivables in the normal course of business, taking into account the customer’s non-performance risk
Non-marketable equity securities (cost-method investments, which carry shares at cost except in the event of impairment)	3	Cost Method, with Impairment Recognized Using a Market-Based Valuation Technique - See the explanation below the table regarding the method used to periodically estimate the fair value of cost-method investments.
Long-term debt (carried at amortized cost)	3	Income - Price estimated using a discounted cash flow analysis based on quoted long-term debt market rates, taking into account Kimball’s non-performance risk

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Note 9. Derivative Instruments (Tables)

9 Months Ended

Mar. 31, 2016

Derivative Instruments [Abstract]

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)

The Effect of Derivative Instruments on Other Comprehensive Income (Loss)

	Three Months Ended				Nine Months Ended
	March 31				March 31
(Amounts in Thousands)	2016		2015		2016		2015
Amount of Pre-Tax Gain Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion):
Foreign exchange contracts	$	—	$	—	$	—	$	2,513

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The Effect of Derivative Instruments on Condensed Consolidated Statements of Income

		Three Months Ended				Nine Months Ended
(Amounts in Thousands)		March 31				March 31
Derivatives in Cash Flow Hedging Relationships	Location of Gain or (Loss)	2016		2015		2016		2015
Amount of Pre-Tax Gain Reclassified from Accumulated OCI into Income (Effective Portion):
Foreign exchange contracts	Income from Discontinued Operations, Net of Tax	$	—	$	—	$	—	$	1,484
Derivatives Not Designated as Hedging Instruments
Amount of Pre-Tax Gain Recognized in Income on Derivatives:
Foreign exchange contracts	Income from Discontinued Operations, Net of Tax	$	—	$	—	$	—	$	740
Total Derivative Pre-Tax Gain Recognized in Income		$	—	$	—	$	—	$	2,224

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Note 10. Investments (Tables)

9 Months Ended

Mar. 31, 2016

Investments [Abstract]

Trading Securities (and Certain Trading Assets)

SERP asset and liability balances were as follows:

(Amounts in Thousands)	March 31, 2016		June 30, 2015
SERP investments - current asset	$	634	$	1,276
SERP investments - other long-term asset	9,391		9,077
Total SERP investments	$	10,025	$	10,353
SERP obligation - current liability	$	634	$	1,276
SERP obligation - other long-term liability	9,391		9,077
Total SERP obligation	$	10,025	$	10,353

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Note 11. Postemployment Benefits (Tables)

9 Months Ended

Mar. 31, 2016

Postemployment Benefits [Abstract]

Schedule of Changes in Projected Benefit Obligations

The components of net periodic postemployment benefit cost applicable to our severance plans were as follows:

	Three Months Ended						Nine Months Ended
	March 31						March 31
(Amounts in Thousands)	2016			2015			2016			2015
Service cost	$	122		$	131		$	366		$	521
Interest cost	19			21			58			77
Amortization of prior service costs	—			41			—			177
Amortization of actuarial income	(112		)	(69		)	(331		)	(146		)
Net periodic benefit cost — Total cost	$	29		$	124		$	93		$	629
Less: Discontinued operations	—			—			—			81
Net periodic benefit cost — Continuing operations	$	29		$	124		$	93		$	548

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Note 12. Stock Compensation Plan (Tables)

9 Months Ended

Mar. 31, 2016

Stock Compensation Plan [Abstract]

Schedule of Share-based Compensation Arrangement by Share-based Payment Award, Grants in Period

Type of Award	Quarter Awarded	Shares or Units	Grant Date Fair Value (5)
Annual Performance Shares (1)	1st Quarter	111,695		$12.12
Relative Total Shareholder ReturnAwards (2)	1st Quarter	36,093		$15.10
Restricted Share Units (3)	1st Quarter	93,232	$11.58 - $12.32
Unrestricted Shares (4)	1st Quarter	5,304		$11.31
Unrestricted Shares (4)	2nd Quarter	2,443		$12.29
Unrestricted Shares (Director Compensation) (4)	2nd Quarter	6,587		$12.04
Unrestricted Shares (Director Compensation) (4)	3rd Quarter	15,248		$9.65

(1) Annual performance shares were awarded to officers and other key employees. The number of annual performance shares to be issued will be dependent upon operating income performance, with a percentage payout up to a maximum of 200% of the target number set forth above. Annual performance shares vest after one year.

(2) Performance units were awarded to key officers under the Company’s Relative Total Shareholder Return program. Vesting occurs at June 30, 2018. Participants will earn from 0% to 200% of the target award depending upon how the compound annual growth rate of Kimball International common stock ranks within the peer group at the end of the performance period.

(3) Restricted share units were awarded to officers and key employees. Vesting occurs at June 30, 2016, June 30, 2017, and June 30, 2018. Upon vesting, the outstanding number of restricted share units and the value of dividends accumulated over the vesting period are converted to shares of common stock.

(4) Unrestricted shares were awarded to key employees as consideration for service to the Company. Other unrestricted shares were awarded to non-employee members of the Board of Directors as compensation for director’s fees which are expensed over the period that directors earn the compensation. Unrestricted shares do not have vesting periods, holding periods, restrictions on sale, or other restrictions.

(5) The grant date fair value of annual performance shares is based on the stock price at the date of the award, reduced by the present value of dividends normally paid over the vesting period which are not payable on outstanding annual performance share awards. The grant date fair value of the Relative Total Shareholder Return awards was calculated using a Monte Carlo simulation. This valuation technique includes estimating the movement of stock prices and the effects of volatility, interest rates, and dividends. The grant date fair value of the restricted share units and unrestricted shares was based on the stock price at the date of the award.

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Note 14. Credit Quality and Allowance for Credit Losses of Notes Receivable (Tables)

9 Months Ended

Mar. 31, 2016

Credit Quality and Allowance for Credit Losses of Notes Receivable [Abstract]

Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent

	As of March 31, 2016						As of June 30, 2015
(Amounts in Thousands)	Unpaid Balance		Related Allowance		Receivable Net of Allowance		Unpaid Balance		Related Allowance		Receivable Net of Allowance
Note Receivable from Sale of Indiana Facility	$	1,313	$	489	$	824	$	1,347	$	489	$	858
Other Notes Receivable	373		140		233		439		149		290
Total	$	1,686	$	629	$	1,057	$	1,786	$	638	$	1,148

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Note 2. Spin-Off Transaction - Disposal Group, Income Statement (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales				$ 275,551
Income Before Taxes on Income				13,098
Provision for Income Taxes				3,941
Income from Discontinued Operations, Net of Tax	$ 0	$ 0	$ 0	$ 9,157
Income From Discontinued Operations per Diluted Share				$ 0.23

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Note 3. Recent Accounting Pronouncements and Supplemental Information - Textuals (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Accounts Receivable, Customary Payment Terms			30 days
Accounts Receivable, Days Beyond Which Terms Are Considered Extended Payment Terms			30 days
Effective Income Tax Rate Reconciliation, Percent	38.00%	10.50%	37.50%	28.10%
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations		$ 1.1		$ 1.1
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount		$ 0.4		0.4
Effective Income Tax Rate Reconciliation, State and Local Income Taxes, Amount				$ 0.4

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Note 3. Recent Accounting Pronouncements and Supplemental Information - Components of Non-operating income (expense), net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Foreign Currency Gain (Loss)	$ 28	$ 2	$ (12)	$ (40)
Gain (Loss) on Supplemental Employee Retirement Plan Investments	108	353	(170)	519
Other	(85)	(65)	(255)	(339)
Non-operating income (expense), net	$ 51	$ 290	$ (437)	$ 140

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Note 4. Inventories - Inventory Components (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Jun. 30, 2015
Finished products	$ 27,480	$ 26,634
Work-in-process	1,486	1,952
Raw materials	25,117	23,201
Total FIFO inventory	54,083	51,787
LIFO reserve	(13,366)	(14,153)
Total inventory	$ 40,717	$ 37,634

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Note 5. Accumulated Other Comprehensive Income - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss) at beginning of period	$ 1,268	$ 1,182	$ 1,229	$ 2,440
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	112	28	285	(3,552)
Reclassification to (earnings) loss	(68)	(17)	(202)	(1,174)
Distribution to Kimball Electronics, Inc.				3,479
Net current-period other comprehensive income (loss)	44	11	83	(1,247)
Accumulated Other Comprehensive Income (Loss) at end of period	1,312	1,193	1,312	1,193
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss) at beginning of period			0	4,909
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax			0	(6,070)
Reclassification to (earnings) loss			0	0
Distribution to Kimball Electronics, Inc.				1,161
Net current-period other comprehensive income (loss)			0	(4,909)
Accumulated Other Comprehensive Income (Loss) at end of period	0	0	0	0
Derivative Gain (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss) at beginning of period			0	(3,411)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax			0	2,097
Reclassification to (earnings) loss			0	(1,193)
Distribution to Kimball Electronics, Inc.				2,507
Net current-period other comprehensive income (loss)			0	3,411
Accumulated Other Comprehensive Income (Loss) at end of period	0	0	0	0
Postemployment Benefits, Prior Service Costs
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss) at beginning of period	0	(30)	0	(120)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	0	0	0	0
Reclassification to (earnings) loss	0	25	0	107
Distribution to Kimball Electronics, Inc.				8
Net current-period other comprehensive income (loss)	0	25	0	115
Accumulated Other Comprehensive Income (Loss) at end of period	0	(5)	0	(5)
Postemployment Benefits, Net Actuarial Gain (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss) at beginning of period	1,268	1,212	1,229	1,062
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	112	28	285	421
Reclassification to (earnings) loss	(68)	(42)	(202)	(88)
Distribution to Kimball Electronics, Inc.				(197)
Net current-period other comprehensive income (loss)	44	(14)	83	136
Accumulated Other Comprehensive Income (Loss) at end of period	$ 1,312	$ 1,198	$ 1,312	$ 1,198

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Note 5. Accumulated Other Comprehensive Income - Reclassifications from Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Amortization of Prior Service Costs		$ 0	$ (41)	$ 0	$ (177)
Amortization of Actuarial Gain (Loss)		112	69	331	146
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax		68	17	202	1,174
Cost of Sales
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Amortization of Prior Service Costs	[1]	0	(26)	0	(106)
Amortization of Actuarial Gain (Loss)	[1]	71	38	214	68
Selling and Administrative Expenses
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Amortization of Prior Service Costs	[1]	0	(15)	0	(58)
Amortization of Actuarial Gain (Loss)	[1]	41	31	117	65
Benefit (Provision) for Income Taxes
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Amortization of Prior Service Costs		0	16	0	65
Amortization of Actuarial Gain (Loss)		(44)	(27)	(129)	(52)
Income (Loss) from Continuing Operations
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Amortization of Prior Service Costs		0	(25)	0	(99)
Amortization of Actuarial Gain (Loss)		68	42	202	81
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax		68	17	202	(18)
Income (Loss) from Discontinued Operations
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	[2]	0	0	0	1,193
Amortization of Prior Service Costs		0	0	0	(8)
Amortization of Actuarial Gain (Loss)		0	0	0	7
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax		$ 0	$ 0	$ 0	$ 1,192

[1] See Note 11 - Postemployment Benefits of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.

[2] See Note 9 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.

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Note 6. Commitments and Contingent Liabilities - Commitments and Contingent Liabilities Textuals (Details) - Financial Standby Letter of Credit	Mar. 31, 2016 USD ($)
Guarantor Obligations
Loss Contingency Accrual, at Carrying Value	$ 0
Primary Revolving Credit Facility
Guarantor Obligations
Letters of Credit, Amount	$ 1,000,000

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Note 6. Commitments and Contingent Liabilities - Product Warranty (Details) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Product Warranty Liability at the beginning of the period	$ 2,264	$ 3,221
Additions to warranty accrual (including changes in estimates)	982	625
Settlements made (in cash or in kind)	(785)	(564)
Distribution To Kimball Electronics - Warranty Liability	0	(910)
Product Warranty Liability at the end of the period	$ 2,461	$ 2,372

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Note 7. Restructuring Expense -Textuals (Details) - USD ($) $ in Thousands		3 Months Ended			9 Months Ended
		Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Restructuring Expense and Other Related Items
Restructuring Charges		$ 2,761		$ 388	$ 5,961	$ 3,723
Restructuring and Related Cost, Cost Incurred to Date		11,251			11,251
Gain (Loss) on Disposition of Property Plant Equipment					(121)	$ (916)
Restructuring and Related Cost, Expected Cost	[1]	11,706			$ 11,706
Percentage of Restructuring Costs Expected in Cash					91.00%
FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Anticipated Property Plant and Equipment Additions					$ 800
Restructuring and Related Cost, Cost Incurred to Date		10,205			10,205
Restructuring and Related Cost, Expected Cost		10,660			10,660
FY 2015 Plane Fleet Reduction [Domain]
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Cost Incurred to Date		1,046			1,046
Anticipated Annual Pre-tax Operating Income Savings					800
Restructuring and Related Cost, Expected Cost		1,046			1,046
Transition and Other Employee Costs
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost		4,800			4,800
Transition and Other Employee Costs | FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Cost Incurred to Date		4,591			4,591
Restructuring and Related Cost, Expected Cost		4,615			4,615
Transition and Other Employee Costs | FY 2015 Plane Fleet Reduction [Domain]
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Cost Incurred to Date		224			224
Restructuring and Related Cost, Expected Cost		224			224
Plant Closure and Other Exit Costs
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost		5,800			5,800
Plant Closure and Other Exit Costs | FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Cost Incurred to Date		5,384			5,384
Restructuring and Related Cost, Expected Cost		5,815			5,815
Asset Write-Downs
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost		1,100			1,100
Asset Write-Downs | FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Cost Incurred to Date		230			230
Restructuring and Related Cost, Expected Cost		230			230
Asset Write-Downs | FY 2015 Plane Fleet Reduction [Domain]
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Cost Incurred to Date		822			822
Restructuring and Related Cost, Expected Cost		$ 822			$ 822
Property, Plant and Equipment, Other Types
Restructuring Expense and Other Related Items
Gain (Loss) on Disposition of Property Plant Equipment				$ 200
Fair Value, Measurements, Nonrecurring | Property, Plant and Equipment, Other Types
Restructuring Expense and Other Related Items
Impairment of Long-Lived Assets to be Disposed of			$ 1,100

[1] Excludes ongoing building maintenance costs such as property taxes, insurance, and utilities that will be incurred until the facility is sold. These costs will be included in the Restructuring line on the Condensed Consolidated Statements of Income as they are incurred.

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Note 7. Restructuring Expense - Restructuring Plan (Details) - USD ($) $ in Thousands		9 Months Ended
		Mar. 31, 2016		Jun. 30, 2015
Restructuring Expense and Other Related Items
Restructuring Reserve		$ 3,706	[1]	$ 2,613
Restructuring Reserve, Period Expense, Cash		5,862
Restructuring Reserve, Period Expense, Non-Cash		99
Restructuring Reserve, Amounts Utilized or Cash Paid		(4,868)
Restructuring and Related Cost, Cost Incurred to Date		11,251
Restructuring and Related Cost, Expected Cost	[2]	11,706
FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve		3,706		2,613
Restructuring Reserve, Period Expense, Cash		5,862
Restructuring Reserve, Period Expense, Non-Cash		99
Restructuring Reserve, Amounts Utilized or Cash Paid		(4,868)
Restructuring and Related Cost, Cost Incurred to Date		10,205
Restructuring and Related Cost, Expected Cost		10,660
FY 2015 Plane Fleet Reduction [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve		0		0
Restructuring Reserve, Period Expense, Cash		0
Restructuring Reserve, Period Expense, Non-Cash		0
Restructuring Reserve, Amounts Utilized or Cash Paid		0
Restructuring and Related Cost, Cost Incurred to Date		1,046
Restructuring and Related Cost, Expected Cost		1,046
Transition and Other Employee Costs
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost		4,800
Transition and Other Employee Costs | FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve		3,461		2,613
Restructuring Reserve, Period Expense, Cash		1,934
Restructuring Reserve, Period Expense, Non-Cash		0
Restructuring Reserve, Amounts Utilized or Cash Paid		(1,086)
Restructuring and Related Cost, Cost Incurred to Date		4,591
Restructuring and Related Cost, Expected Cost		4,615
Transition and Other Employee Costs | FY 2015 Plane Fleet Reduction [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve		0		0
Restructuring Reserve, Period Expense, Cash		0
Restructuring Reserve, Period Expense, Non-Cash		0
Restructuring Reserve, Amounts Utilized or Cash Paid		0
Restructuring and Related Cost, Cost Incurred to Date		224
Restructuring and Related Cost, Expected Cost		224
Asset Write-Downs
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost		1,100
Asset Write-Downs | FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve		0		0
Restructuring Reserve, Period Expense, Cash		0
Restructuring Reserve, Period Expense, Non-Cash		99
Restructuring Reserve, Amounts Utilized or Cash Paid		(99)
Restructuring and Related Cost, Cost Incurred to Date		230
Restructuring and Related Cost, Expected Cost		230
Asset Write-Downs | FY 2015 Plane Fleet Reduction [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve		0		0
Restructuring Reserve, Period Expense, Cash		0
Restructuring Reserve, Period Expense, Non-Cash		0
Restructuring Reserve, Amounts Utilized or Cash Paid		0
Restructuring and Related Cost, Cost Incurred to Date		822
Restructuring and Related Cost, Expected Cost		822
Plant Closure and Other Exit Costs
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost		5,800
Plant Closure and Other Exit Costs | FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve		245		$ 0
Restructuring Reserve, Period Expense, Cash		3,928
Restructuring Reserve, Period Expense, Non-Cash		0
Restructuring Reserve, Amounts Utilized or Cash Paid		(3,683)
Restructuring and Related Cost, Cost Incurred to Date		5,384
Restructuring and Related Cost, Expected Cost		$ 5,815

[1] The accrued restructuring balance at March 31, 2016 is recorded in current liabilities.

[2] Excludes ongoing building maintenance costs such as property taxes, insurance, and utilities that will be incurred until the facility is sold. These costs will be included in the Restructuring line on the Condensed Consolidated Statements of Income as they are incurred.

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Note 8. Fair Value - Recurring Fair Value Measurments (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Jun. 30, 2015
Recurring Fair Value Measurements:
Trading Securities: Mutual funds in nonqualified SERP	$ 10,025	$ 10,353
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1
Recurring Fair Value Measurements:
Cash equivalents	38,848	23,414
Trading Securities: Mutual funds in nonqualified SERP	10,025	10,353
Total assets at fair value	$ 48,873	$ 33,767

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Note 8. Fair Value - Textuals (Details)	3 Months Ended
	Mar. 31, 2016 USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value, Transfers Between Levels, Amount	$ 0
Fair Value, Purchases of Level 3 Assets	$ 500,000

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Note 9. Derivative Instruments - The Effect of Derivative Instruments on Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Derivative Instruments, Gain (Loss)
Derivative Instruments, Pre-Tax Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion			$ 0	$ 2,513
Foreign Exchange Contract
Derivative Instruments, Gain (Loss)
Derivative Instruments, Pre-Tax Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion	$ 0	$ 0	$ 0	$ 2,513

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Note 9. Derivative Instruments - The Effect of Derivative Instruments on Consolidated Statements of Income (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Derivative Instruments, Gain (Loss)
Total Derivative Pre-Tax Gain (Loss) Recognized in Income		$ 0	$ 0	$ 0	$ 2,224
Income (Loss) from Discontinued Operations
Derivative Instruments, Gain (Loss)
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	[1]	0	0	0	1,193
Foreign Exchange Contract | Income (Loss) from Discontinued Operations
Derivative Instruments, Gain (Loss)
Derivatives Not Designated as Hedging Instruments, Pre-Tax Gain (Loss) Recognized in Income		0	0	0	740
Cash Flow Hedging | Foreign Exchange Contract | Income (Loss) from Discontinued Operations
Derivative Instruments, Gain (Loss)
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net		$ 0	$ 0	$ 0	$ 1,484

[1] See Note 9 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.

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Note 9. Derivative Instruments - Textuals (Details) $ in Millions	Mar. 31, 2016 USD ($)
Derivative Instruments [Abstract]
Derivative, Fair Value, Net	$ 0.0

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Note 10. Investments - Supplemental Employee Retirement Investments Textuals (Details) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Schedule of Trading Securities and Other Trading Assets
Trading Securities, Change in net unrealized holding gains (losses)	$ (550)	$ (121)

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Note 10. Investments - Supplemental Employee Retirement Plan Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Jun. 30, 2015
Schedule of Trading Securities and Other Trading Assets
SERP investments	$ 10,025	$ 10,353
SERP obligation	10,025	10,353
Short-term Investments
Schedule of Trading Securities and Other Trading Assets
SERP investments	634	1,276
SERP obligation	634	1,276
Other Long-term Investments
Schedule of Trading Securities and Other Trading Assets
SERP investments	9,391	9,077
SERP obligation	$ 9,391	$ 9,077

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Note 10. Investments - Investments - Non-Marketable Equity Securities Textuals (Details) $ in Millions	3 Months Ended
	Mar. 31, 2016 USD ($)
Investments, Debt and Equity Securities [Abstract]
Payments to Acquire Investments	$ 0.5
Non-marketable Securities, carrying value	$ 0.5

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Note 11. Postemployment Benefits (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Mar. 31, 2015
Components of Net Periodic Benefit Cost (before tax):
Service cost	$ 122	$ 131	$ 366	$ 521
Interest cost	19	21	58	77
Amortization of prior service costs	0	41	0	177
Amortization of actuarial (income) loss	(112)	(69)	(331)	(146)
Net periodic benefit cost — Total cost	29	124	93	629
Discontinued Operations
Components of Net Periodic Benefit Cost (before tax):
Net periodic benefit cost — Total cost	0	0	0	81
Continuing Operations
Components of Net Periodic Benefit Cost (before tax):
Net periodic benefit cost — Total cost	$ 29	$ 124	$ 93	$ 548

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Note 12. Stock Compensation Plan - Stock Compensation Awards (Details) - $ / shares	3 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015
Annual Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award
Stock Compensation, Shares Awarded			111,695
Stock Compensation, Grant Date Fair Value			$ 12.12
Relative Total Shareholder Return
Share-based Compensation Arrangement by Share-based Payment Award
Stock Compensation, Shares Awarded			36,093
Stock Compensation, Grant Date Fair Value			$ 15.10
Restricted Share Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award
Stock Compensation, Shares Awarded			93,232
Unrestricted Shares
Share-based Compensation Arrangement by Share-based Payment Award
Stock Compensation, Shares Awarded		2,443	5,304
Stock Compensation, Grant Date Fair Value		$ 12.29	$ 11.31
Unrestricted Shares Director Compensation
Share-based Compensation Arrangement by Share-based Payment Award
Stock Compensation, Shares Awarded	15,248	6,587
Stock Compensation, Grant Date Fair Value	$ 9.65	$ 12.04
Minimum | Restricted Share Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award
Stock Compensation, Grant Date Fair Value			11.58
Maximum | Restricted Share Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award
Stock Compensation, Grant Date Fair Value			$ 12.32

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Note 12. Stock Compensation Plan - Stock Compensation Plans Textuals (Details)	Mar. 31, 2016
Annual Performance Shares Maximum Payout Percent	200.00%
Minimum
Relative Total Shareholder Return, Earned Percentage, Target	0.00%
Maximum
Relative Total Shareholder Return, Earned Percentage, Target	200.00%

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Note 13. Variable Interest Entities -Textuals (Details) - USD ($) $ in Thousands	9 Months Ended
	Mar. 31, 2016	Jun. 30, 2015
Variable Interest Entity
Variable Interest Entity, Nonconsolidated, Related Allowance	$ 629	$ 638
Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure
Variable Interest Entity
Variable Interest Entity, Obligation to Provide Additional Funding, Amount	0
Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure | Notes Receivable
Variable Interest Entity
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets	800	900
Variable Interest Entity, Nonconsolidated, Related Allowance	500	$ 500
Cost-method Investments | Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure
Variable Interest Entity
Variable Interest Entity, Nonconsolidated, Carrying Amount, Assets	$ 500

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Note 14. Credit Quality and Allowance for Credit Losses of Notes Receivable - Textuals (Details) - USD ($)	Mar. 31, 2016	Jun. 30, 2015
Notes Receivable
Notes Receivable
Financing Receivable, Recorded Investment, Past Due	$ 0	$ 0

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Note 14. Credit Quality and Allowance for Credit Losses of Notes Receivable - Credit Quality and Allowance for Credit Losses (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Jun. 30, 2015
Notes Receivable
Notes Receivable, Unpaid Balance	$ 1,686	$ 1,786
Notes Receivable, Related Allowance	629	638
Notes Receivable, Net of Allowance	1,057	1,148
Notes Receivable | Note Receivable From Sale of Indiana Facility
Notes Receivable
Notes Receivable, Unpaid Balance	1,313	1,347
Notes Receivable, Related Allowance	489	489
Notes Receivable, Net of Allowance	824	858
Notes Receivable | Other Notes Receivable
Notes Receivable
Notes Receivable, Unpaid Balance	373	439
Notes Receivable, Related Allowance	140	149
Notes Receivable, Net of Allowance	$ 233	$ 290