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 December 31, 2014

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 January 22, 2015 was:

Class A Common Stock - 1,460,053 shares

Class B Common Stock - 37,409,062 shares

KIMBALL INTERNATIONAL, INC.

FORM 10-Q

INDEX

		Page No.
PART I    FINANCIAL INFORMATION
	Item 1. Financial Statements
	Condensed Consolidated Balance Sheets         - December 31, 2014 (Unaudited) and June 30, 2014	3
	Condensed Consolidated Statements of Income (Unaudited)         - Three and Six Months Ended December 31, 2014 and 2013	4
	Condensed Consolidated Statements of Comprehensive Income (Unaudited)         - Three and Six Months Ended December 31, 2014 and 2013	5
	Condensed Consolidated Statements of Cash Flows (Unaudited)         - Six Months Ended December 31, 2014 and 2013	6
	Notes to Condensed Consolidated Financial Statements (Unaudited)	7
	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	23
	Item 3. Quantitative and Qualitative Disclosures About Market Risk	32
	Item 4. Controls and Procedures	32
PART II    OTHER INFORMATION
	Item 1A. Risk Factors	33
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	34
	Item 5. Other Information	34
	Item 6. Exhibits	35
SIGNATURES		36
EXHIBIT INDEX		37

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)
	December 31, 2014			June 30, 2014
ASSETS
Current Assets:
Cash and cash equivalents	$	48,993		$	136,624
Receivables, net of allowances of $2,335 and $2,345, respectively	50,786			175,695
Inventories	33,647			140,475
Prepaid expenses and other current assets	33,822			46,998
Assets held for sale	1,345			—
Total current assets	168,593			499,792
Property and Equipment, net of accumulated depreciation of $201,954 and $358,493, respectively	89,268			188,833
Goodwill	—			2,564
Other Intangible Assets, net of accumulated amortization of $36,839 and $61,912, respectively	2,566			4,191
Other Assets	15,110			26,766
Total Assets	$	275,537		$	722,146
LIABILITIES AND SHARE OWNERS' EQUITY
Current Liabilities:
Current maturities of long-term debt	$	27		$	25
Accounts payable	60,622			174,436
Dividends payable	1,951			1,883
Accrued expenses	46,385			77,256
Total current liabilities	108,985			253,600
Other Liabilities:
Long-term debt, less current maturities	246			268
Other	20,615			26,745
Total other liabilities	20,861			27,013
Share Owners' Equity:
Common stock-par value $0.05 per share:
Class A - Shares authorized: 50,000,000                Shares issued: 1,906,000 and 11,212,000, respectively	95			560
Class B - Shares authorized: 100,000,000                Shares issued: 41,119,000 and 31,813,000, respectively	2,056			1,591
Additional paid-in capital	2,443			6,269
Retained earnings	188,920			487,040
Accumulated other comprehensive income	1,182			2,440
Less: Treasury stock, at cost:
Class A - 0 and 3,505,000 shares, respectively	—			(42,198		)
Class B - 4,156,000 and 1,082,000 shares, respectively	(49,005		)	(14,169		)
Total Share Owners' Equity	145,691			441,533
Total Liabilities and Share Owners' Equity	$	275,537		$	722,146

See Notes to Condensed Consolidated Financial Statements

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KIMBALL INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in Thousands, Except for Per Share Data)

	(Unaudited)						(Unaudited)
	Three Months Ended						Six Months Ended
	December 31						December 31
	2014			2013			2014			2013
Net Sales	$	151,418		$	139,049		$	295,864		$	280,851
Cost of Sales	104,822			93,243			202,085			192,799
Gross Profit	46,596			45,806			93,779			88,052
Selling and Administrative Expenses	43,422			42,776			86,927			84,914
Restructuring Expense	3,335			—			3,335			—
Operating Income (Loss)	(161		)	3,030			3,517			3,138
Other Income (Expense):
Interest income	50			53			91			108
Interest expense	(6		)	(6		)	(12		)	(13		)
Non-operating income (expense), net	183			777			(150		)	1,557
Other income (expense), net	227			824			(71		)	1,652
Income from Continuing Operations Before Taxes on Income	66			3,854			3,446			4,790
Provision for Income Taxes	67			1,766			1,930			1,693
Income (Loss) from Continuing Operations	$	(1	)	$	2,088		$	1,516		$	3,097
Income from Discontinued Operations, Net of Tax	2,678			7,134			9,157			15,308
Net Income	$	2,677		$	9,222		$	10,673		$	18,405
Earnings Per Share of Common Stock:
Basic Earnings (Loss) Per Share from Continuing Operations:
Class A	$	(0.02	)	$	0.05		$	0.02		$	0.07
Class B	$	0.00		$	0.06		$	0.04		$	0.08
Diluted Earnings (Loss) Per Share from Continuing Operations:
Class A	$	(0.02	)	$	0.05		$	0.02		$	0.07
Class B	$	0.00		$	0.06		$	0.04		$	0.08
Basic Earnings Per Share:
Class A	$	0.05		$	0.24		$	0.26		$	0.47
Class B	$	0.07		$	0.24		$	0.28		$	0.48
Diluted Earnings Per Share:
Class A	$	0.05		$	0.23		$	0.26		$	0.47
Class B	$	0.07		$	0.24		$	0.28		$	0.48
Dividends Per Share of Common Stock:
Class A	$	0.050		$	0.045		$	0.095		$	0.090
Class B	$	0.050		$	0.050		$	0.100		$	0.100
Average Number of Shares Outstanding:
Class A and B Common Stock:
Basic	38,862			38,434			38,786			38,372
Diluted	38,862			38,613			38,892			38,760

See Notes to Condensed Consolidated Financial Statements

4

KIMBALL INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in Thousands)

	Three Months Ended									Three Months Ended
	December 31, 2014									December 31, 2013
(Unaudited)	Pre-tax			Tax			Net of Tax			Pre-tax			Tax			Net of Tax
Net income							$	2,677								$	9,222
Other comprehensive income (loss):
Foreign currency translation adjustments	$	(484	)	$	—		$	(484	)	$	1,781		$	(97	)	$	1,684
Postemployment severance actuarial change	305			(122		)	183			(330		)	131			(199		)
Derivative gain (loss)	282			(68		)	214			(393		)	49			(344		)
Reclassification to (earnings) loss:
Derivatives	(130		)	16			(114		)	267			(56		)	211
Amortization of prior service costs	65			(26		)	39			72			(29		)	43
Amortization of actuarial change	(97		)	39			(58		)	104			(41		)	63
Other comprehensive income (loss)	$	(59	)	$	(161	)	$	(220	)	$	1,501		$	(43	)	$	1,458
Total comprehensive income							$	2,457								$	10,680

	Six Months Ended									Six Months Ended
	December 31, 2014									December 31, 2013
(Unaudited)	Pre-tax			Tax			Net of Tax			Pre-tax			Tax			Net of Tax
Net income							$	10,673								$	18,405
Other comprehensive income (loss):
Foreign currency translation adjustments	$	(6,070	)	$	—		$	(6,070	)	$	4,883		$	(271	)	$	4,612
Postemployment severance actuarial change	653			(260		)	393			122			(49		)	73
Derivative gain (loss)	2,513			(416		)	2,097			(898		)	164			(734		)
Reclassification to (earnings) loss:
Derivatives	(1,484		)	291			(1,193		)	617			(107		)	510
Amortization of prior service costs	136			(54		)	82			143			(57		)	86
Amortization of actuarial change	(77		)	31			(46		)	194			(77		)	117
Other comprehensive income (loss)	$	(4,329	)	$	(408	)	$	(4,737	)	$	5,061		$	(397	)	$	4,664
Total comprehensive income							$	5,936								$	23,069

See Notes to Condensed Consolidated Financial Statements

5

KIMBALL INTERNATIONAL, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in Thousands)

	(Unaudited)
	Six Months Ended
	December 31
	2014			2013
Cash Flows From Operating Activities:
Net income	$	10,673		$	18,405
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	13,071			15,727
Loss on sales of assets	646			41
Restructuring and asset impairment charges	1,132			1,509
Deferred income tax and other deferred charges	634			(4,676		)
Stock-based compensation	4,506			3,254
Excess tax benefits from stock-based compensation	(1,157		)	(43		)
Other, net	2,668			143
Change in operating assets and liabilities:
Receivables	(10,259		)	(131		)
Inventories	(17,954		)	(5,401		)
Prepaid expenses and other current assets	(8,515		)	(507		)
Accounts payable	13,605			9,351
Accrued expenses	(7,283		)	7,388
Net cash provided by operating activities	1,767			45,060
Cash Flows From Investing Activities:
Capital expenditures	(18,504		)	(15,664		)
Proceeds from sales of assets	624			1,473
Purchases of capitalized software	(865		)	(90		)
Other, net	71			607
Net cash used for investing activities	(18,674		)	(13,674		)
Cash Flows From Financing Activities:
Transfer of cash and cash equivalents to Kimball Electronics, Inc.	(63,006		)	—
Change in capital leases and long-term debt	(20		)	(19		)
Dividends paid to Share Owners	(3,786		)	(3,743		)
Excess tax benefits from stock-based compensation	1,157			43
Repurchase of employee shares for tax withholding	(3,823		)	(1,947		)
Net cash used for financing activities	(69,478		)	(5,666		)
Effect of Exchange Rate Change on Cash and Cash Equivalents	(1,246		)	272
Net (Decrease) Increase in Cash and Cash Equivalents	(87,631		)	25,992
Cash and Cash Equivalents at Beginning of Period	136,624			103,600
Cash and Cash Equivalents at End of Period	$	48,993		$	129,592
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for:
Income taxes	$	10,661		$	4,763
Interest expense	$	30		$	27

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 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 (“the Record Date”). On the Distribution Date, each of the Company's Share Owners received three shares of Kimball Electronics for every four shares of the Company held by such Share Owner on the Record Date. 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 following is a summary of the assets and liabilities distributed to Kimball Electronics on the Distribution Date or shortly thereafter:

(Amounts in Millions)
Assets:
Cash and cash equivalents	$	63
Receivables	133
Inventories	124
Prepaid expenses and other current assets	19
Net property and equipment	98
Goodwill	3
Net other intangible assets	1
Other long-term assets	15
	$	456
Liabilities:
Accounts payable	$	125
Accrued expenses	22
Other long-term liabilities	9
	$	156
Net Assets Distributed to Kimball Electronics, Inc.	$	300

The Company distributed $63 million of cash to Kimball Electronics, including the cash held by its foreign facilities, as Kimball Electronics began operation as an independent company. The cash distribution occurred in several installments immediately preceding the Distribution Date or shortly thereafter. In addition, $3.5 million of accumulated other comprehensive losses, net of tax, related to foreign translation, derivatives, and the postemployment benefit plan was transferred to Kimball Electronics.

7

The EMS segment was reclassified to discontinued operations in the Condensed Consolidated Statements of Income for all periods presented. Summarized financial results of discontinued operations through the October 31, 2014 spin-off date, were as follows:

	Three Months Ended				Six Months Ended
	December 31				December 31
(Amounts in Thousands, Except Per Share Data)	2014		2013		2014		2013
Net Sales	$	71,748	$	181,264	$	275,551	$	356,901
Income Before Taxes on Income	3,599		7,557		13,098		19,367
Provision for Income Taxes	921		423		3,941		4,059
Income from Discontinued Operations, Net of Tax	$	2,678	$	7,134	$	9,157	$	15,308
Income From Discontinued Operations per Class B Diluted Share	$	0.07	$	0.18	$	0.24	$	0.40

In connection with the spin-off of Kimball Electronics, the Company and Kimball Electronics entered into several agreements covering administrative and tax matters to provide or obtain services on a transitional basis, as needed, for varying periods after the spin-off. The administrative agreements cover various services such as information technology, human resources, taxation, and finance. The Company expects all services to be substantially complete within one year after the spin-off. The Company has retained all liabilities for U.S. federal, state, and local income taxes on income prior to the spin-off, as well as certain non-income taxes attributable to Kimball Electronics’ business. Kimball Electronics generally will be liable for all other taxes attributable to its business. In connection with the spin-off, the Company has adjusted its employee stock compensation awards and separated its retirement and post-employment benefit plans.

On October 30, 2014, holders of a sufficient number of shares of Class A common stock converted such shares into Class B common stock such that the number of outstanding shares of Class A common stock is, after such conversions, less than 15% of the total number of issued and outstanding shares of both Class A common stock and Class B common stock. Pursuant to the Company’s Amended and Restated Articles of Incorporation if at any time the number of shares of Class A common stock issued and outstanding is less than 15% of the total number of issued and outstanding shares of both Class A common stock and Class B common stock, then all of the rights, preferences, limitations and restrictions relating to Class B common stock shall become the same as the rights, preferences, limitations and restrictions of Class A common stock, without any further action of or by its Share Owners, and all distinctions between Class A common stock and Class B common stock shall be 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. The elimination of such distinctions, which occurred on October 30, 2014, is referred to as the “stock unification.” As a result of the stock unification, Class A common stock and Class B common stock now vote as a single class (except as otherwise required by applicable law) on all matters submitted to a vote of the Company’s Share Owners.

Note 3. Recent Accounting Pronouncements and Supplemental Information

Recent Accounting Pronouncements:

In June 2014, the Financial Accounting Standards Board (“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. The guidance is effective for our first quarter fiscal year 2018 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

8

guidance recognized at the date of initial application and providing certain additional disclosures. 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 is effective prospectively for disposals or components of our business classified as held for sale during the first quarter of fiscal year 2016. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

In July 2013, the FASB issued guidance to eliminate the diversity in practice related to the financial statement presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The guidance became effective prospectively for our first quarter fiscal year 2015 financial statements. 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.

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 effective tax rate for the first half of fiscal year 2015 of 56.0% was unfavorably impacted as our combined state tax rate is lower post spin-off, requiring a $0.4 million adjustment to deferred taxes in the current period which increased our fiscal 2015 year-to-date tax expense and effective tax rate. In addition, a portion of our spin-off expenses which are nondeductible in the U.S. also unfavorably impacted the current year effective tax rate. The impact to our effective tax rate is magnified in periods when our pre-tax income is lower. Our effective tax rate for the first half of fiscal year 2014 was 35.3%.

Non-operating Income (Expense), net:

The non-operating income (expense), net line item includes the impact of such items as foreign currency rate movements and related derivative gain or loss, fair value adjustments on Supplemental Employee Retirement Plan (“SERP”) investments, investment gain or loss, 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) line, from continuing operations were:

	Three Months Ended						Six Months Ended
	December 31						December 31
(Amounts in Thousands)	2014			2013			2014			2013
Foreign Currency/Derivative Loss	$	(17	)	$	(38	)	$	(42	)	$	(16	)
Gain on Supplemental Employee Retirement Plan Investments	352			973			166			1,854
Other	(152		)	(158		)	(274		)	(281		)
Non-operating income (expense), net	$	183		$	777		$	(150	)	$	1,557

Note 4. Inventories

Inventory components were as follows:

(Amounts in Thousands)	December 31, 2014			June 30, 2014
Finished products	$	26,267		$	37,373
Work-in-process	1,971			13,808
Raw materials	19,826			103,083
Total FIFO inventory	48,064			154,264
LIFO reserve	(14,417		)	(13,789		)
Total inventory	$	33,647		$	140,475

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 six-month periods ended December 31, 2014 and 2013 was immaterial. The reduction in FIFO inventory from June 30, 2014 to December 31, 2014 was due to the spin-off of Kimball Electronics, Inc. from Kimball International, Inc. on October 31, 2014.

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Note 5. Accumulated Other Comprehensive Income (Loss)

During the three months ended December 31, 2014 and 2013, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows:

Accumulated Other Comprehensive Income (Loss)							Postemployment Benefits
(Amounts in Thousands)	Foreign Currency Translation Adjustments			Derivative Gain (Loss)			Prior Service Costs			Net Actuarial Gain (Loss)			Accumulated Other Comprehensive Income (Loss)
Balance at September 30, 2014	$	(677	)	$	(2,607	)	$	(77	)	$	1,284		$	(2,077	)
Other comprehensive income (loss) before reclassifications	(484		)	214			—			183			(87		)
Reclassification to (earnings) loss	—			(114		)	39			(58		)	(133		)
Distribution of Kimball Electronics, Inc.	1,161			2,507			8			(197		)	3,479
Net current-period other comprehensive income (loss)	677			2,607			47			(72		)	3,259
Balance at December 31, 2014	$	—		$	—		$	(30	)	$	1,212		$	1,182
Balance at September 30, 2013	$	3,783		$	(4,450	)	$	(249	)	$	645		$	(271	)
Other comprehensive income (loss) before reclassifications	1,684			(344		)	—			(199		)	1,141
Reclassification to (earnings) loss	—			211			43			63			317
Net current-period other comprehensive income (loss)	1,684			(133		)	43			(136		)	1,458
Balance at December 31, 2013	$	5,467		$	(4,583	)	$	(206	)	$	509		$	1,187

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During the six months ended December 31, 2014 and 2013, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows:

Accumulated Other Comprehensive Income (Loss)							Postemployment Benefits
(Amounts in Thousands)	Foreign Currency Translation Adjustments			Derivative Gain (Loss)			Prior Service Costs			Net Actuarial Gain (Loss)			Accumulated Other Comprehensive Income (Loss)
Balance at June 30, 2014	$	4,909		$	(3,411	)	$	(120	)	$	1,062		$	2,440
Other comprehensive income (loss) before reclassifications	(6,070		)	2,097			—			393			(3,580		)
Reclassification to (earnings) loss	—			(1,193		)	82			(46		)	(1,157		)
Distribution of Kimball Electronics, Inc.	1,161			2,507			8			(197		)	3,479
Net current-period other comprehensive income (loss)	(4,909		)	3,411			90			150			(1,258		)
Balance at December 31, 2014	$	—		$	—		$	(30	)	$	1,212		$	1,182
Balance at June 30, 2013	$	855		$	(4,359	)	$	(292	)	$	319		$	(3,477	)
Other comprehensive income (loss) before reclassifications	4,612			(734		)	—			73			3,951
Reclassification to (earnings) loss	—			510			86			117			713
Net current-period other comprehensive income (loss)	4,612			(224		)	86			190			4,664
Balance at December 31, 2013	$	5,467		$	(4,583	)	$	(206	)	$	509		$	1,187

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

Reclassifications from Accumulated Other Comprehensive Income (Loss)	Three Months Ended						Six Months Ended						Affected Line Item in the Condensed Consolidated Statements of Income
	December 31,						December 31,
(Amounts in Thousands)	2014			2013			2014			2013
Derivative Gain (Loss) (1)	$	114		$	(211	)	$	1,193		$	(510	)	Income from Discontinued Operations, Net of Tax
Postemployment Benefits:
Amortization of Prior Service Costs (2)	$	(40	)	$	(42	)	$	(79	)	$	(84	)	Cost of Sales
	(21		)	(19		)	(43		)	(38		)	Selling and Administrative Expenses
	24			24			48			49			Provision for Income Taxes
	(37		)	(37		)	(74		)	(73		)	Income (Loss) from Continuing Operations
	$	(2	)	$	(6	)	$	(8	)	$	(13	)	Income from Discontinued Operations, Net of Tax
Amortization of Actuarial Gain (Loss) (2)	$	48		$	(55	)	$	30		$	(110	)	Cost of Sales
	38			(25		)	34			(49		)	Selling and Administrative Expenses
	(34		)	32			(25		)	63			Provision for Income Taxes
	52			(48		)	39			(96		)	Income (Loss) from Continuing Operations
	$	6		$	(15	)	$	7		$	(21	)	Income from Discontinued Operations, Net of Tax
Total Reclassifications for the Period	$	15		$	(85	)	$	(35	)	$	(169	)	Income (Loss) from Continuing Operations
	118			(232		)	1,192			(544		)	Income from Discontinued Operations, Net of Tax
	$	133		$	(317	)	$	1,157		$	(713	)	Net Income

Amounts in parentheses indicate reductions to income.

(1) See Note 10 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.

(2) See Note 12 - 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 December 31, 2014, we had a maximum financial exposure from unused standby letters of credit totaling $1.1 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

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of December 31, 2014 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 six months ended December 31, 2014 and 2013 were as follows:

	Six Months Ended
	December 31
(Amounts in Thousands)	2014			2013
Product Warranty Liability at the beginning of the period	$	3,221		$	2,384
Additions to warranty accrual (including changes in estimates)	475			1,900
Settlements made (in cash or in kind)	(374		)	(879		)
Distribution of Kimball Electronics, Inc.	(910		)	—
Product Warranty Liability at the end of the period	$	2,412		$	3,405

Note 7. Restructuring Expense

We recognized pre-tax restructuring expense related to continuing operations of $3.3 million in both the three and six months ended December 31, 2014, respectively, and recognized no restructuring expense related to continuing operations in the three and six months ended December 31, 2013. 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.

For more information related to restructuring activities that are included in the discontinued operations line item on the Company's Condensed Consolidated Statements of Income, refer to our Annual Report on Form 10-K for the fiscal year ended June 30, 2014.

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.

Key factors in the decision to consolidate the Post Falls operation into the Indiana facilities include the improvement of customer delivery, supply chain dynamics, and transportation costs. The transfer of work involves 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 will be carefully managed over a period of seven to eight quarters to ensure no customer disruptions. The consolidation activities began immediately and we are actively marketing for sale the Post Falls, Idaho facility. Incremental capital for equipment purchases to transfer this operation to Indiana is approximately $5 million, exclusive of the capital reduction that is estimated to occur upon the sale of the Post Falls facility. No changes in operating income are anticipated until the later quarters of the transfer of work. When fully implemented in seven to eight quarters, we anticipate pre-tax savings of approximately $5 million per year thereafter.

The reduction of our plane fleet from two jets to one reduces 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 and manufacturing locations, while the remaining jet was used primarily for management travel. The plane used primarily for management travel has been placed for sale, and the completion of this restructuring is contingent on the sale of the aircraft. An impairment charge was recorded on the held-for-sale plane due to the book value of the plane exceeding current fair market value estimates less selling costs. As a result of the aircraft fleet reduction, we anticipate annual pre-tax savings of $0.8 million, with those savings starting in the third quarter of fiscal year 2015. 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.

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We currently estimate that the pre-tax restructuring charges will be approximately $10.2 million, with $3.3 million recorded in the second quarter of fiscal year 2015, and the remainder is expected to be incurred over the remaining anticipated transition period. The restructuring charges are expected to consist of approximately $5.7 million of transition, training, and other employee costs, $3.1 million of plant closure and other exit costs, and $1.4 million of non-cash asset impairment. Approximately 86% of the total cost estimate is expected to be cash expense.

Summary of Restructuring Plan:
	Accrued June 30, 2014		Six Months Ended December 31, 2014									Total Charges Incurred Since Plan Announcement		Total Expected Plan Costs
(Amounts in Thousands)			Amounts Charged Cash		Amounts Charged  Non-cash		Amounts Utilized/ Cash Paid			Accrued December 31, 2014 (1)
Capacity Realignment and Post Falls, Idaho Exit
Transition and Other Employee Costs	$	—	$	1,913	$	—	$	—		$	1,913	$	1,913	$	5,432
Asset Write-downs	—		—		81		(81		)	—		81		334
Plant Closure and Other Exit Costs	—		66		—		(66		)	—		66		3,113
Total	$	—	$	1,979	$	81	$	(147	)	$	1,913	$	2,060	$	8,879
Plane Fleet Reduction
Transition and Other Employee Costs	$	—	$	224	$	—	$	—		$	224	$	224	$	224
Asset Write-downs	—		—		1,051		(1,051		)	—		1,051		1,051
Total	$	—	$	224	$	1,051	$	(1,051	)	$	224	$	1,275	$	1,275
Total Restructuring Plan	$	—	$	2,203	$	1,132	$	(1,198	)	$	2,137	$	3,335	$	10,154

(1) The accrued restructuring balance at December 31, 2014 includes $0.5 million recorded in current liabilities and $1.6 million recorded in other long-term liabilities.

Note 8. Assets Held for Sale

At December 31, 2014, an aircraft which had been used primarily for management travel totaling $1,345, in thousands, was classified as held for sale. A pre-tax impairment charge, in thousands, of $1,051 was recorded on the Restructuring Expense line of the Condensed Consolidated Statements of Income during the second quarter of fiscal year 2015 due to the book value of the aircraft exceeding current fair market value estimates less selling costs.

At June 30, 2014, no assets were classified as held for sale.

Note 9. 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 six months ended December 31, 2014. 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, 2014.

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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
Derivative Assets: Foreign exchange contracts	2	Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk.
Trading securities: Mutual funds in nonqualified SERP	1	Market - Quoted market prices
Derivative Liabilities: Foreign exchange contracts	2	Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball's non-performance risk.

Recurring Fair Value Measurements:

As of December 31, 2014 and June 30, 2014, the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows:

	December 31, 2014
(Amounts in Thousands)	Level 1		Level 2		Total
Assets
Cash equivalents	$	25,901	$	—	$	25,901
Derivatives: Foreign exchange contracts	—		—		—
Trading Securities: Mutual funds in nonqualified SERP	18,369		—		18,369
Total assets at fair value	$	44,270	$	—	$	44,270
Liabilities
Derivatives: Foreign exchange contracts	$	—	$	—	$	—
Total liabilities at fair value	$	—	$	—	$	—
	June 30, 2014
(Amounts in Thousands)	Level 1		Level 2		Total
Assets
Cash equivalents	$	103,845	$	—	$	103,845
Derivatives: Foreign exchange contracts	—		800		800
Trading Securities: Mutual funds in nonqualified SERP	23,106		—		23,106
Total assets at fair value	$	126,951	$	800	$	127,751
Liabilities
Derivatives: Foreign exchange contracts	$	—	$	699	$	699
Total liabilities at fair value	$	—	$	699	$	699

The reduction in balances from June 30, 2014 to December 31, 2014 was due to the spin-off of the EMS segment on October 31, 2014. We had no purchases or sales of Level 3 assets during the three and six months ended December 31, 2014.

The nonqualified supplemental employee retirement plan (“SERP”) assets consist primarily of equity funds, balanced 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 11 - Investments of Notes to Condensed Consolidated Financial Statements for further information regarding the SERP.

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Non-Recurring Fair Value Measurements:

Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments when events or circumstances indicate a significant adverse effect on the fair value of the asset. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs.

Non-recurring fair value adjustment	Level	Valuation Technique/Inputs Used
Impairment of long-lived assets (property and equipment)	2	Market - Quoted market prices for similar assets sold, adjusted for features specific to our aircraft

During the three months ended December 31, 2014, we classified an aircraft as held for sale and accordingly recognized pre-tax impairment of $1.1 million due to a reduction in its market value. During the three months ended December 31, 2013, we had no fair value adjustments applicable to items that are subject to non-recurring fair value measurement after the initial measurement date. During the six months ended December 31, 2013, we classified an aircraft as held for sale and accordingly recognized pre-tax impairment of $1.2 million due to a significant downward shift in the market for private aviation aircraft.

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
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

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.

Note 10. 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.

As of December 31, 2014, after the spin-off of the EMS segment, we held no derivative instruments. As of June 30, 2014, the fair value of outstanding derivative instruments was recognized on the balance sheet as a derivative asset or liability. When

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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 (Loss), 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.

See Note 9 - Fair Value of Notes to Condensed Consolidated Financial Statements for further information regarding the fair value of derivative assets and liabilities and the Condensed Consolidated Statements of Comprehensive Income for the changes in deferred derivative gains and losses. Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets and derivative gains and losses in the Condensed Consolidated Statements of Income are presented below.

Fair Value of Derivative Instruments on the Condensed Consolidated Balance Sheets

	Asset Derivatives					Liability Derivatives
		Fair Value As of					Fair Value As of
(Amounts in Thousands)	Balance Sheet Location	December 31, 2014		June 30, 2014		Balance Sheet Location	December 31, 2014		June 30, 2014
Derivatives designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses and other current assets	$	—	$	599	Accrued expenses	$	—	$	241
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses and other current assets	—		201		Accrued expenses	—		458
Total derivatives		$	—	$	800		$	—	$	699

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

	Three Months Ended					Six Months Ended
	December 31					December 31
(Amounts in Thousands)	2014		2013			2014		2013
Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion):
Foreign exchange contracts	$	282	$	(393	)	$	2,513	$	(898	)

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The Effect of Derivative Instruments on Condensed Consolidated Statements of Income

		Three Months Ended						Six Months Ended
(Amounts in Thousands)		December 31						December 31
Derivatives in Cash Flow Hedging Relationships	Location of Gain or (Loss)	2014			2013			2014		2013
Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion):
Foreign exchange contracts	Income from Discontinued Operations, Net of Tax	$	130		$	(267	)	$	1,484	$	(617	)
Derivatives Not Designated as Hedging Instruments
Amount of Pre-Tax Gain or (Loss) Recognized in Income on Derivatives:
Foreign exchange contracts	Income from Discontinued Operations, Net of Tax	$	(184	)	$	(294	)	$	740	$	(838	)
Stock warrants	Non-operating income (expense), net	—			4			—		8
Total		$	(184	)	$	(290	)	$	740	$	(830	)
Total Derivative Pre-Tax Gain (Loss) Recognized in Income		$	(54	)	$	(557	)	$	2,224	$	(1,447	)

Note 11. 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. The change in net unrealized holding losses recognized in continuing operations for the six months ended December 31, 2014 and 2013 was, in thousands, $389 and $258, respectively.

SERP asset and liability balances were as follows:

(Amounts in Thousands)	December 31, 2014		June 30, 2014
SERP investments - current asset	$	8,632	$	8,812
SERP investments - other long-term asset	9,737		14,294
Total SERP investments	$	18,369	$	23,106
SERP obligation - current liability	$	8,632	$	8,812
SERP obligation - other long-term liability	9,737		14,294
Total SERP obligation	$	18,369	$	23,106

The reduction in SERP investments and obligation from June 30, 2014 to December 31, 2014 was due primarily to the spin-off of Kimball Electronics on October 31, 2014.

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Note 12. 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 has 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					Six Months Ended
	December 31					December 31
(Amounts in Thousands)	2014			2013		2014			2013
Service cost	$	159		$	246	$	390		$	483
Interest cost	26			35		56			69
Amortization of prior service costs	65			72		136			143
Amortization of actuarial (income) loss	(97		)	104		(77		)	194
Net periodic benefit cost — Total cost	$	153		$	457	$	505		$	889
Less: Discontinued operations	11			97		81			184
Net periodic benefit cost — Continuing operations	$	142		$	360	$	424		$	705

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 13. Stock Compensation Plan

In connection with the spin-off of the EMS segment the Company entered into the Amendment of Annual and/or Long-Term Performance Share Award Agreement, which adjusted employee performance share awards to preserve the fair value of the awards before and after the spin-off. This modification did not result in additional compensation expense.

During fiscal year 2015, the following stock compensation was awarded to officers and key employees. 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, 2014.

Unrestricted Shares (1)	Quarter Awarded	Shares	Grant Date Fair Value (2)
Unrestricted Shares (Director Compensation) – Class B	1st Quarter	17,335		$16.01
Unrestricted Shares – Class B	2nd Quarter	17,529		$9.10
Restricted Share Units (3)	Quarter Awarded	Shares	Grant Date Fair Value (2)
Restricted Share Units – Class B	2nd Quarter	159,416		$9.10

(1) Unrestricted shares were awarded to non-employee members of the Board of Directors as compensation for director's fees as a result of directors' elections to receive unrestricted shares in lieu of cash payment. Director's fees are expensed over the period that directors earn the compensation. Other unrestricted shares were awarded to key employees as consideration for service to the Company. Unrestricted shares do not have vesting periods, holding periods, restrictions on sale, or other restrictions.

(2) The grant date fair value of the unrestricted and restricted shares was based on the stock price at the date of the award.

(3) Restricted share units (RSU) were awarded to officers. Vesting occurs at the end of each of the Company's next three fiscal years ending June 30, 2015, June 30, 2016, and June 30, 2017. Upon vesting, the outstanding number of RSUs and the value of dividends accumulated over the vesting period are converted to shares of Class B common stock.

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Note 14. Variable Interest Entities

Kimball's involvement with a variable interest entity (“VIE”) is limited to a situation 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 the VIE is limited to a note receivable related to the sale of an Indiana facility. The carrying value of the note receivable, net of a $0.5 million allowance, was $0.9 million as of both December 31, 2014 and June 30, 2014. 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 VIE, and thus our exposure and risk of loss related to the VIE is limited to the carrying value of the notes receivable. Kimball did not provide additional financial support to the VIE during the quarter ended December 31, 2014.

Note 15. 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 December 31, 2014 and June 30, 2014, Kimball had no material past due outstanding notes receivable.

	As of December 31, 2014						As of June 30, 2014
(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	$	1,369	$	489	$	880	$	1,392	$	489	$	903
Other Notes Receivable	210		144		66		223		149		74
Total	$	1,579	$	633	$	946	$	1,615	$	638	$	977

Note 16. Credit Agreement

In connection with the spin-off, on October 31, 2014 Kimball entered into a new credit facility. The new Kimball credit agreement, which replaced its previously existing primary credit facility, has a maturity date of October 31, 2019 and allows for up to $30 million in borrowings, with an option to increase the amount available for borrowing to $55 million at the Company's request, subject to participating banks' consent. The complete credit agreement was filed as Exhibit 10.4 to our Current Report on Form 8-K filed on November 3, 2014.

At December 31, 2014, we had $1.1 million in letters of credit outstanding, which reduced our borrowing capacity on the credit facility.

The revolving loans under the Credit Agreement may consist of, at the Company's election, advances in U.S. dollars or advances in any other currency that is agreed to by the lenders. The proceeds of the revolving loans are to be used for general corporate purposes of the Company including acquisitions. A portion of the credit facility, not to exceed $10 million of the principal amount, will be available for the issuance of letters of credit. A commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 20.0 to 25.0 basis points per annum as determined by the Company's ratio of consolidated total indebtedness to adjusted consolidated EBITDA.

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The interest rate is dependent on the type of borrowings and will be one of the following two options:

• The adjusted London Interbank Offered Rate (“Adjusted LIBO Rate” as defined in the Credit Agreement) in effect two business days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period, plus the Eurocurrency Loans margin which can range from 125.0 to 175.0 basis points based on the Company's ratio of consolidated total indebtedness to adjusted consolidated EBITDA; or

• The Alternate Base Rate, which is defined as the highest of the fluctuating rate per annum equal to the higher of

a. JPMorgan's prime rate;

b. 1% per annum above the Adjusted LIBO rate; or

c. 1/2% per annum above the Federal funds rate;

plus the ABR Loans spread which can range from 25.0 to 75.0 basis points based on the Company's ratio of consolidated total indebtedness to adjusted consolidated EBITDA.

The Company's financial covenants under the Credit Agreement require:

• An adjusted leverage ratio of (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, and

• A fixed charge coverage ratio of (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.

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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”) is a leading manufacturer of design driven, technology savvy, high quality furnishings sold under the Company’s family of brands: National Office Furniture, Kimball Office and Kimball Hospitality. Our diverse portfolio provides solutions for the workplace, learning, healing, and hospitality environments. Customers can access our products globally through a variety of distribution channels.  Recognized with a reputation for excellence and a recipient of the Forbes 2014 America’s Most Trustworthy Companies designation, Kimball International is committed to a high performance culture that is committed to sound ethics, continuous improvement, and social responsibility.

Key economic indicators currently point toward continued strengthening in the overall economy. However, uncertainties still exist and may pose a threat to our future growth as they have the tendency to cause disruption in business strategy, execution, and timing in many of 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 December 2014) projects a year-over-year increase of 8% for calendar year 2015. The forecast for two of the leading indicators for the hospitality furniture market (January 2015 PwC and September 2014 PKF Hospitality Research reports) include an increase in occupancy rates of 1% and an increase in RevPAR (Revenue Per Available Room) of 7% for calendar year 2015 over calendar year 2014.

We invest in capital expenditures prudently for projects in support of both organic growth and 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, group, or 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 $77.9 million at December 31, 2014.

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 plans 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 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 as some customers continue to defer the purchase of new furniture for large projects driven by fiscal uncertainty 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.

• 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.

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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 (the “Record Date”). On the Distribution Date, each of the Company's Share Owners received three shares of Kimball Electronics for every four shares of the Company held by such Share Owner on the Record Date. 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”.

In connection with the spin-off of Kimball Electronics, the Company and Kimball Electronics entered into several agreements covering administrative and tax matters to provide or obtain services on a transitional basis, as needed, for varying periods after the spin-off. The administrative agreements cover various services such as information technology, human resources, taxation, and finance. The Company expects all services to be substantially complete within one year after the spin-off.

The Company distributed $63 million of cash to Kimball Electronics, including the cash held by its foreign facilities, as Kimball Electronics began operation as an independent company. The cash distribution occurred in several installments immediately preceding the October 31, 2014 spin-off date or shortly thereafter.

The EMS business was reclassified to discontinued operations for all periods presented. Financial results of the discontinued operations were as follows:

	Three Months Ended		Six Months Ended
	December 31		December 31
(Amounts in Thousands, Except Per Share Data)	2014	2013	2014	2013
Net Sales of Discontinued Operations	$71,748	$181,264	$275,551	$356,901
Income from Discontinued Operations, Net of Tax	$2,678	$7,134	$9,157	$15,308
Income From Discontinued Operations per Class B Diluted Share	$0.07	$0.18	$0.24	$0.40

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Financial Overview

	At or for the Three Months Ended								For the Six Months Ended
	December 31								December 31
(Amounts in Millions)	2014			2013			% Change		2014			2013			% Change
Net Sales	$	151.4		$	139.0		8.9	%	$	295.9		$	280.9		5.3	%
Gross Profit	46.6			45.8			1.7	%	93.8			88.1			6.5	%
Selling and Administrative Expense	43.4			42.8			1.5	%	86.9			84.9			2.4	%
Restructuring Expense	3.3			—					3.3			—
Operating Income	(0.2		)	3.0			(105.3	%)	3.5			3.1			12.1	%
Operating Income %	(0.1		%)	2.2		%			1.2		%	1.1		%
Income (Loss) from Continuing Operations	—			2.1			(100.0	%)	1.5			3.1			(51.0	%)
Income from Discontinued Operations, Net of Tax	2.7			7.1			(62.5	%)	9.2			15.3			(40.2	%)
Net Income	$	2.7		$	9.2		(71.0	%)	$	10.7		$	18.4		(42.0	%)
Open Orders	$	119.5		$	99.4		20.2	%

Net Sales by End Market Vertical
	Three Months Ended						Six Months Ended
	December 31						December 31
(Amounts in Millions)	2014		2013		% Change		2014		2013		% Change
Education	$	7.8	$	8.4	(7	%)	$	20.6	$	23.6	(12	%)
Finance	13.6		17.5		(22	%)	28.9		31.8		(9	%)
Government	27.3		22.4		22	%	54.5		47.8		14	%
Healthcare	14.8		15.4		(4	%)	29.4		31.8		(8	%)
Hospitality	35.4		28.8		23	%	60.7		57.4		6	%
Other Commercial	52.5		46.5		13	%	101.8		88.5		15	%
Total Net Sales	$	151.4	$	139.0	9	%	$	295.9	$	280.9	5	%

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

Second quarter fiscal year 2015 consolidated net sales were $151.4 million compared to second quarter fiscal year 2014 net sales of $139.0 million, or a 9% increase. Consolidated net sales for the first half of fiscal year 2015 were $295.9 million compared to net sales of $280.9 million for the first half of fiscal year 2014, or a 5% increase. For both the quarter and year-to-date periods increased sales within the hospitality, government, and other commercial vertical markets more than offset lower sales within the finance, education, and healthcare vertical markets. The positive impact of price increases also contributed to the net sales increase. Our hospitality vertical market increased over the prior year on strength in sales of non-custom hospitality furniture, and the government vertical market is showing momentum as government sales steadily recover from recession levels. Vertical market sales levels can fluctuate depending on the mix of projects in a given quarter.

In the second quarter of fiscal year 2015 we recorded approximate break-even income from continuing operations and earnings per Class B diluted share, inclusive of $2.0 million, or $0.05 per Class B diluted share, of after-tax restructuring charges, and $1.8 million, or $0.05 per Class B diluted share, of incremental after-tax costs related to the spin-off of our EMS segment which was completed on October 31, 2014. We recorded income from continuing operations of $2.1 million, or $0.06 per Class B diluted share in the second quarter of fiscal year 2014.

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In the first half of fiscal year 2015 we recorded income from continuing operations of $1.5 million, or $0.04 per Class B diluted share, inclusive of $2.0 million, or $0.05 per Class B diluted share, of after-tax restructuring charges, and $2.9 million, or $0.08 per Class B diluted share, of incremental after-tax external costs related to the spin-off of our EMS segment. We recorded income from continuing operations of $3.1 million, or $0.08 per Class B diluted share in the first half of fiscal year 2014.

Open orders at December 31, 2014 increased 20% when compared to the open order level as of December 31, 2013 primarily due to a large custom hospitality order received in November 2014. Open orders at a point in time may not be indicative of future sales trends.

Gross profit as a percent of net sales decreased 2.1 percentage points in the second quarter of fiscal year 2015 compared to the second quarter of fiscal year 2014. The decline in gross profit as a percent of net sales was driven by discounting and an unfavorable shift in sales mix to lower margin product. Benefits realized from price increases favorably impacted gross profit. For the year-to-date period of fiscal year 2015 compared to 2014, gross profit as a percent of net sales improved 0.3 of a percentage point primarily due to sales price increases.

As a percent of net sales, selling and administrative expenses in the second quarter and year-to-date period of fiscal year 2015 compared to the same periods of fiscal year 2014 decreased 2.0 percentage points and 0.9 of a percentage point, respectively, due to the increased sales volumes. In absolute dollars, selling and administrative expenses in the second quarter and year-to-date period of fiscal year 2015 compared to the same periods of fiscal year 2014 and increased 1.5% and 2.4%, respectively. Incremental expenses of $1.7 million and $2.9 million were incurred in the second quarter and year-to-date period of fiscal year 2015, respectively, related to the spin-off of our EMS business, a majority of which were for legal services and asset impairment. In addition, higher employee benefit costs and increased sales and marketing activities contributed to the increased selling and administrative costs in both periods. Partially offsetting the aforementioned increased expenses, incentive compensation expense declined in both the second quarter and year-to-date period of fiscal year 2015 compared to the same periods of fiscal year 2014 due to the retirement of key executives as of the spin-off date and changes in the structure of incentive compensation plans post-spin. We had a favorable variance within selling and administrative expenses of $0.6 million and $1.7 million for the second quarter and year-to-date period related to the normal revaluation to fair value of our Supplemental Employee Retirement Plan (“SERP”) liability. The impact from the change in the SERP liability that was recognized in selling and administrative expenses was offset with the change in fair value of the SERP investments which was recorded in Other Income (Expense), and thus there was no effect on income from continuing operations. Also impacting the year-to-date comparison, we had a favorable year-over-year variance driven by a $1.2 million impairment charge related to the decision to downsize the plane fleet from three jets to two in the first quarter of fiscal year 2014.

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 remaining jet is primarily used for customer tours of production facilities and showrooms. We recognized pre-tax restructuring expense related to continuing operations of $3.3 million in both the three and six months ended December 31, 2014, respectively, and recognized no restructuring expense in the three and six months ended December 31, 2013. 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						Six Months Ended
	December 31						December 31
(Amounts in Thousands)	2014			2013			2014			2013
Interest Income	$	50		$	53		$	91		$	108
Interest Expense	(6		)	(6		)	(12		)	(13		)
Foreign Currency/Derivative Loss	(17		)	(38		)	(42		)	(16		)
Gain on Supplemental Employee Retirement Plan Investments	352			973			166			1,854
Other	(152		)	(158		)	(274		)	(281		)
Other Income (Expense), net	$	227		$	824		$	(71	)	$	1,652

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Our effective tax rate for the first half of fiscal year 2015 of 56.0% was unfavorably impacted as our combined state tax rate is lower post spin-off, requiring a $0.4 million adjustment to deferred taxes in the current period which increased our fiscal 2015 year-to-date tax expense and effective tax rate. In addition, a portion of our spin-off expenses which are nondeductible in the U.S. also unfavorably impacted the current year effective tax rate. The impact to our effective tax rate is magnified in periods when our pre-tax income is lower. Our effective tax rate for the first half of fiscal year 2014 was 35.3%.

The June 30, 2014 balance sheet was prior to the spin-off transaction which was completed on October 31, 2014, thus includes the Kimball Electronics balances. Comparing the balance sheet as of December 31, 2014 to June 30, 2014, excluding the impact of the spin-off of Kimball Electronics, we had increased inventory levels primarily to support sales growth and the lead time requirements of select customers, increased accounts payable balance in conjunction with the increased inventory purchases near the end of the second quarter and an increase in deposits received on custom furniture orders which are classified in accounts payable. In addition, the accrued expenses balance declined due to the payment of accrued incentive compensation during the first half of fiscal year 2015.

Liquidity and Capital Resources

The June 30, 2014 balance sheet includes the discontinued operations resulting from the spin-off of Kimball Electronics while the December 31, 2014 balance sheet is post-spin and thus does not include the discontinued operations. Likewise the cash flow statement includes Kimball Electronics activity up to the October 31, 2014 completion of spin-off.

Our cash and cash equivalents position declined to $49.0 million at December 31, 2014 from $136.6 million at June 30, 2014, primarily due to the transfer of $63.0 million of cash to Kimball Electronics in conjunction with the spin-off.

Working capital at December 31, 2014 was $59.6 million compared to working capital of $246.2 million at June 30, 2014. The current ratio was 1.5 at December 31, 2014 and 2.0 at June 30, 2014. The change in working capital and current ratio was primarily driven by the spin-off of Kimball Electronics.

Kimball's short-term liquidity available, represented as cash and cash equivalents plus the unused amount of our credit facilities, totaled $77.9 million at December 31, 2014. We had no short-term borrowings outstanding as of December 31, 2014 or June 30, 2014.

Cash Flows

Cash flows include Kimball Electronics cash flows through the October 31, 2014 spin-off date, as cash management was centralized prior to the spin-off. 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 half of fiscal years 2015 and 2014.

	Six Months Ended
	December 31
(Amounts in millions)	2014			2013
Net cash provided by operating activities	$	1,767		$	45,060
Net cash used for investing activities	$	(18,674	)	$	(13,674	)
Net cash used for financing activities	$	(69,478	)	$	(5,666	)

Cash Flows from Operating Activities

For the first half of fiscal years 2015 and 2014, net cash provided by operating activities was $1.8 million and $45.1 million, respectively. Changes in working capital balances used $30.4 million of cash in the first half of fiscal year 2015 and provided $10.7 million in the first half of fiscal year 2014.

The $30.4 million usage of cash from changes in working capital balances in the first half of fiscal year 2015 was primarily driven by increases in our inventory and accounts receivable balances. Approximately half of the $18.0 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. The $10.3 million usage of cash from an increase in accounts receivable balance was primarily driven by the discontinued EMS business prior to spin date. The $10.7 million cash provided by changes in working capital balances in the first half of fiscal year 2014 was primarily due to increased accounts payable balances.

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As estimated on a continuing operations basis, our measure of accounts receivable performance, also referred to as Days Sales Outstanding (“DSO”), for the six-month periods ended December 31, 2014 and December 31, 2013 was approximately 30 days and approximately 32 days, respectively. The favorable variance was driven by improved collection results. We define DSO as the average of monthly trade accounts and notes receivable divided by an average day's net sales. As estimated on a continuing operations basis, our Production Days Supply on Hand (“PDSOH”) of inventory measure for the six-month period endedDecember 31, 2014 increased to approximately 42 days from approximately 37 days from the six-month period endedDecember 31, 2013. The PDSOH increase was driven by increased inventory levels to support growth. 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 half of fiscal years 2015 and 2014, we reinvested $19.4 million and $15.8 million, respectively, into capital investments for the future. The current year-to-date capital investments were primarily for manufacturing equipment in our discontinued EMS business and facility improvements. The prior-year-to-date capital investments were primarily for manufacturing equipment in our discontinued EMS business and the continuing furniture business.

Cash Flows from Financing Activities

Kimball transferred $63.0 million of cash to Kimball Electronics in conjunction with the spin-off and paid $3.8 million of dividends in the six-month period ended December 31, 2014 and paid $3.7 million of dividends in the six-month period ended December 31, 2013. Consistent with our historical dividend policy, the Company's Board of Directors evaluates the appropriate dividend payment on a quarterly basis.

Credit Facility

On the October 31, 2014 spin off date, we entered into a new $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 December 31, 2014 and June 30, 2014, we had no short-term borrowings outstanding. At December 31, 2014, we had $1.1 million in letters of credit outstanding, which reduced our borrowing capacity on the credit facility. The complete credit agreement was filed as Exhibit 10.4 to our Current Report on Form 8-K filed on November 3, 2014.

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 this current credit facility from October 31, 2014 through December 31, 2014, and prior to October 31, 2014 we were also in compliance with the debt covenants of the credit facilities held at that time.

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	December 31, 2014	Credit Agreement	Excess
Adjusted Leverage Ratio	0.07	3.00	$	2.93
Fixed Charge Coverage Ratio	186.79	1.10	185.69

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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 meet our working capital and other operating needs for at least the next 12 months. During the remainder of fiscal year 2015, we anticipate cash outflow of approximately $6 million for deferred incentive compensation related to our fiscal year 2014 performance. 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.

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.

Fair Value

During the second quarter of fiscal year 2015, no level 1 or level 2 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. Prior to the spin-off of Kimball Electronics, Inc., our foreign currency derivatives, which were classified as level 2 assets/liabilities, were independently valued using observable market inputs such as forward interest rate yield curves, current spot rates, and time value calculations. To verify the reasonableness of the independently determined fair values, these derivative fair values were compared to fair values calculated by the counterparty banks. Our own credit risk and counterparty credit risk had an immaterial impact on the valuation of the foreign currency derivatives.

See Note 9 - Fair Value of Notes to Condensed Consolidated Financial Statements for additional information.

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Contractual Obligations

The following table summarizes the Company's contractual obligations as of December 31, 2014.

	Payments Due During Fiscal Years Ending June 30
(Amounts in Millions)	Total		2015		2016-2017			2018-2019			Thereafter
Recorded Contractual Obligations: (a)
Long-Term Debt Obligations(b)	$	0.3	$	—		$	—		$	0.1		$	0.2
Other Long-Term Liabilities Reflected on the Balance Sheet (c) (d) (e)	26.9		10.2			5.6			3.7			7.4
Unrecorded Contractual Obligations:
Operating Leases (e)	22.9		1.7			6.2			4.9			10.1
Purchase Obligations (f)	55.2		42.0			8.3			4.9			—
Other	0.1		—			—			—			0.1
Total	$	105.4	$	53.9		$	20.1		$	13.6		$	17.8

(a) As of December 31, 2014, the Company had less than $0.1 million of Capital Lease Obligations.

(b) Long-term debt consists of a long-term note payable and capitalized leases. Interest rates range from 2.50% to 9.25% and maturities occur in fiscal years 2018 and 2025. Accrued interest is also included on the Long-Term Debt Obligations line. The December 31, 2014 amount includes less than $0.1 million of long-term debt obligations due in the remainder fiscal year 2015 which were recorded as a current liability. The estimated interest not yet accrued related to debt is included in the Other line item within the Unrecorded Contractual Obligations.

(c) The timing of payments of certain items included on the “Other Long-Term Liabilities Reflected on the Balance Sheet” line above is estimated based on the following assumptions:

• The timing of SERP payments is estimated based on an assumed retirement age of 62 with payout based on the prior distribution elections of participants. The remainder of fiscal year 2015 amount includes $8.6 million for SERP payments recorded as current liabilities.

• The timing of severance plan payments is estimated based on the average remaining service life of employees. The remainder of fiscal year 2015 amount includes $0.3 million for severance payments recorded as a current liability.

• The timing of warranty payments is estimated based on historical data.  The remainder of fiscal year 2015 amount includes $1.0 million for short-term warranty payments recorded as a current liability.

(d) Excludes $4.4 million of long-term unrecognized tax benefits and associated accrued interest and penalties along with deferred tax liabilities and miscellaneous other long-term tax liabilities which are not tied to a contractual obligation and for which the Company cannot make a reasonably reliable estimate of the period of future payments.

(e) The Company has operating leases for certain office, showroom, manufacturing facilities, land, and equipment.

(f) Purchase Obligations are defined as agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms. The amounts listed above for purchase obligations include contractual commitments for items such as raw materials, supplies, capital expenditures, services, and software acquisitions/license commitments. Cancellable purchase obligations that we intend to fulfill are also included in the purchase obligations amount listed above through fiscal year 2019.

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Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements other than standby letters of credit 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 December 31, 2014 and June 30, 2014, the reserve for returns and allowances was $0.8 million and $1.3 million, respectively. The returns and allowances reserve approximated 1% to 2% of gross trade receivables during the two-year period preceding December 31, 2014.

• 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 December 31, 2014 and June 30, 2014 was $1.9 million and $1.8 million. During the two-year period preceding the spin-off this reserve approximated 1% of gross trade accounts receivable, and as of December 31, 2014, this reserve approximated 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 December 31, 2014 and June 30, 2014, our accrued liabilities for self-insurance exposure were $3.6 million and $4.2 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 income in the various taxing jurisdictions and the amount of deferred taxes ultimately realizable. Future events could change management's assessment.

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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 onthose positions, was $3.9 million and $3.8 million at December 31, 2014 and June 30, 2014, respectively.

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 ability to fully realize the expected benefits of the spin-off of our former EMS segment, 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, 2014.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Exchange Rate Risk: 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. Our risk management strategy included the use of derivative financial instruments to hedge certain foreign currency exposures. Derivatives were used only to manage underlying exposures and were not used in a speculative manner. Further information on derivative financial instruments is provided in Note 10 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements.

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 December 31, 2014, 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 December 31, 2014 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

32

PART II. OTHER INFORMATION

Item 1A. Risk Factors

A comprehensive disclosure of risk factors related to Kimball can be found in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014. Below are two additional risk factors related to the spin-off of our Electronics Manufacturing Services (“EMS”) segment.

We may not realize the potential benefits that we expect to achieve subsequent to the spin-off of our EMS segment into a new independent publicly traded company. The spin-off was completed on October 31, 2014, but spin-off related matters will likely continue to require time and attention of our management, and we may not be able to realize the anticipated benefits. We may not realize the anticipated benefits from the spin-off as quickly as expected. Any such difficulties or distractions could adversely affect our financial position, results of operations, or cash flows.

If the distribution or certain internal transactions undertaken in anticipation of the spin-off do not qualify as tax-free transactions, the Company, its Share Owners as of the distribution date, and Kimball Electronics could be subject to substantial tax liabilities.

On October 10, 2014 the Company received a favorable written tax ruling from the Internal Revenue Service that the Company’s stock unification in connection with the spin-off will not cause the Company to recognize income or gain as a result of the unification. In addition, the Company has also received an opinion of Squire Patton Boggs (US) LLP to the effect that the distribution satisfies the requirements to qualify as a tax-free transaction (except for cash received in lieu of fractional shares) for U.S. federal income tax purposes to the Company, the Company’s Share Owners and Kimball Electronics under Section 355 of the Internal Revenue Code of 1986, as amended (the “Code”).

The tax ruling and the tax opinion rely on the accuracy of certain factual representations and assumptions provided by the Company and Kimball Electronics in connection with obtaining the tax ruling and tax opinion, including with respect to post-spin-off operations and conduct of the parties. If these factual representations and assumptions are inaccurate or incomplete in any material respect, we will not be able to rely on the tax ruling and/or the tax opinion.

Furthermore, the tax opinion will not be binding on the Internal Revenue Service or the courts. Accordingly, the IRS or the courts may reach conclusions with respect to the spin-off that are different from the conclusions reached in the tax opinion. If, notwithstanding our receipt of the tax opinion, the spin-off is determined to be taxable, then (i) the Company would be subject to tax as if it sold the Kimball Electronics common stock in a taxable sale for its fair market value; and (ii) each Share Owner who received Kimball Electronics common stock would be treated as receiving a distribution of property in an amount equal to the fair market value of the Kimball Electronics common stock that would generally result in varied tax liabilities for each Share Owner depending on the facts and circumstances.

Even if the spin-off does qualify as a tax-free transaction for U.S. federal income tax purposes, the distribution will be taxable to the Company (but not to the Company’s Share Owners) pursuant to Section 355(e) of the Code if there are one or more acquisitions (including issuances) of the stock of either the Company or Kimball Electronics, representing 50% or more, measured by vote or value, of the then-outstanding stock of either the Company or Kimball Electronics and the acquisition or acquisitions are deemed to be part of a plan or series of related transactions that include the distribution. Any acquisition of our common stock within two years before or after the distribution (with exceptions, including public trading by less-than-5% Share Owners and certain compensatory stock issuances) generally will be presumed to be part of such a plan unless that presumption is rebutted. The resulting tax liability may have a material adverse effect on our business, financial condition, results of operations and cash flows.

We entered into a Tax Matters Agreement with Kimball Electronics that governs the respective rights, responsibilities and obligations of us and Kimball Electronics after the spin-off with respect to tax liabilities and benefits, tax attributes, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. The Tax Matters Agreement also provides special rules for allocating tax liabilities in the event that the spin-off or certain internal transactions undertaken in anticipation of the spin-off do not qualify as tax-free transactions. Though valid as between us and Kimball Electronics, the Tax Matters Agreement will not be binding on the IRS.

Pursuant to the Tax Matters Agreement, (i) we have agreed (a) not to enter into any transaction that could cause any portion of the spin-off to be taxable to Kimball Electronics, including under Section 355(e) of the Code; (b) to indemnify Kimball Electronics for any tax liabilities resulting from such transactions entered into by us; and (ii) Kimball Electronics has agreed to

33

indemnify us for any tax liabilities resulting from such transactions entered into by Kimball Electronics. In addition, under U.S. Treasury regulations, each member of the Company’s consolidated group at the time of the spin-off (including Kimball Electronics) would be jointly and severally liable for the resulting U.S. federal income tax liability if all or a portion of the spin-off does not or certain internal transactions undertaken in anticipation of the spin-off do not qualify as tax-free transactions. These obligations may discourage, delay or prevent a change of control of our company.

If Kimball Electronics were to default in its obligation to us to pay taxes under the Tax Matters Agreement, we could be legally liable under applicable tax law for such liabilities and required to make additional tax payments. Accordingly, under certain circumstances, we may be obligated to pay amounts in excess of our agreed-upon share of tax liabilities. To the extent we are responsible for any liability under the Tax Matters Agreement, there could be a material adverse impact on our business, financial condition, results or operations and cash flows.

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 any combination of Class A and Class B shares and will remain in effect until all shares authorized have been repurchased. Kimball did not repurchase any shares under the repurchase program during the second quarter of fiscal year 2015. At December 31, 2014, two million shares remained available under the repurchase program.

Item 5. Other Information

Pursuant to the terms of the Kimball International, Inc. (the “Company”) Amended and Restated 2003 Stock Option and Incentive Plan (the “Plan”), participants may be granted a variety of different types of stock incentive awards, one of which is performance shares. In accordance with the terms of the outstanding Long-Term Performance Share Award Agreements and the Annual Performance Share Award Agreements, an equitable adjustment was necessary for outstanding Performance Share Awards to reflect the change in the Company's stock value as a result of the completion of the spin-off of Kimball Electronics, Inc. from the Company (the “Spin-off”). The Compensation and Governance Committee of the Company’s Board of Directors (the “Committee”) decided in advance of the Spin-off that the appropriate adjustment formula was the weighted average closing price per share of the Company's shares on the last five trading days prior to the date the Spin-off was completed relative to the weighted average closing price per share of the Company's shares on the first five trading days after the date the Spin-off was completed. That formula has resulted in an adjustment factor of 1.6 times.

In addition, due to the unification of the Company's Class A and Class B common stock, all future shares issued pursuant to the Performance Share Award Agreements shall be issued as Class B shares rather than Class A shares. Class B shares have equal rights, preferences, limitations and restrictions as Class A shares.

On February 2, 2015, or shortly thereafter, the Company entered into the Amendment of Annual and/or Long-Term Performance Share Award Agreement with each of the plan participants with outstanding Performance Share Awards, including the Company's named executive officers.

The foregoing description of the Amendment of Annual and/or Long-Term Performance Share Awards is only a summary. For the complete text, see the form of amendment filed with this Quarterly Report on Form 10-Q as Exhibit 10(c) which is incorporated herein by reference.

34

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 filed November 3, 2014)

10(a) Summary of Director and Named Executive Officer Compensation

10(b) Restricted Share Unit Award Agreement (Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed December 19, 2014)

10(c) Form of Amendment of Annual and/or Long-Term Performance Share Awards

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

35

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
	February 4, 2015
By:	/s/ MICHELLE R. SCHROEDER
	Michelle R. Schroeder Vice President, Chief Financial Officer
	February 4, 2015

36

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 filed November 3, 2014)
10(a)	Summary of Director and Named Executive Officer Compensation
10(b)	Restricted Share Unit Award Agreement (Incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed December 19, 2014)
10(c)	Form of Amendment of Annual and/or Long-Term Performance Share Awards
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

37

EX-10.A

Exhibit 10(a)

SUMMARY OF DIRECTOR AND NAMED EXECUTIVE OFFICER COMPENSATION

This summary sets forth the compensation of the Directors of Kimball International, Inc. (the “Company”). On October 29, 2014, in conjunction with the completion of the spin-off of Kimball Electronics, Inc. from the Company (the “Spin-Off”), Douglas A. Habig and James C. Thyen retired from the Board of Directors of the Company (the “Board”), and Douglas A. Habig resigned as Chairman of the Board. In addition, on October 29, 2014, Donald D. Charron resigned from the Board in order to serve as Chairman of the Board of Directors and Chief Executive Officer at Kimball Electronics, Inc. On October 31, 2014, Robert F. Schneider assumed the position of Chairman of the Board.

The summary also includes compensation of the Company's current Chief Executive Officer, President and Chief Operating Officer, and Chief Financial Officer. On October 31, 2014, in conjunction with the completion of the Spin-Off, James C. Thyen retired as President, Chief Executive Officer of the Company. On October 31, 2014, Donald D. Charron resigned from his position as Executive Vice President of Kimball International, President-Kimball Electronics Group to serve as Chief Executive Officer of Kimball Electronics, Inc. Also on October 31, 2014, John H. Kahle resigned from his position of Executive Vice President, General Counsel, Secretary of the Company to serve as Vice President, General Counsel and Secretary of Kimball Electronics, Inc. In addition, as of the spin-off date, Robert F. Schneider was promoted to Chief Executive Officer of Kimball International, Inc., Donald W. Van Winkle was promoted to President, Chief Operating Officer of Kimball International, Inc., and Michelle R. Schroeder was promoted to Vice President, Chief Financial Officer of Kimball International, Inc. For purposes of this summary, Robert F. Schneider, Donald W. Van Winkle, and Michelle R. Schroeder constitute the Company's “Named Executive Officers.”

For a detailed description of the compensation arrangements that the Directors and Named Executive Officers participate in, refer to the Company's most recent Proxy Statement filed with the Securities and Exchange Commission.

Director Compensation

All Outside (non-employee) Directors receive annual compensation of $75,000 for the year for service as Directors. The Chairperson of the Audit Committee of the Board of Directors and the Chairperson of the Compensation and Governance Committee of the Board of Directors each receive an additional $10,000 annual retainer fee.

The Directors can elect to receive all of their annual retainer fees in shares of Common Stock under the Company's 2003 Amended and Restated Stock Option and Incentive Plan. Directors are also reimbursed for travel expenses incurred in connection with Board and Committee meeting attendance.

An Outside Director is a director who is not an employee of the Company or one of its subsidiaries. Robert F. Schneider, Chairman of the Board and Chief Executive Officer, is a Director of the Company but does not receive compensation for his service as a Director.

Named Executive Officer Compensation

Base Pay

Periodically, the Compensation and Governance Committee of the Board of Directors reviews and approves the salaries that are paid to the Company's executive officers. The following are the current annualized base salaries for the Company's Named Executive Officers:

Robert F. Schneider, Chief Executive Officer	$	550,000
Donald W. Van Winkle, President, Chief Operating Officer	$	401,804
Michelle R. Schroeder, Vice President, Chief Financial Officer	$	320,008

Cash Incentive Compensation

Each of the Named Executive Officers was eligible to participate in the Company's 2010 Profit Sharing Incentive Bonus Plan (the “Plan”) for fiscal year 2014. A long-standing component of the Company's profit sharing incentive bonus plan is that it is linked to the Company's worldwide, group, or business unit performance which adjusts compensation expense as profits change. Under the Plan, cash incentives are accrued annually and paid in five installments over the succeeding fiscal year. Except for provisions relating to retirement, death, permanent disability, and certain other circumstances described in a participant's employment agreement, participants must be actively employed on each payment date to be eligible to receive any unpaid cash incentive installment. The total amount of cash incentives accrued and authorized to be paid to the Named Executive Officers based on the Company's fiscal year 2014 results is listed below. The Named Executive Officers received an installment of 50% of the payment in August 2014, 12.5% was paid in both September 2014 and January 2015, and the remaining portions will be paid in equal installments in April 2015 and June 2015.

Robert F. Schneider, Chief Executive Officer	$	407,745
Donald W. Van Winkle, President, Chief Operating Officer	$	223,431
Michelle R. Schroeder, Vice President, Chief Financial Officer	$	213,860

Donald W. Van Winkle and Michelle R. Schroeder were also awarded discretionary compensation of $50,000 and $60,000, respectively, in December 2014 in recognition of their efforts with the spin-off of Kimball Electronics.

Stock Compensation

The Named Executive Officers may also receive a variety of stock incentive benefits under the Amended and Restated 2003 Stock Option and Incentive Plan consisting of: restricted stock, restricted share units (“RSU”), unrestricted share grants, incentive stock options, nonqualified stock options, stock appreciation rights, performance shares, and performance units. During August 2013 the Named Executive Officers were awarded grants of performance shares. Performance shares include both an annual performance share (“APS”) award and a long-term performance share (“LTPS”) award with one-fifth (1/5) of the LTPS award vesting annually over the succeeding five-year period.

The following table summarizes the performance shares issued in Class A Common Stock during August 2014 to the Company's Named Executive Officers pursuant to their August 2013 performance share awards:

	APS Award (number of  shares issued) (1)	LTPS Award (number of  shares issued) (1)
Robert F. Schneider, Chief Executive Officer	6,375	31,500
Donald W. Van Winkle, President, Chief Operating Officer	4,425	22,020
Michelle R. Schroeder, Vice President, Chief Financial Officer	2,975	7,700
(1) Shares have not been reduced by the number of shares withheld to satisfy tax withholding obligations.

The following table summarizes the maximum number of performance shares awarded in June 2014 to the Company's Named Executive Officers for fiscal year 2015:

	APS Award  (number of  shares) (1)	LTPS Award  (number of  shares) (1)
Robert F. Schneider, Chief Executive Officer	8,480	27,200
Donald W. Van Winkle, President, Chief Operating Officer	8,480	27,200
Michelle R. Schroeder, Vice President, Chief Financial Officer	4,000	7,520
(1) Shares have been increased due to the Spin-Off by an adjustment factor of 1.60.

The number of shares to be issued will be dependent upon the percentage payout under the Plan. Refer to the Company's Proxy Statement for further details.

In December 2014, the Company granted RSUs to each of the Named Executive Officers. The RSU awards are structured as a retention tool with vesting occurring at the end of each of the Company's next three fiscal years ending June 30, 2015, June 30, 2016, and June 30, 2017. The RSUs accumulate dividends during the vesting periods. With the promotions occurring mid-fiscal year, the first year tranche was pro-rated.

		Shares Vesting On
	Total RSUs Awarded	June 30, 2015	June 30, 2016	June 30, 2017
Robert F. Schneider	60,675	15,169	22,753	22,753
Donald W. Van Winkle	29,848	7,462	11,193	11,193
Michelle R. Schroeder	7,584	1,896	2,844	2,844

Retirement Plans

The Named Executive Officers participate in a defined contribution, participant-directed retirement plan that all domestic employees are eligible to participate in (the “Retirement Plan”). The Retirement Plan provides for voluntary employee contributions as well as a discretionary Company contribution which is determined annually by the Compensation and Governance Committee of the Board of Directors. Each eligible employee's Company contribution is defined as a percent of eligible compensation, the percent being identical for all eligible employees, including Named Executive Officers. Participant contributions are fully vested immediately, and Company contributions are fully vested after five years of participation. All Named Executive Officers are fully vested. The Retirement Plan is fully funded. For those eligible employees who, under the 1986 Tax Reform Act, are deemed to be highly compensated, their individual Company contribution under the Retirement Plan is reduced. For employees who are eligible, including all Named Executive Officers, there is a nonqualified, Supplemental Employee Retirement Plan (“SERP”) in which the Company contributes to the account of each individual an amount equal to the reduction in the contribution under the Retirement Plan arising from the provisions of the 1986 Tax Reform Act. The SERP investment is primarily composed of employee contributions.

EX-10.C

Exhibit 10(c)

KIMBALL INTERNATIONAL, INC.

AMENDMENT OF ANNUAL AND/OR LONG-TERM PERFORMANCE SHARE AWARDS

This Amendment (“Amendment”) is dated February ___, 2015 by and between Kimball International, Inc. (“Company”), and ________________ (“Recipient”) pursuant to the terms of certain Annual Performance Share Award Agreement(s) and/or Long-Term Performance Share Award Agreement(s) as noted below (“Agreements”).

WHEREAS Recipient has been previously awarded by Kimball International, Inc. certain Annual and/or Long-Term Performance Share Awards (“Awards”), some of which remain outstanding, as follows:

Performance Share Type	Date of Award Agreement	KII Share Awards Outstanding
Long Term
Long Term
Long Term
Long Term
Long Term
Annual

AND WHEREAS each of such Agreements made provision for the appropriate equitable adjustment of the Awards in the event of a reorganization, sale, merger, consolidation or other similar transaction in a manner to be selected by the Compensation and Governance Committee of the Board of Directors of Kimball International, Inc. (“Committee”).

AND WHEREAS Kimball International, Inc. completed a spin-off of its electronics business by a distribution to the Company's shareholders of all the shares of common stock of Kimball Electronics, Inc. on October 31, 2014 (the “Spin-off”), and the concurrent unification of Class A and Class B common stock resulting in the elimination of all distinctions between Class A common stock and Class B common stock 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.

AND WHEREAS the Committee has determined that an appropriate equitable adjustment of the Awards as a result of the Spin-off is to multiply each outstanding Award by a factor of 1.60.

Now therefore, in consideration of these premises, the Company and Recipient hereby agree as follows:

AWARDS

The Awards shall be adjusted in the amounts as noted below, to be granted in shares of Company common stock:

Performance Share Type	Date of Award Agreement	Number of KII Shares Awarded	Adjustment Factor	Number of remaining KII Shares Outstanding
Long Term			1.6
Long Term			1.6
Long Term			1.6
Long Term			1.6
Long Term			1.6
Annual			1.6

AWARDS OF SHARES

The number of shares earned under the Awards will be determined by the applicable bonus percentages as noted in each of the Agreements computed under the Company’s Profit Sharing Incentive Bonus Plan for the applicable fiscal year(s) ending June 30 - beginning with the fiscal year ending June 30, 2015.

CONVERSION OF SHARE AWARDS

In accordance with the terms of the Articles of Incorporation and Bylaws of Kimball International, Inc., as a result of the stock unification, Class A and Class B shares now have equal rights, preferences, limitations and restrictions. Therefore, all future shares issued pursuant to the Awards shall be issued as KBAL Class B shares rather than Class A shares to the extent the latter were designated as the shares of choice for the Awards.

ASSIGNMENT AND OTHER TERMS

This Agreement shall be assignable by the Company to any successors, assigns, successors in interest, affiliates or subsidiaries. All other terms and conditions of the Agreements, except as modified by this Amendment, shall remain in full force and effect.

IN WITNESS WHEREOF, the Company and the Recipient have agreed to the terms and conditions of this Amendment all as of the day and date first above written.

The Company		Recipient
By:	/s/ Julia Heitz Cassidy	By:
	JULIA HEITZ CASSIDY Vice President, General Counsel, Secretary Kimball International, Inc.
			(printed)

EX-11

Exhibit 11

KIMBALL INTERNATIONAL, INC.

COMPUTATION OF EARNINGS PER SHARE

EARNINGS PER SHARE FROM CONTINUING OPERATIONS

(Unaudited)	Three Months Ended									Three Months Ended
(Amounts in Thousands, Except for Per Share Data)	December 31, 2014									December 31, 2013
	Class A			Class B			Total			Class A			Class B			Total
Basic Earnings (Loss) Per Share from Continuing Operations:
Dividends Declared	$	112		$	1,839		$	1,951		$	360		$	1,522		$	1,882
Undistributed Earnings (Loss)	(168		)	(1,784		)	(1,952		)	44			162			206
Income (Loss) from Continuing Operations	$	(56	)	$	55		$	(1	)	$	404		$	1,684		$	2,088
Average Basic Shares Outstanding	3,345			35,517			38,862			8,146			30,288			38,434
Basic Earnings (Loss) Per Share from Continuing Operations	$	(0.02	)	$	0.00					$	0.05		$	0.06
Diluted Earnings (Loss) Per Share from Continuing Operations:
Dividends Declared and Assumed Dividends on Dilutive Shares	$	112		$	1,839		$	1,951		$	368		$	1,522		$	1,890
Undistributed Earnings (Loss)	(168		)	(1,784		)	(1,952		)	43			155			198
Income (Loss) from Continuing Operations	$	(56	)	$	55		$	(1	)	$	411		$	1,677		$	2,088
Average Diluted Shares Outstanding	3,345			35,517			38,862			8,325			30,288			38,613
Diluted Earnings (Loss) Per Share from Continuing Operations	$	(0.02	)	$	0.00					$	0.05		$	0.06
Reconciliation of Basic and Diluted EPS from Continuing Operations Calculations:
Income (Loss) from Continuing Operations Used for Basic EPS Calculation	$	(56	)	$	55		$	(1	)	$	404		$	1,684		$	2,088
Assumed Dividends Payable on Dilutive Shares	—			—			—			8			—			8
Increase (Reduction) in Undistributed Earnings (Loss) - allocated based on Class A and Class B shares	—			—			—			(1		)	(7		)	(8		)
Income (Loss) from Continuing Operations Used for Diluted EPS Calculation	$	(56	)	$	55		$	(1	)	$	411		$	1,677		$	2,088
Average Shares Outstanding for Basic EPS Calculation	3,345			35,517			38,862			8,146			30,288			38,434
Dilutive Effect of Average Outstanding Compensation Awards	—			—			—			179			—			179
Average Shares Outstanding for Diluted EPS Calculation	3,345			35,517			38,862			8,325			30,288			38,613

For the quarter ended December 31, 2014, all of the 503,000 outstanding compensation awards were antidilutive and were excluded from the dilutive calculation.

(Unaudited)	Six Months Ended									Six Months Ended
(Amounts in Thousands, Except for Per Share Data)	December 31, 2014									December 31, 2013
	Class A			Class B			Total			Class A			Class B			Total
Basic Earnings Per Share from Continuing Operations:
Dividends Declared	$	474		$	3,380		$	3,854		$	735		$	3,027		$	3,762
Undistributed Earnings (Loss)	(340		)	(1,998		)	(2,338		)	(142		)	(523		)	(665		)
Income from Continuing Operations	$	134		$	1,382		$	1,516		$	593		$	2,504		$	3,097
Average Basic Shares Outstanding	5,642			33,144			38,786			8,217			30,155			38,372
Basic Earnings Per Share from Continuing Operations	$	0.02		$	0.04					$	0.07		$	0.08
Diluted Earnings Per Share from Continuing Operations:
Dividends Declared and Assumed Dividends on Dilutive Shares	$	474		$	3,390		$	3,864		$	770		$	3,027		$	3,797
Undistributed Earnings (Loss)	(341		)	(2,007		)	(2,348		)	(155		)	(545		)	(700		)
Income from Continuing Operations	$	133		$	1,383		$	1,516		$	615		$	2,482		$	3,097
Average Diluted Shares Outstanding	5,642			33,250			38,892			8,605			30,155			38,760
Diluted Earnings Per Share from Continuing Operations	$	0.02		$	0.04					$	0.07		$	0.08
Reconciliation of Basic and Diluted EPS from Continuing Operations Calculations:
Income from Continuing Operations Used for Basic EPS Calculation	$	134		$	1,382		$	1,516		$	593		$	2,504		$	3,097
Assumed Dividends Payable on Dilutive Shares	—			10			10			35			—			35
Increase (Reduction) in Undistributed Earnings (Loss) - allocated based on Class A and Class B shares	(1		)	(9		)	(10		)	(13		)	(22		)	(35		)
Income from Continuing Operations Used for Diluted EPS Calculation	$	133		$	1,383		$	1,516		$	615		$	2,482		$	3,097
Average Shares Outstanding for Basic EPS Calculation	5,642			33,144			38,786			8,217			30,155			38,372
Dilutive Effect of Average Outstanding Compensation Awards	—			106			106			388			—			388
Average Shares Outstanding for Diluted EPS Calculation	5,642			33,250			38,892			8,605			30,155			38,760

EARNINGS PER SHARE FROM DISCONTINUED OPERATIONS

(Unaudited)	Three Months Ended				Three Months Ended
	December 31, 2014				December 31, 2013
	Class A		Class B		Class A		Class B
Basic Earnings Per Share	$	0.07	$	0.07	$	0.19	$	0.18
Diluted Earnings Per Share	$	0.07	$	0.07	$	0.18	$	0.18
	Six Months Ended				Six Months Ended
	December 31, 2014				December 31, 2013
	Class A		Class B		Class A		Class B
Basic Earnings Per Share	$	0.24	$	0.24	$	0.40	$	0.40
Diluted Earnings Per Share	$	0.24	$	0.24	$	0.40	$	0.40

EARNINGS PER SHARE (INCLUDING DISCONTINUED OPERATIONS)

(Unaudited)	Three Months Ended						Three Months Ended
(Amounts in Thousands, Except for Per Share Data)	December 31, 2014						December 31, 2013
	Class A		Class B		Total		Class A		Class B		Total
Basic Earnings Per Share:
Dividends Declared	$	112	$	1,839	$	1,951	$	360	$	1,522	$	1,882
Undistributed Earnings	62		664		726		1,556		5,784		7,340
Net Income	$	174	$	2,503	$	2,677	$	1,916	$	7,306	$	9,222
Average Basic Shares Outstanding	3,345		35,517		38,862		8,146		30,288		38,434
Basic Earnings Per Share	$	0.05	$	0.07			$	0.24	$	0.24
Diluted Earnings Per Share:
Dividends Declared and Assumed Dividends on Dilutive Shares	$	112	$	1,839	$	1,951	$	368	$	1,522	$	1,890
Undistributed Earnings	62		664		726		1,581		5,751		7,332
Net Income	$	174	$	2,503	$	2,677	$	1,949	$	7,273	$	9,222
Average Diluted Shares Outstanding	3,345		35,517		38,862		8,325		30,288		38,613
Diluted Earnings Per Share	$	0.05	$	0.07			$	0.23	$	0.24

For the quarter ended December 31, 2014, all of the 503,000 outstanding compensation awards were antidilutive and were excluded from the dilutive calculation.

(Unaudited)	Six Months Ended						Six Months Ended
(Amounts in Thousands, Except for Per Share Data)	December 31, 2014						December 31, 2013
	Class A		Class B		Total		Class A		Class B		Total
Basic Earnings Per Share:
Dividends Declared	$	474	$	3,380	$	3,854	$	735	$	3,027	$	3,762
Undistributed Earnings	992		5,827		6,819		3,136		11,507		14,643
Net Income	$	1,466	$	9,207	$	10,673	$	3,871	$	14,534	$	18,405
Average Basic Shares Outstanding	5,642		33,144		38,786		8,217		30,155		38,372
Basic Earnings Per Share	$	0.26	$	0.28			$	0.47	$	0.48
Diluted Earnings Per Share:
Dividends Declared and Assumed Dividends on Dilutive Shares	$	474	$	3,390	$	3,864	$	770	$	3,027	$	3,797
Undistributed Earnings	988		5,821		6,809		3,243		11,365		14,608
Net Income	$	1,462	$	9,211	$	10,673	$	4,013	$	14,392	$	18,405
Average Diluted Shares Outstanding	5,642		33,250		38,892		8,605		30,155		38,760
Diluted Earnings Per Share	$	0.26	$	0.28			$	0.47	$	0.48

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:	February 4, 2015
		/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:	February 4, 2015
		/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 December 31, 2014 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:	February 4, 2015
		/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 December 31, 2014 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:	February 4, 2015
		/s/ MICHELLE R. SCHROEDER
		MICHELLE R. SCHROEDER Vice President, Chief Financial Officer

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Note 12. Postemployment Benefits (Tables)

6 Months Ended

Dec. 31, 2014

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					Six Months Ended
	December 31					December 31
(Amounts in Thousands)	2014			2013		2014			2013
Service cost	$	159		$	246	$	390		$	483
Interest cost	26			35		56			69
Amortization of prior service costs	65			72		136			143
Amortization of actuarial (income) loss	(97		)	104		(77		)	194
Net periodic benefit cost — Total cost	$	153		$	457	$	505		$	889
Less: Discontinued operations	11			97		81			184
Net periodic benefit cost — Continuing operations	$	142		$	360	$	424		$	705

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Note 8. Assets Held for Sale Textuals (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2013	Jun. 30, 2014
Assets Held for Sale [Abstract]
Assets held for sale	$ 1,345			$ 0
Fair Value, Measurements, Nonrecurring | Property, Plant and Equipment, Other Types
Assets Held for Sale [Abstract]
Impairment of Long-Lived Assets to be Disposed of	$ 1,051	$ 0	$ 1,200

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Note 5. Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss)	$ (2,077)	$ (271)	$ 2,440	$ (3,477)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	(87)	1,141	(3,580)	3,951
Reclassification to (earnings) loss	(133)	317	(1,157)	713
Distribution to Kimball Electronics - Accumulated Other Comprehensive Income	3,479		3,479
Net current-period other comprehensive income (loss)	3,259	1,458	(1,258)	4,664
Accumulated Other Comprehensive Income (Loss)	1,182	1,187	1,182	1,187
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss)	(677)	3,783	4,909	855
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	(484)	1,684	(6,070)	4,612
Reclassification to (earnings) loss	0	0	0	0
Distribution to Kimball Electronics - Accumulated Other Comprehensive Income	1,161		1,161
Net current-period other comprehensive income (loss)	677	1,684	(4,909)	4,612
Accumulated Other Comprehensive Income (Loss)	0	5,467	0	5,467
Derivative Gain (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss)	(2,607)	(4,450)	(3,411)	(4,359)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	214	(344)	2,097	(734)
Reclassification to (earnings) loss	(114)	211	(1,193)	510
Distribution to Kimball Electronics - Accumulated Other Comprehensive Income	2,507		2,507
Net current-period other comprehensive income (loss)	2,607	(133)	3,411	(224)
Accumulated Other Comprehensive Income (Loss)	0	(4,583)	0	(4,583)
Postemployment Benefits, Prior Service Costs
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss)	(77)	(249)	(120)	(292)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	0	0	0	0
Reclassification to (earnings) loss	39	43	82	86
Distribution to Kimball Electronics - Accumulated Other Comprehensive Income	8		8
Net current-period other comprehensive income (loss)	47	43	90	86
Accumulated Other Comprehensive Income (Loss)	(30)	(206)	(30)	(206)
Postemployment Benefits, Net Actuarial Gain (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Accumulated Other Comprehensive Income (Loss)	1,284	645	1,062	319
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax	183	(199)	393	73
Reclassification to (earnings) loss	(58)	63	(46)	117
Distribution to Kimball Electronics - Accumulated Other Comprehensive Income	(197)		(197)
Net current-period other comprehensive income (loss)	(72)	(136)	150	190
Accumulated Other Comprehensive Income (Loss)	$ 1,212	$ 509	$ 1,212	$ 509

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Note 9. Fair Value - Recurring Fair Value Measurments (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Jun. 30, 2014
Recurring Fair Value Measurements:
Derivatives: Foreign exchange contracts-Assets	$ 0	$ 800
Trading Securities: Mutual funds in nonqualified SERP	8,632	8,812
Derivatives: Foreign exchange contracts-Liabilities	0	699
Fair Value, Measurements, Recurring
Recurring Fair Value Measurements:
Cash Equivalents	25,901	103,845
Trading Securities: Mutual funds in nonqualified SERP	18,369	23,106
Total assets at fair value	44,270	127,751
Total liabilities at fair value	0	699
Fair Value, Measurements, Recurring | Foreign Exchange Contract
Recurring Fair Value Measurements:
Derivatives: Foreign exchange contracts-Assets	0	800
Derivatives: Foreign exchange contracts-Liabilities	0	699
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 1
Recurring Fair Value Measurements:
Cash Equivalents	25,901	103,845
Trading Securities: Mutual funds in nonqualified SERP	18,369	23,106
Total assets at fair value	44,270	126,951
Total liabilities at fair value	0	0
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2
Recurring Fair Value Measurements:
Total assets at fair value	0	800
Total liabilities at fair value	0	699
Fair Value, Measurements, Recurring | Fair Value, Inputs, Level 2 | Foreign Exchange Contract
Recurring Fair Value Measurements:
Derivatives: Foreign exchange contracts-Assets		800
Derivatives: Foreign exchange contracts-Liabilities		$ 699

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Note 3. Recent Accounting Pronouncements and Supplemental Information - Components of Non-operating income (expense), net (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Foreign Currency/Derivative Loss	$ (17)	$ (38)	$ (42)	$ (16)
Gain on Supplemental Employee Retirement Plan Investments	352	973	166	1,854
Other	(152)	(158)	(274)	(281)
Non-operating income (expense), net	$ 183	$ 777	$ (150)	$ 1,557

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Note 5. Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Dec. 31, 2014

Accumulated Other Comprehensive Income (Loss) [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

During the three months ended December 31, 2014 and 2013, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows:

Accumulated Other Comprehensive Income (Loss)							Postemployment Benefits
(Amounts in Thousands)	Foreign Currency Translation Adjustments			Derivative Gain (Loss)			Prior Service Costs			Net Actuarial Gain (Loss)			Accumulated Other Comprehensive Income (Loss)
Balance at September 30, 2014	$	(677	)	$	(2,607	)	$	(77	)	$	1,284		$	(2,077	)
Other comprehensive income (loss) before reclassifications	(484		)	214			—			183			(87		)
Reclassification to (earnings) loss	—			(114		)	39			(58		)	(133		)
Distribution of Kimball Electronics, Inc.	1,161			2,507			8			(197		)	3,479
Net current-period other comprehensive income (loss)	677			2,607			47			(72		)	3,259
Balance at December 31, 2014	$	—		$	—		$	(30	)	$	1,212		$	1,182
Balance at September 30, 2013	$	3,783		$	(4,450	)	$	(249	)	$	645		$	(271	)
Other comprehensive income (loss) before reclassifications	1,684			(344		)	—			(199		)	1,141
Reclassification to (earnings) loss	—			211			43			63			317
Net current-period other comprehensive income (loss)	1,684			(133		)	43			(136		)	1,458
Balance at December 31, 2013	$	5,467		$	(4,583	)	$	(206	)	$	509		$	1,187

During the six months ended December 31, 2014 and 2013, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows:

Accumulated Other Comprehensive Income (Loss)							Postemployment Benefits
(Amounts in Thousands)	Foreign Currency Translation Adjustments			Derivative Gain (Loss)			Prior Service Costs			Net Actuarial Gain (Loss)			Accumulated Other Comprehensive Income (Loss)
Balance at June 30, 2014	$	4,909		$	(3,411	)	$	(120	)	$	1,062		$	2,440
Other comprehensive income (loss) before reclassifications	(6,070		)	2,097			—			393			(3,580		)
Reclassification to (earnings) loss	—			(1,193		)	82			(46		)	(1,157		)
Distribution of Kimball Electronics, Inc.	1,161			2,507			8			(197		)	3,479
Net current-period other comprehensive income (loss)	(4,909		)	3,411			90			150			(1,258		)
Balance at December 31, 2014	$	—		$	—		$	(30	)	$	1,212		$	1,182
Balance at June 30, 2013	$	855		$	(4,359	)	$	(292	)	$	319		$	(3,477	)
Other comprehensive income (loss) before reclassifications	4,612			(734		)	—			73			3,951
Reclassification to (earnings) loss	—			510			86			117			713
Net current-period other comprehensive income (loss)	4,612			(224		)	86			190			4,664
Balance at December 31, 2013	$	5,467		$	(4,583	)	$	(206	)	$	509		$	1,187

Reclassification out of Accumulated Other Comprehensive Income (Loss)

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

Reclassifications from Accumulated Other Comprehensive Income (Loss)	Three Months Ended						Six Months Ended						Affected Line Item in the Condensed Consolidated Statements of Income
	December 31,						December 31,
(Amounts in Thousands)	2014			2013			2014			2013
Derivative Gain (Loss) (1)	$	114		$	(211	)	$	1,193		$	(510	)	Income from Discontinued Operations, Net of Tax
Postemployment Benefits:
Amortization of Prior Service Costs (2)	$	(40	)	$	(42	)	$	(79	)	$	(84	)	Cost of Sales
	(21		)	(19		)	(43		)	(38		)	Selling and Administrative Expenses
	24			24			48			49			Provision for Income Taxes
	(37		)	(37		)	(74		)	(73		)	Income (Loss) from Continuing Operations
	$	(2	)	$	(6	)	$	(8	)	$	(13	)	Income from Discontinued Operations, Net of Tax
Amortization of Actuarial Gain (Loss) (2)	$	48		$	(55	)	$	30		$	(110	)	Cost of Sales
	38			(25		)	34			(49		)	Selling and Administrative Expenses
	(34		)	32			(25		)	63			Provision for Income Taxes
	52			(48		)	39			(96		)	Income (Loss) from Continuing Operations
	$	6		$	(15	)	$	7		$	(21	)	Income from Discontinued Operations, Net of Tax
Total Reclassifications for the Period	$	15		$	(85	)	$	(35	)	$	(169	)	Income (Loss) from Continuing Operations
	118			(232		)	1,192			(544		)	Income from Discontinued Operations, Net of Tax
	$	133		$	(317	)	$	1,157		$	(713	)	Net Income

Amounts in parentheses indicate reductions to income.

(1) See Note 10 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.

(2) See Note 12 - Postemployment Benefits of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.

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Note 10. Derivative Instruments - Fair Values of Derivative Instruments on the Consolidated Balance Sheet (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Jun. 30, 2014
Derivatives, Fair Value
Derivative Asset, Fair Value, Gross Asset	$ 0	$ 800
Derivative Liability	0	699
Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets
Derivatives, Fair Value
Derivative Asset, Fair Value, Gross Asset	0	599
Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Expenses
Derivatives, Fair Value
Derivative Liability	0	241
Not Designated as Hedging Instrument | Foreign Exchange Contract | Prepaid Expenses and Other Current Assets
Derivatives, Fair Value
Derivative Asset, Fair Value, Gross Asset	0	201
Not Designated as Hedging Instrument | Foreign Exchange Contract | Accrued Expenses
Derivatives, Fair Value
Derivative Liability	$ 0	$ 458

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Note 4. Inventories (Policies)

6 Months Ended

Dec. 31, 2014

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 - Commitments and Contingent Liabilities Textuals (Details) (Financial Standby Letter of Credit, USD $)	Dec. 31, 2014
Financial Standby Letter of Credit
Guarantor Obligations
Letters of Credit, Amount	$ 1,100,000
Loss Contingency Accrual, at Carrying Value	$ 0

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Note 2. Spin-Off Transaction - Disposal Group, Balance Sheet (Details) (USD $) In Millions, unless otherwise specified	Oct. 31, 2014
ASSETS
Cash and cash equivalents	$ 63
Receivables	133
Inventories	124
Prepaid expenses and other current assets	19
Net property and equipment	98
Goodwill	3
Net other intangible assets	1
Other long-term assets	15
Total Assets	456
Liabilities
Accounts payable	125
Accrued expenses	22
Other long-term liabilities	9
Total Liabilities	156
Net Assets Distributed to Kimball Electronics, Inc.	$ 300

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Note 10. Derivative Instruments (Tables)

6 Months Ended

Dec. 31, 2014

Derivative Instruments [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

Fair Value of Derivative Instruments on the Condensed Consolidated Balance Sheets

	Asset Derivatives					Liability Derivatives
		Fair Value As of					Fair Value As of
(Amounts in Thousands)	Balance Sheet Location	December 31, 2014		June 30, 2014		Balance Sheet Location	December 31, 2014		June 30, 2014
Derivatives designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses and other current assets	$	—	$	599	Accrued expenses	$	—	$	241
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses and other current assets	—		201		Accrued expenses	—		458
Total derivatives		$	—	$	800		$	—	$	699

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

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

	Three Months Ended					Six Months Ended
	December 31					December 31
(Amounts in Thousands)	2014		2013			2014		2013
Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion):
Foreign exchange contracts	$	282	$	(393	)	$	2,513	$	(898	)

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						Six Months Ended
(Amounts in Thousands)		December 31						December 31
Derivatives in Cash Flow Hedging Relationships	Location of Gain or (Loss)	2014			2013			2014		2013
Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion):
Foreign exchange contracts	Income from Discontinued Operations, Net of Tax	$	130		$	(267	)	$	1,484	$	(617	)
Derivatives Not Designated as Hedging Instruments
Amount of Pre-Tax Gain or (Loss) Recognized in Income on Derivatives:
Foreign exchange contracts	Income from Discontinued Operations, Net of Tax	$	(184	)	$	(294	)	$	740	$	(838	)
Stock warrants	Non-operating income (expense), net	—			4			—		8
Total		$	(184	)	$	(290	)	$	740	$	(830	)
Total Derivative Pre-Tax Gain (Loss) Recognized in Income		$	(54	)	$	(557	)	$	2,224	$	(1,447	)

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Note 7. Restructuring Expense -Textuals (Details) (USD $)	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Restructuring Expense and Other Related Items
Restructuring Charges	$ 3,335,000	$ 0	$ 3,335,000	$ 0
Restructuring and Related Cost, Expected Cost	10,154,000		10,154,000
Percentage of Restructuring Costs Expected in Cash			86.00%
FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Property, Plant and Equipment, Additions			5,000,000
Anticipated Short Term Pretax Operating Income Savings			0
Anticipated Annual Pre-tax Operating Income Savings			5,000,000
Restructuring and Related Cost, Expected Cost	8,879,000		8,879,000
FY 2015 Plane Fleet Reduction [Domain]
Restructuring Expense and Other Related Items
Anticipated Annual Pre-tax Operating Income Savings			800,000
Restructuring and Related Cost, Expected Cost	1,275,000		1,275,000
Transition and Other Employee Costs
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost	5,700,000		5,700,000
Transition and Other Employee Costs | FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost	5,432,000		5,432,000
Transition and Other Employee Costs | FY 2015 Plane Fleet Reduction [Domain]
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost	224,000		224,000
Plant Closure and Other Exit Costs
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost	3,100,000		3,100,000
Plant Closure and Other Exit Costs | FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost	3,113,000		3,113,000
Asset Write-Downs
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost	1,400,000		1,400,000
Asset Write-Downs | FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost	334,000		334,000
Asset Write-Downs | FY 2015 Plane Fleet Reduction [Domain]
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost	$ 1,051,000		$ 1,051,000

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Note 15. Credit Quality and Allowance for Credit Losses of Notes Receivable - Credit Quality and Allowance for Credit Losses (Details) (USD $)	Dec. 31, 2014	Jun. 30, 2014
Notes Receivable
Notes Receivable, Unpaid Balance	$ 1,579,000	$ 1,615,000
Notes Receivable, Related Allowance	633,000	638,000
Notes Receivable, Net of Allowance	946,000	977,000
Notes Receivable | Note Receivable From Sale of Indiana Facility
Notes Receivable
Notes Receivable, Unpaid Balance	1,369,000	1,392,000
Notes Receivable, Related Allowance	489,000	489,000
Notes Receivable, Net of Allowance	880,000	903,000
Notes Receivable | Other Notes Receivable
Notes Receivable
Notes Receivable, Unpaid Balance	210,000	223,000
Notes Receivable, Related Allowance	144,000	149,000
Notes Receivable, Net of Allowance	$ 66,000	$ 74,000

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Note 11. Investments - Supplemental Employee Retirement Investments Textuals (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended	12 Months Ended
	Dec. 31, 2014	Jun. 30, 2014
Schedule of Trading Securities and Other Trading Assets
Trading Securities, Change in net unrealized holding gains (losses)	$ (389)	$ (258)

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Note 4. Inventories - Inventory Components (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Jun. 30, 2014
Finished products	$ 26,267	$ 37,373
Work-in-process	1,971	13,808
Raw materials	19,826	103,083
Total FIFO inventory	48,064	154,264
LIFO reserve	(14,417)	(13,789)
Total inventory	$ 33,647	$ 140,475

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Note 3. Recent Accounting Pronouncements and Supplemental Information

6 Months Ended

Dec. 31, 2014

Recent Accounting Pronouncements and Supplemental Information [Abstract]

Recent Accounting Pronouncements and Supplemental Information

Recent Accounting Pronouncements:

In June 2014, the Financial Accounting Standards Board (“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. The guidance is effective for our first quarter fiscal year 2018 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. 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 is effective prospectively for disposals or components of our business classified as held for sale during the first quarter of fiscal year 2016. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

In July 2013, the FASB issued guidance to eliminate the diversity in practice related to the financial statement presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The guidance became effective prospectively for our first quarter fiscal year 2015 financial statements. 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.

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 effective tax rate for the first half of fiscal year 2015 of 56.0% was unfavorably impacted as our combined state tax rate is lower post spin-off, requiring a $0.4 million adjustment to deferred taxes in the current period which increased our fiscal 2015 year-to-date tax expense and effective tax rate. In addition, a portion of our spin-off expenses which are nondeductible in the U.S. also unfavorably impacted the current year effective tax rate. The impact to our effective tax rate is magnified in periods when our pre-tax income is lower. Our effective tax rate for the first half of fiscal year 2014 was 35.3%.

Non-operating Income (Expense), net:

The non-operating income (expense), net line item includes the impact of such items as foreign currency rate movements and related derivative gain or loss, fair value adjustments on Supplemental Employee Retirement Plan (“SERP”) investments, investment gain or loss, 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) line, from continuing operations were:

	Three Months Ended						Six Months Ended
	December 31						December 31
(Amounts in Thousands)	2014			2013			2014			2013
Foreign Currency/Derivative Loss	$	(17	)	$	(38	)	$	(42	)	$	(16	)
Gain on Supplemental Employee Retirement Plan Investments	352			973			166			1,854
Other	(152		)	(158		)	(274		)	(281		)
Non-operating income (expense), net	$	183		$	777		$	(150	)	$	1,557

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Note 11. Investments - Supplemental Employee Retirement Plan Investments (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Jun. 30, 2014
Schedule of Trading Securities and Other Trading Assets
SERP investments - current asset	$ 8,632	$ 8,812
SERP investments - other long-term asset	9,737	14,294
Total SERP investments	18,369	23,106
SERP obligation - current liability	8,632	8,812
SERP obligation - other long-term liability	9,737	14,294
Total SERP obligation	$ 18,369	$ 23,106

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Note 2. Spin-Off Transaction - Disposal Group, Income Statement (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net Sales	$ 71,748	$ 181,264	$ 275,551	$ 356,901
Income Before Taxes on Income	3,599	7,557	13,098	19,367
Provision for Income Taxes	921	423	3,941	4,059
Income from Discontinued Operations, Net of Tax	$ 2,678	$ 7,134	$ 9,157	$ 15,308
Income From Discontinued Operations per Class B Diluted Share	$ 0.07	$ 0.18	$ 0.24	$ 0.40

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Note 10. Derivative Instruments (Policies)

6 Months Ended

Dec. 31, 2014

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

the fair value of outstanding derivative instruments was recognized on the balance sheet as a derivative asset or liability. 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 (Loss), 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 9. Fair Value (Policies)

6 Months Ended

Dec. 31, 2014

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 six months ended December 31, 2014. 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, 2014.

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
Derivative Assets: Foreign exchange contracts	2	Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk.
Trading securities: Mutual funds in nonqualified SERP	1	Market - Quoted market prices
Derivative Liabilities: Foreign exchange contracts	2	Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball's non-performance risk.

Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy

Non-Recurring Fair Value Measurements:

Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments when events or circumstances indicate a significant adverse effect on the fair value of the asset. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs.

Non-recurring fair value adjustment	Level	Valuation Technique/Inputs Used
Impairment of long-lived assets (property and equipment)	2	Market - Quoted market prices for similar assets sold, adjusted for features specific to our aircraft

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
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

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. Fair Value - Textuals (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Fair Value, Purchases or Sales of Level 3 Assets	$ 0
Fair Value, Transfers Between Levels, Amount	0	0
Property, Plant and Equipment, Other Types | Fair Value, Measurements, Nonrecurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis
Impairment of Long-Lived Assets to be Disposed of		$ 1,051	$ 0	$ 1,200

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Note 2. Spin-Off Transaction - Textuals (Details) (USD $) In Millions, unless otherwise specified	Oct. 31, 2014
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash and cash equivalents	$ 63
Accumulated Other Comprehensive Loss, Net of Tax	$ 3.5
Class A Stock, Percent of Total	15.00%
Minimum Level of Class A Stock Required For Separate Classes of Stock	15.00%

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Note 2. Spin-Off Transaction (Tables)

6 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

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

The following is a summary of the assets and liabilities distributed to Kimball Electronics on the Distribution Date or shortly thereafter:

(Amounts in Millions)
Assets:
Cash and cash equivalents	$	63
Receivables	133
Inventories	124
Prepaid expenses and other current assets	19
Net property and equipment	98
Goodwill	3
Net other intangible assets	1
Other long-term assets	15
	$	456
Liabilities:
Accounts payable	$	125
Accrued expenses	22
Other long-term liabilities	9
	$	156
Net Assets Distributed to Kimball Electronics, Inc.	$	300

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 for all periods presented. Summarized financial results of discontinued operations through the October 31, 2014 spin-off date, were as follows:

	Three Months Ended				Six Months Ended
	December 31				December 31
(Amounts in Thousands, Except Per Share Data)	2014		2013		2014		2013
Net Sales	$	71,748	$	181,264	$	275,551	$	356,901
Income Before Taxes on Income	3,599		7,557		13,098		19,367
Provision for Income Taxes	921		423		3,941		4,059
Income from Discontinued Operations, Net of Tax	$	2,678	$	7,134	$	9,157	$	15,308
Income From Discontinued Operations per Class B Diluted Share	$	0.07	$	0.18	$	0.24	$	0.40

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

6 Months Ended

Dec. 31, 2014

Recent Accounting Pronouncements and Supplemental Information [Abstract]

Components of Non-operating income (expense), net

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

	Three Months Ended						Six Months Ended
	December 31						December 31
(Amounts in Thousands)	2014			2013			2014			2013
Foreign Currency/Derivative Loss	$	(17	)	$	(38	)	$	(42	)	$	(16	)
Gain on Supplemental Employee Retirement Plan Investments	352			973			166			1,854
Other	(152		)	(158		)	(274		)	(281		)
Non-operating income (expense), net	$	183		$	777		$	(150	)	$	1,557

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Note 2. Spin-Off Transaction

6 Months Ended

Dec. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure

Spin-Off Transaction

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 (“the Record Date”). On the Distribution Date, each of the Company's Share Owners received three shares of Kimball Electronics for every four shares of the Company held by such Share Owner on the Record Date. 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 following is a summary of the assets and liabilities distributed to Kimball Electronics on the Distribution Date or shortly thereafter:

(Amounts in Millions)
Assets:
Cash and cash equivalents	$	63
Receivables	133
Inventories	124
Prepaid expenses and other current assets	19
Net property and equipment	98
Goodwill	3
Net other intangible assets	1
Other long-term assets	15
	$	456
Liabilities:
Accounts payable	$	125
Accrued expenses	22
Other long-term liabilities	9
	$	156
Net Assets Distributed to Kimball Electronics, Inc.	$	300

The Company distributed $63 million of cash to Kimball Electronics, including the cash held by its foreign facilities, as Kimball Electronics began operation as an independent company. The cash distribution occurred in several installments immediately preceding the Distribution Date or shortly thereafter. In addition, $3.5 million of accumulated other comprehensive losses, net of tax, related to foreign translation, derivatives, and the postemployment benefit plan was transferred to Kimball Electronics.

The EMS segment was reclassified to discontinued operations in the Condensed Consolidated Statements of Income for all periods presented. Summarized financial results of discontinued operations through the October 31, 2014 spin-off date, were as follows:

	Three Months Ended				Six Months Ended
	December 31				December 31
(Amounts in Thousands, Except Per Share Data)	2014		2013		2014		2013
Net Sales	$	71,748	$	181,264	$	275,551	$	356,901
Income Before Taxes on Income	3,599		7,557		13,098		19,367
Provision for Income Taxes	921		423		3,941		4,059
Income from Discontinued Operations, Net of Tax	$	2,678	$	7,134	$	9,157	$	15,308
Income From Discontinued Operations per Class B Diluted Share	$	0.07	$	0.18	$	0.24	$	0.40

In connection with the spin-off of Kimball Electronics, the Company and Kimball Electronics entered into several agreements covering administrative and tax matters to provide or obtain services on a transitional basis, as needed, for varying periods after the spin-off. The administrative agreements cover various services such as information technology, human resources, taxation, and finance. The Company expects all services to be substantially complete within one year after the spin-off. The Company has retained all liabilities for U.S. federal, state, and local income taxes on income prior to the spin-off, as well as certain non-income taxes attributable to Kimball Electronics’ business. Kimball Electronics generally will be liable for all other taxes attributable to its business. In connection with the spin-off, the Company has adjusted its employee stock compensation awards and separated its retirement and post-employment benefit plans.

On October 30, 2014, holders of a sufficient number of shares of Class A common stock converted such shares into Class B common stock such that the number of outstanding shares of Class A common stock is, after such conversions, less than 15% of the total number of issued and outstanding shares of both Class A common stock and Class B common stock. Pursuant to the Company’s Amended and Restated Articles of Incorporation if at any time the number of shares of Class A common stock issued and outstanding is less than 15% of the total number of issued and outstanding shares of both Class A common stock and Class B common stock, then all of the rights, preferences, limitations and restrictions relating to Class B common stock shall become the same as the rights, preferences, limitations and restrictions of Class A common stock, without any further action of or by its Share Owners, and all distinctions between Class A common stock and Class B common stock shall be 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. The elimination of such distinctions, which occurred on October 30, 2014, is referred to as the “stock unification.” As a result of the stock unification, Class A common stock and Class B common stock now vote as a single class (except as otherwise required by applicable law) on all matters submitted to a vote of the Company’s Share Owners.

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Note 4. Inventories (Tables)

6 Months Ended

Dec. 31, 2014

Inventories [Abstract]

Schedule of Inventory, Current

Inventory components were as follows:

(Amounts in Thousands)	December 31, 2014			June 30, 2014
Finished products	$	26,267		$	37,373
Work-in-process	1,971			13,808
Raw materials	19,826			103,083
Total FIFO inventory	48,064			154,264
LIFO reserve	(14,417		)	(13,789		)
Total inventory	$	33,647		$	140,475

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Note 13. Stock Compensation Plan (Tables)

6 Months Ended

Dec. 31, 2014

Stock Compensation Plan [Abstract]

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

Unrestricted Shares (1)	Quarter Awarded	Shares	Grant Date Fair Value (2)
Unrestricted Shares (Director Compensation) – Class B	1st Quarter	17,335		$16.01
Unrestricted Shares – Class B	2nd Quarter	17,529		$9.10
Restricted Share Units (3)	Quarter Awarded	Shares	Grant Date Fair Value (2)
Restricted Share Units – Class B	2nd Quarter	159,416		$9.10

(1) Unrestricted shares were awarded to non-employee members of the Board of Directors as compensation for director's fees as a result of directors' elections to receive unrestricted shares in lieu of cash payment. Director's fees are expensed over the period that directors earn the compensation. Other unrestricted shares were awarded to key employees as consideration for service to the Company. Unrestricted shares do not have vesting periods, holding periods, restrictions on sale, or other restrictions.

(2) The grant date fair value of the unrestricted and restricted shares was based on the stock price at the date of the award.

(3) Restricted share units (RSU) were awarded to officers. Vesting occurs at the end of each of the Company's next three fiscal years ending June 30, 2015, June 30, 2016, and June 30, 2017. Upon vesting, the outstanding number of RSUs and the value of dividends accumulated over the vesting period are converted to shares of Class B common stock.

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Note 7. Restructuring Expense Restructuring Plan (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 31, 2014		Jun. 30, 2014
Restructuring Expense and Other Related Items
Restructuring Reserve	$ 2,137	[1]	$ 0
Restructuring and Related Cost, Cost Incurred to Date	3,335
Restructuring and Related Cost, Expected Cost	10,154
Payments for Restructuring	2,203
Restructuring Reserve, Settled without Cash	1,132
Restructuring Reserve, Period Increase (Decrease)	(1,198)
FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve	1,913		0
Restructuring and Related Cost, Cost Incurred to Date	2,060
Restructuring and Related Cost, Expected Cost	8,879
Payments for Restructuring	1,979
Restructuring Reserve, Settled without Cash	81
Restructuring Reserve, Period Increase (Decrease)	(147)
FY 2015 Plane Fleet Reduction [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve	224		0
Restructuring and Related Cost, Cost Incurred to Date	1,275
Restructuring and Related Cost, Expected Cost	1,275
Payments for Restructuring	224
Restructuring Reserve, Settled without Cash	1,051
Restructuring Reserve, Period Increase (Decrease)	(1,051)
Transition and Other Employee Costs
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost	5,700
Transition and Other Employee Costs | FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve	1,913		0
Restructuring and Related Cost, Cost Incurred to Date	1,913
Restructuring and Related Cost, Expected Cost	5,432
Payments for Restructuring	1,913
Restructuring Reserve, Settled without Cash	0
Restructuring Reserve, Period Increase (Decrease)	0
Transition and Other Employee Costs | FY 2015 Plane Fleet Reduction [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve	224		0
Restructuring and Related Cost, Cost Incurred to Date	224
Restructuring and Related Cost, Expected Cost	224
Payments for Restructuring	224
Restructuring Reserve, Settled without Cash	0
Restructuring Reserve, Period Increase (Decrease)	0
Asset Write-Downs
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost	1,400
Asset Write-Downs | FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve	0		0
Restructuring and Related Cost, Cost Incurred to Date	81
Restructuring and Related Cost, Expected Cost	334
Payments for Restructuring	0
Restructuring Reserve, Settled without Cash	81
Restructuring Reserve, Period Increase (Decrease)	(81)
Asset Write-Downs | FY 2015 Plane Fleet Reduction [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve	0		0
Restructuring and Related Cost, Cost Incurred to Date	1,051
Restructuring and Related Cost, Expected Cost	1,051
Payments for Restructuring	0
Restructuring Reserve, Settled without Cash	1,051
Restructuring Reserve, Period Increase (Decrease)	(1,051)
Plant Closure and Other Exit Costs
Restructuring Expense and Other Related Items
Restructuring and Related Cost, Expected Cost	3,100
Plant Closure and Other Exit Costs | FY 2015 Post Falls Restructuring Plan [Domain]
Restructuring Expense and Other Related Items
Restructuring Reserve	0		0
Restructuring and Related Cost, Cost Incurred to Date	66
Restructuring and Related Cost, Expected Cost	3,113
Payments for Restructuring	66
Restructuring Reserve, Settled without Cash	0
Restructuring Reserve, Period Increase (Decrease)	(66)
Other Current Liabilities [Member]
Restructuring Expense and Other Related Items
Restructuring Reserve	500
Other Noncurrent Liabilities [Member]
Restructuring Expense and Other Related Items
Restructuring Reserve	$ 1,600

[1] The accrued restructuring balance at December 31, 2014 includes $0.5 million recorded in current liabilities and $1.6 million recorded in other long-term liabilities.

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Jun. 30, 2014
Current Assets:
Cash and cash equivalents	$ 48,993	$ 136,624
Receivables, net of allowances of $2,335 and $2,345, respectively	50,786	175,695
Inventories	33,647	140,475
Prepaid expenses and other current assets	33,822	46,998
Assets held for sale	1,345	0
Total current assets	168,593	499,792
Property and Equipment, net of accumulated depreciation of $201,954 and $358,493, respectively	89,268	188,833
Goodwill	0	2,564
Other Intangible Assets, net of accumulated amortization of $36,839 and $61,912, respectively	2,566	4,191
Other Assets	15,110	26,766
Total Assets	275,537	722,146
Current Liabilities:
Current maturities of long-term debt	27	25
Accounts payable	60,622	174,436
Dividends payable	1,951	1,883
Accrued expenses	46,385	77,256
Total current liabilities	108,985	253,600
Other Liabilities:
Long-term debt, less current maturities	246	268
Other	20,615	26,745
Total other liabilities	20,861	27,013
Common stock-par value $0.05 per share:
Additional paid-in capital	2,443	6,269
Retained earnings	188,920	487,040
Accumulated other comprehensive income	1,182	2,440
Less: Treasury stock, at cost:
Total Share Owners' Equity	145,691	441,533
Total Liabilities and Share Owners' Equity	275,537	722,146
Class A Common Stock
Common stock-par value $0.05 per share:
Common Stock	95	560
Less: Treasury stock, at cost:
Treasury Stock	0	(42,198)
Class B Common Stock
Common stock-par value $0.05 per share:
Common Stock	2,056	1,591
Less: Treasury stock, at cost:
Treasury Stock	$ (49,005)	$ (14,169)

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Note 3. Recent Accounting Pronouncements and Supplemental Information - Textuals (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Effective Income Tax Rate Reconciliation, Percent	56.00%	35.30%
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount	$ 0.4

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash Flows From Operating Activities:
Net income	$ 10,673	$ 18,405
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	13,071	15,727
Loss on sales of assets	646	41
Restructuring and asset impairment charges	1,132	1,509
Deferred income tax and other deferred charges	634	(4,676)
Stock-based compensation	4,506	3,254
Excess tax benefits from stock-based compensation	(1,157)	(43)
Other, net	2,668	143
Change in operating assets and liabilities:
Receivables	(10,259)	(131)
Inventories	(17,954)	(5,401)
Prepaid expenses and other current assets	(8,515)	(507)
Accounts payable	13,605	9,351
Accrued expenses	(7,283)	7,388
Net cash provided by operating activities	1,767	45,060
Cash Flows From Investing Activities:
Capital expenditures	(18,504)	(15,664)
Proceeds from sales of assets	624	1,473
Purchases of capitalized software	(865)	(90)
Other, net	71	607
Net cash used for investing activities	(18,674)	(13,674)
Cash Flows From Financing Activities:
Transfer of cash and cash equivalents to Kimball Electronics, Inc.	(63,006)	0
Change in capital leases and long-term debt	(20)	(19)
Dividends paid to Share Owners	(3,786)	(3,743)
Excess tax benefits from stock-based compensation	1,157	43
Repurchase of employee shares for tax withholding	(3,823)	(1,947)
Net cash used for financing activities	(69,478)	(5,666)
Effect of Exchange Rate Change on Cash and Cash Equivalents	(1,246)	272
Net (Decrease) Increase in Cash and Cash Equivalents	(87,631)	25,992
Cash and Cash Equivalents at Beginning of Period	136,624	103,600
Cash and Cash Equivalents at End of Period	48,993	129,592
Cash paid during the period for:
Income taxes	10,661	4,763
Interest expense	$ 30	$ 27

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Note 10. Derivative Instruments - The Effect of Derivative Instruments on Consolidated Statements of Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Derivative Instruments, Gain (Loss)
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	$ 114	$ (211)	$ 1,193	$ (510)
Total Derivative Pre-Tax Gain (Loss) Recognized in Income	(54)	(557)	2,224	(1,447)
Derivatives Not Designated as Hedging Instruments, Pre-Tax Gain (Loss) Recognized in Income	(184)	(290)	740	(830)
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	(184)	(294)	740	(838)
Stock Warrant | Non-Operating Income (Expense)
Derivative Instruments, Gain (Loss)
Derivatives Not Designated as Hedging Instruments, Pre-Tax Gain (Loss) Recognized in Income	0	4	0	8
Cash Flow Hedging [Member] | 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	$ 130	$ (267)	$ 1,484	$ (617)

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Note 7. Restructuring Expense (Tables)

6 Months Ended

Dec. 31, 2014

Restructuring Expense [Abstract]

Restructuring and Related Costs [Table Text Block]

Summary of Restructuring Plan:
	Accrued June 30, 2014		Six Months Ended December 31, 2014									Total Charges Incurred Since Plan Announcement		Total Expected Plan Costs
(Amounts in Thousands)			Amounts Charged Cash		Amounts Charged  Non-cash		Amounts Utilized/ Cash Paid			Accrued December 31, 2014 (1)
Capacity Realignment and Post Falls, Idaho Exit
Transition and Other Employee Costs	$	—	$	1,913	$	—	$	—		$	1,913	$	1,913	$	5,432
Asset Write-downs	—		—		81		(81		)	—		81		334
Plant Closure and Other Exit Costs	—		66		—		(66		)	—		66		3,113
Total	$	—	$	1,979	$	81	$	(147	)	$	1,913	$	2,060	$	8,879
Plane Fleet Reduction
Transition and Other Employee Costs	$	—	$	224	$	—	$	—		$	224	$	224	$	224
Asset Write-downs	—		—		1,051		(1,051		)	—		1,051		1,051
Total	$	—	$	224	$	1,051	$	(1,051	)	$	224	$	1,275	$	1,275
Total Restructuring Plan	$	—	$	2,203	$	1,132	$	(1,198	)	$	2,137	$	3,335	$	10,154

(1) The accrued restructuring balance at December 31, 2014 includes $0.5 million recorded in current liabilities and $1.6 million recorded in other long-term liabilities.

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Note 14. Variable Interest Entities -Textuals (Details) (USD $)	6 Months Ended
	Dec. 31, 2014	Jun. 30, 2014
Variable Interest Entity
Variable Interest Entity, Nonconsolidated, Related Allowance	$ 633,000	$ 638,000
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	900,000	900,000
Variable Interest Entity, Nonconsolidated, Related Allowance	$ 500,000	$ 500,000

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Note 16. Credit Agreement

6 Months Ended

Dec. 31, 2014

Credit Agreement [Abstract]

Debt Disclosure

Credit Agreement

In connection with the spin-off, on October 31, 2014 Kimball entered into a new credit facility. The new Kimball credit agreement, which replaced its previously existing primary credit facility, has a maturity date of October 31, 2019 and allows for up to $30 million in borrowings, with an option to increase the amount available for borrowing to $55 million at the Company's request, subject to participating banks' consent. The complete credit agreement was filed as Exhibit 10.4 to our Current Report on Form 8-K filed on November 3, 2014.

At December 31, 2014, we had $1.1 million in letters of credit outstanding, which reduced our borrowing capacity on the credit facility.

The revolving loans under the Credit Agreement may consist of, at the Company's election, advances in U.S. dollars or advances in any other currency that is agreed to by the lenders. The proceeds of the revolving loans are to be used for general corporate purposes of the Company including acquisitions. A portion of the credit facility, not to exceed $10 million of the principal amount, will be available for the issuance of letters of credit. A commitment fee on the unused portion of principal amount of the credit facility is payable at a rate that ranges from 20.0 to 25.0 basis points per annum as determined by the Company's ratio of consolidated total indebtedness to adjusted consolidated EBITDA.

The interest rate is dependent on the type of borrowings and will be one of the following two options:

• The adjusted London Interbank Offered Rate (“Adjusted LIBO Rate” as defined in the Credit Agreement) in effect two business days prior to the advance (adjusted upwards to reflect bank reserve costs) for such interest period, plus the Eurocurrency Loans margin which can range from 125.0 to 175.0 basis points based on the Company's ratio of consolidated total indebtedness to adjusted consolidated EBITDA; or

• The Alternate Base Rate, which is defined as the highest of the fluctuating rate per annum equal to the higher of

a. JPMorgan's prime rate;

b. 1% per annum above the Adjusted LIBO rate; or

c. 1/2% per annum above the Federal funds rate;

plus the ABR Loans spread which can range from 25.0 to 75.0 basis points based on the Company's ratio of consolidated total indebtedness to adjusted consolidated EBITDA.

The Company's financial covenants under the Credit Agreement require:

• An adjusted leverage ratio of (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, and

• A fixed charge coverage ratio of (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.

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Note 9. Fair Value (Tables)

6 Months Ended

Dec. 31, 2014

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
Derivative Assets: Foreign exchange contracts	2	Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk.
Trading securities: Mutual funds in nonqualified SERP	1	Market - Quoted market prices
Derivative Liabilities: Foreign exchange contracts	2	Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball's non-performance risk.

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

As of December 31, 2014 and June 30, 2014, the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows:

	December 31, 2014
(Amounts in Thousands)	Level 1		Level 2		Total
Assets
Cash equivalents	$	25,901	$	—	$	25,901
Derivatives: Foreign exchange contracts	—		—		—
Trading Securities: Mutual funds in nonqualified SERP	18,369		—		18,369
Total assets at fair value	$	44,270	$	—	$	44,270
Liabilities
Derivatives: Foreign exchange contracts	$	—	$	—	$	—
Total liabilities at fair value	$	—	$	—	$	—
	June 30, 2014
(Amounts in Thousands)	Level 1		Level 2		Total
Assets
Cash equivalents	$	103,845	$	—	$	103,845
Derivatives: Foreign exchange contracts	—		800		800
Trading Securities: Mutual funds in nonqualified SERP	23,106		—		23,106
Total assets at fair value	$	126,951	$	800	$	127,751
Liabilities
Derivatives: Foreign exchange contracts	$	—	$	699	$	699
Total liabilities at fair value	$	—	$	699	$	699

Fair Value, Assets and Liabilities Measured on Nonrecurring Basis, Valuation Techniques

Non-recurring fair value adjustment	Level	Valuation Technique/Inputs Used
Impairment of long-lived assets (property and equipment)	2	Market - Quoted market prices for similar assets sold, adjusted for features specific to our aircraft

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
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 3. Recent Accounting Pronouncements and Supplemental Information (Policies)

6 Months Ended

Dec. 31, 2014

Recent Accounting Pronouncements and Supplemental Information [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements:

In June 2014, the Financial Accounting Standards Board (“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. The guidance is effective for our first quarter fiscal year 2018 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. 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 is effective prospectively for disposals or components of our business classified as held for sale during the first quarter of fiscal year 2016. We are currently evaluating the impact of the adoption of this guidance on our consolidated financial statements.

In July 2013, the FASB issued guidance to eliminate the diversity in practice related to the financial statement presentation of unrecognized tax benefits when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists at the reporting date. The guidance became effective prospectively for our first quarter fiscal year 2015 financial statements. 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.

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.

Our effective tax rate for the first half of fiscal year 2015 of 56.0% was unfavorably impacted as our combined state tax rate is lower post spin-off, requiring a $0.4 million adjustment to deferred taxes in the current period which increased our fiscal 2015 year-to-date tax expense and effective tax rate. In addition, a portion of our spin-off expenses which are nondeductible in the U.S. also unfavorably impacted the current year effective tax rate. The impact to our effective tax rate is magnified in periods when our pre-tax income is lower. Our effective tax rate for the first half of fiscal year 2014 was 35.3%.

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 foreign currency rate movements and related derivative gain or loss, fair value adjustments on Supplemental Employee Retirement Plan (“SERP”) investments, investment gain or loss, 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) line, from continuing operations were:

	Three Months Ended						Six Months Ended
	December 31						December 31
(Amounts in Thousands)	2014			2013			2014			2013
Foreign Currency/Derivative Loss	$	(17	)	$	(38	)	$	(42	)	$	(16	)
Gain on Supplemental Employee Retirement Plan Investments	352			973			166			1,854
Other	(152		)	(158		)	(274		)	(281		)
Non-operating income (expense), net	$	183		$	777		$	(150	)	$	1,557

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Note 16. Credit Agreement Textuals (Details) (USD $)	2 Months Ended
	Dec. 31, 2014
Line of Credit Facility, Maximum Borrowing Capacity	30,000,000
Line of Credit Facility, Maximum Borrowing Capacity Upon Request	55,000,000
Primary Credit Facility
Line of Credit Facility, Amount Available for Letters of Credit	10,000,000
Adjusted Leverage Ratio, Indebtedness Reduction For Excess Cash	15,000,000
Adjusted Leverage Ratio Covenant	3.0
Fixed Charge Coverage Ratio Covenant, Percent of Depreciation	50.00%
Fixed Charge Coverage Ratio Covenant	1.10
Financial Standby Letter of Credit
Letters of Credit, Amount	1,100,000
Minimum | Primary Revolving Credit Facility
Line of Credit Facility, Commitment Fee Basis Points	20.0
Maximum | Primary Revolving Credit Facility
Line of Credit Facility, Commitment Fee Basis Points	25.0
Federal Funds Rate | Primary Credit Facility
Debt Instrument, Basis Spread on Variable Rate	0.50%
Eurocurrency Loans Margin | Minimum | Primary Credit Facility
Line of Credit Facility, Interest Rate Basis Points	125.0
Eurocurrency Loans Margin | Maximum | Primary Credit Facility
Line of Credit Facility, Interest Rate Basis Points	175.0
London Interbank Offered Rate (LIBOR) | Primary Credit Facility
Debt Instrument, Basis Spread on Variable Rate	1.00%
Alternate Base Rate Loans Spread | Minimum | Primary Credit Facility
Line of Credit Facility, Interest Rate Basis Points	25.0
Alternate Base Rate Loans Spread | Maximum | Primary Credit Facility
Line of Credit Facility, Interest Rate Basis Points	75.0

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Note 1. Basis of Presentation

6 Months Ended

Dec. 31, 2014

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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Condensed Consolidated Balance Sheets Parentheticals (USD $) In Thousands, except Share data, unless otherwise specified	Dec. 31, 2014	Jun. 30, 2014
ASSETS
Accounts and Notes Receivable Allowances	$ 2,335	$ 2,345
Property and Equipment Accumulated Depreciation	201,954	358,493
Other Intangible Assets Accumulated Amortization	$ 36,839	$ 61,912
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	1,906,000	11,212,000
Treasury Stock, Shares	0	3,505,000
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	41,119,000	31,813,000
Treasury Stock, Shares	4,156,000	1,082,000

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Note 11. Investments

6 Months Ended

Dec. 31, 2014

Investments [Abstract]

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

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. The change in net unrealized holding losses recognized in continuing operations for the six months ended December 31, 2014 and 2013 was, in thousands, $389 and $258, respectively.

SERP asset and liability balances were as follows:

(Amounts in Thousands)	December 31, 2014		June 30, 2014
SERP investments - current asset	$	8,632	$	8,812
SERP investments - other long-term asset	9,737		14,294
Total SERP investments	$	18,369	$	23,106
SERP obligation - current liability	$	8,632	$	8,812
SERP obligation - other long-term liability	9,737		14,294
Total SERP obligation	$	18,369	$	23,106

The reduction in SERP investments and obligation from June 30, 2014 to December 31, 2014 was due primarily to the spin-off of Kimball Electronics on October 31, 2014.

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Document and Entity Information Document	6 Months Ended
	Dec. 31, 2014	Jan. 22, 2015
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	Dec. 31, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Amendment Flag	false
Class A Common Stock
Document Information
Entity Common Stock, Shares Outstanding		1,460,053
Class B Common Stock
Document Information
Entity Common Stock, Shares Outstanding		37,409,062

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Note 12. Postemployment Benefits

6 Months Ended

Dec. 31, 2014

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 has 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					Six Months Ended
	December 31					December 31
(Amounts in Thousands)	2014			2013		2014			2013
Service cost	$	159		$	246	$	390		$	483
Interest cost	26			35		56			69
Amortization of prior service costs	65			72		136			143
Amortization of actuarial (income) loss	(97		)	104		(77		)	194
Net periodic benefit cost — Total cost	$	153		$	457	$	505		$	889
Less: Discontinued operations	11			97		81			184
Net periodic benefit cost — Continuing operations	$	142		$	360	$	424		$	705

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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Condensed Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Average Number of Shares Outstanding:
Average Number of Shares Outstanding, Basic	38,862	38,434	38,786	38,372
Average Number of Shares Outstanding, Diluted	38,862	38,613	38,892	38,760
Statement [Line Items]
Net Sales	$ 151,418	$ 139,049	$ 295,864	$ 280,851
Cost of Sales	104,822	93,243	202,085	192,799
Gross Profit	46,596	45,806	93,779	88,052
Selling and Administrative Expenses	43,422	42,776	86,927	84,914
Restructuring Expense	3,335	0	3,335	0
Operating Income (Loss)	(161)	3,030	3,517	3,138
Other Income (Expense):
Interest income	50	53	91	108
Interest expense	(6)	(6)	(12)	(13)
Non-operating income (expense), net	183	777	(150)	1,557
Other income (expense), net	227	824	(71)	1,652
Income from Continuing Operations Before Taxes on Income	66	3,854	3,446	4,790
Provision for Income Taxes	67	1,766	1,930	1,693
Income (Loss) from Continuing Operations	(1)	2,088	1,516	3,097
Income from Discontinued Operations, Net of Tax	2,678	7,134	9,157	15,308
Net Income	$ 2,677	$ 9,222	$ 10,673	$ 18,405
Class A Common Stock
Basic Earnings Per Share:
Income (Loss) from Continuing Operations, Per Basic Share	$ (0.02)	$ 0.05	$ 0.02	$ 0.07
Earnings (Loss) Per Share, Basic	$ 0.05	$ 0.24	$ 0.26	$ 0.47
Diluted Earnings Per Share:
Income (Loss) from Continuing Operations, Per Diluted Share	$ (0.02)	$ 0.05	$ 0.02	$ 0.07
Earnings (Loss) Per Share, Diluted	$ 0.05	$ 0.23	$ 0.26	$ 0.47
Dividends Per Share of Common Stock:
Dividends Per Share of Common Stock, Declared	$ 0.050	$ 0.045	$ 0.095	$ 0.090
Class B Common Stock
Basic Earnings Per Share:
Income (Loss) from Continuing Operations, Per Basic Share	$ 0.00	$ 0.06	$ 0.04	$ 0.08
Earnings (Loss) Per Share, Basic	$ 0.07	$ 0.24	$ 0.28	$ 0.48
Diluted Earnings Per Share:
Income (Loss) from Continuing Operations, Per Diluted Share	$ 0.00	$ 0.06	$ 0.04	$ 0.08
Earnings (Loss) Per Share, Diluted	$ 0.07	$ 0.24	$ 0.28	$ 0.48
Dividends Per Share of Common Stock:
Dividends Per Share of Common Stock, Declared	$ 0.050	$ 0.050	$ 0.100	$ 0.100

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Note 6. Commitments and Contingent Liabilities

6 Months Ended

Dec. 31, 2014

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 December 31, 2014, we had a maximum financial exposure from unused standby letters of credit totaling $1.1 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 December 31, 2014 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 six months ended December 31, 2014 and 2013 were as follows:

	Six Months Ended
	December 31
(Amounts in Thousands)	2014			2013
Product Warranty Liability at the beginning of the period	$	3,221		$	2,384
Additions to warranty accrual (including changes in estimates)	475			1,900
Settlements made (in cash or in kind)	(374		)	(879		)
Distribution of Kimball Electronics, Inc.	(910		)	—
Product Warranty Liability at the end of the period	$	2,412		$	3,405

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Note 5. Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Dec. 31, 2014

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

During the three months ended December 31, 2014 and 2013, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows:

Accumulated Other Comprehensive Income (Loss)							Postemployment Benefits
(Amounts in Thousands)	Foreign Currency Translation Adjustments			Derivative Gain (Loss)			Prior Service Costs			Net Actuarial Gain (Loss)			Accumulated Other Comprehensive Income (Loss)
Balance at September 30, 2014	$	(677	)	$	(2,607	)	$	(77	)	$	1,284		$	(2,077	)
Other comprehensive income (loss) before reclassifications	(484		)	214			—			183			(87		)
Reclassification to (earnings) loss	—			(114		)	39			(58		)	(133		)
Distribution of Kimball Electronics, Inc.	1,161			2,507			8			(197		)	3,479
Net current-period other comprehensive income (loss)	677			2,607			47			(72		)	3,259
Balance at December 31, 2014	$	—		$	—		$	(30	)	$	1,212		$	1,182
Balance at September 30, 2013	$	3,783		$	(4,450	)	$	(249	)	$	645		$	(271	)
Other comprehensive income (loss) before reclassifications	1,684			(344		)	—			(199		)	1,141
Reclassification to (earnings) loss	—			211			43			63			317
Net current-period other comprehensive income (loss)	1,684			(133		)	43			(136		)	1,458
Balance at December 31, 2013	$	5,467		$	(4,583	)	$	(206	)	$	509		$	1,187

During the six months ended December 31, 2014 and 2013, the changes in the balances of each component of Accumulated Other Comprehensive Income (Loss), net of tax, were as follows:

Accumulated Other Comprehensive Income (Loss)							Postemployment Benefits
(Amounts in Thousands)	Foreign Currency Translation Adjustments			Derivative Gain (Loss)			Prior Service Costs			Net Actuarial Gain (Loss)			Accumulated Other Comprehensive Income (Loss)
Balance at June 30, 2014	$	4,909		$	(3,411	)	$	(120	)	$	1,062		$	2,440
Other comprehensive income (loss) before reclassifications	(6,070		)	2,097			—			393			(3,580		)
Reclassification to (earnings) loss	—			(1,193		)	82			(46		)	(1,157		)
Distribution of Kimball Electronics, Inc.	1,161			2,507			8			(197		)	3,479
Net current-period other comprehensive income (loss)	(4,909		)	3,411			90			150			(1,258		)
Balance at December 31, 2014	$	—		$	—		$	(30	)	$	1,212		$	1,182
Balance at June 30, 2013	$	855		$	(4,359	)	$	(292	)	$	319		$	(3,477	)
Other comprehensive income (loss) before reclassifications	4,612			(734		)	—			73			3,951
Reclassification to (earnings) loss	—			510			86			117			713
Net current-period other comprehensive income (loss)	4,612			(224		)	86			190			4,664
Balance at December 31, 2013	$	5,467		$	(4,583	)	$	(206	)	$	509		$	1,187

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

Reclassifications from Accumulated Other Comprehensive Income (Loss)	Three Months Ended						Six Months Ended						Affected Line Item in the Condensed Consolidated Statements of Income
	December 31,						December 31,
(Amounts in Thousands)	2014			2013			2014			2013
Derivative Gain (Loss) (1)	$	114		$	(211	)	$	1,193		$	(510	)	Income from Discontinued Operations, Net of Tax
Postemployment Benefits:
Amortization of Prior Service Costs (2)	$	(40	)	$	(42	)	$	(79	)	$	(84	)	Cost of Sales
	(21		)	(19		)	(43		)	(38		)	Selling and Administrative Expenses
	24			24			48			49			Provision for Income Taxes
	(37		)	(37		)	(74		)	(73		)	Income (Loss) from Continuing Operations
	$	(2	)	$	(6	)	$	(8	)	$	(13	)	Income from Discontinued Operations, Net of Tax
Amortization of Actuarial Gain (Loss) (2)	$	48		$	(55	)	$	30		$	(110	)	Cost of Sales
	38			(25		)	34			(49		)	Selling and Administrative Expenses
	(34		)	32			(25		)	63			Provision for Income Taxes
	52			(48		)	39			(96		)	Income (Loss) from Continuing Operations
	$	6		$	(15	)	$	7		$	(21	)	Income from Discontinued Operations, Net of Tax
Total Reclassifications for the Period	$	15		$	(85	)	$	(35	)	$	(169	)	Income (Loss) from Continuing Operations
	118			(232		)	1,192			(544		)	Income from Discontinued Operations, Net of Tax
	$	133		$	(317	)	$	1,157		$	(713	)	Net Income

Amounts in parentheses indicate reductions to income.

(1) See Note 10 - Derivative Instruments of Notes to Condensed Consolidated Financial Statements for further information on derivative instruments.

(2) See Note 12 - Postemployment Benefits of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.

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Note 1. Basis of Presentation (Policies)

6 Months Ended

Dec. 31, 2014

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 13. Stock Compensation Plan

6 Months Ended

Dec. 31, 2014

Stock Compensation Plan [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments

Stock Compensation Plan

In connection with the spin-off of the EMS segment the Company entered into the Amendment of Annual and/or Long-Term Performance Share Award Agreement, which adjusted employee performance share awards to preserve the fair value of the awards before and after the spin-off. This modification did not result in additional compensation expense.

During fiscal year 2015, the following stock compensation was awarded to officers and key employees. 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, 2014.

Unrestricted Shares (1)	Quarter Awarded	Shares	Grant Date Fair Value (2)
Unrestricted Shares (Director Compensation) – Class B	1st Quarter	17,335		$16.01
Unrestricted Shares – Class B	2nd Quarter	17,529		$9.10
Restricted Share Units (3)	Quarter Awarded	Shares	Grant Date Fair Value (2)
Restricted Share Units – Class B	2nd Quarter	159,416		$9.10

(1) Unrestricted shares were awarded to non-employee members of the Board of Directors as compensation for director's fees as a result of directors' elections to receive unrestricted shares in lieu of cash payment. Director's fees are expensed over the period that directors earn the compensation. Other unrestricted shares were awarded to key employees as consideration for service to the Company. Unrestricted shares do not have vesting periods, holding periods, restrictions on sale, or other restrictions.

(2) The grant date fair value of the unrestricted and restricted shares was based on the stock price at the date of the award.

(3) Restricted share units (RSU) were awarded to officers. Vesting occurs at the end of each of the Company's next three fiscal years ending June 30, 2015, June 30, 2016, and June 30, 2017. Upon vesting, the outstanding number of RSUs and the value of dividends accumulated over the vesting period are converted to shares of Class B common stock.

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Note 9. Fair Value

6 Months Ended

Dec. 31, 2014

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 six months ended December 31, 2014. 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, 2014.

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
Derivative Assets: Foreign exchange contracts	2	Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates, considering counterparty credit risk.
Trading securities: Mutual funds in nonqualified SERP	1	Market - Quoted market prices
Derivative Liabilities: Foreign exchange contracts	2	Market - Based on observable market inputs using standard calculations, such as time value, forward interest rate yield curves, and current spot rates adjusted for Kimball's non-performance risk.

Recurring Fair Value Measurements:

As of December 31, 2014 and June 30, 2014, the fair values of financial assets and liabilities that are measured at fair value on a recurring basis using the market approach are categorized as follows:

	December 31, 2014
(Amounts in Thousands)	Level 1		Level 2		Total
Assets
Cash equivalents	$	25,901	$	—	$	25,901
Derivatives: Foreign exchange contracts	—		—		—
Trading Securities: Mutual funds in nonqualified SERP	18,369		—		18,369
Total assets at fair value	$	44,270	$	—	$	44,270
Liabilities
Derivatives: Foreign exchange contracts	$	—	$	—	$	—
Total liabilities at fair value	$	—	$	—	$	—
	June 30, 2014
(Amounts in Thousands)	Level 1		Level 2		Total
Assets
Cash equivalents	$	103,845	$	—	$	103,845
Derivatives: Foreign exchange contracts	—		800		800
Trading Securities: Mutual funds in nonqualified SERP	23,106		—		23,106
Total assets at fair value	$	126,951	$	800	$	127,751
Liabilities
Derivatives: Foreign exchange contracts	$	—	$	699	$	699
Total liabilities at fair value	$	—	$	699	$	699

The reduction in balances from June 30, 2014 to December 31, 2014 was due to the spin-off of the EMS segment on October 31, 2014. We had no purchases or sales of Level 3 assets during the three and six months ended December 31, 2014.

The nonqualified supplemental employee retirement plan (“SERP”) assets consist primarily of equity funds, balanced 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 11 - Investments of Notes to Condensed Consolidated Financial Statements for further information regarding the SERP.

Non-Recurring Fair Value Measurements:

Certain assets are measured at fair value on a non-recurring basis. These assets are not measured at fair value on an ongoing basis, but are subject to fair value adjustments when events or circumstances indicate a significant adverse effect on the fair value of the asset. Assets that are written down to fair value when impaired are not subsequently adjusted to fair value unless further impairment occurs.

Non-recurring fair value adjustment	Level	Valuation Technique/Inputs Used
Impairment of long-lived assets (property and equipment)	2	Market - Quoted market prices for similar assets sold, adjusted for features specific to our aircraft

During the three months ended December 31, 2014, we classified an aircraft as held for sale and accordingly recognized pre-tax impairment of $1.1 million due to a reduction in its market value. During the three months ended December 31, 2013, we had no fair value adjustments applicable to items that are subject to non-recurring fair value measurement after the initial measurement date. During the six months ended December 31, 2013, we classified an aircraft as held for sale and accordingly recognized pre-tax impairment of $1.2 million due to a significant downward shift in the market for private aviation aircraft.

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
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

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 10. Derivative Instruments - Textuals (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Jun. 30, 2014
Derivative Instruments [Abstract]
Derivative Asset, Fair Value, Gross Asset	$ 0	$ 800

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Note 7. Restructuring Expense

6 Months Ended

Dec. 31, 2014

Restructuring Expense [Abstract]

Restructuring and Related Activities Disclosure

Restructuring Expense

We recognized pre-tax restructuring expense related to continuing operations of $3.3 million in both the three and six months ended December 31, 2014, respectively, and recognized no restructuring expense related to continuing operations in the three and six months ended December 31, 2013. 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.

For more information related to restructuring activities that are included in the discontinued operations line item on the Company's Condensed Consolidated Statements of Income, refer to our Annual Report on Form 10-K for the fiscal year ended June 30, 2014.

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.

Key factors in the decision to consolidate the Post Falls operation into the Indiana facilities include the improvement of customer delivery, supply chain dynamics, and transportation costs. The transfer of work involves 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 will be carefully managed over a period of seven to eight quarters to ensure no customer disruptions. The consolidation activities began immediately and we are actively marketing for sale the Post Falls, Idaho facility. Incremental capital for equipment purchases to transfer this operation to Indiana is approximately $5 million, exclusive of the capital reduction that is estimated to occur upon the sale of the Post Falls facility. No changes in operating income are anticipated until the later quarters of the transfer of work. When fully implemented in seven to eight quarters, we anticipate pre-tax savings of approximately $5 million per year thereafter.

The reduction of our plane fleet from two jets to one reduces 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 and manufacturing locations, while the remaining jet was used primarily for management travel. The plane used primarily for management travel has been placed for sale, and the completion of this restructuring is contingent on the sale of the aircraft. An impairment charge was recorded on the held-for-sale plane due to the book value of the plane exceeding current fair market value estimates less selling costs. As a result of the aircraft fleet reduction, we anticipate annual pre-tax savings of $0.8 million, with those savings starting in the third quarter of fiscal year 2015. 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 currently estimate that the pre-tax restructuring charges will be approximately $10.2 million, with $3.3 million recorded in the second quarter of fiscal year 2015, and the remainder is expected to be incurred over the remaining anticipated transition period. The restructuring charges are expected to consist of approximately $5.7 million of transition, training, and other employee costs, $3.1 million of plant closure and other exit costs, and $1.4 million of non-cash asset impairment. Approximately 86% of the total cost estimate is expected to be cash expense.

Summary of Restructuring Plan:
	Accrued June 30, 2014		Six Months Ended December 31, 2014									Total Charges Incurred Since Plan Announcement		Total Expected Plan Costs
(Amounts in Thousands)			Amounts Charged Cash		Amounts Charged  Non-cash		Amounts Utilized/ Cash Paid			Accrued December 31, 2014 (1)
Capacity Realignment and Post Falls, Idaho Exit
Transition and Other Employee Costs	$	—	$	1,913	$	—	$	—		$	1,913	$	1,913	$	5,432
Asset Write-downs	—		—		81		(81		)	—		81		334
Plant Closure and Other Exit Costs	—		66		—		(66		)	—		66		3,113
Total	$	—	$	1,979	$	81	$	(147	)	$	1,913	$	2,060	$	8,879
Plane Fleet Reduction
Transition and Other Employee Costs	$	—	$	224	$	—	$	—		$	224	$	224	$	224
Asset Write-downs	—		—		1,051		(1,051		)	—		1,051		1,051
Total	$	—	$	224	$	1,051	$	(1,051	)	$	224	$	1,275	$	1,275
Total Restructuring Plan	$	—	$	2,203	$	1,132	$	(1,198	)	$	2,137	$	3,335	$	10,154

(1) The accrued restructuring balance at December 31, 2014 includes $0.5 million recorded in current liabilities and $1.6 million recorded in other long-term liabilities.

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Note 8. Assets Held for Sale

6 Months Ended

Dec. 31, 2014

Assets Held for Sale [Abstract]

Disclosure of Long Lived Assets Held-for-sale

Assets Held for Sale

At December 31, 2014, an aircraft which had been used primarily for management travel totaling $1,345, in thousands, was classified as held for sale. A pre-tax impairment charge, in thousands, of $1,051 was recorded on the Restructuring Expense line of the Condensed Consolidated Statements of Income during the second quarter of fiscal year 2015 due to the book value of the aircraft exceeding current fair market value estimates less selling costs.

At June 30, 2014, no assets were classified as held for sale.

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Note 10. Derivative Instruments

6 Months Ended

Dec. 31, 2014

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.

As of December 31, 2014, after the spin-off of the EMS segment, we held no derivative instruments. As of June 30, 2014, the fair value of outstanding derivative instruments was recognized on the balance sheet as a derivative asset or liability. 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 (Loss), 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.

See Note 9 - Fair Value of Notes to Condensed Consolidated Financial Statements for further information regarding the fair value of derivative assets and liabilities and the Condensed Consolidated Statements of Comprehensive Income for the changes in deferred derivative gains and losses. Information on the location and amounts of derivative fair values in the Condensed Consolidated Balance Sheets and derivative gains and losses in the Condensed Consolidated Statements of Income are presented below.

Fair Value of Derivative Instruments on the Condensed Consolidated Balance Sheets

	Asset Derivatives					Liability Derivatives
		Fair Value As of					Fair Value As of
(Amounts in Thousands)	Balance Sheet Location	December 31, 2014		June 30, 2014		Balance Sheet Location	December 31, 2014		June 30, 2014
Derivatives designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses and other current assets	$	—	$	599	Accrued expenses	$	—	$	241
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Prepaid expenses and other current assets	—		201		Accrued expenses	—		458
Total derivatives		$	—	$	800		$	—	$	699

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

	Three Months Ended					Six Months Ended
	December 31					December 31
(Amounts in Thousands)	2014		2013			2014		2013
Amount of Pre-Tax Gain or (Loss) Recognized in Other Comprehensive Income (Loss) (OCI) on Derivatives (Effective Portion):
Foreign exchange contracts	$	282	$	(393	)	$	2,513	$	(898	)

The Effect of Derivative Instruments on Condensed Consolidated Statements of Income

		Three Months Ended						Six Months Ended
(Amounts in Thousands)		December 31						December 31
Derivatives in Cash Flow Hedging Relationships	Location of Gain or (Loss)	2014			2013			2014		2013
Amount of Pre-Tax Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion):
Foreign exchange contracts	Income from Discontinued Operations, Net of Tax	$	130		$	(267	)	$	1,484	$	(617	)
Derivatives Not Designated as Hedging Instruments
Amount of Pre-Tax Gain or (Loss) Recognized in Income on Derivatives:
Foreign exchange contracts	Income from Discontinued Operations, Net of Tax	$	(184	)	$	(294	)	$	740	$	(838	)
Stock warrants	Non-operating income (expense), net	—			4			—		8
Total		$	(184	)	$	(290	)	$	740	$	(830	)
Total Derivative Pre-Tax Gain (Loss) Recognized in Income		$	(54	)	$	(557	)	$	2,224	$	(1,447	)

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Note 13. Stock Compensation Plan - Stock Compensation Awards (Details) (Class B Common Stock, USD $)	3 Months Ended
	Sep. 30, 2014	Dec. 31, 2014
Unrestricted Shares Director Compensation
Share-based Compensation Arrangement by Share-based Payment Award
Stock Compensation, Shares Awarded	17,335
Stock Compensation, Grant Date Fair Value	$ 16.01
Unrestricted Shares
Share-based Compensation Arrangement by Share-based Payment Award
Stock Compensation, Shares Awarded		17,529
Stock Compensation, Grant Date Fair Value		$ 9.10
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award
Stock Compensation, Shares Awarded		159,416
Stock Compensation, Grant Date Fair Value		$ 9.10

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Note 15. Credit Quality and Allowance for Credit Losses of Notes Receivable - Textuals (Details) (Notes Receivable, USD $)	Dec. 31, 2014	Jun. 30, 2014
Notes Receivable
Notes Receivable
Financing Receivable, Recorded Investment, Past Due	$ 0	$ 0

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Note 12. Postemployment Benefits (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Components of Net Periodic Benefit Cost (before tax):
Service cost	$ 159	$ 246	$ 390	$ 483
Interest cost	26	35	56	69
Amortization of prior service costs	65	72	136	143
Amortization of actuarial (income) loss	(97)	104	(77)	194
Net periodic benefit cost — Total cost	153	457	505	889
Discontinued Operations
Components of Net Periodic Benefit Cost (before tax):
Net periodic benefit cost — Total cost	11	97	81	184
Continuing Operations
Components of Net Periodic Benefit Cost (before tax):
Net periodic benefit cost — Total cost	$ 142	$ 360	$ 424	$ 705

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Note 6. Commitments and Contingent Liabilities (Tables)

6 Months Ended

Dec. 31, 2014

Commitments and Contingent Liabilities [Abstract]

Schedule of Product Warranty Liability

Changes in the product warranty accrual for the six months ended December 31, 2014 and 2013 were as follows:

	Six Months Ended
	December 31
(Amounts in Thousands)	2014			2013
Product Warranty Liability at the beginning of the period	$	3,221		$	2,384
Additions to warranty accrual (including changes in estimates)	475			1,900
Settlements made (in cash or in kind)	(374		)	(879		)
Distribution of Kimball Electronics, Inc.	(910		)	—
Product Warranty Liability at the end of the period	$	2,412		$	3,405

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Note 6. Commitments and Contingent Liabilities - Product Warranty (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Product Warranty Liability at the beginning of the period	$ 3,221	$ 2,384
Additions to warranty accrual (including changes in estimates)	475	1,900
Settlements made (in cash or in kind)	(374)	(879)
Distribution To Kimball Electronics - Warranty Liability	(910)	0
Product Warranty Liability at the end of the period	$ 2,412	$ 3,405

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Note 15. Credit Quality and Allowance for Credit Losses of Notes Receivable

6 Months Ended

Dec. 31, 2014

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 December 31, 2014 and June 30, 2014, Kimball had no material past due outstanding notes receivable.

	As of December 31, 2014						As of June 30, 2014
(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	$	1,369	$	489	$	880	$	1,392	$	489	$	903
Other Notes Receivable	210		144		66		223		149		74
Total	$	1,579	$	633	$	946	$	1,615	$	638	$	977

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Note 6. Commitments and Contingent Liabilities (Policies)

6 Months Ended

Dec. 31, 2014

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 5. Accumulated Other Comprehensive Income (Loss) - Reclassifications from Accumulated Other Comprehensive Income (Loss) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Dec. 31, 2014		Dec. 31, 2013		Dec. 31, 2014		Dec. 31, 2013
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net	$ 114		$ (211)		$ 1,193		$ (510)
Amortization of Prior Service Costs	(65)		(72)		(136)		(143)
Amortization of Actuarial Gain (Loss)	97		(104)		77		(194)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	133		(317)		1,157		(713)
Cost of Sales
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Amortization of Prior Service Costs	(40)	[1]	(42)	[1]	(79)	[1]	(84)	[1]
Amortization of Actuarial Gain (Loss)	48	[1]	(55)	[1]	30	[1]	(110)	[1]
Selling and Administrative Expenses
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Amortization of Prior Service Costs	(21)	[1]	(19)	[1]	(43)	[1]	(38)	[1]
Amortization of Actuarial Gain (Loss)	38	[1]	(25)	[1]	34	[1]	(49)	[1]
Benefit (Provision) for Income Taxes
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Amortization of Prior Service Costs	24		24		48		49
Amortization of Actuarial Gain (Loss)	(34)		32		(25)		63
Income (Loss) from Continuing Operations
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Amortization of Prior Service Costs	(37)		(37)		(74)		(73)
Amortization of Actuarial Gain (Loss)	52		(48)		39		(96)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	15		(85)		(35)		(169)
Income (Loss) from Discontinued Operations
Reclassification Adjustment out of Accumulated Other Comprehensive Income (Loss)
Amortization of Prior Service Costs	(2)		(6)		(8)		(13)
Amortization of Actuarial Gain (Loss)	6		(15)		7		(21)
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax	$ 118		$ (232)		$ 1,192		$ (544)

[1] See Note 12 - Postemployment Benefits of Notes to Condensed Consolidated Financial Statements for further information on postemployment benefit plans.

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Note 15. Credit Quality and Allowance for Credit Losses of Notes Receivable (Tables)

6 Months Ended

Dec. 31, 2014

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

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

	As of December 31, 2014						As of June 30, 2014
(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	$	1,369	$	489	$	880	$	1,392	$	489	$	903
Other Notes Receivable	210		144		66		223		149		74
Total	$	1,579	$	633	$	946	$	1,615	$	638	$	977

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Net income	$ 2,677	$ 9,222	$ 10,673	$ 18,405
Other comprehensive income (loss):
Foreign currency translation adjustments, Pre-tax	(484)	1,781	(6,070)	4,883
Foreign currency translation adjustments, Tax	0	(97)	0	(271)
Foreign currency translation adjustments, Net of Tax	(484)	1,684	(6,070)	4,612
Postemployment severance actuarial change, Pre-tax	305	(330)	653	122
Postemployment severance actuarial change, Tax	(122)	131	(260)	(49)
Postemployment severance actuarial change, Net of Tax	183	(199)	393	73
Derivative gain (loss), Pre-tax	282	(393)	2,513	(898)
Derivative gain (loss), Tax	(68)	49	(416)	164
Derivative gain (loss), Net of Tax	214	(344)	2,097	(734)
Reclassification to (earnings) loss:
Derivatives, Reclassification to (earnings) loss, Pre-tax	(130)	267	(1,484)	617
Derivatives, Reclassification to (earnings) loss, Tax	16	(56)	291	(107)
Derivatives, Reclassification to (earnings) loss, Net of Tax	(114)	211	(1,193)	510
Amortization of prior service cost, Pre-tax	65	72	136	143
Amortization of prior service cost, Tax	(26)	(29)	(54)	(57)
Amortization of prior service cost, Net of Tax	39	43	82	86
Amortization of actuarial change, Pre-tax	(97)	104	(77)	194
Amortization of actuarial change, Tax	39	(41)	31	(77)
Amortization of actuarial change, Net of Tax	(58)	63	(46)	117
Other comprehensive income (loss), Pre-tax	(59)	1,501	(4,329)	5,061
Other comprehensive income (loss), Tax	(161)	(43)	(408)	(397)
Other comprehensive income (loss), Net of Tax	(220)	1,458	(4,737)	4,664
Total comprehensive income (loss)	2,457	10,680	5,936	23,069
Foreign Exchange Contract
Other comprehensive income (loss):
Derivative gain (loss), Pre-tax	$ 282	$ (393)	$ 2,513	$ (898)

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Note 4. Inventories

6 Months Ended

Dec. 31, 2014

Inventories [Abstract]

Inventory Disclosure

Inventories

Inventory components were as follows:

(Amounts in Thousands)	December 31, 2014			June 30, 2014
Finished products	$	26,267		$	37,373
Work-in-process	1,971			13,808
Raw materials	19,826			103,083
Total FIFO inventory	48,064			154,264
LIFO reserve	(14,417		)	(13,789		)
Total inventory	$	33,647		$	140,475

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 six-month periods ended December 31, 2014 and 2013 was immaterial. The reduction in FIFO inventory from June 30, 2014 to December 31, 2014 was due to the spin-off of Kimball Electronics, Inc. from Kimball International, Inc. on October 31, 2014.

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Note 10. Derivative Instruments - The Effect of Derivative Instruments on Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2014	Dec. 31, 2013
Derivative Instruments, Gain (Loss)
Derivative Instruments, Pre-Tax Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion	$ 282	$ (393)	$ 2,513	$ (898)
Foreign Exchange Contract
Derivative Instruments, Gain (Loss)
Derivative Instruments, Pre-Tax Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion	$ 282	$ (393)	$ 2,513	$ (898)

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Note 7. Restructuring Expense Restructuring Expense (Policies)

6 Months Ended

Dec. 31, 2014

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 11. Investments (Tables)

6 Months Ended

Dec. 31, 2014

Investments [Abstract]

Trading Securities (and Certain Trading Assets)

SERP asset and liability balances were as follows:

(Amounts in Thousands)	December 31, 2014		June 30, 2014
SERP investments - current asset	$	8,632	$	8,812
SERP investments - other long-term asset	9,737		14,294
Total SERP investments	$	18,369	$	23,106
SERP obligation - current liability	$	8,632	$	8,812
SERP obligation - other long-term liability	9,737		14,294
Total SERP obligation	$	18,369	$	23,106

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Note 14. Variable Interest Entities

6 Months Ended

Dec. 31, 2014

Variable Interest Entities [Abstract]

Variable Interest Entities

Variable Interest Entities

Kimball's involvement with a variable interest entity (“VIE”) is limited to a situation 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 the VIE is limited to a note receivable related to the sale of an Indiana facility. The carrying value of the note receivable, net of a $0.5 million allowance, was $0.9 million as of both December 31, 2014 and June 30, 2014. 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 VIE, and thus our exposure and risk of loss related to the VIE is limited to the carrying value of the notes receivable. Kimball did not provide additional financial support to the VIE during the quarter ended December 31, 2014.