UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
( X )☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedFebruary 28, 2021
For the quarterly period ended November 30, 2017 OR
 OR 
(    )☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
For the transition period from to
Commission file number 0-11399
ctas-20210228_g1.jpg
CINTAS CORPORATIONCintas Corporation
(Exact name of Registrantregistrant as specified in its charter)
WASHINGTONWashington31-1188630
(State or other jurisdictionOther Jurisdiction of Incorporation)(I.R.S.IRS Employer Identification Number)

incorporation or organization)6800 Cintas BoulevardIdentification No.)
P.O. Box 625737
Cincinnati,Ohio45262-5737
(Address of Principal Executive Offices)(Zip Code)
 
6800 CINTAS BOULEVARD
P.O. BOX 625737
CINCINNATI, OHIO 45262-5737
(Address of principal executive offices)(Zip Code)
Registrant's Telephone Number, Including Area Code: (513) 459-1200
(Registrant’s telephone number, including area code)Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, no par valueCTASThe NASDAQ Stock Market LLC
(NASDAQ Global Select Market)
Indicate by checkmark 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 ☑ No ☐
Yes ü No  _   
Indicate by checkmark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 ü☑No   _  
☐
Indicate by checkmark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.  (Check one):
Large Accelerated Filer  ü☑               Accelerated Filer   _ ☐                                               Non-Accelerated Filer    _☐
Smaller Reporting Company   _ ☐           Emerging Growth Company    _(Do not check if a smaller reporting company)☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  _   ☐

Indicate by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 
Yes ☐ No ü
☑
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
ClassOutstanding DecemberMarch 31, 20172021
Common Stock, no par value106,488,799105,053,197





CINTAS CORPORATION
TABLE OF CONTENTS


Page
Part I. Financial Information
Part I.Financial InformationPage No.
Three and SixNine Months Ended November 30, 2017February 28, 2021 and 2016February 29, 2020
3
Three and SixNine Months Ended November 30, 2017February 28, 2021 and 2016February 29, 2020
4
November 30, 2017February 28, 2021 and May 31, 20172020
5
6
SixNine Months Ended November 30, 2017February 28, 2021 and 2016February 29, 2020
68
79
Condition and
3422
4333
4333
Part II. Other Information
Other Information34
34
4435
4436
4436
Signatures
Signatures
4537



2
CINTAS CORPORATION

Part I. Financial Information

ITEM 1.                              FINANCIAL STATEMENTS.STATEMENTS
CINTAS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
(In thousands except per share data)


Three Months Ended Six Months Ended Three Months EndedNine Months Ended
November 30,
2017		 November 30,
2016		 November 30,
2017		 November 30,
2016		 February 28, 2021February 29, 2020February 28, 2021February 29, 2020
Revenue: 
  
    Revenue:  
Uniform rental and facility services$1,308,038
 $1,000,015
 $2,619,822
 $1,994,297
Uniform rental and facility services$1,417,865 $1,448,021 $4,222,764 $4,372,524 
Other298,403
 271,062
 598,122
 543,430
Other359,191 362,627 1,057,914 1,093,012 
Total revenueTotal revenue1,777,056 1,810,648 5,280,678 5,465,536 
1,606,441
 1,271,077
 3,217,944
 2,537,727
Costs and expenses: 
  
    Costs and expenses:  
Cost of uniform rental and facility services723,960
 551,498
 1,430,823
 1,088,595
Cost of uniform rental and facility services761,850 784,930 2,217,073 2,338,543 
Cost of other166,112
 154,361
 331,399
 307,487
Cost of other205,690 201,323 608,004 601,065 
Selling and administrative expenses468,084
 361,415
 954,367
 731,118
Selling and administrative expenses483,048 509,743 1,426,555 1,570,666 
G&K Services, Inc. transaction and
integration expenses
13,074
 3,347
 17,045
 6,134
       
Operating income235,211
 200,456
 484,310
 404,393
Operating income326,468 314,652 1,029,046 955,262 
       
Interest income(291) (31) (588) (96)Interest income(87)(347)(369)(792)
Interest expense29,129
 13,267
 59,446
 27,439
Interest expense24,552 25,943 73,659 79,441 
       
Income before income taxes206,373

187,220

425,452

377,050
Income before income taxes302,003 289,056 955,756 876,613 
Income taxes68,636
 65,270
 126,607
 118,892
Income taxes43,619 54,536 112,510 144,838 
Income from continuing operations137,737
 121,950
 298,845
 258,158
Income from continuing operations258,384 234,520 843,246 731,775 
(Loss) income from discontinued operations,
net of tax benefit of $624 and tax expense of
$9,851, $41,103 and $10,992, respectively
(628) 18,427
 55,475
 20,310
Loss from discontinued operations,
net of tax benefit of $107
Loss from discontinued operations,
net of tax benefit of $107
0 0 0 (323)
Net income$137,109
 $140,377

$354,320

$278,468
Net income$258,384 $234,520 $843,246 $731,452 
       
Basic earnings (loss) per share:       
Basic earnings per share:Basic earnings per share:
Continuing operations$1.27
 $1.15
 $2.77
 $2.42
Continuing operations$2.44 $2.23 $7.99 $6.98 
Discontinued operations(0.01) 0.17
 0.51
 0.19
Discontinued operations0.00 0.00 0.00 0.00 
Basic earnings per share$1.26
 $1.32

$3.28

$2.61
Basic earnings per share$2.44 $2.23 $7.99 $6.98 
       
Diluted earnings (loss) per share:       
Diluted earnings per share:Diluted earnings per share:
Continuing operations$1.24
 $1.12
 $2.69
 $2.36
Continuing operations$2.37 $2.16 $7.78 $6.76 
Discontinued operations(0.01) 0.17
 0.50
 0.19
Discontinued operations0.00 0.00 0.00 0.00 
Diluted earnings per share$1.23

$1.29

$3.19

$2.55
Diluted earnings per share$2.37 $2.16 $7.78 $6.76 
       
Dividends declared per share$1.62
 $1.33
 $1.62
 $1.33
Dividends declared per share$0.75 $0 $4.26 $2.55 
 

See accompanying notes.

3


CINTAS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
(In thousands)


Three Months EndedNine Months Ended
February 28,
2021		February 29,
2020		February 28,
2021		February 29,
2020
Net income$258,384 $234,520 $843,246 $731,452 
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments8,947 (4,039)38,853 4,098 
Change in fair value of interest rate lock
   agreements, net of tax expense (benefit)
   of $25,689, $(17,294), $34,761 and
   $(19,792), respectively
75,850 (53,582)102,634 (60,724)
Amortization of interest rate lock agreements, net of tax benefit of $116,
   $116, $347 and $411, respectively
(358)(358)(1,075)(1,011)
Other comprehensive income (loss), net of
   tax expense (benefit) of $25,805,
   $(17,178), $35,108 and $(19,381),
   respectively
84,439 (57,979)140,412 (57,637)
Comprehensive income$342,823 $176,541 $983,658 $673,815 
 Three Months Ended Six Months Ended
 November 30, 2017 November 30, 2016 November 30, 2017 November 30, 2016
        
Net income$137,109
 $140,377
 $354,320
 $278,468
        
Other comprehensive (loss) income, net of tax:       
Foreign currency translation adjustments(11,374) (7,650) 23,810
 (7,535)
Change in fair value of cash flow hedges—
 26,390
 —
 14,353
Amortization of interest rate lock agreements(172) 385
 (344) 770
Change in fair value of available-for-sale securities(20) 1
 —
 —
        
Other comprehensive (loss) income(11,566) 19,126
 23,466
 7,588
        
Comprehensive income$125,543
 $159,503
 $377,786
 $286,056


See accompanying notes.














4

CINTAS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands except share data)
 November 30,
2017		 May 31,
2017
 (Unaudited)  
ASSETS 
  
Current assets: 
  
Cash and cash equivalents$236,002
 $169,266
Marketable securities22,732
 22,219
Accounts receivable, net763,555
 736,008
Inventories, net272,830
 278,218
Uniforms and other rental items in service674,572
 635,702
Income taxes, current35,700
 44,320
Prepaid expenses and other current assets38,058
 30,132
Assets held for sale—
 38,613
Total current assets2,043,449
 1,954,478
    
Property and equipment, net1,353,159
 1,323,501
    
Investments175,663
 164,788
Goodwill2,811,796
 2,782,335
Service contracts, net565,574
 586,988
Other assets, net29,160
 31,967
 $6,978,801
 $6,844,057
    
LIABILITIES AND SHAREHOLDERS’ EQUITY 
  
Current liabilities: 
  
Accounts payable$162,981
 $177,051
Accrued compensation and related liabilities113,430
 149,635
Accrued liabilities577,960
 429,809
Debt due within one year300,000
 362,900
Liabilities held for sale—
 11,457
Total current liabilities1,154,371
 1,130,852
    
Long-term liabilities: 
  
Debt due after one year2,534,222
 2,770,624
Deferred income taxes539,043
 469,328
Accrued liabilities198,132
 170,460
Total long-term liabilities3,271,397
 3,410,412
    
Shareholders’ equity: 
  
Preferred stock, no par value:—
 —
100,000 shares authorized, none outstanding

 

Common stock, no par value:600,563
 485,068
425,000,000 shares authorized 
  
FY 2018:  182,338,749 issued and 106,470,073 outstanding 
  
FY 2017:  180,992,605 issued and 105,400,629 outstanding   
Paid-in capital192,191
 223,924
Retained earnings5,349,539
 5,170,830
Treasury stock:(3,609,697) (3,574,000)
FY 2018:  75,868,676 shares 
  
FY 2017:  75,591,976 shares   
Accumulated other comprehensive income (loss)20,437
 (3,029)
Total shareholders’ equity2,553,033
 2,302,793
 $6,978,801
 $6,844,057


 February 28, 2021May 31,
2020
 (Unaudited) 
ASSETS  
Current assets:  
Cash and cash equivalents$553,611 $145,402 
Accounts receivable, net929,492 870,369 
Inventories, net533,211 408,898 
Uniforms and other rental items in service777,364 770,411 
Income taxes, current57,929 0 
Prepaid expenses and other current assets126,949 114,619 
Total current assets2,978,556 2,309,699 
Property and equipment, net1,329,930 1,403,065 
Investments264,581 214,847 
Goodwill2,895,251 2,870,020 
Service contracts, net418,318 451,529 
Operating lease right-of-use assets, net156,850 159,967 
Other assets, net304,011 260,758 
 $8,347,497 $7,669,885 
LIABILITIES AND SHAREHOLDERS’ EQUITY  
Current liabilities:  
Accounts payable$237,857 $230,995 
Accrued compensation and related liabilities224,641 127,417 
Accrued liabilities514,159 456,653 
Income taxes, current0 27,099 
Operating lease liabilities, current43,767 43,031 
Debt due within one year249,936 0 
Total current liabilities1,270,360 885,195 
Long-term liabilities:  
Debt due after one year2,291,418 2,539,705 
Deferred income taxes389,553 388,579 
Operating lease liabilities119,071 122,695 
Accrued liabilities460,585 498,509 
Total long-term liabilities3,260,627 3,549,488 
Shareholders’ equity:  
Preferred stock, no par value:0 0 
100,000 shares authorized, NaN outstanding
Common stock, no par value:1,403,229 1,102,689 
425,000,000 shares authorized  
FY 2021: 188,913,700 shares issued and 105,039,174 shares outstanding  
FY 2020: 186,793,207 shares issued and 103,415,368 shares outstanding
Paid-in capital74,451 171,521 
Retained earnings7,688,425 7,296,509 
Treasury stock:(5,336,627)(5,182,137)
FY 2021: 83,874,526 shares  
FY 2020: 83,377,839 shares
Accumulated other comprehensive loss(12,968)(153,380)
Total shareholders’ equity3,816,510 3,235,202 
 $8,347,497 $7,669,885 
See accompanying notes.

5


CINTAS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(In thousands)
Common Stock  Paid-In
Capital		Retained
Earnings		Other
Accumulated
Comprehensive
Loss		Treasury Stock  Total
Shareholders'
Equity
SharesAmountSharesAmount
Balance at June 1, 2020186,793 $1,102,689 $171,521 $7,296,509 $(153,380)(83,378)$(5,182,137)$3,235,202 
Net income— — — 300,005 — — — 300,005 
Comprehensive income, net of tax— — — — 37,430 — — 37,430 
Stock-based compensation— — 29,055 — — — — 29,055 
Vesting of stock-based compensation awards568 170,421 (170,421)— — — — 0 
Stock options exercised, net of shares
surrendered		795 72,123 — — — — — 72,123 
Repurchase of common stock— — — — — (230)(69,011)(69,011)
Balance at August 31, 2020188,156 $1,345,233 $30,155 $7,596,514 $(115,950)(83,608)$(5,251,148)$3,604,804 
Net income— — — 284,857 — — — 284,857 
Comprehensive income, net of tax— — — — 18,543 — — 18,543 
Dividends— — — (371,827)— — — (371,827)
Stock-based compensation— — 28,547 — — — — 28,547 
Vesting of stock-based compensation awards21 7,094 (7,094)— — — — 0 
Stock options exercised, net of shares
surrendered		424 35,407 — — — — — 35,407 
Repurchase of common stock— — — — — (7)(2,371)(2,371)
Balance at November 30, 2020188,601 $1,387,734 $51,608 $7,509,544 $(97,407)(83,615)$(5,253,519)$3,597,960 
Net income— — — 258,384 — — — 258,384 
Comprehensive income, net of tax— — — — 84,439 — — 84,439 
Dividends— — — (79,503)— — — (79,503)
Stock-based compensation— — 25,819 — — — — 25,819 
Vesting of stock-based compensation awards9 2,976 (2,976)— — — — 0 
Stock options exercised, net of shares
surrendered		304 12,519 — — — — — 12,519 
Repurchase of common stock— — — — — (260)(83,108)(83,108)
Balance at February 28, 2021188,914 $1,403,229 $74,451 $7,688,425 $(12,968)(83,875)$(5,336,627)$3,816,510 


6

CINTAS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(In thousands)
Common Stock  Paid-In
Capital		Retained
Earnings		Other
Accumulated
Comprehensive
Loss		Treasury Stock  Total
Shareholders'
Equity
SharesAmountSharesAmount
Balance at June 1, 2019184,791 $840,328 $227,928 $6,691,236 $(39,152)(81,506)$(4,717,619)$3,002,721 
Net income— — — 250,812 — — — 250,812 
Comprehensive loss, net of tax— — — — (23,474)— — (23,474)
Stock-based compensation— — 40,395 — — — — 40,395 
Vesting of stock-based compensation awards605 157,882 (157,882)— — — — 0 
Stock options exercised, net of shares
surrendered		557 37,915 — — — — — 37,915 
Repurchase of common stock— — — — — (1,082)(256,830)(256,830)
Cumulative effect of change in accounting
principle		— — — (2,808)1,975 — — (833)
Balance at August 31, 2019185,953 $1,036,125 $110,441 $6,939,240 $(60,651)(82,588)$(4,974,449)$3,050,706 
Net income— — — 246,120 — — — 246,120 
Comprehensive income, net of tax— — — — 23,816 — — 23,816 
Dividends— — — (268,050)— — — (268,050)
Stock-based compensation— — 29,003 — — — — 29,003 
Vesting of stock-based compensation awards21 5,403 (5,403)— — — — 0 
Stock options exercised, net of shares
surrendered		324 25,286 — — — — — 25,286 
Repurchase of common stock— — — — — (7)(1,911)(1,911)
Balance at November 30, 2019186,298 $1,066,814 $134,041 $6,917,310 $(36,835)(82,595)$(4,976,360)$3,104,970 
Net income— — — 234,520 — — — 234,520 
Comprehensive loss, net of tax— — — — (57,979)— — (57,979)
Dividends— — — 8 — — — 8 
Stock-based compensation— — 27,030 — — — — 27,030 
Vesting of stock-based compensation awards25 6,914 (6,914)— — — — 0 
Stock options exercised, net of shares
surrendered		309 18,346 — — — — — 18,346 
Repurchase of common stock— — — — — (10)(2,586)(2,586)
Balance at February 29, 2020186,632 $1,092,074 $154,157 $7,151,838 $(94,814)(82,605)$(4,978,946)$3,324,309 

See accompanying notes.
7

CINTAS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands) 
 Nine Months Ended
 February 28, 2021February 29, 2020
Cash flows from operating activities:  
Net income$843,246 $731,452 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation182,132 175,261 
Amortization of intangible assets and capitalized contract costs107,689 107,232 
Stock-based compensation83,421 96,428 
Gain on sale of operating assets(21,861)0 
Deferred income taxes(36,259)5,013 
Change in current assets and liabilities, net of acquisitions of businesses:  
Accounts receivable, net(63,178)(31,135)
Inventories, net(123,678)(17,780)
Uniforms and other rental items in service(6,269)(33,732)
Prepaid expenses and other current assets and capitalized contract costs(76,971)(95,169)
Accounts payable5,113 14,271 
Accrued compensation and related liabilities97,474 (4,792)
Accrued liabilities and other(1,357)3,426 
Income taxes, current(84,687)(15,926)
Net cash provided by operating activities904,815 934,549 
Cash flows from investing activities:  
Capital expenditures(100,410)(189,379)
Purchases of investments(7,873)(10,461)
Proceeds from sale of operating assets, net of cash disposed32,490 13,300 
Acquisitions of businesses, net of cash acquired(7,570)(47,850)
Other, net(5,301)(2,090)
Net cash used in investing activities(88,664)(236,480)
Cash flows from financing activities:  
Payments of commercial paper, net0 (112,500)
Proceeds from exercise of stock-based compensation awards120,049 81,547 
Dividends paid(371,818)(268,042)
Repurchase of common stock(154,490)(261,327)
Other, net(3,836)30 
Net cash used in financing activities(410,095)(560,292)
Effect of exchange rate changes on cash and cash equivalents2,153 19 
Net increase in cash and cash equivalents408,209 137,796 
Cash and cash equivalents at beginning of period145,402 96,645 
Cash and cash equivalents at end of period$553,611 $234,441 
 Six Months Ended
 November 30,
2017		 November 30,
2016
Cash flows from operating activities: 
  
Net income$354,320
 $278,468
Adjustments to reconcile net income to net cash provided by operating activities: 
  
Depreciation107,578
 79,590
Amortization of intangible assets31,261
 7,460
Stock-based compensation55,204
 39,582
Gain on sale of business(99,060) —
Gain on Shred-it—
 (25,876)
Deferred income taxes42,162
 (3,833)
Change in current assets and liabilities, net of acquisitions of businesses: 
  
Accounts receivable, net(24,800) (44,920)
Inventories, net2,595
 (14,616)
Uniforms and other rental items in service(33,294) (4,315)
Prepaid expenses and other current assets(18,573) (1,952)
Accounts payable(8,706) 15,451
Accrued compensation and related liabilities(36,480) (18,936)
Accrued liabilities and other(1,940) (4,866)
Income taxes, current8,742
 484
Net cash provided by operating activities379,009
 301,721
    
Cash flows from investing activities: 
  
Capital expenditures(132,466) (155,173)
Proceeds from redemption of marketable securities100,259
 172,968
Purchase of marketable securities and investments(99,877) (118,270)
Proceeds from sale of business127,835
 —
Proceeds from sale of investment in Shred-it—
 25,876
Acquisitions of businesses, net of cash acquired(1,099) (17,778)
Other, net(870) 332
Net cash used in investing activities(6,218) (92,045)
    
Cash flows from financing activities: 
  
(Payments) issuance of commercial paper, net(50,500) 66,000
Repayment of debt(250,000) (250,000)
Prepaid short-term debt financing fees—
 (13,495)
Proceeds from exercise of stock-based compensation awards28,558
 19,225
Repurchase of common stock(35,697) (19,230)
Other, net(1,882) (5,572)
Net cash used in financing activities(309,521) (203,072)
    
Effect of exchange rate changes on cash and cash equivalents3,466
 (2,388)
    
Net increase in cash and cash equivalents66,736
 4,216
    
Cash and cash equivalents at beginning of period169,266
 139,357
    
Cash and cash equivalents at end of period$236,002
 $143,573


See accompanying notes.

8


CINTAS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited) 


1.Note 1 - Basis of Presentation
The consolidated condensed financial statements of Cintas Corporation (Cintas, the Company, we, us or our) included herein have been prepared by Cintas, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S.United States generally accepted accounting principles (GAAP)(U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. While we believe that the disclosures are adequately presented, we suggest that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2017.2020. A summary of our significant accounting policies is presented beginning on page 3840 of that report. There have been no material changes in the accounting policies followed by Cintas during the current fiscal year other than the adoption of new accounting pronouncements discussed in Note 2. below. 

Interim results are subject to variations and are not necessarily indicative of the results of operations for a full fiscal year. In the opinion of management, adjustments (which include only normal recurring adjustments) necessary for a fair statement of the consolidated results of the interim periods shown have been made.

On March 21, 2017, Cintas completed the acquisition of G&K Services, Inc. (G&K) for consideration of approximately $2.1 billion. G&K is now a wholly-owned subsidiary of Cintas that operates within the Uniform Rental and Facility Services operating segment. To finance the G&K acquisition, Cintas used a combination of new senior notes, a term loan, other borrowings under its existing credit facility and cash on hand. G&K's results of operations are included in Cintas' consolidated financial statements as of and from the date of acquisition.

During the three months ended August 31, 2017, Cintas sold a significant business, referred to as "Discontinued Services," and as a result, its operations are classified as discontinued operations for all periods presented. See Note 13 entitled Discontinued Operations for more information.


Inventories, net are measuredvalued at the lower of cost (first-in, first-out) or net realizable value. Inventory is comprised of the following amounts at:following: 
(In thousands)November 30,
2017		 May 31,
2017		(In thousands)February 28, 2021May 31,
2020
   
Raw materials$16,231
 $17,528
Raw materials$15,757 $18,661 
Work in process23,199
 17,951
Work in process32,290 29,497 
Finished goods233,400
 242,739
Finished goods485,164 360,740 
$272,830
 $278,218
 $533,211 $408,898 
Inventories are recorded net of reserves for obsolete inventory of $37.5$63.6 million and $38.3$45.5 million at November 30, 2017February 28, 2021 and May 31, 2017,2020, respectively. The inventory obsolescence reserve is determined by specific identification, as well as an estimate based on Cintas' historical rates of obsolescence. Once a specific inventory item is written down to the lower of cost or net realizable value, a new cost basis has been established, and that inventory item cannot subsequently be marked up.

2.New Accounting Pronouncements

In May 2014,Effective June 1, 2020, the Company adopted Financial Accounting Standards Board (FASB) issued Accounting StandardStandards Update (ASU) 2014-09, "Revenue from Contracts2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 replaces the incurred loss impairment methodology with Customers (Topic 606),"a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to clarify revenue recognition principles. This guidance is intended to improve disclosure requirementsinform credit loss estimates. In connection with recognizing credit losses on accounts receivable and enhanceother financial instruments, Cintas now uses a forward-looking expected loss model rather than the comparabilityincurred loss model. Adoption of revenue recognition practices. Improved disclosures under the amended guidance relate to the nature, amount, timing and uncertainty of revenue that is recognized from contracts with customers. This guidance will be effective for reporting periods beginning after December 15, 2017. A cross-functional implementation team has been established consisting of representatives from all of our operating segments. The implementation team is working to analyze the impact of the standard on Cintas' contract portfolio by reviewing current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to revenue contracts. In addition, we are in the process of identifying and implementing the appropriate changes to business processes and controls to support recognition and disclosure under the new standard.


Based on our preliminary analysis, we currently do not believe the adoption of this guidance will haveASU 2016-13 requires using a material impact on our consolidated condensed financial statements. Based on our evaluation of each revenue stream, we believe that most revenue transactions will be accounted for in a manner substantially consistent with existing guidance. The majority of our business services revenue transactions represent a series of distinct services over the term of the contract where performance obligations are the same each day. We will continue to evaluate the impact of this guidance on our consolidated condensed financial statements, disclosures, and internal controls. Our preliminary assessments are subject to change. Cintas plans to adopt the standard as of the first quarter of fiscal year 2019 using the modified retrospective adoption alternative under this standard, and therefore, it is anticipated we will recordapproach through a cumulativecumulative-effect adjustment to retained earnings as of June 1, 2018.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which sets outeffective date to align existing credit loss methodology with the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease, respectively. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. Topic 842 supersedes the previous leases standard, Accounting Standards Codification (ASC) 840, "Leases." This guidance is effective for reporting periods beginning after December 15, 2018, however, early adoption is permitted. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Cintas is currently evaluating the impact that ASU 2016-02 will have on its consolidated condensed financial statements.

In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates the two-step process that required identification of potential impairment and a separate measure of the actual impairment. Goodwill impairment charges, if any, would be determined by the difference between a reporting unit's carrying value and its fair value (impairment loss is limited to the carrying value). This standard is effective for annual or any interim goodwill impairment tests beginning after December 15, 2019.standard. The adoption of this standard isASU 2016-13 did not expected to have a material impact on the Company's consolidated condensed financial statements.

In March 2017, the FASB issued ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Costs.” ASU 2017-07 requires the service component of pension and other postretirement benefit costs to be presented in the same line item as other employee compensation costs on the consolidated condensed statement of income; however, the other components of net benefit costs are required to be presented outside of operating income within the consolidated condensed statements of income. Cintas retrospectively adopted ASU 2017-07 on June 1, 2017.


No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on Cintas' consolidated condensed financial statements.

9


Note 2 - Revenue Recognition
3.The following table presents Cintas' total revenue disaggregated by operating segment:
Three Months EndedNine Months Ended
February 28,
2021		February 29,
2020		February 28,
2021		February 29,
2020
(In thousands)Revenue%Revenue%Revenue%Revenue%
Uniform Rental and
Facility Services		$1,417,865 79.8 %$1,448,021 80.0 %$4,222,764 80.0 %$4,372,524 80.0 %
First Aid and Safety
Services		198,474 11.2 %170,541 9.4 %597,373 11.3 %512,299 9.4 %
Fire Protection
Services		110,212 6.2 %107,127 5.9 %322,913 6.1 %323,988 5.9 %
Uniform Direct Sales50,505 2.8 %84,959 4.7 %137,628 2.6 %256,725 4.7 %
Total revenue$1,777,056 100.0 %$1,810,648 100.0 %$5,280,678 100.0 %$5,465,536 100.0 %

Fire Protection Services and Uniform Direct Sales are included within All Other as disclosed in Note 12 entitled Segment Information.

Revenue Recognition Policy
More than 95% of the Company's revenue is derived from fees for route servicing of Uniform Rental and Facility Services, First Aid and Safety Services and Fire Protection Services, performed by a Cintas employee-partner, at the customer's location of business. Revenues from our route servicing customer contracts represent a single-performance obligation. The Company recognizes these revenues over time as services are performed based on the nature of services provided and contractual rates (output method). The Company's remaining revenues, primarily within the Uniform Direct Sales operating segment, and representing less than 5% of the Company's total revenues, are recognized when the obligations under the terms of a contract with a customer are satisfied. This generally occurs when the goods are transferred to the customer.

Revenue recorded is presented net of sales and other taxes we collect on behalf of governmental authorities. Shipping and handling costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. Certain of our customer contracts, primarily within our Uniform Direct Sales operating segment, include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration paid to a customer based on performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company's actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company's performance period generally corresponds with the monthly invoice period. No constraints on our revenue recognition were applied during the three or nine months ended February 28, 2021 or February 29, 2020. The Company reassesses these estimates during each reporting period. Cintas maintains a liability for these discounts and rebates within accrued liabilities on the consolidated condensed balance sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. Cintas capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue in accordance with Accounting Standards Codification (ASC) 606, "Revenue" (Topic 606). These assets are included in other assets, net on the consolidated condensed balance sheets.

Additionally, in accordance with Topic 606, certain Uniform Direct Sales operating segment customer contracts contain a provision with an enforceable right of payment and the underlying product has no alternative use to Cintas. Consequently, when both aforementioned provisions are prevalent in a customer contract, the revenue is recorded for finished goods that the customer is obligated to purchase under the termination terms of the contract.
10

Costs to Obtain a Contract
The Company capitalizes commission expenses paid to our employee-partners when the commissions are deemed to be incremental for obtaining the route servicing customer contract. The deferred commissions are amortized on a straight-line basis over the expected period of benefit. We review the deferred commission balances for impairment on an ongoing basis. Deferred commissions are classified as current or noncurrent based on the timing of when we expect to recognize the expense. The current portion is included in prepaid expenses and other current assets and the noncurrent portion is included in other assets, net on the Company's consolidated condensed balance sheets. As of February 28, 2021, the current and noncurrent assets related to deferred commissions totaled $79.1 million and $229.3 million, respectively. As of May 31, 2020, the current and noncurrent assets related to deferred commissions totaled $76.2 million and $227.1 million, respectively. We recorded amortization expense related to deferred commissions of $20.9 million and $19.7 million during the three months ended February 28, 2021 and February 29, 2020, respectively. During the nine months ended February 28, 2021 and February 29, 2020, we recorded amortization expense related to deferred commissions of $62.0 million and $57.7 million, respectively. These expenses are classified in selling and administrative expenses on the consolidated condensed statements of income.
Note 3 - Leases
Cintas has operating leases for certain operating facilities, vehicles and equipment, which provide the right to use the underlying asset and require lease payments over the term of the lease. Each new contract is evaluated to determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. All identified leases are recorded on the consolidated condensed balance sheet with a corresponding operating lease right-of-use asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the consolidated condensed balance sheet.

Operating lease right-of-use assets, net and operating lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at lease commencement date. Lease expense for operating leases is recorded on a straight-line basis over the lease term and variable lease costs are recorded as incurred. Both lease expense and variable lease costs are primarily recorded in cost of uniform rental and facility services and other on the Company's consolidated condensed statements of income. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating lease costs, including short-term lease expense and variable lease costs, which were immaterial in each period, were $17.7 million and $18.0 million for the three months ended February 28, 2021 and February 29, 2020, respectively. For both the nine months ended February 28, 2021 and February 29, 2020, operating lease costs, including short-term lease expense and variable lease costs, which were immaterial in each period, were $52.9 million.

The following table provides supplemental information related to the Company's consolidated condensed statements of cash flows for the nine months ended:
(In thousands)February 28,
2021		February 29,
2020
Cash paid for amounts included in the measurement of operating lease liabilities$36,654 $38,292 
Operating lease right-of-use assets obtained in exchange for new and renewed
operating lease liabilities		$27,771 $33,382 


11

Other information related to the operating lease right-of-use assets, net and operating lease liabilities was as follows:
February 28,
2021		May 31,
2020
Weighted-average remaining lease term - operating leases5.00 years5.19 years
Weighted-average discount rate - operating leases2.46%2.66%

The contractual future minimum lease payments of Cintas' operating lease liabilities by fiscal year are as follows as of February 28, 2021:
(In thousands)
2021 (remaining three months)
$12,273 
202244,593 
202336,182 
202426,018 
202518,976 
Thereafter35,420 
Total payments173,462 
Less interest(10,624)
Total present value of lease payments$162,838 

Note 4 - Fair Value Measurements
All financial instruments that are measured at fair value on a recurring basis (at least annually) have been classified within the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the consolidated condensed balance sheet date. These financial instruments measured at fair value on a recurring basis are summarized below: 
As of February 28, 2021
(In thousands)Level 1Level 2Level 3Fair Value
Cash and cash equivalents$553,611 $0 $0 $553,611 
Other assets, net:
  Interest rate lock agreements0 35,814 0 35,814 
Total assets at fair value$553,611 $35,814 $0 $589,425 
Long-term accrued liabilities:
  Interest rate lock agreements$0 $62,560 $0 $62,560 
Total liabilities at fair value$0 $62,560 $0 $62,560 
 As of November 30, 2017
(In thousands)Level 1 Level 2 Level 3 Fair Value
        
Cash and cash equivalents$236,002
 $—
 $—
 $236,002
Marketable securities:       
Canadian treasury securities—
 22,732
 —
 22,732
Total assets at fair value$236,002
 $22,732
 $—
 $258,734



As of May 31, 2020
(In thousands)Level 1Level 2Level 3Fair Value
Cash and cash equivalents$145,402 $0 $0 $145,402 
Other assets, net:
Interest rate lock agreements0 1,546 0 1,546 
Total assets at fair value$145,402 $1,546 $0 $146,948 
Long-term accrued liabilities:
  Interest rate lock agreements$0 $165,686 $0 $165,686 
Total liabilities at fair value$0 $165,686 $0 $165,686 
12
 As of May 31, 2017
(In thousands)Level 1 Level 2 Level 3 Fair Value
        
Cash and cash equivalents$169,266
 $—
 $—
 $169,266
Marketable securities:       
Canadian treasury securities—
 22,219
 —
 22,219
Total assets at fair value$169,266
 $22,219
 $—
 $191,485


Cintas’ cash and cash equivalents and marketable securities are generally classified within Level 1 or Level 2 of the fair value hierarchy. Financial instruments classified as Level 1 are based on quoted market prices in active markets, and financial instruments classified as Level 2 are based on quoted market prices, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. The types of financial instruments Cintas classifies within Level 1 include most bank deposits and money market securities. Cintas does not adjust the quoted market price for such financial instruments.


The typesfair values of financial instruments Cintas classifies within Level 2outstanding interest rate lock agreements are primarily high grade domestic commercial paperincluded in other assets, net and Canadian treasury securities (federal).long-term accrued liabilities at both February 28, 2021 and May 31, 2020. The valuation technique used for Cintas’ marketable securities classifiedfair values of Cintas' interest rate lock agreements are based on similar exchange traded derivatives (market approach) and are, therefore, included within Level 2 of the fair value hierarchy is primarily the market approach.hierarchy. The primary inputs to value Cintas’ marketable securities are the respective instrument's future cash flows based on its stated yield and the amount a market participant would pay for a similar instrument. Primarily all of Cintas’ marketable securities are actively traded and the recorded fair value reflects current market conditions. However, due towas determined by comparing the inherent volatility inlocked rates against the investment market, there is at least a possibility that recorded investment values may change in the near term.

Interest, realized gains and losses and declines in value determined to bebenchmarked treasury rate. No other than temporary on available-for-sale securities areamounts included in interest incomeother assets, net or expense. The cost of the securities sold is basedlong-term accrued liabilities are recorded at fair value on the specific identification method. The amortized cost basis of marketable securities as of November 30, 2017 and May 31, 2017 was $22.7 million and $22.2 million, respectively. All outstanding marketable securities as of November 30, 2017 and May 31, 2017 had contractual maturities due within one year.a recurring basis.

The methods described above may produce a fair value that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while Cintas believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the consolidated condensed balance sheet dates.

In addition to assets and liabilities that are recorded at fair value on a recurring basis, the CompanyCintas records assets and liabilities at fair value on a nonrecurring basis as required under U.S. GAAP. The Company's acquisition of G&K in the fourth quarter of fiscal 2017 was recordedassets and liabilities measured at fair value. See Note 9 entitled Acquisitions for additional informationvalue on the measurement of the G&Ka nonrecurring basis primarily relate to assets acquired and liabilities assumed. Thereacquired in a business acquisition, which were nonot material acquisitions duringfor the sixthree and nine months ended November 30, 2017.February 28, 2021 and February 29, 2020.



Note 5 - Investments
4.Investments
Investments at November 30, 2017 of $175.7At February 28, 2021, investments were $264.6 million and include the cash surrender value of insurance policies of $151.3$238.4 million, equity method investments of $19.4$23.0 million and cost method investments of $5.0$3.2 million. Investments atAt May 31, 2017 of $164.82020, investments were $214.8 million and include the cash surrender value of insurance policies of $144.0$192.7 million, equity method investments of $15.8$19.0 million and cost method investments of $5.0$3.1 million.

Investments are generally evaluated for impairment on an annual basis or when indicators of impairment exist. For the sixthree and nine months ended November 30, 2017February 28, 2021 and 2016, noFebruary 29, 2020, 0 impairment losses were recorded.




5.Note 6 - Earnings Per Share
Cintas uses the two-class method to calculate basic and diluted earnings per share as a result of outstanding participating securities in the form of restricted stock awards. The following table setstables set forth the computation of basic and diluted earnings per share from continuing operations using the two-class method for amounts attributable to Cintas’ common shares: shares.
Three Months EndedNine Months Ended
Basic Earnings per Share from Continuing Operations (in thousands except per share data)
February 28, 2021February 29, 2020February 28, 2021February 29, 2020
Income from continuing operations$258,384 $234,520 $843,246 $731,775 
Less: income from continuing operations
allocated to participating securities		1,894 2,193 5,908 6,864 
Income from continuing operations available
to common shareholders		$256,490 $232,327 $837,338 $724,911 
Basic weighted average common shares outstanding105,264 104,245 104,782 103,840 
Basic earnings per share from continuing operations$2.44 $2.23 $7.99 $6.98 

13

Three Months EndedNine Months Ended
Three Months Ended Six Months Ended
Basic Earnings per Share from Continuing
Operations (in thousands except per share data)
November 30,
2017		 November 30,
2016		 November 30,
2017
November 30,
2016
Diluted Earnings per Share from Continuing Operations (in thousands except per share data)
Diluted Earnings per Share from Continuing Operations (in thousands except per share data)
February 28, 2021February 29, 2020February 28, 2021February 29, 2020
       
Income from continuing operations$137,737
 $121,950
 $298,845
 $258,158
Income from continuing operations$258,384 $234,520 $843,246 $731,775 
Less: income from continuing operations allocated to participating securities2,111
 1,923
 5,298
 4,775
Less: income from continuing operations allocated to participating securities1,894 2,193 5,908 6,864 
Income from continuing operations available to common shareholders$135,626
 $120,027

$293,547

$253,383
Income from continuing operations available to common shareholders$256,490 $232,327 $837,338 $724,911 
Basic weighted average common shares outstanding106,340
 104,957
 106,039
 104,719
Basic weighted average common shares outstanding105,264 104,245 104,782 103,840 
Effect of dilutive securities – employee stock optionsEffect of dilutive securities – employee stock options2,732 3,343 2,914 3,440 
Diluted weighted average common shares outstandingDiluted weighted average common shares outstanding107,996 107,588 107,696 107,280 
       
Basic earnings per share from continuing operations$1.27
 $1.15

$2.77
 $2.42
Diluted earnings per share from continuing operationsDiluted earnings per share from continuing operations$2.37 $2.16 $7.78 $6.76 

 Three Months Ended Six Months Ended
Diluted Earnings per Share from Continuing
   Operations (in thousands except per share data)
November 30,
2017		 November 30,
2016		 November 30,
2017		 November 30,
2016
        
Income from continuing operations$137,737
 $121,950
 $298,845
 $258,158
Less: income from continuing operations allocated to participating securities2,111
 1,923
 5,298
 4,775
Income from continuing operations available to common shareholders$135,626
 $120,027
 $293,547
 $253,383
Basic weighted average common shares outstanding106,340
 104,957
 106,039
 104,719
Effect of dilutive securities – employee stock options3,478
 2,690
 2,899
 2,559
Diluted weighted average common shares outstanding109,818
 107,647
 108,938
 107,278
        
Diluted earnings per share from continuing operations$1.24
 $1.12
 $2.69
 $2.36

There were no discontinued operations for the three or nine months ended February 28, 2021. For the three and nine months ended November 30, 2017,February 29, 2020, both basic and diluted loss per share from discontinued operations were $0.01. Both basic and diluted earnings per share from discontinued operations were $0.17 for the three months ended November 30, 2016. For the six months ended November 30, 2017, basic and diluted earnings per share from discontinued operations were $0.51 and $0.50, respectively. Both basic and diluted earnings per share from discontinued operations were $0.19 for the six months ended November 30, 2016.rounded to 0.


For the three months ended November 30, 2017February 28, 2021 and 2016,February 29, 2020, options granted to purchase 0.5 million and 0.70.1 million shares of Cintas common stock respectively, were excluded from the computation of diluted earnings per share. For both the sixnine months ended November 30, 2017February 28, 2021 and 2016,February 29, 2020, options granted to purchase 0.60.2 million shares of Cintas common stock were excluded from the computation of diluted earnings per share. The exercise prices of these options were greater than the average market price of the common stock (anti-dilutive).


On August 2, 2016,October 30, 2018, Cintas announced that the Board of Directors authorized a $500.0 million$1.0 billion share buyback program, which does not have an expiration date. AsThe October 30, 2018 share buyback program was completed during the third quarter of Novemberfiscal 2021. From the inception of the October 30, 2017, no2018 share buybacksbuyback program through February 28, 2021, Cintas purchased a total of 4.5 million shares of Cintas common stock at an average price of $223.68 per share for a total purchase price of $1.0 billion. On October 29, 2019, we announced that the Board of Directors authorized a new $1.0 billion share buyback program, which does not have occurred underan expiration date.

The following tables summarize the August 2, 2016share buyback activity by program and there were no share buybacks under this programfiscal period:

Three Months EndedNine Months Ended
February 28, 2021February 28, 2021
Buyback Program
(In thousands except per share data)
SharesAvg. Price
per Share		Purchase
Price		SharesAvg. Price
per Share		Purchase
Price
October 30, 2018190 $319.88 $60,877 190 $319.88 $60,877 
October 29, 201966 $321.51 $21,080 66 $321.51 $21,080 
256 $320.30 $81,957 256 $320.30 $81,957 

Three Months EndedNine Months Ended
February 29, 2020February 29, 2020
Buyback Program
(In thousands except per share data)
SharesAvg. Price
per Share		Purchase
Price		SharesAvg. Price
per Share		Purchase
Price
October 30, 20180 $0 $0 837 $230.66 $193,109 
October 29, 20190 $0 $0 0 $0 $0 
0 $0 $0 837 $230.66 $193,109 
14

In the period subsequent to November 30, 2017February 28, 2021, through January 5, 2018.April 6, 2021, we purchased less than 0.1 million shares of Cintas common stock at an average price of $337.39 for a total purchase price of $8.0 million. From the inception of the October 29, 2019 program through April 6, 2021, Cintas has purchased less than 0.1 million shares of Cintas common stock in the aggregate, at an average price of $325.71 per share, for a total purchase price of $29.1 million.


For the sixthree months ended November 30, 2017,February 28, 2021, Cintas acquired less than 0.1 million shares of Cintas common stock for employee payroll taxes due on restricted stock awards that vested. These shares were acquired at an average price of $332.73 per share for a total purchase price of $1.2 million. For the three months ended February 29, 2020, Cintas acquired less than 0.1 million shares of Cintas common stock for employee payroll taxes due on restricted stock awards that vested. These shares were acquired at an average price of $278.21 per share for a total purchase price of $2.5 million. During the nine months ended February 28, 2021, Cintas acquired 0.2 million shares of Cintas common stock for employee payroll taxes due on restricted stock awards that vested. These shares were acquired at an average price of $301.49 per share for a total purchase price of $72.5 million. During the nine months ended February 29, 2020, Cintas acquired 0.3 million shares of Cintas common stock for employee payroll taxes due on restricted stock awards that vested during the six months ended November 30, 2017.vested. These shares were acquired at an average price of $129.01$261.48 per share for a total purchase price of $35.7$68.4 million.



6.Note 7 - Goodwill, Service Contracts and Other Assets
Changes in the carrying amount of goodwill and service contracts for the sixnine months ended November 30, 2017,February 28, 2021, by reportable operating segment and All Other, are as follows:
Goodwill
(in thousands)
Uniform Rental
and Facility Services		First Aid
and Safety Services		All
Other		Total
Balance as of June 1, 2020$2,513,041 $243,266 $113,713 $2,870,020 
Goodwill acquired1,568 2,545 659 4,772 
Foreign currency translation18,875 1,519 65 20,459 
Balance as of February 28, 2021$2,533,484 $247,330 $114,437 $2,895,251 
Goodwill (in thousands)
Uniform Rental
 and Facility Services
 
First Aid
 and Safety Services
 
All
Other
 Total
        
Balance as of June 1, 2017$2,448,070
 $243,112
 $91,153
 $2,782,335
Goodwill acquired (1)
27,107
 73
 426
 27,606
Foreign currency translation927
 891
 37
 1,855
Balance as of November 30, 2017$2,476,104
 $244,076
 $91,616
 $2,811,796


Service Contracts
(in thousands)
Uniform Rental
and Facility Services		First Aid
and Safety Services		All
Other		Total
Balance as of June 1, 2020$407,611 $19,805 $24,113 $451,529 
Service contracts acquired2,369 2,132 473 4,974 
Service contracts amortization(36,449)(2,850)(3,705)(43,004)
Foreign currency translation4,692 127 0 4,819 
Balance as of February 28, 2021$378,223 $19,214 $20,881 $418,318 
(1) Adjustments to the G&K preliminary purchase price allocation represent $27.1 million of the acquired goodwill in the Uniform Rental and Facility Services reportable operating segment. See Note 9 entitled Acquisitions for more information.

15
Service Contracts (in thousands)
Uniform Rental
 and Facility Services
 
First Aid
 and Safety Services
 
All
Other
 Total
  
  
  
  
Balance as of June 1, 2017$529,923
 $30,062
 $27,003
 $586,988
Service contracts acquired32
 411
 533
 976
Service contracts amortization(21,946) (1,927) (2,364) (26,237)
Foreign currency translation3,748
 99
 —
 3,847
Balance as of November 30, 2017$511,757
 $28,645
 $25,172
 $565,574


Information regarding Cintas’ service contracts and other assets is as follows:
 As of February 28, 2021
(In thousands)Carrying
Amount		Accumulated
Amortization		Net
Service contracts$954,553 $536,235 $418,318 
Capitalized contract costs (1)
$440,202 $210,862 $229,340 
Noncompete and consulting agreements44,431 42,077 2,354 
Other96,944 24,627 72,317 
Total other assets$581,577 $277,566 $304,011 
 As of November 30, 2017
(In thousands)Carrying Amount Accumulated Amortization Net
      
Service contracts$917,072
 $351,498
 $565,574
      
Noncompete and consulting agreements$40,913
 $39,588
 $1,325
Other35,711
 7,876
 27,835
Total other assets$76,624
 $47,464
 $29,160

 As of May 31, 2020
(In thousands)Carrying
Amount		Accumulated
Amortization		Net
Service contracts$941,383 $489,854 $451,529 
Capitalized contract costs (1)
$375,912 $148,853 $227,059 
Noncompete and consulting agreements43,890 41,317 2,573 
Other54,239 23,113 31,126 
Total other assets$474,041 $213,283 $260,758 
 As of May 31, 2017
(In thousands)Carrying Amount Accumulated Amortization Net
      
Service contracts$911,273
 $324,285
 $586,988
      
Noncompete and consulting agreements$40,743
 $39,244
 $1,499
Other34,890
 4,422
 30,468
Total other assets$75,633
 $43,666
 $31,967
(1)    The current portion of capitalized contract costs, included in prepaid expenses and other current assets on the consolidated condensed balance sheets as of February 28, 2021 and May 31, 2020, is $79.1 million and $76.2 million, respectively.


Amortization expense for service contracts and other assets for continuing operations was $15.6$35.6 million and $3.2$35.7 million for the three months ended November 30, 2017February 28, 2021 and 2016,February 29, 2020, respectively. AmortizationFor the nine months ended February 28, 2021 and February 29, 2020, amortization expense for service contracts and other assets for continuing operations was $29.8$106.0 million and $6.4$105.6 million, forrespectively. As of February 28, 2021, the six months ended November 30, 2017 and 2016, respectively. Estimatedestimated future amortization expense for service contracts and other assets, excluding any future acquisitions for each of the next five full fiscal years and thereaftercommissions to be earned, is $61.3 million, $61.0 million, $59.6 million, $53.8 million, $51.8 million and $248.3 million, respectively. The increase in amortization expense in the current year and for the next five years over past fiscal years is the result of the G&K acquisition.

as follows:

Fiscal Year (In thousands)
2021 (remaining three months)
$35,595 
2022133,539 
2023114,282 
2024101,952 
202588,837 
Thereafter257,590 
Total future amortization expense$731,795 
7.
16

Note 8 - Debt, Derivatives and Hedging Activities
Cintas' outstanding debt is summarized as follows:

(In thousands)
Interest
 Rate
 
Fiscal Year
Issued
 
Fiscal Year
Maturity
 
November 30,
2017
 
May 31,
2017
(In thousands)Interest
Rate		Fiscal Year
Issued		Fiscal Year
Maturity		February 28,
2021		May 31,
2020
     
Debt due within one year     Debt due within one year
Senior notes6.13% 2008 2018 $300,000
 $300,000
Senior notes4.30 %20122022$250,000 $0 
Commercial paper1.24%
(1) 
Various Various —
 50,500
Current portion of term loan2.00%
(1) 
2017 2018 —
 12,500
Debt issuance costs  —
 (100)Debt issuance costs(64)0 
Total debt due within one year  $300,000
 $362,900
Total debt due within one year$249,936 $0 
     
Debt due after one year     Debt due after one year
Senior notes4.30% 2012 2022 $250,000
 $250,000
Senior notes4.30 %20122022$0 $250,000 
Senior notes2.90% 2017 2022 650,000
 650,000
Senior notes2.90 %20172022650,000 650,000 
Senior notes3.25% 2013 2023 300,000
 300,000
Senior notes3.25 %20132023300,000 300,000 
Senior notes (1)
Senior notes (1)
2.78 %2013202350,924 51,250 
Senior notes (2)
2.78% 2013 2023 52,337
 52,554
Senior notes (2)
3.11 %2015202551,385 51,637 
Senior notes (3)
3.11% 2015 2025 52,476
 52,645
Senior notes3.70% 2017 2027 1,000,000
 1,000,000
Senior notes3.70 %201720271,000,000 1,000,000 
Senior notes6.15% 2007 2037 250,000
 250,000
Senior notes6.15 %20072037250,000 250,000 
Long-term portion of term loan2.00%
(1) 
2017 2022 —
 237,500
Debt issuance costs  (20,591) (22,075)Debt issuance costs(10,891)(13,182)
Total debt due after one year  $2,534,222
 $2,770,624
 Total debt due after one year$2,291,418 $2,539,705 

(1)Variable rate debt instrument. The rate presented is the variable borrowing rate at May 31, 2017.
(2)  Cintas assumed these senior notes with the acquisition of G&K Services, Inc. (G&K) in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.73%.
(3) (2)    Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.88%.


Cintas' senior notes, excluding the G&K senior notes assumed with the acquisition of G&K in fiscal 2017, and term loan are recorded at cost, net of debt issuance costs. The fair value of the long-term debt is estimated using Level 2 inputs based on general market prices. The carrying value and fair value of Cintas' debt as of November 30, 2017February 28, 2021 were $2,854.8$2,550.0 million and $2,985.2$2,810.9 million,, respectively, and as of May 31, 20172020 were $3,156.0$2,550.0 million and $3,296.8$2,804.2 million,, respectively. During the six months ended November 30, 2017, Cintas made payments of $50.5 million, net on commercial paper borrowings and paid off the term loan balance of $250.0 million with cash on hand. On December 1, 2017, in accordance with the terms of the notes, Cintas paid the $300.0 million aggregate principal amount of its 6.13% 10-year senior notes that matured on that date with cash on hand and $265.0 million in proceeds from the issuance of commercial paper.


The credit agreement that supports our commercial paper program was amended and restated on September 16, 2016.May 24, 2019. The amendment increased the capacity of the revolving credit facility from $450.0$600.0 million to $600.0 million$1.0 billion and addedcreated a $250.0 millionnew term loan facility. The existing term loan facility was paid in full as of the first quarter of fiscal 2018.$200.0 million. The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under either the revolving credit facility or a newthe term loan of up to $250.0 million in the aggregate, subject to customary conditions. The maturity date of the revolving credit agreementfacility is September 15, 2021. May 23, 2024. As of November 30, 2017, thereFebruary 28, 2021 and May 31, 2020, there was no0 commercial paper outstanding and no0 borrowings on our revolving credit facility. As of May 31, 2017, there was $50.5 million of commercial paper outstanding with a weighted average interest rate of 1.24% and maturity dates less than 30 days and no borrowings on our revolving credit facility. The fair value of the commercial paper is estimated using Level 2 inputs based on general market prices. Given its short-term nature, the carrying value of the outstanding commercial paper approximates fair value.




Cintas uses interest rate locks to manage our overall interest expense as interest rate locks effectively change the interest rate of specific debt issuances. The interest rate locks are entered into to protect against unfavorable movements in the benchmark treasury rate related to forecasted debt issuances. Cintas used interest rate lock agreements to hedge against movements in the treasury rates at the time Cintas issued its senior notes in fiscal 2007, fiscal 2008, fiscal 2012, fiscal 2013 and fiscal 2017. The amortization of the cash flow hedges resulted in a decrease to other comprehensive income (loss) of $0.1$0.4 million for both the three months ended November 30, 2017February 28, 2021 and an increase to other comprehensive income of $0.4 million for the three months ended November 30, 2016. For the six months ended November 30, 2017 and 2016, theFebruary 29, 2020. The amortization of the cash flow hedges resulted in a decrease to other comprehensive income (loss) of $0.3$1.1 million and $1.0 million for the nine months ended February 28, 2021 and February 29, 2020. During fiscal 2020, Cintas entered into interest rate lock agreements with a notional value of $950.0 million for a forecasted debt issuance in connection with the upcoming debt maturities. As of February 28, 2021, the fair values of these interest rate locks was an increase toasset of $35.8 million, recorded in other assets and in other comprehensive loss, net of tax. As of May 31, 2020, the fair values of these interest rate locks were an asset of $1.5 million and a liability of $53.8 million,
17

recorded in other assets and long-term accrued liabilities, respectively, and in other comprehensive loss, net of tax. During fiscal 2019, Cintas entered into interest rate lock agreements with a notional value of $500.0 million for a forecasted debt issuance in connection with the upcoming debt maturities. As of February 28, 2021 and May 31, 2020, the fair values of these interest rate locks were a liability of $62.6 million and $111.9 million, respectively, and were recorded in long-term accrued liabilities and in other comprehensive loss, net of tax. These interest rate locks had no impact on net income of $0.8 million, respectively.or cash flows from continuing operations for the three and nine months endedFebruary 28, 2021 or February 29, 2020.


Cintas has certain covenants related to debt agreements. These covenants limit Cintas’Cintas' ability to incur certain liens, to engage in sale-leaseback transactions and to merge, consolidate or sell all or substantially all of Cintas’Cintas' assets. These covenants also require Cintas to maintain certain debt to consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) and interest coverage ratios. Cross-default provisions exist between certain debt instruments. If a default of a significant covenant were to occur, the default could result in an acceleration of the maturity of the indebtedness, impair liquidity and limit the ability to raise future capital. Cintas was in compliance with all of the debt covenants for all periods presented.



As of February 28, 2021 and May 31, 2020, the Company had unrecognized inventory purchase commitments with various suppliers totaling $10.1 million and $117.6 million, respectively. In fiscal 2021, we entered into $29.3 million of new unrecognized inventory purchase commitments and made $19.2 million of inventory purchases under these commitments. All unrecognized inventory purchase commitments outstanding at May 31, 2020 have been satisfied. The Company expects to purchase all remaining commitments within the next twelve months.

8.
Note 9 - Income Taxes
In the normal course of business, Cintas provides for uncertain tax positions and the related interest and adjusts its unrecognized tax benefits and accrued interest accordingly. As of November 30, 2017February 28, 2021 and May 31, 2017,2020, recorded unrecognized tax benefits were $18.7$35.8 million and $12.6$35.9 million, respectively, and are included in long-term accrued liabilities on the consolidated condensed balance sheet. The increase in the liability for the six months ended November 30, 2017 is primarily related to an adjustment to the preliminary purchase price allocation for the G&K acquisition.sheets.

All U.S. federal income tax returns are closed to audit through fiscal 2013. Cintas is currently in various audits in certain foreign jurisdictions and certain domestic states. The years under foreign and domestic state audits cover fiscal years back to 2013. Based on the resolution of the various audits and other potential regulatory developments, it is reasonably possible that the balance of unrecognized tax benefits would not change for the fiscal year ending May 31, 2018.


The majority of Cintas' operations are in North America. Cintas is required to file federal income tax returns, as well as state income tax returns in a majority of the domestic states and also in certain Canadian provinces. At times, Cintas is subject to audits in these jurisdictions. The audits, by nature, are sometimes complex and can require several years to resolve. The final resolution of any such tax audit could result in either a reduction in Cintas' accruals or an increase in its income tax provision, either of which could have an impact on the consolidated condensed results of operations in any given period.


All United States federal income tax returns are closed to audit through fiscal 2016. Cintas is currently in various audits in certain foreign jurisdictions and certain domestic states. The years under foreign and domestic state audits cover fiscal years back to 2013. Based on the resolution of the various audits and other potential regulatory developments, it is reasonably possible that the balance of unrecognized tax benefits would not change for the fiscal year ending May 31, 2021.

Cintas’ effective tax rate for continuing operations was 33.3%14.4% and 34.9%18.9% for the three months ended November 30, 2017February 28, 2021 and 2016,February 29, 2020, respectively. For the sixnine months ended November 30, 2017February 28, 2021 and 2016,February 29, 2020, Cintas' effective tax rate for continuing operations was 29.8%11.8% and 31.5%16.5%, respectively. The effective tax rate for all periods was largely impacted by certain discrete items (primarily the tax accounting for stock-based compensation).

On December 22, 2017, In addition, the President signed into legislation The Tax Cuts and Jobs Act (the Act).  The Act changes existing U.S.effective tax law and includes numerous provisions that will affect our business, including our income tax accounting, disclosure and tax compliance. We believerate for the most impactful changes within the Act provision are those that will reduce the U.S. corporate tax rates, business-related exclusions and deductions and credits. ASC 740, "Income Taxes" (Topic 740), requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. Consequently, as of the date of enactment, and during the threenine months ended February 28, 2018, we will remeasure all deferred2021 included a one-time tax assets and liabilities at the newly enacted Corporate U.S. income tax rate. We are currently evaluating the impact of the Act, which will include remeasuring the deferred tax assets and liabilities, the one-time transition tax, as well as evaluating our reinvestment assertion on all future earnings and profits of our foreign entities, and we will disclose the estimated impact upon recognition in the third quarter of fiscal 2018. 




9.Acquisitions

On March 21, 2017, Cintas acquired G&K for consideration of approximately $2.1 billion. Pursuant to the merger agreement among Cintas, G&K and Bravo Merger Sub, Inc., a wholly-owned subsidiary of Cintas, each share of common stock of G&K issued and outstanding immediately prior to the effective time of the G&K acquisition was canceled and converted into the right to receive $97.50 in cash. The total purchase price was $2,078.4 million, which was funded using a combination of new senior notes, a term loan, other borrowings under our existing credit facility and cash on hand. The net consideration transferred for G&K consisted of the following items:
(In thousands)  
   
Cash consideration for common stock$1,901,845
(1) 
Cash consideration for share-based awards62,257
(2) 
Cash consideration for G&K revolving debt124,180
(3) 
Cash consideration for transaction expenses24,529
(4) 
Total consideration2,112,811
 
Cash acquired(34,393)
(5) 
Net consideration transferred$2,078,418
 
(1) The cash consideration for outstanding shares of G&K common stock is the product of the agreed-upon cash per share price of $97.50 and total G&K outstanding shares of approximately 19.5 million.
(2) The cash consideration for share-based awards is the product of the agreed-upon cash per share price of $97.50 and the total number of restricted stock outstanding and the “in the money” stock options net of the weighted average exercise price.
(3) The cash consideration for G&K revolving debt reflects the repayment of the outstanding obligation.
(4) Represents G&K legal and professional fees that were incurred prior to acquisition and were due upon the closing of the transaction.
(5) Represents the G&K cash balance acquired at acquisition.
Cintas accounted for the G&K acquisition using the acquisition method. The preliminary allocation of the purchase price was determined by management with the assistance of third-party valuation specialists and was based on estimates of the fair value of assets acquired and liabilities assumed as of March 21, 2017. During the six months ended November 30, 2017, $28.3 million of adjustments related to deferred taxes and $1.2 million of adjustments related to income taxes, current were made to the preliminary purchase price allocation. Cintas is continuing to evaluate information to determine the fair value of acquired assets and liabilities. As of November 30, 2017, the purchase price allocation for the acquisition was preliminary and subject to completion. The components of the preliminary purchase price allocation, at fair value, are as follows:


Assets 
Accounts receivable$95,846
Inventories30,254
Uniforms and other rental items in service93,659
Income taxes, current15,873
Prepaid expenses and other current assets43,235
Property and equipment254,035
Goodwill1,520,295
Service contracts519,000
Trade names17,000
Other assets15,585
Liabilities 
Accounts payable(53,220)
Accrued compensation and related liabilities(9,594)
Accrued liabilities(115,109)
Long-term accrued liabilities(28,380)
G&K senior notes(105,359)
Deferred income taxes(214,702)
Total consideration$2,078,418


The preliminary fair value of the intangible assets has been estimated using the income approach through a discounted cash flow analysis (except as noted below with respect to the trade names) with the cash flow projections discounted using a rate of 9.5%. The cash flows are based on estimates used to price the G&K acquisition, and the discount rates applied were benchmarked with reference to the implied rate of return from Cintas’ pricing model and the weighted average cost of capital.

The G&K service contract intangible asset will be amortized over a period of 15 years, which represents the estimated useful life of the economic benefit and the asset amortization is based on the annual economic valuesale of the underlying asset which generally decreases over the 15-year term. The trade names represent the G&K corporate trade name and all of the branded variations thereof. Cintas applied the income approach through a relief from royalty method analysis to determine the preliminary fair value of the trade namecertain operating assets.

The table below sets forth the preliminary valuation and amortization period of identifiable intangible assets:
18
Identifiable intangible assetsPreliminary ValuationAmortization Period
   
Service contracts$519,000
15 years
Trade names17,000
3 years
Total$536,000
 

Cintas estimated the preliminary fair value of the acquired property, plant and equipment using a combination of the cost and market approaches, depending on the type of asset. The preliminary fair value of property, plant and equipment consisted of real property of $141.8 million and personal property of $112.2 million.

Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. None of the goodwill is expected to be deductible for income tax purposes. The factors contributing to the recognition of the amount of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the G&K acquisition. These benefits include improved service capabilities, an enhanced footprint in the markets that we serve, attractive synergy opportunities and value creation. The goodwill is entirely allocated to the Uniform Rental and Facility Services reportable operating segment.

The following unaudited pro forma information presents the combined financial results for Cintas and G&K as if the G&K acquisition had been completed at the beginning of Cintas’ prior fiscal year, June 1, 2016. Prior to the acquisition, G&K used a 52-week or 53-week fiscal year ending on the Saturday nearest June 30. The pro forma financial information set forth below for the three and six months ended November 30, 2016 includes G&K's quarterly and year to date results, respectively, for the periods of October 2, 2016 through December 31, 2016 and July 2, 2016 through December 31, 2016, adjusted for number of working days in Cintas' first and second quarters of fiscal 2017.

 Three Months Ended Six Months Ended
(In thousands except per share data)
November 30,
 2016
 
November 30,
 2016
    
Net sales$1,515,222
 $3,026,600
Net income from continuing operations$131,212
 $277,625
    
Earnings from continuing operations per common share - diluted$1.20
 $2.54
The information above does not include the pro forma adjustments that would be required under Regulation S-X for pro forma financial information, and does not reflect future events that may occur after November 30, 2017 or any operating efficiencies or inefficiencies that may result from the G&K acquisition and related financing. Therefore, the information is not necessarily indicative of results that would have been achieved had the businesses been combined during the periods presented or the results that Cintas will experience going forward.



Cintas is required to provide additional disclosures about fair value measurements as part of the consolidated financial statements for each major category of assets and liabilities measured at fair value on a nonrecurring basis (including business acquisitions). The working capital assets and liabilities, as well as the property and equipment acquired, were valued using Level 2 inputs which included data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets (market approach). Goodwill, service contracts and other intangibles were valued using Level 3 inputs, which are unobservable by nature, and included internal estimates of future cash flow using a discount rate of 9.5% (income approach). Significant increases (decreases) in any of those unobservable inputs in isolation would result in a significantly lower (higher) fair value measurement.  Management utilizes third-party valuation firms to assist in the determination of purchase accounting fair values, and specifically those considered Level 3 measurements. Management ultimately oversees the third-party valuation firms to ensure that the transaction-specific assumptions are appropriate for Cintas.


10.Note 10 - Pension Plans

In conjunction with the acquisition of G&K in fiscal 2017, Cintas assumed G&K's noncontributory frozen defined benefit pension plan (the Pension Plan) that covers substantially all legacy G&K employees who were employed as of July 1, 2005, except certain employees who were covered by union-administered plans. Benefits are based on the number of years of service and each employee’s compensation near retirement. We will make annual contributions to the Pension Plan consistent with federal funding requirements. The Pension Plan was frozen by G&K effective December 31, 2006. Future growth in benefits will not occur beyond this date. Applicable accounting standards require that the consolidated condensed balance sheetsheets reflect the funded status of the Pension Plan. The funded status of the Pension Plan is measured as the difference between the plan assets at fair value and the projected benefit obligation.obligation (PBO). The PBO represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The measurement of the PBO is based on the Company’s estimates and actuarial valuations. The net pension liability at November 30, 2017 is included in long-term accrued liabilities on the consolidated condensed balance sheet.sheets. Unrecognized differences between actual amounts and estimates based on actuarial assumptions are included in accumulated other comprehensive incomeloss in our consolidated condensed balance sheet.sheets. The difference between actual amounts and estimates based on actuarial assumptions are recognized in other comprehensive income (loss), net of tax, in the period in which they occur. The Pension Plan assumptions are evaluated annually and are updated as deemed necessary.


The components of net periodic pension cost recognized in other comprehensive income for the Pension Planbenefit are summarized as follows:
Three Months EndedNine Months Ended
(In thousands)February 28,
2021		February 29,
2020		February 28,
2021		February 29,
2020
Interest cost$512 $720 $1,537 $2,161 
Expected return on assets(731)(740)(2,193)(2,221)
Amortization of net loss56 0 167 0 
Net periodic pension benefit$(163)$(20)$(489)$(60)

 Three Months Ended Six Months Ended
(In thousands)
November 30,
 2017
 
November 30,
 2017
    
Interest cost$711
 $1,421
Expected return on assets(716) (1,432)
Amortization of net loss—
 —
Total net periodic benefit cost$(5) $(11)



11.Note 11 - Accumulated Other Comprehensive Income (Loss)

The following table summarizestables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss), net of tax:
(In thousands)Foreign
Currency		Unrealized Loss on
Interest Rate Hedges		OtherTotal
Balance at June 1, 2020$(26,343)$(112,718)$(14,319)$(153,380)
Other comprehensive income before reclassifications26,946 10,842 0 37,788 
Amounts reclassified from accumulated other
comprehensive loss		0 (358)0 (358)
Net current period other comprehensive income26,946 10,484 0 37,430 
Balance at August 31, 2020603 (102,234)(14,319)(115,950)
Other comprehensive income before reclassifications2,960 15,942 0 18,902 
Amounts reclassified from accumulated other comprehensive loss0 (359)0 (359)
Net current period other comprehensive income2,960 15,583 0 18,543 
Balance at November 30, 20203,563 (86,651)(14,319)(97,407)
Other comprehensive income before reclassifications8,947 75,850 0 84,797 
Amounts reclassified from accumulated other comprehensive loss0 (358)0 (358)
Net current period other comprehensive income8,947 75,492 0 84,439 
Balance at February 28, 2021$12,510 $(11,159)$(14,319)$(12,968)

19

(In thousands)Foreign Currency Unrealized Income on Cash Flow Hedges Other Total(In thousands)Foreign
Currency		Unrealized Loss on
Interest Rate Hedges		OtherTotal
       
Balance at June 1, 2017$(12,726) $11,382
 $(1,685) $(3,029)
Balance at June 1, 2019Balance at June 1, 2019$(15,022)$(18,389)$(5,741)$(39,152)
Other comprehensive income (loss) before
reclassifications		Other comprehensive income (loss) before
reclassifications		6,724 (29,903)0 (23,179)
Amounts reclassified from accumulated other comprehensive lossAmounts reclassified from accumulated other comprehensive loss0 (295)0 (295)
Net current period other comprehensive income (loss)Net current period other comprehensive income (loss)6,724 (30,198)0 (23,474)
Cumulative effect of change in accounting principle Cumulative effect of change in accounting principle0 2,058 (83)1,975 
Balance at August 31, 2019Balance at August 31, 2019(8,298)(46,529)(5,824)(60,651)
Other comprehensive income before reclassifications35,184
 —
 20
 35,204
Other comprehensive income before reclassifications1,413 22,761 0 24,174 
Amounts reclassified from accumulated other comprehensive income (loss)—
 (172) —
 (172)
Net current period other comprehensive income (loss)35,184

(172)
20

35,032
Balance at August 31, 201722,458

11,210

(1,665)
32,003
Amounts reclassified from accumulated other comprehensive lossAmounts reclassified from accumulated other comprehensive loss0 (358)0 (358)
Net current period other comprehensive incomeNet current period other comprehensive income1,413 22,403 0 23,816 
Balance at November 30, 2019Balance at November 30, 2019(6,885)(24,126)(5,824)(36,835)
Other comprehensive loss before reclassifications(11,374) —
 (20) (11,394)Other comprehensive loss before reclassifications(4,039)(53,582)0 (57,621)
Amounts reclassified from accumulated other comprehensive income (loss)—
 (172) —
 (172)
Amounts reclassified from accumulated other comprehensive lossAmounts reclassified from accumulated other comprehensive loss0 (358)0 (358)
Net current period other comprehensive loss(11,374) (172) (20) (11,566)Net current period other comprehensive loss(4,039)(53,940)0 (57,979)
Balance at November 30, 2017$11,084

$11,038

$(1,685)
$20,437
Balance at February 29, 2020Balance at February 29, 2020$(10,924)$(78,066)$(5,824)$(94,814)
(In thousands)Foreign Currency Unrealized Loss on Cash Flow Hedges Other Total
        
Balance at June 1, 2016$(2,474) $(20,830) $(1,570) $(24,874)
Other comprehensive income (loss) before
    reclassifications
115
 (12,037) (1) (11,923)
Amounts reclassified from accumulated other comprehensive income (loss)—
 385
 —
 385
Net current period other comprehensive income (loss)115

(11,652)
(1)
(11,538)
Balance at August 31, 2016(2,359) (32,482) (1,571) (36,412)
Other comprehensive (loss) income before
   reclassifications
(7,650) 26,390
 1
 18,741
Amounts reclassified from accumulated other comprehensive income (loss)—
 385
 —
 385
Net current period other comprehensive (loss) income(7,650) 26,775
 1
 19,126
Balance at November 30, 2016$(10,009) $(5,707) $(1,570) $(17,286)


The following table summarizes the reclassifications out of accumulated other comprehensive income (loss):loss:

Details about Accumulated
Other Comprehensive
Income (Loss) Components		Amount Reclassified from
Accumulated Other
Comprehensive Loss		Affected Line in the
Consolidated Condensed
Statements of Income
Three Months EndedNine Months Ended
(In thousands)February 28,
2021		February 29,
2020		February 28,
2021		February 29,
2020
Amortization of interest rate locks$474 $474 $1,422 $1,422 Interest expense
Tax expense(116)(116)(347)(411)Income taxes
Amortization of interest rate locks, net of tax$358 $358 $1,075 $1,011 Net income

20
Reclassifications out of Accumulated Other Comprehensive Income (Loss)
           
Details about Accumulated Other Comprehensive Income (Loss) Components 
Amount Reclassified from Accumulated Other
 Comprehensive Income (Loss)
 Affected Line in the Consolidated Condensed Statements of Income
       
  Three Months Ended Six Months Ended  
(In thousands) November 30, 2017 November 30, 2016 November 30, 2017 November 30, 2016  
           
Amortization of interest rate locks $278
 $(615) $556
 $(1,229) Interest expense
Tax (expense) benefit (106) 230
 (212) 459
 Income taxes
Amortization of interest rate locks, net of tax $172
 $(385)
$344

$(770) Net income




12.Note 12 - Segment Information
Cintas’ reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The Uniform Rental and Facility Services reportable operating segment, consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ operating segments, which consists of the Fire Protection Services operating segment and the Uniform Direct Sale operating segment, is included in All Other.

Cintas evaluates the performance of each operating segment based on several factors of which the primary financial measures are operating segment revenue and income before income taxes. The accounting policies of the operating segments are the same as those described in Note 1 entitled Basis of Presentation. Information related to the operations of Cintas’ reportable operating segments and All Other is set forth below: 

(In thousands)Uniform Rental
and Facility Services		First Aid
and Safety Services		All
Other
Corporate (1)
Total
For the three months ended February 28, 2021   
Revenue$1,417,865 $198,474 $160,717 $0 $1,777,056 
Income (loss) before income taxes$283,403 $25,820 $17,245 $(24,465)$302,003 
For the three months ended February 29, 2020   
Revenue$1,448,021 $170,541 $192,086 $0 $1,810,648 
Income (loss) before income taxes$271,629 $24,692 $18,331 $(25,596)$289,056 
As of and for the nine months ended February 28, 2021   
Revenue$4,222,764 $597,373 $460,541 $0 $5,280,678 
Income (loss) before income taxes$914,040 $65,853 $49,153 $(73,290)$955,756 
Total assets$6,783,655 $653,662 $356,569 $553,611 $8,347,497 
As of and for the nine months ended February 29, 2020
Revenue$4,372,524 $512,299 $580,713 $0 $5,465,536 
Income (loss) before income taxes$826,999 $74,102 $54,161 $(78,649)$876,613 
Total assets$6,695,002 $552,455 $420,082 $234,441 $7,901,980 
(1) Corporate assets include cash and marketable securities, if applicable, in all periods.
21

ITEM 2.                MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
 
Business Strategy
Cintas helps more than one million businesses of all types and sizes, primarily in the United States (U.S.), as well as Canada, Latin America, Europe and Asia, get READY™ to open their doors with confidence every day by providing a wide range of products and services that enhance our customers’ image and help keep their facilities and employees clean, safe and looking their best. With products and services including uniforms, mats, mops, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety training, Cintas helps customers get Ready for the Workday®. The company is also the creator of the Total Clean Program™ — a first-of-its-kind service that includes scheduled delivery of essential cleaning supplies, hygienically clean laundering, and sanitizing and disinfecting projects and services.

We are North America’s leading provider of corporate identity uniforms through rental and sales programs, as well as a significant provider of related business services, including entrance mats, restroom cleaning services and supplies, first aid and safety services and fire protection products and services.

Cintas’ principal objective is “to exceed customers’ expectations in order to maximize the long-term value of Cintas for shareholders and working partners,” and it provides the framework and focus for Cintas’ business strategy. This strategy is to achieve revenue growth for all our products and services by increasing our penetration at existing customers and by broadening our customer base to include business segments to which we have not historically served. We will also continue to identify additional product and service opportunities for our current and future customers.

To pursue the strategy of increasing penetration, we have a highly talented and diverse team of service professionals visiting our customers on a regular basis. This frequent contact with our customers enables us to develop close personal relationships. The combination of our distribution system and these strong customer relationships provides a platform from which we launch additional products and services.

We pursue the strategy of broadening our customer base in several ways. Cintas has a national sales organization introducing all its products and services to prospects in all business segments. Our broad range of products and services allows our sales organization to consider any type of business a prospect. We also broaden our customer base through geographic expansion, especially in our fire protection operating segment. Finally, we evaluate strategic acquisitions as opportunities arise.
Results of Operations
Cintas classifies its business into two reportable operating segments and places the remainder of its operating segments in an All Other category. Cintas’ two reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The Uniform Rental and Facility Services reportable operating segment consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies carpet and tile cleaning services and the sale of items from our catalogs to our customers on route are included within this reportable operating segment. The First Aid and Safety Services reportable operating segment consists of first aid and safety products and services. The remainder of Cintas’ business, which consists of the Fire Protection Services operating segment and itsthe Uniform Direct Sale business, is included in All Other.
Cintas evaluates the performance of each operating segment, based on several factors of which the primary financial measures are operating segment revenue and income before income taxes. The accounting policies of the operating segments are the same as those described in Note 1 entitled Basis of Presentation. Information related to the operations of Cintas’ operating segments is set forth below: 
(In thousands)
Uniform Rental
and Facility Services
 
First Aid
and Safety Services
 
All
Other
 
Corporate (1)
 Total
          
For the three months ended
November 30, 2017		 
  
  
  
  
Revenue$1,308,038
 $139,090
 $159,313
 $—
 $1,606,441
Income (loss) before income taxes$203,814
 $17,975
 $13,422
 $(28,838) $206,373
          
For the three months ended
November 30, 2016		 
  
  
  
  
Revenue$1,000,015
 $124,797
 $146,265
 $—
 $1,271,077
Income (loss) before income taxes$176,947
 $14,779
 $8,730
 $(13,236) $187,220
          
As of and for the six months ended
November 30, 2017		 
  
  
  
  
Revenue$2,619,822
 $279,672
 $318,450
 $—
 $3,217,944
Income (loss) before income taxes$422,724
 $37,386
 $24,200
 $(58,858) $425,452
Total assets$5,899,010
 $467,902
 $353,155
 $258,734
 $6,978,801
          
As of and for the six months ended
November 30, 2016		         
Revenue$1,994,297
 $249,636
 $293,794
 $—
 $2,537,727
Income (loss) before income taxes$361,735
 $26,290
 $16,368
 $(27,343) $377,050
Total assets$3,262,448
 $443,151
 $326,039
 $182,941
 $4,214,579
(1) Corporate assets include cash and marketable securities in all periods. Corporate assets as of November 30, 2016 include the assets of Discontinued Services, which were classified as held for sale at May 31, 2017 and sold during the six months ended November 30, 2017.


13.Discontinued Operations
In fiscal 2018, Cintas sold a significant business referred to as Discontinued Services and received proceeds from the sale of $127.8 million. The results of Discontinued Services are included in discontinued operations for all periods presented. In accordance with the applicable accounting guidance for the disposal of long-lived assets and discontinued operations, the results of Discontinued Services have been excluded from both continuing operations and operating segment results for all periods presented.

During the three months ended November 30, 2016, we received additional proceeds related to contingent consideration on the sale of Shred-it. Cintas realized a pre-tax gain of $25.9 million as a result of the additional consideration received. As of November 30, 2017, Cintas still has the opportunity to receive additional consideration, subject to certain holdback provisions. Because of the uncertainty surrounding the holdback provision, this opportunity represents a gain contingency that has not been recorded.

Following is selected financial information included in net income from discontinued operations for Discontinued Services and Shred-it:
 Three Months Ended Six Months Ended
(In thousands)November 30, 2017 
November 30, 2016 (1)
 November 30, 2017 
November 30, 2016 (1)
        
Revenue$—
 $25,845
 $10,773
 $53,326
        
(Loss) income before income taxes(43) 2,402
 (2,482) 5,426
Income tax benefit (expense)18
 (898) 920
 (2,039)
(Loss) gain on sale of business(1,209) —
 99,060
 —
Gain on Shred-it—
 25,876
 —
 25,876
Income tax benefit (expense) on net gain606
 (8,953) (42,023) (8,953)
Net (loss) income from discontinued operations$(628) $18,427

$55,475

$20,310
(1) The results of Discontinued Services for the three and six months ended November 30, 2016 were previously included in continuing operations.


14.G&K Services, Inc. Transaction and Integration Expenses
As a result of the acquisition of G&K in fiscal 2017, the Company incurred $13.1 million and $3.3 million in transaction and integration expenses during the three months ended November 30, 2017 and 2016, respectively, and $17.0 million and $6.1 million during the six months ended November 30, 2017 and 2016, respectively. The $13.1 million of costs incurred in the three months ended November 30, 2017 related to integration expenses directly related to the acquisition. During the six months ended November 30, 2017, the costs incurred related to $16.0 million of integration expenses directly related to the acquisition and $1.0 million of employee termination expenses recognized under ASC Topic 712, "Compensation - Nonretirement Postemployment Benefits." The costs incurred in the three and six months ended November 30, 2016 related to legal and professional fees directly related to the acquisition. As of November 30, 2017 and May 31, 2017, employee termination benefits included in accrued compensation and related liabilities on the consolidated condensed balance sheet was $15.7 millionand$24.3 million, respectively. The amount of employee termination benefits paid during the three and six months ended November 30, 2017 was $3.6 million and $9.6 million, respectively.



15.Supplemental Guarantor Information
Cintas Corporation No. 2 (Corp. 2) is the indirectly, wholly-owned principal operating subsidiary of Cintas. Corp. 2 is the issuer of the aggregate principal amount of the $2,857.5 million aggregate principal amount of senior notes outstanding as of November 30, 2017, which are unconditionally guaranteed, jointly and severally, by Cintas Corporation and certain wholly-owned, direct and indirect domestic subsidiaries.
As allowed by SEC rules, the following consolidating condensed financial statements are provided as an alternative to filing separate financial statements of the guarantors. Each of the subsidiaries presented in the following consolidating condensed financial statements has been fully consolidated in Cintas’ consolidated condensed financial statements. The following consolidating condensed financial statements should be read in conjunction with the consolidated condensed financial statements of Cintas and notes thereto of which this note is an integral part. During fiscal 2018, the Company sold Discontinued Services (see Note 13) previously included in Cintas Corporation and Corp. 2. The sale of Discontinued Services has been reflected as discontinued operations as of the beginning of the earliest period presented herein. Consolidating condensed financial statements for Cintas, Corp. 2, the subsidiary guarantors and non-guarantors are presented on the following pages: 





Consolidating Condensed Income Statement
Three Months Ended November 30, 2017
(In thousands)

 Cintas
Corporation		 Corp. 2 Subsidiary
Guarantors		 Non-
Guarantors		 Eliminations 
Cintas
Corporation
Consolidated
            
Revenue: 
  
  
  
  
  
Uniform rental and facility services$—
 $1,086,667
 $170,320
 $100,933
 $(49,882) $1,308,038
Other—
 435,539
 (313) 21,982
 (158,805) 298,403
Equity in net income of affiliates137,737
 —
 —
 —
 (137,737) —
 137,737
 1,522,206
 170,007
 122,915
 (346,424) 1,606,441
Costs and expenses (income): 
  
  
  
  
  
Cost of uniform rental and facility services—
 628,123
 105,954
 65,220
 (75,337) 723,960
Cost of other—
 302,065
 (25,046) 15,438
 (126,345) 166,112
Selling and administrative expenses—
 528,369
 (85,417) 31,211
 (6,079) 468,084
G&K Services, Inc. transaction and
    integration expenses
—
 4,192
 8,319
 563
 —
 13,074
Operating income137,737
 59,457
 166,197
 10,483
 (138,663) 235,211
            
Interest income—
 (45) (59) (187) —
 (291)
Interest expense (income)—
 29,444
 (313) (2) —
 29,129
            
Income before income taxes137,737

30,058

166,569

10,672

(138,663)
206,373
Income taxes—
 11,449
 54,414
 2,798
 (25) 68,636
Income from continuing operations137,737

18,609

112,155

7,874

(138,638) 137,737
            
Loss from discontinued operations, net of tax(628) (628) —
 —
 628
 (628)
            
Net income$137,109
 $17,981
 $112,155
 $7,874
 $(138,010) $137,109



Consolidating Condensed Income Statement
Three Months Ended November 30, 2016
(In thousands)

 Cintas
Corporation		 Corp. 2 Subsidiary
Guarantors		 Non-
Guarantors		 Eliminations 
Cintas
Corporation
Consolidated
            
Revenue: 
  
  
  
  
  
Uniform rental and facility services$—
 $835,892
 $149,886
 $57,610
 $(43,373) $1,000,015
Other—
 390,963
 633
 18,162
 (138,696) 271,062
Equity in net income of affiliates121,950
 —
 —
 —
 (121,950) —
 121,950
 1,226,855
 150,519
 75,772
 (304,019) 1,271,077
Costs and expenses (income): 
  
  
  
  
  
Cost of uniform rental and facility services—
 483,399
 94,323
 37,603
 (63,827) 551,498
Cost of other—
 271,812
 (19,549) 13,636
 (111,538) 154,361
Selling and administrative expenses—
 398,592
 (48,256) 18,703
 (7,624) 361,415
G&K Services, Inc. transaction and
   integration expenses
—
 —
 3,347
 —
 —
 3,347
Operating income121,950
 73,052
 120,654
 5,830
 (121,030) 200,456
            
Interest income—
 —
 (7) (25) 1
 (31)
Interest expense (income)—
 14,528
 (1,176) (85) —
 13,267
            
Income before income taxes121,950
 58,524
 121,837
 5,940
 (121,031) 187,220
Income taxes—
 20,635
 42,652
 2,011
 (28) 65,270
Income from continuing operations121,950

37,889

79,185

3,929

(121,003)
121,950
           

Income from discontinued operations, net of tax18,427
 17,115
 —
 1,941
 (19,056) 18,427
            
Net income$140,377

$55,004

$79,185

$5,870

$(140,059)
$140,377


























Consolidating Condensed Income Statement
Six Months Ended November 30, 2017
(In thousands)

 Cintas
Corporation		 Corp. 2 Subsidiary
Guarantors		 Non-
Guarantors		 Eliminations 
Cintas
Corporation
Consolidated
            
Revenue: 
  
  
  
  
  
Uniform rental and facility services$—
 $2,186,536
 $335,215
 $197,528
 $(99,457) $2,619,822
Other—
 862,841
 (6) 42,290
 (307,003) 598,122
Equity in net income of affiliates298,845
 —
 —
 —
 (298,845) —
 298,845
 3,049,377
 335,209
 239,818
 (705,305) 3,217,944
Costs and expenses (income): 
  
  
  
  
  
Cost of uniform rental and facility services—
 1,250,271
 204,973
 125,737
 (150,158) 1,430,823
Cost of other—
 590,984
 (44,715) 30,173
 (245,043) 331,399
Selling and administrative expenses—
 1,039,324
 (132,955) 61,117
 (13,119) 954,367
G&K Services, Inc. transaction and
   integration expenses
—
 5,713
 10,754
 578
 —
 17,045
Operating income298,845
 163,085
 297,152
 22,213
 (296,985) 484,310
            
Interest income—
 (76) (158) (354) —
 (588)
Interest expense (income)—
 60,005
 (452) (107) —
 59,446
            
Income before income taxes298,845
 103,156
 297,762
 22,674
 (296,985) 425,452
Income taxes—
 31,019
 89,537
 6,095
 (44) 126,607
Income from continuing operations298,845

72,137

208,225

16,579

(296,941)
298,845
           

Income (loss) from discontinued
    operations, net of tax
55,475
 64,374
 (8,899) —
 (55,475) 55,475
            
Net income$354,320

$136,511

$199,326

$16,579

$(352,416)
$354,320
























Consolidating Condensed Income Statement
Six Months Ended November 30, 2016
(In thousands)

 Cintas
Corporation		 Corp. 2 Subsidiary
Guarantors		 Non-
Guarantors		 Eliminations 
Cintas
Corporation
Consolidated
            
Revenue: 
  
  
  
  
  
Uniform rental and facility services$—
 $1,667,852
 $299,034
 $115,273
 $(87,862) $1,994,297
Other—
 779,045
 1,601
 37,037
 (274,253) 543,430
Equity in net income of affiliates258,158
 —
 —
 —
 (258,158) —
 258,158
 2,446,897
 300,635
 152,310
 (620,273) 2,537,727
Costs and expenses (income): 
  
  
  
  
  
Cost of uniform rental and facility services—
 958,620
 184,995
 74,717
 (129,737) 1,088,595
Cost of other—
 535,538
 (34,480) 27,464
 (221,035) 307,487
Selling and administrative expenses—
 806,203
 (98,990) 38,968

(15,063) 731,118
G&K Services, Inc. transaction and
   integration expenses
—
 —
 6,134
 —
 —
 6,134
Operating income258,158
 146,536
 242,976
 11,161
 (254,438) 404,393
            
Interest income—
 —
 (24) (73) 1
 (96)
Interest expense (income)—
 29,355
 (1,878) (38) —
 27,439
            
Income before income taxes258,158
 117,181
 244,878
 11,272
 (254,439) 377,050
Income taxes—
 37,304
 78,178
 3,464
 (54) 118,892
Income from continuing operations258,158

79,877

166,700

7,808

(254,385)
258,158
           

Income from discontinued operations,
   net of tax
20,310
 18,998
 —
 1,941
 (20,939) 20,310
            
Net income$278,468

$98,875

$166,700

$9,749

$(275,324)
$278,468




Consolidating Condensed Statement of Comprehensive Income
Three Months Ended November 30, 2017
(In thousands)

 Cintas
Corporation		 Corp. 2 Subsidiary
Guarantors		 Non-
Guarantors		 Eliminations 
Cintas
Corporation
Consolidated
            
Net income$137,109
 $17,981
 $112,155
 $7,874
 $(138,010) $137,109
            
Other comprehensive loss,
    net of tax:
           
Foreign currency translation adjustments(11,374) —
 —
 (11,374) 11,374
 (11,374)
Amortization of interest rate lock agreements(172) (172) —
 —
 172
 (172)
Change in fair value of available-for-sale securities(20) —
 —
 (20) 20
 (20)
            
Other comprehensive loss(11,566) (172) —
 (11,394) 11,566
 (11,566)
            
Comprehensive income (loss)$125,543
 $17,809
 $112,155
 $(3,520) $(126,444) $125,543



Consolidating Condensed Statement of Comprehensive Income
Three Months Ended November 30, 2016
(In thousands)

 Cintas
Corporation		 Corp. 2 Subsidiary
Guarantors		 Non-
Guarantors		 Eliminations 
Cintas
Corporation
Consolidated
            
Net income$140,377
 $55,004
 $79,185
 $5,870
 $(140,059) $140,377
            
Other comprehensive (loss) income,
   net of tax:
           
Foreign currency translation adjustments(7,650) —
 —
 (7,650) 7,650
 (7,650)
Change in fair value of cash
   flow hedges
26,390
 26,390
 —
 —
 (26,390) 26,390
Amortization of interest rate lock agreements385
 385
 —
 —
 (385) 385
Change in fair value of available-for-sale securities1
 —
 —
 1
 (1) 1
            
Other comprehensive income (loss)19,126
 26,775
 —
 (7,649) (19,126) 19,126
            
Comprehensive income (loss)$159,503
 $81,779
 $79,185
 $(1,779) $(159,185) $159,503




































Consolidating Condensed Statement of Comprehensive Income
Six Months Ended November 30, 2017
(In thousands)

 Cintas
Corporation		 Corp. 2 Subsidiary
Guarantors		 Non-
Guarantors		 Eliminations 
Cintas
Corporation
Consolidated
            
Net income$354,320
 $136,511
 $199,326
 $16,579
 $(352,416) $354,320
            
Other comprehensive income (loss),
   net of tax:
           
Foreign currency translation adjustments23,810
 —
 —
 23,810
 (23,810) 23,810
Amortization of interest rate lock agreements(344) (344) —
 —
 344
 (344)
            
Other comprehensive income (loss)23,466
 (344) —
 23,810
 (23,466) 23,466
            
Comprehensive income$377,786
 $136,167
 $199,326
 $40,389
 $(375,882) $377,786




































Consolidating Condensed Statement of Comprehensive Income
Six Months Ended November 30, 2016
(In thousands)

 Cintas
Corporation		 Corp. 2 Subsidiary
Guarantors		 Non-
Guarantors		 Eliminations 
Cintas
Corporation
Consolidated
            
Net income$278,468
 $98,875
 $166,700
 $9,749
 $(275,324) $278,468
            
Other comprehensive (loss) income,
   net of tax:
           
Foreign currency translation adjustments(7,535) —
 —
 (7,535) 7,535
 (7,535)
Change in fair value of cash flow
    hedges
14,353
 14,353
 —
 —
 (14,353) 14,353
Amortization of interest rate lock agreements770
 770
 —
 —
 (770) 770
            
Other comprehensive income (loss)7,588
 15,123
 —
 (7,535) (7,588) 7,588
            
Comprehensive income$286,056
 $113,998
 $166,700
 $2,214
 $(282,912) $286,056



























Consolidating Condensed Balance Sheet
As of November 30, 2017
(In thousands)

 
Cintas
Corporation
 Corp. 2 
Subsidiary
Guarantors
 
Non-
Guarantors
 Eliminations 
Cintas
Corporation
Consolidated
Assets 
  
  
  
  
  
Current assets: 
  
  
  
  
  
Cash and cash equivalents$—
 $42,126
 $83,515
 $110,361
 $—
 $236,002
Marketable securities—
 —
 —
 22,732
 —
 22,732
Accounts receivable, net—
 586,992
 117,106
 59,457
 —
 763,555
Inventories, net—
 224,217
 31,994
 16,620
 (1) 272,830
Uniforms and other rental items
    in service
—
 562,724
 81,459
 49,025
 (18,636) 674,572
Income taxes, current—
 (16,790) 47,940
 4,550
 —
 35,700
Prepaid expenses and other
    current assets
—
 7,837
 29,222
 999
 —
 38,058
Total current assets—
 1,407,106
 391,236
 263,744
 (18,637) 2,043,449
            
Property and equipment, net—
 875,883
 366,041
 111,235
 —
 1,353,159
            
Investments (1)
321,083
 3,598,267
 947,722
 1,713,070
 (6,404,479) 175,663
Goodwill—
 —
 2,770,504
 41,403
 (111) 2,811,796
Service contracts, net—
 483,985
 —
 81,589
 —
 565,574
Other assets, net1,766,703
 557
 3,489,627
 13,866
 (5,241,593) 29,160
 $2,087,786
 $6,365,798
 $7,965,130
 $2,224,907
 $(11,664,820) $6,978,801
            
Liabilities and Shareholders’ Equity  
  
  
  
  
Current liabilities: 
  
  
  
  
  
Accounts payable$(465,247) $(1,458,658) $2,162,751
 $(113,813) $37,948
 $162,981
Accrued compensation and
   related liabilities
—
 101,379
 6,141
 5,910
 —
 113,430
Accrued liabilities—
 187,828
 368,784
 21,348
 —
 577,960
Debt due within one year—
 300,000
 —
 —
 —
 300,000
Total current liabilities(465,247) (869,451) 2,537,676
 (86,555) 37,948
 1,154,371
            
Long-term liabilities: 
  
  
  
  
  
Debt due after one year—
 2,533,832
 —
 390
 —
 2,534,222
Deferred income taxes—
 —
 492,999
 46,044
 —
 539,043
Accrued liabilities—
 32,998
 163,863
 1,271
 —
 198,132
Total long-term liabilities—
 2,566,830
 656,862
 47,705
 —
 3,271,397
            
Total shareholders’ equity2,553,033
 4,668,419
 4,770,592
 2,263,757
 (11,702,768) 2,553,033
 $2,087,786
 $6,365,798
 $7,965,130
 $2,224,907
 $(11,664,820) $6,978,801

(1) Investments include inter company investment activity. Corp 2 and Subsidiary Guarantors hold $20.3 million and $155.4 million, respectively, of the $175.7 million consolidated net investments.



Consolidating Condensed Balance Sheet
As of May 31, 2017
(In thousands)

 
Cintas
Corporation
 Corp. 2 
Subsidiary
Guarantors
 
Non-
Guarantors
 Eliminations 
Cintas
Corporation
Consolidated
Assets 
  
  
  
  
  
Current assets: 
  
  
  
  
  
Cash and cash equivalents$—
 $48,658
 $17,302
 $103,306
 $—
 $169,266
Marketable securities—
 —
 —
 22,219
 —
 22,219
Accounts receivable, net—
 543,769
 137,881
 54,358
 —
 736,008
Inventories, net—
 243,677
 21,466
 14,461
 (1,386) 278,218
Uniforms and other rental items
    in service
—
 531,295
 78,012
 45,388
 (18,993) 635,702
Income taxes, current—
 16,173
 25,138
 3,009
 —
 44,320
Prepaid expenses and other
   current assets
—
 13,234
 16,188
 710
 —
 30,132
Assets held for sale—
 23,095
 15,518
 —
 —
 38,613
Total current assets—
 1,419,901
 311,505
 243,451
 (20,379) 1,954,478
            
Property and equipment, net—
 851,018
 364,724
 107,759
 —
 1,323,501
            
Investments (1)
321,083
 3,605,457
 929,657
 1,711,070
 (6,402,479) 164,788
Goodwill—
 —
 2,742,898
 39,549
 (112) 2,782,335
Service contracts, net—
 505,698
 —
 81,290
 —
 586,988
Other assets, net1,516,463
 14,705
 3,489,653
 11,983
 (5,000,837) 31,967
 $1,837,546
 $6,396,779
 $7,838,437
 $2,195,102
 $(11,423,807) $6,844,057
            
Liabilities and Shareholders’ Equity  
  
  
  
  
Current liabilities: 
  
  
  
  
  
Accounts payable$(465,247) $(1,596,731) $2,292,388
 $(91,467) $38,108
 $177,051
Accrued compensation and
  related liabilities
—
 94,505
 42,866
 12,264
 —
 149,635
Accrued liabilities—
 191,819
 219,303
 18,687
 —
 429,809
Debt due within one year—
 362,900
 —
 —
 —
 362,900
Liabilities held for sale—
 11,457
 —
 —
 —
 11,457
Total current liabilities(465,247) (936,050) 2,554,557
 (60,516) 38,108
 1,130,852
            
Long-term liabilities: 
  
  
  
  
  
Debt due after one year—
 2,770,234
 —
 390
 —
 2,770,624
Deferred income taxes—
 —
 436,613
 32,715
 —
 469,328
Accrued liabilities—
 28,384
 140,923
 1,153
 —
 170,460
Total long-term liabilities—
 2,798,618
 577,536
 34,258
 —
 3,410,412
            
Total shareholders’ equity2,302,793
 4,534,211
 4,706,344
 2,221,360
 (11,461,915) 2,302,793
 $1,837,546
 $6,396,779
 $7,838,437
 $2,195,102
 $(11,423,807) $6,844,057

(1) Investments include inter company investment activity. Corp 2 and Subsidiary Guarantors hold $29.0 million and $135.8 million, respectively, of the $164.8 million consolidated net investments.




Consolidating Condensed Statement of Cash Flows
Six Months Ended November 30, 2017
(In thousands)

 
Cintas
Corporation
 Corp. 2 
Subsidiary
Guarantors
 
Non-
Guarantors
 Eliminations 
Cintas
Corporation
Consolidated
            
Cash flows from operating activities: 
  
  
  
  
  
Net income$354,320
 $136,511
 $199,326
 $16,579
 $(352,416) $354,320
Adjustments to reconcile net income to net
   cash provided by operating activities
 
  
  
  
  
  
Depreciation—
 65,942
 34,789
 6,847
 —
 107,578
Amortization of intangible assets—
 24,522
 2,547
 4,192
 —
 31,261
Stock-based compensation55,204
 —
 —
 —
 —
 55,204
Gain on sale of business—
 (114,581) 15,521
 —
 —
 (99,060)
Deferred income taxes—
 —
 40,555
 1,607
 —
 42,162
Changes in current assets and liabilities, net of acquisitions of businesses: 
  
  
  
  
  
Accounts receivable, net—
 (42,881) 20,790
 (2,709) —
 (24,800)
Inventories, net—
 17,728
 (13,863) 115
 (1,385) 2,595
Uniforms and other rental items
   in service
—
 (29,520) (112) (3,305) (357) (33,294)
Prepaid expenses and other
   current assets
—
 (5,428) (13,609) 464
 —
 (18,573)
Accounts payable—
 155,461
 (153,831) (10,176) (160) (8,706)
Accrued compensation and related liabilities—
 6,341
 (39,311) (3,510) —
 (36,480)
Accrued liabilities and other—
 (26,847) 26,373
 (1,466) —
 (1,940)
Income taxes, current—
 32,963
 (22,794) (1,427) —
 8,742
Net cash provided by operating activities409,524
 220,211
 96,381
 7,211
 (354,318) 379,009
            
Cash flows from investing activities: 
  
  
  
  
  
Capital expenditures—
 (90,497) (36,875) (5,094) —
 (132,466)
Proceeds from redemption of marketable securities and investments—
 12,400
 —
 87,859
 —
 100,259
Purchase of marketable securities and investments—
 5,510
 (20,064) (87,323) 2,000
 (99,877)
Proceeds from sale of business—
 127,835
 —
 —
 —
 127,835
Acquisitions of businesses—
 (1,099) —
 —
 —
 (1,099)
Other, net(402,385) 21,470
 26,771
 956
 352,318
 (870)
Net cash (used in) provided by investing
    activities
(402,385) 75,619
 (30,168) (3,602) 354,318
 (6,218)
            
Cash flows from financing activities: 
  
  
  
  
  
Payments of commercial paper, net—
 (50,500) —
 —
 —
 (50,500)
Repayment of debt—
 (250,000) —
 —
 —
 (250,000)
Proceeds from exercise of stock-based compensation awards28,558
 —
 —
 —
 —
 28,558
Repurchase of common stock(35,697) —
 —
 —
 —
 (35,697)
Other, net—
 (1,862) —
 (20) —
 (1,882)
Net cash used in financing activities(7,139) (302,362) —
 (20) —
 (309,521)
            
Effect of exchange rate changes on cash
    and cash equivalents
—
 —
 —
 3,466
 —
 3,466
            
Net (decrease) increase in cash and cash
    equivalents
—
 (6,532) 66,213
 7,055
 —
 66,736
Cash and cash equivalents at beginning of period—
 48,658
 17,302
 103,306
 —
 169,266
Cash and cash equivalents at end of period$—
 $42,126
 $83,515
 $110,361
 $—
 $236,002


Consolidating Condensed Statement of Cash Flows
Six Months Ended November 30, 2016
(In thousands)

 
Cintas
Corporation
 Corp. 2 
Subsidiary
Guarantors
 
Non-
Guarantors
 Eliminations 
Cintas
Corporation
Consolidated
            
Cash flows from operating activities: 
  
  
  
  
  
Net income$278,468
 $98,875
 $166,700
 $9,749
 $(275,324) $278,468
Adjustments to reconcile net income to net
    cash provided by operating activities
 
  
  
  
  
  
Depreciation—
 52,259
 22,412
 4,919
 —
 79,590
Amortization of intangible assets—
 6,847
 175
 438
 —
 7,460
Stock-based compensation39,582
 —
 —
 —
 —
 39,582
Gain on Shred-it—
 (23,935) —
 (1,941) —
 (25,876)
Deferred income taxes—
 (9,578) 5,395
 350
 —
 (3,833)
Changes in current assets and liabilities, net of acquisitions of businesses: 
  
  
  
  
  
Accounts receivable, net—
 (36,939) (6,813) (1,168) —
 (44,920)
Inventories, net—
 (14,038) 2,871
 (1,593) (1,856) (14,616)
Uniforms and other rental items in service—
 754
 (4,182) 511
 (1,398) (4,315)
Prepaid expenses and other current
    assets
—
 412
 (2,411) 47
 —
 (1,952)
Accounts payable—
 23,367
 (10,857) 2,831
 110
 15,451
Accrued compensation and related liabilities2,819
 (12,734) (8,935) (86) —
 (18,936)
Accrued liabilities and other139,766
 3,711
 (148,384) 41
 —
 (4,866)
Income taxes, current—
 (1,635) 1,460
 659
 —
 484
Net cash provided by operating activities460,635
 87,366
 17,431
 14,757
 (278,468) 301,721
            
Cash flows from investing activities: 
  
  
  
  
  
Capital expenditures—
 (85,207) (60,837) (9,129) —
 (155,173)
Proceeds from redemption of marketable securities—
 —
 —
 172,968
 —
 172,968
Purchase of marketable securities and investments—
 (4,560) (28,751) (102,692) 17,733
 (118,270)
Proceeds from sale of investment in Shred-it—
 23,935
 —
 1,941
 —
 25,876
Acquisitions of businesses, net of cash acquired—
 (7,245) —
 (10,533) —
 (17,778)
Other, net(460,630) 177,446
 21,190
 1,591
 260,735
 332
Net cash (used in) provided by investing activities(460,630) 104,369
 (68,398) 54,146
 278,468
 (92,045)
            
Cash flows from financing activities: 
  
  
  
  
  
Issuance of commercial paper, net—
 66,000
 —
 —
 —
 66,000
Proceeds from issuance of debt—
 —
 (2,000) 2,000
 —
 —
Repayment of debt—
 (250,000) —
 —
 —
 (250,000)
Prepaid short-term debt financing fees—
 (13,495) —
 —
 —
 (13,495)
Proceeds from exercise of stock-based compensation awards19,225
 —
 —
 —
 —
 19,225
Repurchase of common stock(19,230) —
 —
 —
 —
 (19,230)
Other, net—
 (5,572) —
 —
 —
 (5,572)
Net cash (used in) provided by financing activities(5) (203,067) (2,000) 2,000
 —
 (203,072)
            
Effect of exchange rate changes on cash and cash equivalents—
 —
 —
 (2,388) —
 (2,388)
            
Net (decrease) increase in cash and cash
    equivalents
—
 (11,332) (52,967) 68,515
 —
 4,216
Cash and cash equivalents at beginning of period—
 57,893
 55,392
 26,072
 —
 139,357
Cash and cash equivalents at end of period$—
 $46,561
 $2,425
 $94,587
 $—
 $143,573


CINTAS CORPORATION
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

BUSINESS STRATEGY

Cintas helps more than one million businesses of all types and sizes, primarily in North America, as well as Latin America, Europe and Asia, get Ready™ to open their doors with confidence every day by providing a wide range of products and services that enhance our customers’ image and help keep their facilities and employees clean, safe and looking their best. With products and services including uniforms, floor care, restroom supplies, first aid and safety products, fire extinguishers and testing, and safety and compliance training, Cintas helps customers get Ready for the Workday™.

We are North America’s leading provider of corporate identity uniforms through rental and sales programs, as well as a significant provider of related business services, including entrance mats, restroom cleaning services and supplies, carpet and tile cleaning services, first aid and safety services and fire protection products and services.
Cintas’ principal objective is “to exceed customers’ expectations in order to maximize the long-term value of Cintas for shareholders and working partners,” and it provides the framework and focus for Cintas’ business strategy. This strategy is to achieve revenue growth for all of our products and services by increasing our penetration at existing customers and by broadening our customer base to include business segments to which we have not historically served. We will also continue to identify additional product and service opportunities for our current and future customers.
To pursue the strategy of increasing penetration, we have a highly talented and diverse team of service professionals visiting our customers on a regular basis. This frequent contact with our customers enables us to develop close personal relationships. The combination of our distribution system and these strong customer relationships provides a platform from which we launch additional products and services.
We pursue the strategy of broadening our customer base in several ways. Cintas has a national sales organization introducing all of its products and services to prospects in all business segments. Our broad range of products and services allows our sales organization to consider any type of business a prospect. We also broaden our customer base through geographic expansion, especially in our first aid and safety service reportable operating segment and fire protection businesses. Finally, we evaluate strategic acquisitions as opportunities arise.
RESULTS OF OPERATIONS
Cintas classifies its business into two reportable operating segments and places the remainder of its operating segments in an All Other category. Cintas’ two reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The Uniform Rental and Facility Services operating segment consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops, and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies and carpet and tile cleaning services are also provided within this operating segment. The First Aid and Safety Services operating segment consists of first aid and safety services. The remainder of Cintas’ business, which consists of Fire Protection Services and its Uniform Direct Sale business, is included in All Other. These operating segments consist of fire protection products and services and the direct sale of uniforms and related items. Revenue and income before income taxes for the sixthree and nine months endedNovember 30, 2017 February 28, 2021 and 2016February 29, 2020, for the two reportable operating segments and All Other is presented in Note 12 entitled Segment Information of “Notes to Consolidated Condensed Financial Statements.”


OnIn December 2019, a novel strain of coronavirus (COVID-19) was reported to have surfaced in Wuhan, China, and has since spread globally. In March 21, 2017,2020, the World Health Organization characterized COVID-19 as a pandemic. Efforts to contain the spread of COVID-19 intensified during our fiscal 2020 fourth quarter and have remained in effect throughout our fiscal 2021. Most states and municipalities within the U.S. as well as Canada enacted temporary closures of businesses, issued quarantine orders and took other restrictive measures in response to the COVID-19 pandemic. Many of the business closures, quarantine orders and other restrictive measures remained in
22

place at the end of the third quarter of fiscal 2021. Within the U.S., our business has been designated an essential business, which allows us to continue to serve customers that remain open.

We have operations throughout the U.S. and Canada and participate in a global supply chain. During the first nine months of fiscal 2021, the existence of the COVID-19 pandemic, the fear associated with the COVID-19 pandemic and the reactions of governments around the world in response to the COVID-19 pandemic to regulate the flow of labor and products and impede the business of our customers, continued to impact our ability to conduct normal business operations, which had an adverse effect on our business. If we need to close a significant number of our facilities or a critical number of our employees become too ill to work, our business operations could be materially adversely affected in a rapid manner. Similarly, if our customers experience adverse business consequences due to the COVID-19 pandemic, including being required to shut down their operations, demand for our services and products could also be materially adversely affected in a rapid manner. In response to the impact of COVID-19, Cintas completedput in place health and safety measures to keep Cintas employees, contractors and customers safe. These health and safety measures have not materially impacted our ability to service our customers. Many of Cintas' customers were also impacted by COVID-19 and we did see an impact on some customer's ability to pay. While there was minimal disruption to our supply chain, Cintas did increase inventory, primarily personal protective equipment and facility services inventory, in response to the acquisitioncustomer needs and demand associated with the safety and cleanliness requirements of G&KCOVID-19. The increase in inventory could result in additional inventory reserves if demand for personal protective equipment materially declines. The roll out of vaccines together with lower COVID-19 case counts is encouraging. However, the impact of the COVID-19 pandemic is fluid and continues to evolve, and therefore, we cannot predict the extent to which our business, consolidated results of operations, consolidated financial condition or liquidity will ultimately be impacted.

Consolidated Results
Three Months Ended February 28, 2021 Compared to Three Months Ended February 29, 2020
Total revenue decreased 1.9% to $1,777.1 million for the three months ended February 28, 2021, compared to $1,810.6 million for the three months ended February 29, 2020. The change from the same period of the prior year was primarily a result of one less workday during the current year period. Total revenue declined organically by 0.1%. Organic growth adjusts for the impact of acquisitions, divestitures, foreign currency exchange rate fluctuations and workday differences. Revenue growth was negatively impacted by a net 0.4% due to acquisitions and divestitures and by 1.6% due to one less workday in the three months ended February 28, 2021 compared to the three months ended February 29, 2020. Revenue growth was positively impacted by 0.2% due to foreign currency exchange rate fluctuations.

As previously discussed, government enactments of temporary and indefinite closures of certain businesses in response to the COVID-19 pandemic continued to impact our ability to access and service some of our customers impacted by these mandates during the third quarter of fiscal 2021. Due to the constantly changing impact of the COVID-19 pandemic, uncertainty remains about the pace of the economic recovery and about its impact on future Cintas consolidated financial results. Uniform Rental and Facility Services Inc. (G&K)reportable operating segment revenue was $1,417.9 million for considerationthe three months ended February 28, 2021, compared to $1,448.0 million for the same period in the prior fiscal year, which was a decrease of approximately $2.1 billion2.1%. G&K is now a wholly-owned subsidiary of Cintas that operates withinOrganic revenue for this reportable operating segment also declined 0.1%. In addition to the adverse impact from the COVID-19 pandemic, revenue growth in the Uniform Rental and Facility Services reportable operating segment. To financesegment was negatively impacted by a net 0.7% due to acquisitions and divestitures, negatively impacted by 1.5% due to one less workday in the G&K acquisition, Cintas used a combinationthree months ended February 28, 2021 compared to the three months ended February 29, 2020, and positively impacted by 0.2% due to foreign currency exchange rate fluctuations.

Other revenue, consisting of new senior notes, a term loan, other borrowings under its existing credit facility and cash on hand. G&K's results of operations are included in Cintas' consolidated financial statements as of andrevenue from the date of acquisition. See Note 9 entitled Acquisitions of “Notes to Consolidated Condensed Financial Statements” for additional information.

During the first quarter of the current fiscal year, Cintas sold a significant business, referred to as "DiscontinuedFirst Aid and Safety Services" reportable operating segment and as a result, its operations are classified as discontinued operations for all periods presented. See Note 13 entitled Discontinued Operations of “Notes to Consolidated Condensed Financial Statements” for more information.


Consolidated Results
Three Months EndedNovember 30, 2017 Compared to Three Months EndedNovember 30, 2016
Total revenue increased 26.4%All Other, decreased 0.9% for the three months ended November 30, 2017 overFebruary 28, 2021, compared to the same period in the prior fiscal year, from $1,271.1$362.6 million to $1,606.4$359.2 million. Other revenue organic growth was 0.1%. Revenue increased organicallygrowth was negatively impacted by 7.7% as a result of increased sales volume. Organic growth adjusts for1.5% due to one less workday in the impact of acquisitionsthree months ended February 28, 2021 compared to the three months ended February 29, 2020 and foreign currency exchange rate fluctuations. Total revenue was positively impacted by 0.3%0.5% due to foreign currency exchange rate fluctuationsrevenue growth derived through acquisitions in our First Aid and by 18.4%Safety Services reportable operating segment and our Fire Protection operating segment, which is included in All Other.

Cost of uniform rental and facility services consists primarily of production expenses, delivery expenses and the amortization of in service inventory, including uniforms, mats, shop towels and other ancillary items. Cost of uniform
23

rental and facility services decreased $23.1 million, or 2.9%, for the three months ended February 28, 2021, compared to the three months ended February 29, 2020. This change from prior fiscal year was due to acquisitions,lower Uniform Rental and Facility Services reportable operating segment sales volume, as well as certain cost control measures such as reduced labor and supplies that were partially offset by increases in material cost, primarily related to personal protective equipment.

Cost of other consists primarily of cost of goods sold (predominantly first aid and safety products, personal protective equipment, uniforms, and fire protection products), delivery expenses and distribution expenses in the First Aid and Safety Services reportable operating segment and All Other. Cost of other increased $4.4 million, or 2.2%, for the three months ended February 28, 2021, compared to the three months ended February 29, 2020. The increase was primarily due to an increase in the proportion of sales in the First Aid and Safety Services reportable operating segment of personal protective equipment, which typically have lower gross margins compared to the First Aid cabinet products.

Selling and administrative expenses decreased $26.7 million, to 27.2% as a percent of revenue, for the three months ended February 28, 2021, compared to 28.2% for the same period in the prior fiscal year. The improvement as a percent of revenue was primarily due to efficiencies in labor and employee-partner related expenses as well as lower discretionary spending.

Operating income was $326.5 million, or 18.4% of revenue, for the three months ended February 28, 2021, compared to $314.7 million, or 17.4% of revenue, for the three months ended February 29, 2020. The 100 basis point increase in operating income as a percent of revenue was due to both cost of sales and selling and administrative expenses decreasing as a percent of revenue for the three months ended February 28, 2021.

Net interest expense (interest expense less interest income) was $24.5 million for the three months ended February 28, 2021, compared to $25.6 million for the three months ended February 29, 2020. The change was primarily due to the decrease in total debt outstanding during the three months ended February 28, 2021, compared to the same period of the prior fiscal year.

Cintas’ effective tax rate for continuing operations was 14.4% and 18.9% for the three months ended February 28, 2021 and February 29, 2020, respectively. The effective tax rate in both periods was impacted by certain discrete items, primarily the acquisitiontax accounting impact for stock-based compensation.

Net income from continuing operations for the three months ended February 28, 2021 increased $23.9 million, or 10.2%, compared to the three months ended February 29, 2020. Diluted earnings per share from continuing operations were $2.37 for the three months ended February 28, 2021, which was an increase of G&K.9.7% compared to the same period in the prior fiscal year. Diluted earnings per share from continuing operations increased due to the increase in net income.


Uniform Rental and Facility Services Reportable Operating Segment
Three Months Ended February 28, 2021 Compared to Three Months Ended February 29, 2020
Uniform Rental and Facility Services reportable operating segment revenue increased 30.8%was $1,417.9 million for the three months ended November 30, 2017February 28, 2021 compared to $1,448.0 million for the same period of the prior fiscal year, and the cost of uniform rental and facility services decreased $23.1 million, or 2.9%. Organic revenue for the reportable operating segment declined 0.1%. The reportable operating segment’s gross margin was $656.0 million, or 46.3% of revenue. The gross margin was 50 basis points higher than the prior fiscal year’s third quarter gross margin of 45.8%. The improvement in gross margin as a percent to revenue was driven by certain cost control measures such as reduced labor and supplies that were partially offset by increases in material cost, primarily related to personal protective equipment.

Selling and administrative expenses for the Uniform Rental and Facility Services reportable operating segment decreased $18.9 million and improved as a percent of revenue to 26.3%, compared to 27.0% in the third quarter of the prior fiscal year. The improvement as a percent of revenue was primarily due to efficiencies in labor and employee-partner related expenses as well as lower discretionary spending.

Income before income taxes increased $11.8 million, or 4.3%, for the Uniform Rental and Facility Services reportable operating segment for the three months ended February 28, 2021, compared to the same period in the
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prior fiscal year. Income before income taxes was 20.0% of the reportable operating segment’s revenue, which was a 120 basis point increase compared to the third quarter of the prior fiscal year of 18.8%. This increase was primarily due to the previously discussed improvement in gross margin and selling and administrative expenses as a percent of revenue.

First Aid and Safety Services Reportable Operating Segment
Three Months Ended February 28, 2021 Compared to Three Months Ended February 29, 2020

First Aid and Safety Services reportable operating segment revenue increased from $170.5 million to $198.5 million, or 16.4%, for the three months ended February 28, 2021, over the same period in the prior fiscal year, from $1,000.0 million to $1,308.0 million.year. Revenue for the reportable operating segment increased organically by 7.3%17.7%. RevenueFirst Aid and Safety Services reportable operating segment revenue growth was positively impacted 23.2%by 0.4% due to acquisitions primarily G&K. Foreignand by 0.1% due to foreign currency exchange rate fluctuations positively impacted growth by 0.3%.fluctuations. Growth was driven by many factors including new business sold by sales representatives, penetration of additional products and services into existing customers and strong customer retention.sales of personal protective equipment in response to the COVID-19 pandemic. Revenue growth was negatively impacted by 1.8% due to one less workday in the three months ended February 28, 2021 compared to the three months ended February 29, 2020.

Cost of first aid and safety services increased $23.5 million, or 26.5%, for the three months ended February 28, 2021, over the three months ended February 29, 2020, due to higher sales volume. The gross margin as a percent of revenue was 43.5% for the quarter ended February 28, 2021 compared to the gross margin as a percent of revenue of 48.0% in the same period of the prior fiscal year. The change in gross margin from the third quarter of the prior year was primarily driven by an increase in the proportion of sales of personal protective equipment, which typically have lower gross margins than first aid cabinet sales, as a result of the impact of the COVID-19 pandemic.
Selling and administrative expenses increased $3.3 million, but improved as a percent of revenue to 30.5%, compared to 33.6% in the third quarter of the prior fiscal year. The improvement as a percent of revenue was primarily due to revenue growing at a faster pace than labor and employee-partner related expenses and lower discretionary spending.

Income before income taxes for the First Aid and Safety Services reportable operating segment increased $1.1 million to $25.8 million for the three months ended February 28, 2021, compared to the same period in the prior fiscal year. Income before income taxes was 13.0% of the reportable operating segment’s revenue compared to the third quarter of the prior fiscal year of 14.5%. This change was primarily due to the previously discussed decrease in gross margin.

Consolidated Results
Nine Months Ended February 28, 2021 Compared to Nine Months Ended February 29, 2020
 
Total revenue decreased 3.4% to $5,280.7 million for the nine months ended February 28, 2021, compared to $5,465.5 million for the nine months ended February 29, 2020. The change compared to the same period of the prior fiscal year was due to decreased sales volume from the COVID-19 pandemic business closures. Total organic revenue declined 3.2%. Organic growth adjusts for the impact of acquisitions, divestitures and foreign currency exchange rate fluctuations. Revenue growth was negatively impacted by a net 0.2% due to acquisitions and divestitures.

As previously discussed, government enactments of temporary and indefinite closures of certain businesses in response to the COVID-19 pandemic continued to impact our ability to access and service some of our customers impacted by these mandates during the nine months ended February 28, 2021. Due to the constantly changing impact of the COVID-19 pandemic, uncertainty remains about the pace of the economic recovery and about its impact on future Cintas consolidated financial results. Uniform Rental and Facility Services reportable operating segment revenue was $4,222.8 million for the nine months ended February 28, 2021, compared to $4,372.5 million in the same period of the prior fiscal year, which was a decrease of 3.4%. Organic revenue for this reportable operating segment declined 3.1%. Uniform Rental and Facility Services reportable operating segment revenue was negatively impacted by a net 0.4% due to acquisitions and divestitures and positively impacted by 0.1% due to foreign currency exchange rate fluctuations.
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Other revenue, consisting of revenue from the First Aid and Safety Services reportable operating segment and All Other, increased 10.1%was $1,057.9 million for the threenine months ended November 30, 2017February 28, 2021, compared to $1,093.0 million for the same period in the prior fiscal year, from $271.1 million to $298.4 millionnine months ended February 29, 2020, which was a decrease of 3.2%. Revenue increasedOther revenue declined organically by 9.2%3.7%. Revenue growth was positively impacted by 0.2%0.5% due to foreign currency exchange rate fluctuations and by 0.7% due torevenue growth derived through acquisitions in our First Aid and Safety Services reportable operating segment and our Fire Protection business,operating segment, which is included in All Other.


Cost of uniform rental and facility services consists primarily of production expenses, delivery expenses and the amortization of in service inventory, including uniforms, mats, shop towels and other ancillary items. Cost of uniform rental and facility services increased $172.5decreased $121.5 million, or 31.3%5.2%, for the threenine months ended November 30, 2017,February 28, 2021, compared to the threenine months ended November 30, 2016.February 29, 2020. This increasechange over the same period of the prior fiscal year was due to higherlower Uniform Rental and Facility Services reportable operating segment sales volume, as well as certain cost control measures, such as reduced labor and supplies that were partially offset by increases in material cost, including the newly acquired G&Kincreases related to increased sales volume.of personal protective equipment.

Cost of other consists primarily of cost of goods sold (predominantly first aid and safety products, personal protective equipment, uniforms, and fire protection products), delivery expenses and distribution expenses in the First Aid and Safety Services reportable operating segment and All Other. Cost of other increased $11.8$6.9 million,, or 7.6%1.2%, for the threenine months ended November 30, 2017,February 28, 2021, compared to the threenine months ended November 30, 2016.February 29, 2020. The increase was primarily due to higheran increase in the proportion of sales volume in the First Aid and Safety Services reportable operating segment and All Other.of personal protective equipment, which typically have lower gross margins compared to the First Aid cabinet products.


Selling and administrative expenses increased $106.7decreased $144.1 million, or 9.2%, or 29.5%,and improved as a percent of revenue from 28.7% to 27.0% for the threenine months ended November 30, 2017,February 28, 2021, compared to the same period in the prior fiscal year. The increaseimprovement as a percent of revenue was primarily due to higher sales volume, increasedefficiencies in labor and other employee-partner related expenses as well as lower discretionary spending. In addition, during the nine months ended February 28, 2021, there was a resultone-time benefit from the gain on the sale of certain operating assets.

Operating income was $1,029.0 million, or 19.5% of revenue, for the acquisitionnine months ended February 28, 2021, compared to $955.3 million, or 17.5% of G&K, increased amortization expense related to intangible assets acquiredrevenue, for the nine months ended February 29, 2020. The 200 basis point increase in operating income as a resultpercent of revenue was due to both cost of sales and selling and administrative expenses decreasing as a percent of revenue for the G&K acquisition and increased costs related to investments in a new enterprise resource planning system.nine months ended February 28, 2021. Operating income foralso benefited from a one-time gain on the three months ended November 30, 2017 was negatively impacted by $13.1 millionsale of transaction and integration expenses incurred in connection with the G&K acquisition. For the three months ended November 30, 2017, the after-tax effect of these transaction and integration expenses represents a negative impact of $0.07 per share on diluted earnings per share.certain operating assets.


Net interest expense (interest expense less interest income) was $28.8$73.3 million for the threenine months ended November 30, 2017,February 28, 2021, compared to $13.2$78.6 million for the threenine months ended November 30, 2016.February 29, 2020. The increasechange over the same period of the prior year was primarily due to the additionaldecrease in total debt issuedoutstanding during the nine months ended February 28, 2021, compared to finance the G&K acquisition.same period of the prior fiscal year.


Cintas’ effective tax rate for continuing operations was 33.3%11.8% and 34.9%16.5% for the threenine months ended November 30, 2017February 28, 2021 and 2016,February 29, 2020, respectively. The effective tax rate forin both periods was largely impacted by certain discrete items, (primarilyprimarily the tax accounting for stock-based compensation).compensation. In addition, the effective tax rate for the nine months ended February 28, 2021 included a one-time tax benefit on the sale of certain operating assets.


Net income from continuing operations for the threenine months ended November 30, 2017February 28, 2021 increased $15.8$111.5 million, or 12.9%15.2%, compared to the threenine months ended November 30, 2016.February 29, 2020. Diluted earnings per share from continuing operations was $1.24$7.78 for the threenine months ended November 30, 2017,February 28, 2021, which was an increase of 10.7%15.1% compared to the same period in the prior fiscal year. Diluted earnings per share from continuing operations increased due to the increase in earnings from continuing operations.net income.



Uniform Rental and Facility Services Reportable Operating Segment
ThreeNine Months Ended November 30, 2017 February 28, 2021 Compared to ThreeNine Months EndedNovember 30, 2016 February 29, 2020
 
Uniform Rental and Facility Services reportable operating segment revenue increased from $1,000.0decreased 3.4% to $4,222.8 million to $1,308.0 million, or 30.8%, for the threenine months ended November 30, 2017, overFebruary 28, 2021, compared to $4,372.5 million for the same period inof the prior fiscal year, and the cost of uniform rental and facility services increased $172.5decreased $121.5 million,, or 31.3%5.2%. Revenue increased organically by 7.3%Organic revenue for this reportable operating segment declined 3.1%. The reportable operating segment’s gross margin was $584.1 $2,005.7
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million,, or 44.7%47.5% of revenue. The gross margin was 20100 basis points lowerhigher than the first nine months of the prior fiscal year’s second quarter gross margin of 44.9%.46.5% for the nine months ended February 29, 2020. The decreaseincrease in gross margin as a percent of revenue was driven by the recent G&K acquisition, which has lower margins than our legacy Cintas margins.certain cost control measures such as reduced labor and supplies that were partially offset by increases in material cost, including increases related to increased sales of personal protective equipment.

Selling and administrative expenses increased $99.0for the Uniform Rental and Facility Services reportable operating segment decreased $115.3 million to 28.1%and improved as a percent of revenue comparedfrom 27.6% to 26.8%25.9% for the nine months ended February 28, 2021. The improvement as a percent of revenue was primarily due to efficiencies in the second quarter of the prior fiscal year. This increase in expense was due primarily to increased labor and employee-partner related expenses, incurred as well as lower discretionary spending and a resultone-time benefit from the gain on the sale of the G&K acquisition, increased amortization expense related to intangibles acquired as a result of the G&K acquisition and an investment in an enterprise resource planning system.certain operating assets.

Income before income taxes increased $26.9$87.0 million, or 15.2%10.5%, for the Uniform Rental and Facility Services reportable operating segment for the threenine months ended November 30, 2017February 28, 2021, compared to the same period in the prior fiscal year. Income before income taxes was 15.6%21.6% of the reportable operating segment’s revenue, which was a 210270 basis point decreaseincrease compared to 18.9% for the second quarter of the prior fiscal year of 17.7%.nine months ended February 29, 2020. This decreaseincrease was primarily due to the increasepreviously discussed improvement in gross margin and selling and administrative expenses as previously discussed, and the G&K transaction and integration expenses incurred during the quarter, which had a 70 basis point impact.percent of revenue.


First Aid and Safety Services Reportable Operating Segment
ThreeNine Months Ended November 30, 2017February 28, 2021 Compared to ThreeNine Months Ended November 30, 2016February 29, 2020


First Aid and Safety Services reportable operating segment revenue increased from $124.8$512.3 million to $139.1$597.4 million, or 11.5%16.6%, for the threenine months ended November 30, 2017February 28, 2021, over the same period in the prior fiscal year. Revenue for this reportable operating segment increased organically by 10.8%16.4% as a result of increased sales volume. TotalFirst Aid and Safety Services reportable operating segment revenue was positively impacted by 0.2% due to foreign currency exchange rate fluctuations and by 0.5% due to acquisitions in the three months ended November 30, 2017 compared to the three months ended November 30, 2016. Growthgrowth was driven by many factors including new business sold by sales representatives, penetration of additional products and services into existing customers and strong customer retention.sales of personal protective equipment in response to the COVID-19 pandemic.


Cost of first aid and safety services increased $6.6$81.3 million, or 9.8%30.8%, for the threenine months ended November 30, 2017,February 28, 2021, over the threenine months ended November 30, 2016,February 29, 2020, due to higher sales volume. The gross margin as a percent of revenue was 46.9%42.2% for the quarternine months ended November 30, 2017,February 28, 2021, which is an increasewas a decrease of 80630 basis points compared to the gross margin as a percent of revenue of 46.1%48.5% in the same period of the prior fiscal year. The change in gross margin from the first nine months of the prior year was primarily a result of the increase was driven primarily by improved sourcing, leveragingin the proportion of existing warehouses and optimizationsales related to personal protective equipment, as a result of delivery routes.the impact of the COVID-19 pandemic. Personal protective equipment typically has lower gross margins than first aid cabinet sales.


Selling and administrative expenses increased $4.5$12.0 million, compared to the same quarter in the prior fiscal year. The increase was due primarily to increased labor. Selling and administrative expensesbut improved as a percent of revenue improvedto 31.2%, compared to 34.0% compared to 34.3% infor the second quarter of the prior fiscal year.nine months ended February 29, 2020. The decrease in selling and administrative expensesimprovement as a percent toof revenue was primarily due to revenue growing at a faster pace than labor and employee-partner related expenses.expenses and lower discretionary spending.


Income before income taxes for the First Aid and Safety Services reportable operating segment increased $3.2 million to $18.0was $65.9 million for the threenine months ended November 30, 2017,February 28, 2021, compared to the same period in the prior fiscal year, due to the previously discussed growth in revenue, improvement in the gross margin percentage and improvement in selling and administrative expenses as a percent to revenue. Income before income taxes, at 12.9% of the reportable operating segment’s revenue, was a 110 basis point increase compared to the same quarter last fiscal year due to the reasons previously mentioned.



Consolidated Results
Six Months Ended November 30, 2017 Compared to Six Months Ended November 30, 2016
Total revenue increased 26.8% for the six months ended November 30, 2017 over the same period in the prior fiscal year, from $2,537.7 million to $3,217.9 million. Revenue increased organically by 8.0% as a result of increased sales volume. Organic growth adjusts for the impact of acquisitions and foreign currency exchange rate fluctuations. Total revenue was positively impacted by 0.2% due to foreign currency exchange rate fluctuations and by 18.6% due to acquisitions, primarily the acquisition of G&K.

Uniform Rental and Facility Services reportable operating segment revenue increased 31.4% for the six months ended November 30, 2017 over the same period in the prior fiscal year, from $1,994.3 million to $2,619.8 million. Revenue increased organically by 7.7%. Revenue growth was positively impacted by 0.2% due to foreign currency exchange rate fluctuations and 23.5% due to acquisitions, primarily the acquisition of G&K. Growth was driven by many factors including new business sold by sales representatives, penetration of additional products and services into existing customers and strong customer retention.
Other revenue, consisting of revenue from the First Aid and Safety Services reportable operating segment and All Other, increased 10.1% for the six months ended November 30, 2017 compared to the same period in the prior fiscal year, from $543.4 million to $598.1 million. Revenue increased organically by 9.0%. Revenue growth was positively impacted by 0.2% due to foreign currency exchange rate fluctuations and by 0.9% due to growth derived through acquisitions in our First Aid and Safety Services reportable operating segment and our Fire Protection business, which is included in All Other.

Cost of uniform rental and facility services consists primarily of production expenses, delivery expenses and the amortization of in service inventory, including uniforms, mats, shop towels and other ancillary items. Cost of uniform rental and facility services increased $342.2 million, or 31.4%, for the six months ended November 30, 2017, compared to the six months ended November 30, 2016. This increase was due to higher Uniform Rental and Facility Services reportable operating segment sales volume, including the newly acquired G&K sales volume.
Cost of other consists primarily of cost of goods sold (predominantly first aid and safety products, uniforms, and fire protection products), delivery expenses and distribution expenses in the First Aid and Safety Services reportable operating segment and All Other. Cost of other increased $23.9 million, or 7.8%, for the six months ended November 30, 2017, compared to the six months ended November 30, 2016. The increase was primarily due to higher sales volume in the First Aid and Safety Services reportable operating segment and All Other.

Selling and administrative expenses increased $223.2 million, or 30.5%, for the six months ended November 30, 2017, compared to the same period in the prior fiscal year. The increase was due to higher sales volume, increased labor and other employee-partner related expenses as a result of the acquisition of G&K, increased amortization expense related to intangible assets acquired as a result of the G&K acquisition and increased costs related to investments in a new enterprise resource planning system. Operating income for the six months ended November 30, 2017 was negatively impacted by $17.0 million of transaction and integration expenses incurred in connection with the G&K acquisition. For the six months ended November 30, 2017, the after-tax effect of these transaction and integration expenses represents a negative impact of $0.10 per share on diluted earnings per share.

Net interest expense (interest expense less interest income) was $58.9$74.1 million for the six months ended November 30, 2017, compared to $27.3 million for the six months ended November 30, 2016. The increase was primarily due to the additional debt issued to finance the G&K acquisition.

Cintas’ effective tax rate for continuing operations was 29.8% and 31.5% for the six months ended November 30, 2017 and 2016, respectively. The effective tax rate for both periods was largely impacted by certain discrete items (primarily the tax accounting for stock-based compensation).

Net income from continuing operations for the six months ended November 30, 2017 increased $40.7 million, or 15.8%, compared to the six months ended November 30, 2016. Diluted earnings per share from continuing operations was $2.69 for the six months ended November 30, 2017, which was an increase of 14.0% compared to the same period in the prior fiscal year. Diluted earnings per share from continuing operations increased due to the increase in earnings from continuing operations.


Uniform Rental and Facility Services Reportable Operating Segment
Six Months Ended November 30, 2017 Compared to Six Months Ended November 30, 2016
Uniform Rental and Facility Services reportable operating segment revenue increased from $1,994.3 million to $2,619.8 million, or 31.4%, for the six months ended November 30, 2017, over the same period in the prior fiscal year, and the cost of uniform rental and facility services increased $342.2 million, or 31.4%. Revenue increased organically by 7.7%. The reportable operating segment’s gross margin was $1,189.0 million, or 45.4% of revenue, which was the same gross margin as the prior year's first half gross margin. The increase in gross margin was a result of new business sold by sales representatives, penetration of additional products and services into existing customers and continuous improvement in process efficiency that was offset by lower margin business attributed to the recent G&K acquisition.

Selling and administrative expenses increased $211.4 million to 28.6% of revenue, compared to 27.0% in the first six months of the prior fiscal year. This increase in expense was due primarily to increased labor and employee-partner related expenses incurred as a result of the G&K acquisition, increased amortization expense related to intangibles acquired as a result of the G&K acquisition and an investment in an enterprise resource planning system.
Income before income taxes increased $61.0 million, or 16.9%, for the Uniform Rental and Facility Services reportable operating segment for the six months ended November 30, 2017 compared to the same period in the prior fiscal year. Income before income taxes, was 16.1%at 11.0% of the reportable operating segment’s revenue, which was a 200 basis point decrease compared to the first half of the prior fiscal year of 18.1%. This decrease was due to the increase in selling and administrative expenses, as previously discussed, and the G&K transaction and integration expenses incurred during the quarter, which had a 40 basis point impact.

First Aid and Safety Services Reportable Operating Segment
Six Months Ended November 30, 2017 Compared to Six Months Ended November 30, 2016

First Aid and Safety Services reportable operating segment revenue increased from $249.6 million to $279.7 million, or 12.0%, for the six months ended November 30, 2017 over the same period in the prior fiscal year. Revenue increased organically by 11.4% as a result of increased sales volume. Total revenue was positively impacted by 0.6% due to acquisitions in the six months ended November 30, 2017 compared to the six months ended November 30, 2016. Growth was driven by many factors including new business sold by sales representatives, penetration of additional products and services into existing customers and strong customer retention.

Cost of first aid and safety services increased $12.7 million, or 9.4%, for the six months ended November 30, 2017, over the six months ended November 30, 2016, due to higher sales volume. The gross margin as a percent of revenue was 47.2% for the six months ended November 30, 2017, which is an increase of 130decreased 350 basis points compared to the gross margin as a percent of revenue of 45.9% in the same period of the prior fiscal year. The increase was driven primarily by improved sourcing, leveraging of existing warehouses and optimization of delivery routes, as a result of the ZEE Medical Inc. (ZEE) acquisition.

Selling and administrative expenses increased $6.3 million compared to the first half of the prior fiscal year. The increase was due primarily to increased labor. Selling and administrative expenses as a percent of revenue improved to 33.8% compared to 35.4% in the first half of the prior fiscal year. The decrease in selling and administrative expenses as a percent to revenue was due to revenue growing at a faster pace than labor and employee-partner related expenses as a result of the ZEE acquisition.
Income before income taxes for the First Aid and Safety Services reportable operating segment increased $11.1 million to $37.4 million for the six months ended November 30, 2017, compared to the same period in the prior fiscal year, due to the growth in revenue, the improvement in the gross margin percentage and the decrease in selling and administrative expenses as a percent to revenue. Income before income taxes, at 13.4% of the reportable operating segment’s revenue, was a 290 basis point increase compared to the same period last fiscal year due to the reasons previously mentioned.




LIQUIDITY AND CAPITAL RESOURCES
Liquidity and Capital Resources
The following is a summary of our cash flows and cash and cash equivalents and marketable securities as of and for the sixnine months ended November 30, 2017February 28, 2021 and 2016:February 29, 2020:
(In thousands)20212020
Net cash provided by operating activities$904,815 $934,549 
Net cash used in investing activities$(88,664)$(236,480)
Net cash used in financing activities$(410,095)$(560,292)
Cash and cash equivalents at the end of the period$553,611 $234,441 
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(In thousands)2017 2016
    
Net cash provided by operating activities$379,009
 $301,721
Net cash used in investing activities$(6,218) $(92,045)
Net cash used in financing activities$(309,521) $(203,072)
    
Cash and cash equivalents at the end of the period$236,002
 $143,573
Marketable securities at the end of the period$22,732
 $—

Cash and cash equivalents and marketable securities as of November 30, 2017February 28, 2021 and 2016February 29, 2020 include $133.1$28.9 million and $94.6$25.3 million, respectively, that is located outside of the United States. We expect to use these amounts to fund our international operations and international expansion activities. 

Cash flows provided by operating activities have historically supplied us with a significant source of liquidity. We generally use these cash flows to fund most, if not all, of our operations and expansion activities and dividends on our common stock. We may also use cash flows provided by operating activities, as well as proceeds from long-term debt and short-term borrowings, to fund growth and expansion opportunities, as well as other cash requirements such as the repurchase of our common stock and payment of long-term debt.

The disruption from the COVID-19 pandemic continued to have an impact on Cintas' fiscal 2021 financial results. However, net cash flow provided by operating activities was not significantly impacted. We expect our cash flows from operating activities to remain sufficient to provide us with adequate levels of short-term liquidity. In addition, we have access to $1.0 billion of short-term debt from our revolving credit facility. Although the scope and nature of the impacts of the COVID-19 pandemic remain unclear, we believe our long-term liquidity position remains strong. In an effort to ensure short-term liquidity, we have taken proactive measures to maintain financial flexibility within the landscape of the COVID-19 pandemic. We believe the Company has sufficient liquidity to operate in the current business environment as a result of these actions. Acquisitions and dividends remain strategic objectives, but they will be dependent on the economic outlook and liquidity of the Company.
On October 27, 2020, Cintas declared an annual cash dividend of $2.81 per share on outstanding common stock, representing a 10.2% increase over the annual dividend paid in the prior fiscal year. In addition, on October 27, 2020, the Cintas Board of Directors approved a change in the dividend policy from an annual dividend to a quarterly dividend, and subsequently declared a quarterly dividend of $0.70 per share on outstanding common stock. These dividends, totaling $371.8 million, were paid on December 4, 2020, to shareholders of record as of November 6, 2020. On January 19, 2021, the Board of Directors declared a quarterly dividend of $0.75 per share on outstanding common stock. This dividend was paid on March 15, 2021, to shareholder of record as of February 15, 2021. Any future dividend declarations, including the amount of any dividends, are at the discretion of the Board of Directors and dependent upon then-existing conditions, including the Company's operating results and financial condition, capital requirements, contractual restrictions, business prospects and other factors that the Board of Directors may deem relevant.
Net cash provided by operating activities was $379.0$904.8 million for the sixnine months ended November 30, 2017, an increase of $77.3 millionFebruary 28, 2021, compared to $934.5 million for the sixnine months ended November 30, 2016.February 29, 2020. The increasechange from the prior fiscal year was primarily the result of highera temporary investment in inventory, namely personal protective equipment, so that we could help our customers secure necessary items to remain open during the COVID-19 pandemic. The investment in inventory was partially offset by increased net income offset byand a favorable changes in working capital.accrued compensation on other related liabilities.
Net cash used in investing activities includes capital expenditures, purchases of investments, proceeds from the sale of businessesoperating assets and cash paid for acquisitions of businesses. Capital expenditures were $132.5$100.4 million and $155.2$189.4 million for the sixnine months ended November 30, 2017February 28, 2021 and 2016,February 29, 2020, respectively. Capital expenditures in fiscal 2018 primarily relate to expansion efforts innine months ended February 28, 2021 included $74.8 million for the Uniform Rental and Facility Services reportable operating segment representing $111.4and $22.9 million offor the current year amount.First Aid and Safety Services reportable operating segment. Cash paid for acquisitions of businesses was $1.1$7.6 million and $17.8$47.9 million for the sixnine months ended November 30, 2017February 28, 2021 and 2016,February 29, 2020, respectively. The acquisitions during both the sixnine months ended November 30, 2017February 28, 2021 and February 29, 2020, occurred in our Uniform Rental and Facility Services reportable operating segment, our First Aid and Safety Services reportable operating segment and our Fire Protection business,operating segment, which is included in All Other. ForAlso, during the sixnine months ended November 30, 2017, investing activities includedFebruary 28, 2021 and February 29, 2020, the Company received proceeds of $127.8$32.5 million related toand $13.3 million, respectively, from the sale of Discontinued Services.certain operating assets, net of cash disposed. Net cash used in investing activities also includes net proceeds from purchases and redemptions of marketable securities and investments of $0.4$7.9 million and $54.7$10.5 million forof purchases of investments during the sixnine months ended November 30, 2017February 28, 2021 and 2016,February 29, 2020, respectively.

Net cash used in financing activities was $309.5$410.1 million and $203.1$560.3 million for the sixnine months endedNovember February 28, 2021 and February 29, 2020, respectively. The change in cash provided by financing activities was due to the decrease in share buyback activity and debt repayments in the nine months ended February 28, 2021. On October 30, 2017 and 2016, respectively. On August 4, 2015,2018, we announced that the Board of Directors authorized a $500.0 million$1.0 billion share buyback program. Duringprogram, which was completed during the sixthird quarter of fiscal 2021. On October 29, 2019, we announced the Board of Directors authorized a new $1.0 billion share buyback program, which does not have an expiration date.
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The following table summarizes the buyback activity by program and for the nine months ended November 30, 2016, underFebruary 28, 2021 and February 29, 2020:
20212020
Buyback Program
(In thousands except per share data)
SharesAvg. Price
per Share		Purchase
Price		SharesAvg. Price
per Share		Purchase
Price
October 30, 2018190 $319.88 $60,877 837 $230.66 $193,109 
October 29, 201966 $321.51 $21,080 — $— $— 
256 $320.30 $81,957 837 $230.66 $193,109 

In the August 4, 2015 share buyback plan,period subsequent to February 28, 2021, through April 6, 2021, we purchased less than 0.1 million shares at an average price of $94.11 per share for a total purchase price of $3.7 million. This completed the August 4, 2015 program through which Cintas purchased a total of 5.7 million shares of Cintas common stock at an average price of $87.89$337.39 for a total purchase price of $500.0$8.0 million. On August 2, 2016, we announced thatFrom the Boardinception of Directors authorized a new $500.0 millionthe October 29, 2019 share buyback program which does not havethrough April 6, 2021, Cintas has purchased less than 0.1 million shares of Cintas common stock in the aggregate, at an expiration date. Asaverage price of November 30, 2017, no share buybacks have occurred under the August 2, 2016 program and there were no share buybacks under this program subsequent to November 30, 2017 through January 5, 2018.$325.71, for a total purchase price of $29.1 million. In addition, for the sixnine months ended November 30, 2017,February 28, 2021, Cintas acquired 0.2 million shares of Cintas common stock for employee payroll taxes due on restricted stock awards that vested during the nine months ended February 28, 2021. These shares were acquired at an average price of $301.49 per share for a total purchase price of $72.5 million. For the nine months ended February 29, 2020, Cintas acquired 0.3 million shares of Cintas common stock for employee payroll taxes due on restricted stock awards that vested during the sixnine months ended November 30, 2017.February 29, 2020. These shares were acquired at an average price of $129.01$261.48 per share for a total purchase price of $35.7$68.4 million.


During the sixnine months ended November 30, 2016, Cintas paid $13.5 million in prepaid short term debt financing fees related to bridge loan financing in connection with the entry into the merger agreement among Cintas, G&K and Bravo Merger Sub, Inc., a wholly-owned subsidiary of Cintas, pursuant to which Cintas would acquire all outstanding shares of G&K for $97.50 per share in cash, for a total enterprise value of approximately $2.1 billion, including acquired net debt.


During the six months ended November 30, 2017,February 29, 2020, Cintas made payments of $50.5$112.5 million, net on commercial paper borrowings and paid off the term loan balance of $250.0 million with cash on hand. On June 1, 2016, Cintas paid the $250.0 million aggregate principal amount of five-year senior notes that matured on that date with cash on hand and proceeds from the issuance of commercial paper. On December 1, 2017, in accordance with the terms of the notes, Cintas paid the $300.0 million aggregate principal amount of 6.13% 10-year senior notes that matured on that date with cash on hand and $265.0 million in proceeds from the issuance of commercial paper.

The following table summarizesborrowings. Cintas' outstanding debt:debt is summarized as follows:
(In thousands)Interest
Rate		Fiscal Year
Issued		Fiscal Year
Maturity		February 28,
2021		May 31,
2020
Debt due within one year
Senior notes4.30 %20122022$250,000 $— 
Debt issuance costs(64)— 
Total debt due within one year$249,936 $— 
Debt due after one year
Senior notes4.30 %20122022$— $250,000 
Senior notes2.90 %20172022650,000 650,000 
Senior notes3.25 %20132023300,000 300,000 
Senior notes (1)
2.78 %2013202350,924 51,250 
Senior notes (2)
3.11 %2015202551,385 51,637 
Senior notes3.70 %201720271,000,000 1,000,000 
Senior notes6.15 %20072037250,000 250,000 
Debt issuance costs(10,891)(13,182)
   Total debt due after one year$2,291,418 $2,539,705 
(In thousands)
Interest
 Rate
 
Fiscal Year
Issued
 
Fiscal Year
 Maturity
 
November 30,
2017
 
May 31,
 2017
          
Debt due within one year         
Senior notes6.13% 2008 2018 $300,000
 $300,000
Commercial paper1.24%
(1) 
Various Various —
 50,500
Current portion of term loan2.00%
(1) 
2017 2018 —
 12,500
Debt issuance costs      —
 (100)
Total debt due within one year      $300,000
 $362,900
          
Debt due after one year         
Senior notes4.30% 2012 2022 $250,000
 $250,000
Senior notes2.90% 2017 2022 650,000
 650,000
Senior notes3.25% 2013 2023 300,000
 300,000
Senior notes (2)
2.78% 2013 2023 52,337
 52,554
Senior notes (3)
3.11% 2015 2025 52,476
 52,645
Senior notes3.70% 2017 2027 1,000,000
 1,000,000
Senior notes6.15% 2007 2037 250,000
 250,000
Long-term portion of term loan2.00%
(1) 
2017 2022 —
 237,500
Debt issuance costs      (20,591) (22,075)
   Total debt due after one year      $2,534,222
 $2,770,624

(1) Variable rate debt instrument. The rate presented is the variable borrowing rate at May 31, 2017.
(2)Cintas assumed these senior notes with the acquisition of G&K Services, Inc. (G&K) in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.73%.
(3) (2)    Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.88%.

The credit agreement that supports our commercial paper program was amended and restated on September 16, 2016.May 24, 2019. The amendment increased the capacity of the revolving credit facility from $450.0$600.0 million to $600.0 million$1.0 billion and addedcreated a $250.0 millionnew term loan facility. The existing term loan facility was paid in full during the first quarter of fiscal 2018.$200.0 million. The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under either the revolving credit facility or a newthe term loan of up to $250.0 million in the aggregate, subject to customary conditions. The maturity date of the revolving credit agreementfacility is September 15, 2021.May 23, 2024. As of November 30, 2017,February 28, 2021 and May 31, 2020, there was no commercial paper outstanding and no borrowings on our revolving credit facility. As of May 31, 2017, there was $50.5 million of commercial paper outstanding with a weighted average interest rate of 1.24% and maturity dates less than 30 days and no borrowings on our revolving credit facility. The fair value of the commercial paper is estimated using Level 2 inputs based on general market prices. Given its short-term nature, the carrying value of the outstanding commercial paper approximates fair value.

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Cintas has certain covenants related to debt agreements. These covenants limit our ability to incur certain liens, to engage in sale-leaseback transactions and to merge, consolidate or sell all or substantially all of Cintas' assets. These covenants also require Cintas to maintain certain debt to earnings before interest, taxes, depreciation and amortization (EBITDA) and interest coverage ratios. Cross-default provisions exist between certain debt instruments. If a default of a significant covenant were to occur, the default could result in an acceleration of the maturity of the indebtedness, impair liquidity and limit the ability to raise future capital. As of November 30, 2017, Cintas was in compliance with all of the debt covenants.covenants for all periods presented.



Our access to the commercial paper and long-term debt markets has historically provided us with sources of liquidity. We do not anticipate having difficulty in obtaining financing from those markets in the future in view of our favorable experiences in the debt markets in the recent past. OurHowever, the COVID-19 pandemic, which has caused disruption in the capital markets, could make financing more difficult and/or expensive. Additionally, our ability to continue to access the commercial paper and long-term debt markets on favorable interest rate and other terms will depend, to a significant degree, on the ratings assigned by the credit rating agencies to our indebtedness. 

As of November 30, 2017,February 28, 2021, our ratings were as follows:
Rating AgencyOutlookCommercial PaperLong-term Debt
Rating AgencyOutlookCommercial PaperLong-term Debt
Standard & Poor’sStableA-2BBB+A-
Moody’s Investors ServiceStableP-2A3

In the event that the ratings of our commercial paper or our outstanding long-term debt issues were substantially lowered or withdrawn for any reason, or if the ratings assigned to any new issue of long-term debt securities were significantly lower than those noted above, particularly if we no longer had investment grade ratings, our ability to access the debt markets may be adversely affected. In addition, in such a case, our cost of funds for new issues of commercial paper and long-term debt would be higher than our cost of funds would have been had the ratings of those new issues been at or above the level of the ratings noted above. The rating agency ratings are not recommendations to buy, sell or hold our commercial paper or debt securities. Each rating may be subject to revision or withdrawal at any time by the assigning rating organization and should be evaluated independently of any other rating. Moreover, each credit rating is specific to the security to which it applies.

To monitor our credit rating and our capacity for long-term financing, we consider various qualitative and quantitative factors. One such factor is the ratio of our total debt to EBITDA. For the purpose of this calculation, debt is defined as the sum of short-term borrowings, long-term debt due within one year, obligations under capital leases due in one year, long-term debt and long-term obligations under capital leases.standby letters of credit. 


On December 22, 2017, the President signed into legislation The Tax Cuts and Jobs Act (the Act).  The Act changes existing U.S. tax law and includes numerous provisions that will affect our business, including our income tax accounting, disclosure and tax compliance. We believe the most impactful changes within the Act provision are those that will reduce the U.S. corporate tax rates, business-related exclusions and deductions and credits. We are currently evaluatinghave assessed the impact of events subsequent to our consolidated condensed balance sheet date but prior to the Act,issuance of this filing. The impact from the COVID-19 pandemic, however, continues to evolve, and the scope and nature of the impacts of the COVID-19 pandemic remain unclear. As such, our conclusions regarding both our short-term and long-term liquidity position remain unchanged. Management will continue to evaluate the Company’s liquidity position and our near- and longer-term financial performance as we manage the Company through the uncertainty related to the COVID-19 pandemic.
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Financial and Nonfinancial Disclosure About Issuers and Guarantors of Cintas’ Senior Notes
Cintas Corporation No. 2 (Corp. 2) is the indirectly, wholly owned principal operating subsidiary of Cintas. Corp. 2 is the issuer of the $2,550.0 million aggregate principal amount of senior notes outstanding as of February 28, 2021, which willare unconditionally guaranteed, jointly and severally, by Cintas Corporation and its wholly owned, direct and indirect domestic subsidiaries.

Basis of Preparation of the Summarized Financial Information
The following tables include remeasuringsummarized financial information of Cintas Corporation (Issuer), Corp. 2 and subsidiary guarantors (together, the deferred tax assetsObligor Group). Investments in and liabilities,equity in the one-time transition tax,earnings of non-guarantors, which are not members of the Obligor Group, have been excluded. Non-guarantor subsidiaries are located outside the U.S., and therefore, excluded from the Obligor Group.

The summarized financial information of the Obligor Group is presented on a combined basis with intercompany balances and transactions between entities in the Obligor Group eliminated. The Obligor Group’s amounts due from, amounts due to and transactions with non-guarantors have been presented in separate line items, if they are material. Summarized financial information of the Obligor Group is as well evaluating our reinvestment assertion on all future earningsfollows:
Nine Months Ended
Summarized Consolidated Statement of Income
(In thousands)
February 28,
2021
Net sales to unrelated parties$4,976,885 
Net sales to non-guarantors$3,430 
Operating income$981,026 
Net income$802,301 

Summarized Consolidated Balance Sheets
(In thousands)
February 28,
2021		May 31,
2020
ASSETS
Receivables due from non-obligor subsidiaries$6,383 $3,199 
Total other current assets$2,801,395 $2,143,489 
Total other noncurrent assets$4,923,086 $4,938,093 
LIABILITIES
Amounts due to non-obligor subsidiaries$1,594 $3,437 
Current liabilities$1,236,009 $843,203 
Noncurrent liabilities$3,198,343 $3,495,956 

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Litigation and profits of our foreign entities. We expect the Act to have a positive impact on our cash flows through a reduction of cash taxes paid.




LITIGATION AND OTHER CONTINGENCIES
Other Contingencies
Cintas is subject to other legal proceedings, insurance receipts, legal settlements and claims arising from the ordinary course of its business, including personal injury, customer contract, environmental and employment claims. In the opinion of management, the aggregate liability, if any, with respect to such ordinary course of business actions will not have a material adverse effect on the consolidated financial position, orconsolidated results of operationoperations or consolidated cash flows of Cintas. 



Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements.  Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “predicts,” “projects,” “plans,” “expects,” “intends,” “target,” “forecast,” “believes,” “seeks,” “could,” “should,” “may” and “will” or the negative versions thereof and similar words, terms and expressions and by the context in which they are used. Such statements are based upon current expectations of Cintas and speak only as of the date made. You should not place undue reliance on any forward-looking statement. We cannot guarantee that any forward-looking statement will be realized. These statements are subject to various risks, uncertainties, potentially inaccurate assumptions and other factors that could cause actual results to differ from those set forth in or implied by this Quarterly Report. Factors that might cause such a difference include, but are not limited to, risks inherent with the G&K transaction in the achievement of cost synergies and the timing thereof, including whether the transaction will be accretive and within the expected timeframe and the actual amounts of future transaction and integration expenses; the possibility of greater than anticipated operating costs including energy and fuel costs; lower sales volumes; loss of customers due to outsourcing trends; the performance and costs of integration of acquisitions, including G&K;acquisitions; fluctuations in costs of materials and labor including increased medical costs; costs and possible effects of union organizing activities; failure to comply with government regulations concerning employment discrimination, employee pay and benefits and employee health and safety; the effect on operations of exchange rate fluctuations, tariffs and other political, economic and regulatory risks; uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation; the cost, results and ongoing assessment of internal controls for financial reporting required by the Sarbanes-Oxley Act of 2002; coststhe effect of our SAP system implementation;new accounting pronouncements; disruptions caused by the inaccessibility of computer systems data, including cybersecurity risks; the initiation or outcome of litigation, investigations or other proceedings; higher assumed sourcing or distribution costs of products; the disruption of operations from catastrophic or extraordinary events including viral pandemics such as the negative impacts from hurricanes Harvey and Irma;COVID-19 coronavirus; the amount and timing of repurchases of our common stock, if any; changes in federal and state tax and labor laws; and the reactions of competitors in terms of price and service. Cintas undertakes no obligation to publicly release any revisions to any forward-looking statements or to otherwise update any forward-looking statements whether as a result of new information or to reflect events, circumstances or any other unanticipated developments arising after the date on which such statements are made. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the year ended May 31, 20172020 and in our reports on Forms 10-Q and 8-K. The risks and uncertainties described herein are not the only ones we may face. Additional risks and uncertainties presently not known to us, or that we currently believe to be immaterial, may also harm our business.




32

ITEM 3.
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK.RISK
 
In our normal operations, Cintas has market risk exposure to interest rates. There has been no material change to this market risk exposure to interest rates from that which was previously disclosed on page 2829 of our Annual Report on Form 10-K for the year ended May 31, 2017.2020.
 
Through its foreign operations, Cintas is exposed to foreign currency risk. Foreign currency exposures arise from transactions denominated in a currency other than the functional currency and from foreign currency denominated revenue and profit translated into U.S. dollars. The primary foreign currency to which Cintas is exposed is the Canadian dollar. 

ITEM 4.
CONTROLS AND PROCEDURES.PROCEDURES
 
Disclosure Controls and Procedures
With the participation of Cintas’ management, including Cintas’ Chief Executive Officer, Chief Financial Officer, General Counsel and Controllers, Cintas has evaluated the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)) as of November 30, 2017.February 28, 2021.  Based on such evaluation, Cintas’ management, including Cintas’ Chief Executive Officer, Chief Financial Officer, General Counsel and Controllers, has concluded that Cintas’ disclosure controls and procedures were effective as of November 30, 2017,February 28, 2021, in ensuring (i) information required to be disclosed by Cintas in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’sSecurities and Exchange Commission's rules and forms and (ii) information required to be disclosed by Cintas in the reports that it files or submits under the Exchange Act is accumulated and communicated to Cintas’ management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.


Internal Control over Financial Reporting
There were no changes in Cintas’ internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended November 30, 2017,February 28, 2021, that have materially affected, or are reasonably likely to materially affect, Cintas' internal control over financial reporting.








33

Part II.  Other Information
 
Item 2.    Unregistered SalesITEM 1.                              LEGAL PROCEEDINGS

Cintas is subject to legal proceedings, insurance receipts, legal settlements and claims arising from the ordinary course of Equity Securitiesits business, including personal injury, customer contract, environmental and Useemployment claims. In the opinion of Proceeds.management, the aggregate liability, if any, with respect to such ordinary course of business actions will not have a material adverse effect on the consolidated financial position, consolidated results of operations or consolidated cash flows of Cintas.


ITEM 1A.                              RISK FACTORS

The following disclosure modifies the discussion of certain risks and uncertainties previously disclosed in our Annual Report on Form 10-K for the year ended May 31, 2020. These risks and uncertainties, along with those previously disclosed, could materially adversely affect our business or financial results. Additional risks and uncertainties that are not presently known to us or that we deem immaterial may also impact our business or financial results.

We rely extensively on computer systems, including third-party systems, to process transactions, maintain information and manage our businesses. Disruptions in the availability of computer systems due to implementation of a new system or otherwise, or privacy breaches involving computer systems, could impact our ability to service our customers and adversely affect our sales, consolidated results of operations and reputation and expose us to litigation risk.
Our businesses rely on various computer systems, including third-party systems, to provide customer information, process customer transactions and provide other general information necessary to manage our businesses. We have an active disaster recovery plan in place that is frequently reviewed and tested. However, our computer systems are subject to damage or interruption due to system conversions, such as our current conversion to SAP enterprise system, power outages, computer or telecommunication failures, catastrophic events such as fires, tornadoes and hurricanes and usage errors by our employees. Although we believe that we have adopted appropriate measures to mitigate potential risks to our technology and our operations from these information technology-related and other potential disruptions, given the unpredictability of the timing, nature and scope of such disruptions, we could potentially be subject to production downtimes, operational delays and interruptions in our ability to provide products and services to our customers. Any disruption caused by the unavailability of our computer systems could adversely affect our sales, could require us to make a significant investment to fix or replace them and, therefore, could adversely affect our consolidated results of operations. In addition, cyber-security attacks are evolving and include, but are not limited to, malicious software, attempts to gain unauthorized access to data and other electronic security breaches that could lead to disruptions in systems, unauthorized release of confidential or otherwise protected information and corruption of data. If the network of security controls, policy enforcement mechanisms and monitoring systems to address these threats to our technology fails, or we are unable to successfully address security incidents, production downtimes, operational delays and interruptions in our ability to provide products and services to our customers, the compromising of confidential or otherwise protected Company, customer, or employee information, destruction or corruption of data, security breaches, or other manipulation or improper use of our systems and networks could result in financial losses from remedial actions, loss of business or potential liability and damage to our reputation or otherwise have a material impact on our business, operations or financial condition.

We also rely on software applications, enterprise cloud storage systems and cloud computing services provided by third-party vendors for certain information technology services, including our SAP enterprise system, payroll data, risk management data and lease data. If these third-party vendors, as well as our suppliers and other vendors, experience service interruptions or damage, security breaches, cyber-attacks, computer viruses, ransomware or other similar events or intrusions, our business and our consolidated results of operations may be adversely affected.



34
Period (In millions, except share and per share data)
Total number
of shares
purchased
 
Average
price paid
per share
 
Total number of
shares purchased
as part of the
publicly announced
plan (1)
 
Maximum
approximate dollar
value of shares that
may yet be
purchased under
the plan (1)
        
September 1 - 30, 2017 (2)
957
 $136.10
 —
 $500.0
October 1 - 31, 2017 (3)
1,261
 $149.04
 —
 $500.0
November 1 - 30, 2017 (4)
2,232
 $152.03
 —
 $500.0
Total4,450
 $147.76
 —
 $500.0


ITEM 2.                           UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS

Period
(In millions, except share and per share data)
Total number
of shares
purchased		Average
price paid
per share
Total number of
shares purchased
as part of the
publicly announced
plan (1)
Maximum
approximate dollar
value of shares that
may yet be
purchased under
the plan (1)
December 1 - 31, 2020 (2)
776 $347.37 — $1,060.9 
January 1 - 31, 2021 (3)
132,915 $319.71 130,244 $1,019.3 
February 1 - 28, 2021 (4)
125,822 $321.12 125,632 $978.9 
Total259,513 $320.48 255,876 $978.9 

(1)   On August 2, 2016,October 30, 2018, Cintas announced that the Board of Directors authorized a $500.0 million$1.0 billion share buyback program, which does not have an expiration date. From the inception of the October 30, 2018 share buyback program through February 28, 2021, Cintas has purchased a total of 4.5 million shares of Cintas common stock at an average price of $223.68 per share for a total purchase price of $1.0 billion. The October 30, 2018 share buyback program was completed in January 2021. Additionally, on October 29, 2019, Cintas announced that the Board of Directors authorized a new $1.0 billion share buyback program, which does not have an expiration date. From the inception of the October 29, 2019 share buyback program through February 28, 2021, Cintas has purchased a total of less than 0.1 million shares of Cintas common stock at an average price of $321.51 per share for a total purchase price of $21.1 million.
(2)  During September 2017,December 2020, Cintas acquired 957776 shares of Cintas common stock in trade for employee payroll taxes due on restricted stock awards that vested during the fiscal year. These shares were acquired at an average price of $136.10$347.37 per share for a total purchase price of $0.1$0.3 million.
(3)  During October 2017,January 2021, Cintas acquired 1,2612,671 shares of Cintas common stock in trade for employee payroll taxes due on restricted stock awards that vested during the fiscal year. These shares were acquired at an average price of $149.04$328.19 per share for a total purchase price of $0.2$0.9 million.
(4)  During November 2017,February 2021, Cintas acquired 2,232190 shares of Cintas common stock in trade for employee payroll taxes due on restricted stock awards that vested during the fiscal year. These shares were acquired at an average price of $152.03$336.83 per share for a total purchase price of $0.3less than $0.1 million.




ItemITEM 5.                           Other Information.OTHER INFORMATION


On October 17, 2017, Cintas declared an annual cash dividendMarch 31, 2021, as part of $1.62 per share on outstanding common stock, a 21.8% increase oversuccession planning, Scott D. Farmer, Chairman and Chief Executive Officer of the annual dividend paid inCompany, notified the prior year. The dividend was paid on December 8, 2017, to shareholdersBoard of recordDirectors (the “Board”) of the Company that he would retire as Chief Executive Officer of the Company, effective as of November 10, 2017.May 31, 2021. Mr. Farmer will continue to serve on the Board and will become Executive Chairman, effective June 1, 2021.



The Board has elected Todd M. Schneider, currently the Company’s Executive Vice President and Chief Operating Officer, as Chief Executive Officer to replace Mr. Farmer, effective as of June 1, 2021. Mr. Schneider has also been elected to the Board, effective as of June 1, 2021.


Mr. Schneider, age 53, has served as the Company’s Executive Vice President and Chief Operating Officer since July 2018. Mr. Schneider initially joined the Company in 1989. Mr. Schneider has held various positions within the Company, including several management positions. Mr. Schneider was Vice President of Sales of the Midwest/South Central Region Rental Division and President and Chief Operating Officer of the former Document Management Division. Mr. Schneider served as Senior Vice President of Sales of the Rental Division until June 2013, when he was appointed President & Chief Operating Officer of the Rental Division until July 2018.

35

ItemITEM 6.                                   Exhibits.EXHIBITS

31.1
Certification of Principal Executive Officer required by Rule 13a-14(a)
101.INS101XBRL Instance DocumentThe following financial statements from Cintas' Quarterly Report on Form 10-Q for the period ended February 28, 2021, formatted in Inline XBRL: (i) Consolidated Condensed Statements of Income (unaudited), (ii) Consolidated Condensed Statements of Comprehensive Income (unaudited), (iii) Consolidated Condensed Balance Sheets (unaudited), (iv) Consolidated Condensed Statements of Shareholders' Equity (unaudited), (v) Consolidated Condensed Statements of Cash Flows (unaudited) and (vi) Notes to Consolidated Condensed Financial Statements, tagged as blocks of text and including detailed tags.
101.SCH104Cover Page Interactive Data File (formatted as Inline XBRL Taxonomy Extension Schema Document
101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Documentand contained in Exhibit 101)




36

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.


 
CINTAS CORPORATION
(Registrant)
Date:January 5, 2018April 6, 2021/s/J. Michael Hansen
J. Michael Hansen
SeniorExecutive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)


45
37