Item 8.01 Other Events

As disclosed in the Form 8-K filed on April 11, 2008 by Kimball International, Inc. (the "Company"), the Company had signed a conditional agreement (the "Agreement") to sell and lease back the facilities and real estate that house its current Poland operations. The Company planned to lease back the building until December 2011 at which time it will have completed the consolidation of its European operations into a newly constructed facility in Poland. The closing on the sale of the existing Poland facility was expected to occur before December 31, 2008. The buyer was unable to close the transaction and thus the gain on the sale disclosed in the April 11th Form 8-K will not be recognized in the Company's fiscal year 2009 second quarter. Pursuant to the Agreement, the Company is entitled to retain approximately 1.4 million Euros (or approximately $1.9 million USD) of the deposit funds held by the Company which will be recorded as pre-tax income in the Company's second quarter of fiscal year 2009.

The Company will continue to market the facilities and real estate.

Since the Company had planned to lease back the facilities for approximately the next 36 months until all production of the Poland operation has been transferred to the new facility, there will be savings realized by the elimination of lease payments.

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