⁽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
Inventories 30,254
Uniforms and other rental items in service 93,659
Income taxes, current 15,873
Prepaid expenses and other current assets 43,235
Property and equipment 254,035
Goodwill 1,520,295
Service contracts 519,000
Trade names 17,000
Other assets 15,585
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 value 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 name assets.

~~The table below sets forth the preliminary valuation and amortization period of identifiable intangible assets:~~

Identifiable intangible assets Preliminary Valuation Amortization Period

Service contracts $ 519,000
15 years
Trade names 17,000
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.Pension Plans~~

In conjunction with the acquisition of G&K, Cintas assumed G&K's noncontributory frozen defined benefit pension plan (the Pension Plan) that covers substantially all 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 sheet 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. The net pension liability at November 30, 2017 is included in long-term accrued liabilities on the consolidated condensed balance sheet. Unrecognized differences between actual amounts and estimates based on actuarial assumptions are included in accumulated other comprehensive income in our consolidated condensed balance sheet. The difference between actual amounts and estimates based on actuarial assumptions are recognized in other comprehensive income 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 Plan are as follows:~~

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 10 - Accumulated Other Comprehensive Income (Loss)

The following ~~table summarizes~~tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss), net of tax:


(In thousands)	Foreign Currency		Unrealized Income on Interest Rate Locks		Other		Total

Balance at June 1, 2022	$	17,006	$	92,688	$	(1,777)	$	107,917
Other comprehensive (loss) income before reclassifications	(19,206)		934		—		(18,272)
Amounts reclassified from accumulated other comprehensive income (loss)	—		(1,521)		—		(1,521)
Net current period other comprehensive loss	(19,206)		(587)		—		(19,793)
Balance at August 31, 2022	(2,200)		92,101		(1,777)		88,124
Other comprehensive (loss) income before reclassifications	(9,901)		7,394		—		(2,507)
Amounts reclassified from accumulated other comprehensive income (loss)	—		(1,521)		—		(1,521)
Net current period other comprehensive (loss) income	(9,901)		5,873		—		(4,028)
Balance at November 30, 2022	(12,101)		97,974		(1,777)		84,096
Other comprehensive (loss) income before reclassifications	(7,972)		1,501		—		(6,471)
Amounts reclassified from accumulated other comprehensive income (loss)	—		(1,521)		—		(1,521)
Net current period other comprehensive loss	(7,972)		(20)		—		(7,992)
Balance at February 28, 2023	$	(20,073)	$	97,954	$	(1,777)	$	76,104

(In thousands) Foreign Currency Unrealized Income on Cash Flow Hedges Other Total

Balance at June 1, 2017 $ (12,726 ) $ 11,382
$ (1,685 ) $ (3,029 )
Other comprehensive income before reclassifications 35,184
—
20
35,204
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, 2017 22,458

11,210

(1,665 )
32,003
Other comprehensive loss before reclassifications (11,374 ) —
(20 ) (11,394 )
Amounts reclassified from accumulated other comprehensive income (loss) —
(172 ) —
(172 )
Net current period other comprehensive loss (11,374 ) (172 ) (20 ) (11,566 )
Balance at November 30, 2017 $ 11,084

$ 11,038

$ (1,685 )
$ 20,437


(In thousands)	Foreign Currency		Unrealized (Loss) Income on Interest Rate Locks		Other		Total

Balance at June 1, 2021	$	41,839	$	(7,308)	$	(3,643)	$	30,888
Other comprehensive loss before reclassifications	(24,016)		(36,679)		—		(60,695)
Amounts reclassified from accumulated other comprehensive income (loss)	—		(459)		—		(459)
Net current period other comprehensive loss	(24,016)		(37,138)		—		(61,154)
Balance at August 31, 2021	17,823		(44,446)		(3,643)		(30,266)
Other comprehensive (loss) income before reclassifications	(7,472)		10,940		—		3,468
Amounts reclassified from accumulated other comprehensive income (loss)	—		(460)		—		(460)
Net current period other comprehensive (loss) income	(7,472)		10,480		—		3,008
Balance at November 30, 2021	10,351		(33,966)		(3,643)		(27,258)
Other comprehensive income before reclassifications	5,297		34,567		—		39,864
Amounts reclassified from accumulated other comprehensive income (loss)	—		(459)		—		(459)
Net current period other comprehensive income	5,297		34,108		—		39,405
Balance at February 28, 2022	$	15,648	$	142	$	(3,643)	$	12,147

(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 )

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The following table summarizes the 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				Nine Months Ended
(In thousands)	February 28, 2023		February 28, 2022		February 28, 2023		February 28, 2022

Amortization of interest rate locks	$	2,033	$	608	$	6,100	$	1,823	Interest expense
Tax expense	(512)		(149)		(1,537)		(445)		Income taxes
Amortization of interest rate locks, net of tax	$	1,521	$	459	$	4,563	$	1,378

Note 11 - 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, 2023
Revenue	$	1,716,165	$	231,605	$	242,216	$	—	$	2,189,986
Income (loss) before income taxes	$	359,995	$	47,271	$	39,546	$	(28,446)	$	418,366

For the three months ended February 28, 2022
Revenue	$	1,553,320	$	212,958	$	194,264	$	—	$	1,960,542
Income (loss) before income taxes	$	355,990	$	26,304	$	25,311	$	(21,974)	$	385,631

As of and for the nine months ended February 28, 2023
Revenue	$	5,123,924	$	701,740	$	705,634	$	—	$	6,531,298
Income (loss) before income taxes	$	1,093,861	$	133,612	$	104,393	$	(84,587)	$	1,247,279
Total assets	$	7,150,227	$	694,777	$	532,434	$	88,563	$	8,466,001

As of and for the nine months ended February 28, 2022
Revenue	$	4,596,767	$	614,234	$	568,772	$	—	$	5,779,773
Income (loss) before income taxes	$	1,022,987	$	74,109	$	85,838	$	(65,618)	$	1,117,316
Total assets	$	7,022,646	$	668,475	$	393,343	$	84,136	$	8,168,600

(1) Corporate assets include cash and cash equivalents and marketable securities, if applicable, in all periods.

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

Table of Contents

Note 12 - Litigation and Other Contingencies

~~12.Segment Information~~Cintas is subject to 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, consolidated results of operations or consolidated cash flows of Cintas. Cintas is party to additional litigation not considered in the ordinary course of business, including the litigation discussed below.

The Company is a defendant in a purported class action lawsuit, City of Laurel, Mississippi v. Cintas Corporation No. 2, filed on March 12, 2021. This is a contract dispute whereby plaintiffs allege that Cintas breached its contracts with participating public agencies and seek, among other things, contract-based damages in an unspecified amount. In March 2022, the District Court denied Cintas’ motion to compel arbitration, and on March 6, 2023, the Ninth Circuit Court of Appeals affirmed. Liability in this matter is not probable nor estimable at this time. However, this matter, if decided adversely to Cintas or settled, may result in liability material to Cintas’ consolidated financial condition, consolidated results of operations or consolidated cash flows.

Table of Contents

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 and Latin America, 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®.

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 market 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 market 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. 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 ~~its~~the 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 gain 606
(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 million~~and$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 affiliates 137,737
—
—
—
(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 income 137,737
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 taxes 137,737

30,058

166,569

10,672

(138,663 )
206,373
Income taxes —
11,449
54,414
2,798
(25 ) 68,636
Income from continuing operations 137,737

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 affiliates 121,950
—
—
—
(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 income 121,950
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 taxes 121,950
58,524
121,837
5,940
(121,031 ) 187,220
Income taxes —
20,635
42,652
2,011
(28 ) 65,270
Income from continuing operations 121,950

37,889

79,185

3,929

(121,003 )
121,950

Income from discontinued operations, net of tax 18,427
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 affiliates 298,845
—
—
—
(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 income 298,845
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 taxes 298,845
103,156
297,762
22,674
(296,985 ) 425,452
Income taxes —
31,019
89,537
6,095
(44 ) 126,607
Income from continuing operations 298,845

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 affiliates 258,158
—
—
—
(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 income 258,158
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 taxes 258,158
117,181
244,878
11,272
(254,439 ) 377,050
Income taxes —
37,304
78,178
3,464
(54 ) 118,892
Income from continuing operations 258,158

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 agreements 385
385
—
—
(385 ) 385
Change in fair value of available-for-sale securities 1
—
—
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 adjustments 23,810
—
—
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 agreements 770
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, net 1,766,703
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’ equity 2,553,033
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, net 1,516,463
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’ equity 2,302,793
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 compensation 55,204
—
—
—
—
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 activities 409,524
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 awards 28,558
—
—
—
—
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 compensation 39,582
—
—
—
—
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 liabilities 2,819
(12,734 ) (8,935 ) (86 ) —
(18,936 )
Accrued liabilities and other 139,766
3,711
(148,384 ) 41
—
(4,866 )
Income taxes, current —
(1,635 ) 1,460
659
—
484
Net cash provided by operating activities 460,635
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 awards 19,225
—
—
—
—
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.

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. Cintas evaluates operating segment performance based on revenue and income before income taxes. Revenue and income before income taxes for the ~~six~~three and nine months ended~~November 30, 2017~~ February 28, 2023 and ~~2016~~2022, for the two reportable operating segments and All Other isare presented in Note 1211 entitled Segment Information of “Notes to Consolidated Condensed Financial Statements.”

~~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. 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 "Discontinued Services," 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 Ended~~November 30, 2017~~ February 28, 2023 Compared to Three Months Ended~~November 30, 2016~~ February 28, 2022

Total revenue increased ~~26.4%~~11.7% to $2,190.0 million for the three months ended ~~November 30, 2017 over~~February 28, 2023, compared to $1,960.5 million for the ~~same period in the prior fiscal year, from $1,271.1 million to $1,606.4 million. Revenue increased organically by 7.7% as a result of increased sales volume. Organic~~three months ended February 28, 2022. The organic revenue growth rate, which adjusts for the impact of acquisitions and foreign currency exchange rate ~~fluctuations. Total revenue~~fluctuations, was 11.8%. Revenue growth was positively impacted by 0.3% due to acquisitions and negatively impacted by 0.4% due to foreign currency exchange rate ~~fluctuations and by 18.4% due to acquisitions, primarily the acquisition~~fluctuations.

Table of ~~G&K.~~Contents

Uniform Rental and Facility Services reportable operating segment revenue ~~increased 30.8%~~was $1,716.2 million for the three months ended ~~November 30, 2017 over~~February 28, 2023, compared to $1,553.3 million for the same period in the prior fiscal year, ~~from $1,000.0 million to $1,308.0 million. Revenue increased organically by 7.3%~~which was an increase of 10.5%. The organic revenue growth rate for this reportable operating segment was 10.8%. Revenue growth in the Uniform Rental and Facility Services reportable operating segment was positively impacted ~~23.2%~~by 0.2% due to acquisitions ~~primarily G&K. Foreign~~and negatively impacted by 0.5% due to foreign currency exchange rate ~~fluctuations positively impacted~~fluctuations. Revenue growth ~~by 0.3%. Growth~~ was ~~driven by many factors including~~a result of new business, ~~sold by sales representatives,~~the penetration of additional products and services into existing customers and ~~strong customer retention.~~price increases, partially offset by lost business. New business growth resulted from an increase in the number and productivity of sales representatives.

Other revenue, consisting of revenue from the First Aid and Safety Services reportable operating segment and All Other, increased ~~10.1%~~16.4% for the three months ended ~~November 30, 2017~~February 28, 2023, compared to the same period in the prior fiscal year, from ~~$271.1~~$407.2 million to ~~$298.4 million. Revenue increased organically by 9.2%~~$473.8 million. The organic revenue growth rate for other revenue was 15.8%. Revenue growth was positively impacted by ~~0.2%~~0.7% due to acquisitions and negatively impacted by 0.1% due to foreign currency exchange rate ~~fluctuations and by 0.7% 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.~~fluctuations.

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 ~~$172.5~~$73.9 million, or ~~31.3%~~8.9%, for the three months ended ~~November 30, 2017,~~February 28, 2023, compared to the three months ended ~~November 30, 2016.~~February 28, 2022. This ~~increase~~change from the same period in the prior fiscal year was primarily due to higher Uniform Rental and Facility Services reportable operating segment sales volume, ~~including~~as well as investments in material cost to support increased revenue growth achieved during the ~~newly acquired G&K sales volume.~~three months ended February 28, 2023.

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~~$19.7 million,, or ~~7.6%~~8.6%, for the three months ended ~~November 30, 2017~~,February 28, 2023, compared to the three months ended ~~November 30, 2016~~.February 28, 2022, primarily due to increased sales volume in each of the underlying operating segments. Cost of other improved as a percentage of revenue, decreasing from 56.1% for three months ended February 28, 2022, to 52.3% for the three months ended February 28, 2023. The ~~increase~~improvement in cost of sales as a percent to revenue was primarily due to ~~higher~~favorable changes in the sales ~~volume~~mix in the First Aid and Safety Services reportable operating segment as well as improved leverage of fixed costs for both the First Aid and Safety Services reportable operating segment and All Other.

Selling and administrative expenses increased ~~$106.7~~$96.7 million, or 19.7%, or ~~29.5%, for~~in the three months ended ~~November 30, 2017~~,February 28, 2023, compared to the same period inof the prior fiscal year. The increase was due to ~~higher sales volume, increased~~increases in labor and other employee-partner ~~related~~expenses as well as a one-time gain on an equity method investment transaction of $30.2 million recorded in the three months ended February 28, 2022. Selling and administrative expenses as a ~~result~~percent 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 incomerevenue were 26.8% for the three months ended ~~November 30, 2017 was negatively impacted by $13.1 million of~~February 28, 2023, compared to 25.0% for the same period in the prior fiscal year. Selling and administrative expenses increased as a percent to revenue primarily due to the one-time gain on an equity method investment transaction ~~and integration expenses incurred~~recorded in ~~connection with the G&K acquisition. For~~ the three months ended ~~November 30, 2017,~~February 28, 2022.

Operating income was $446.8 million, or 20.4% of revenue, for the ~~after-tax effect~~three months ended February 28, 2023, compared to $407.6 million, or 20.8% of ~~these~~revenue, for the three months ended February 28, 2022. The decrease in operating income as a percent of revenue was due to previously mentioned gain on an equity method investment transaction ~~and integration expenses represents a negative impact of $0.07 per share on diluted earnings per share.~~recorded in the three months ended February 28, 2022.

Net interest expense (interest expense less interest income) was ~~$28.8~~$28.4 million for the three months ended ~~November 30, 2017,~~February 28, 2023, compared to ~~$13.2~~$22.0 million for the three months ended ~~November 30, 2016.~~February 28, 2022. The ~~increase~~change was primarily due to an increase in interest rates on outstanding debt, specifically commercial paper, during the ~~additional debt issued~~three months ended February 28, 2023 compared to ~~finance~~ the ~~G&K acquisition.~~three months ended February 28, 2022.

Cintas’ effective tax rate ~~for continuing operations~~ was ~~33.3%~~22.1% and ~~34.9%~~18.2% for the three months ended ~~November 30, 2017~~February 28, 2023 and ~~2016,~~2022, respectively. The effective tax rate ~~for~~in both periods was ~~largely~~ impacted by certain discrete items, ~~(primarily~~primarily the tax accounting impact for stock-based ~~compensation).~~

~~Net income from continuing operations~~compensation. In addition, the effective tax rate for the three months ended ~~November 30, 2017~~February 28, 2022 included a one-time tax benefit from a gain on an equity method investment transaction.

Net income for the three months ended February 28, 2023 increased ~~$15.8~~$10.4 million, or ~~12.9%~~3.3%, compared to the three months ended ~~November 30, 2016.~~February 28, 2022. Diluted earnings per share ~~from continuing operations was $1.24~~were $3.14 for the three months ended ~~November 30, 2017~~,February 28,

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2023, which was an increase of ~~10.7%~~5.7% compared to the same period in the prior fiscal year. Diluted earnings per share ~~from continuing operations~~ increased primarily due to the increase in ~~earnings~~net income combined with the decrease in diluted weighted average common shares outstanding. The decrease in diluted weighted average common shares outstanding resulted from ~~continuing operations.~~purchasing an aggregate of approximately 2.7 million shares of common stock under the board approved share buyback programs since the beginning of the third quarter of fiscal 2022 through the third quarter of fiscal 2023.

Uniform Rental and Facility Services Reportable Operating Segment

Three Months Ended ~~November 30, 2017~~ February 28, 2023 Compared to Three Months Ended~~November 30, 2016~~ February 28, 2022

Uniform Rental and Facility Services reportable operating segment revenue ~~increased from~~ ~~$1,000.0~~was $1,716.2 million to ~~$1,308.0 million, or~~ ~~30.8%~~, for the three months ended ~~November 30, 2017, over~~February 28, 2023 compared to $1,553.3 million for the same period inof the prior fiscal ~~year, and~~year. The organic revenue growth rate for the reportable operating segment was 10.8%. The cost of uniform rental and facility services increased ~~$172.5~~$73.9 million,, or ~~31.3%. Revenue increased organically by 7.3%~~8.9%. The reportable operating segment’s gross margin was ~~$584.1 million, or~~ ~~44.7%~~$808.2 million. Gross margin as a percentage of ~~revenue.~~revenue was 47.1% for the three months ended February 28, 2023 and 46.3% for the three months ended February 28, 2022. The improvement in gross margin was ~~20 basis points lower than~~ the ~~prior fiscal year’s second quarter gross margin~~result of ~~44.9%. The decrease was driven~~efficiencies in labor and improved leverage of fixed costs, partially offset by ~~the recent G&K acquisition, which has lower margins than our legacy Cintas margins.~~investments in material cost to support increased revenue growth.

Selling and administrative expenses for the Uniform Rental and Facility Services reportable operating segment increased ~~$99.0~~$84.9 million in the three months ended February 28, 2023 compared to ~~28.1%~~the same period of the prior fiscal year. Selling and administrative expenses as a percent of revenue for the three months ended February 28, 2023 was 26.1% compared to ~~26.8%~~the 23.4% in the ~~second~~third quarter of the prior fiscal year. ~~This increase in expense was due primarily to increased labor and employee-partner related expenses incurred~~The change as a ~~result~~percent of revenue was primarily due to the ~~G&K acquisition, increased amortization expense related to intangibles acquired~~previously mentioned one-time gain on an equity method investment transaction of $30.2 million recorded in the three months ended February 28, 2022, as ~~a result of~~well as investments in selling resources in the ~~G&K acquisition and an investment in an enterprise resource planning system.~~three months ended February 28, 2023.

Income before income taxes increased ~~$26.9~~$4.0 million, or ~~15.2%~~1.1%, for the Uniform Rental and Facility Services reportable operating segment for the three months ended ~~November 30, 2017~~February 28, 2023, compared to the same period in the prior fiscal year. Income before income taxes was ~~15.6%~~21.0% of the reportable operating segment’s revenue, which was a ~~210~~190 basis point decrease ~~compared to~~from the ~~second~~third quarter of the prior fiscal year of ~~17.7%~~22.9%. This decrease as a percent of revenue was primarily due to the previously discussed increase in selling and administrative expenses ~~as previously discussed, and~~partially offset by the ~~G&K transaction and integration expenses incurred during the quarter, which had a 70 basis point impact.~~improvements in gross margin.

First Aid and Safety Services Reportable Operating Segment

Three Months Ended ~~November 30, 2017~~February 28, 2023 Compared to Three Months Ended ~~November 30, 2016~~February 28, 2022

First Aid and Safety Services reportable operating segment revenue increased from ~~$124.8~~$213.0 million to ~~$139.1~~$231.6 million, or ~~11.5%~~8.8%, for the three months ended ~~November 30, 2017~~February 28, 2023, over the same period in the prior fiscal year. ~~Revenue increased organically by 10.8% as a result of increased sales volume. Total~~The organic revenue growth rate for the reportable operating segment was 7.8%. First Aid and Safety Services reportable operating segment revenue was positively impacted by ~~0.2%~~1.1% due to acquisitions and negatively impacted by 0.1% due to foreign currency exchange rate ~~fluctuations and by 0.5% due to acquisitions~~fluctuations. The increase in ~~the three months ended November 30, 2017 compared to the three months ended November 30, 2016. Growth~~revenue was driven by many factors including new business sold by sales representatives, penetration of additional products and services into existing customers, price increases and strong customer retention.

Cost of first aid and safety services ~~increased~~decreased $6.6 million, or ~~9.8%~~5.5%, for the three months ended ~~November 30, 2017,~~February 28, 2023, over the three months ended ~~November 30, 2016, due to higher sales volume.~~February 28, 2022. The gross margin as a percent of revenue was ~~46.9%~~51.6% for the quarter ended ~~November 30, 2017, which is an increase of 80 basis points~~February 28, 2023, compared to the gross margin as a percent of revenue of ~~46.1%~~44.2% in the same period of the prior fiscal year. The ~~increase~~improvement in gross margin from the third quarter of the prior fiscal year was primarily driven ~~primarily~~ by ~~improved sourcing, leveraging~~favorable changes in the sales mix, as well as improved leverage of ~~existing warehouses and optimization of delivery routes.~~fixed costs.

Selling and administrative expenses increased ~~$4.5~~$4.2 million in the three months ended February 28, 2023, compared to the same ~~quarter in~~period of the prior fiscal year. ~~The increase was due primarily to increased labor.~~ Selling and administrative expenses as a percent of revenue ~~improved to 34.0%~~for the three months ended February 28, 2023 were 31.1%, compared to ~~34.3%~~31.9% in the ~~second~~third quarter of the prior fiscal year. The ~~decrease~~change as a percent of revenue from the same period in the prior fiscal year was primarily due to efficiencies realized 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.

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Income before income taxes for the First Aid and Safety Services reportable operating segment increased ~~$3.2~~$21.0 million to ~~$18.0~~$47.3 million for the three months ended ~~November 30, 2017,~~February 28, 2023, 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.~~year. Income before income taxes ~~at 12.9%~~was 20.4% of the reportable operating segment’s revenue ~~was a 110 basis point increase~~ compared to the ~~same~~third quarter ~~last~~of the prior fiscal year of 12.4%. The increase in income before income taxes was due to the ~~reasons~~ previously ~~mentioned.~~discussed improvements in gross margin and selling and administrative expenses.

Consolidated Results

~~Six~~Nine Months Ended ~~November 30, 2017~~February 28, 2023 Compared to ~~Six~~Nine Months Ended ~~November 30, 2016~~February 28, 2022

Total revenue increased ~~26.8%~~13.0% to $6,531.3 million for the ~~six~~nine months ended ~~November 30, 2017 over~~February 28, 2023, compared to $5,779.8 million for 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.~~nine months ended February 28, 2022. Total organic revenue growth was 12.8%. Organic growth adjusts for the impact of acquisitions, divestitures and foreign currency exchange rate fluctuations. ~~Total revenue~~Revenue growth was positively impacted by ~~0.2%~~a net 0.5% due primarily to acquisitions and negatively impacted by 0.3% due to foreign currency exchange rate ~~fluctuations and by 18.6% due to acquisitions, primarily the acquisition of G&K.~~fluctuations.

Uniform Rental and Facility Services reportable operating segment revenue ~~increased 31.4%~~was $5,123.9 million for the ~~six~~nine months ended ~~November 30, 2017 over~~February 28, 2023, compared to $4,596.8 million in the same period inof the prior fiscal year, ~~from $1,994.3 million to $2,619.8 million. Revenue increased organically by 7.7%~~which was an increase of 11.5%. ~~Revenue~~Organic revenue growth for this reportable operating segment was 11.4%. Uniform Rental and Facility Services reportable operating segment revenue was positively impacted by ~~0.2%~~0.4% due to acquisitions and negatively impacted by 0.3% due to foreign currency exchange rate ~~fluctuations and 23.5% due to acquisitions, primarily the acquisition~~fluctuations. Revenue growth was a result of ~~G&K. Growth was driven by many factors including~~ new business, ~~sold by sales representatives,~~the penetration of additional products and services into existing customers and ~~strong customer retention.~~price increases, partially offset by lost business. New business growth resulted from an increase in the number and productivity of sales representatives.

Other revenue, consisting of revenue from the First Aid and Safety Services reportable operating segment and All Other, ~~increased 10.1%~~was $1,407.4 million for the ~~six~~nine months ended ~~November 30, 2017~~February 28, 2023, compared to $1,183.0 million for the ~~same period in the prior fiscal year, from $543.4 million to $598.1 million. Revenue increased organically by 9.0%~~nine months ended February 28, 2022, which was an increase of 19.0%. Other revenue organic growth was 18.4%. Revenue growth was positively impacted by ~~0.2%~~a net 0.7% due primarily to acquisitions and negatively impacted by 0.1% 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.~~fluctuations.

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~~$274.8 million, or ~~31.4%~~11.3%, for the ~~six~~nine months ended ~~November 30, 2017,~~February 28, 2023, compared to the ~~six~~nine months ended ~~November 30, 2016.~~February 28, 2022. This increase over the same period of the prior fiscal year 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, 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 ~~$23.9~~$78.1 million, or ~~7.8%~~11.8%, for the ~~six~~nine months ended ~~November 30, 2017,~~February 28, 2023, compared to the ~~six~~nine months ended ~~November 30, 2016.~~February 28, 2022. Cost of other improved as a percentage of revenue, decreasing from 56.1% for nine months ended February 28, 2022, to 52.7% for the nine months ended February 28, 2023. The ~~increase~~improvement in cost of sales as a percent to revenue was primarily due to ~~higher~~favorable changes in the sales ~~volume~~mix in the First Aid and Safety Services reportable operating segment as well as improved leverage of fixed costs for both the First Aid and Safety Services reportable operating segment and All Other.

Selling and administrative expenses increased ~~$223.2~~$249.6 million, or ~~30.5%~~16.6%, for the ~~six~~nine months ended ~~November 30, 2017,~~February 28, 2023, compared to the same period in the prior fiscal year. Selling and administrative expenses as a percent to revenue were 26.8% for the nine months ended February 28, 2023, compared to 26.0% for the same period of the prior fiscal year. The ~~increase~~change as a percent of revenue is primarily due to the $12.1 million gain on the sale of certain operating assets recorded within the Uniform Direct Sales operating segment and a one-time gain on an equity method investment transaction of $30.2 million recorded in the nine months ended February 28, 2022.

Operating income was $1,331.9 million, or 20.4% of revenue, for the nine months ended February 28, 2023, compared to $1,182.9 million, or 20.5% of revenue, for the nine months ended February 28, 2022. The change in operating income as a percent of revenue 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~~previously mentioned one-time gains recorded during the ~~G&K acquisition and increased costs related to investments in a new enterprise resource planning system. Operating income for the six~~nine months ended ~~November 30, 2017 was negatively impacted~~February 28, 2022, partially offset by ~~$17.0 million~~the improvements in gross margin previously mentioned.

Table 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.Contents

Net interest expense (interest expense less interest income) was ~~$58.9~~$84.6 million for the ~~six~~nine months ended ~~November 30, 2017,~~February 28, 2023, compared to ~~$27.3~~$65.6 million for the ~~six~~nine months ended ~~November 30, 2016.~~February 28, 2022. The ~~increase~~change was primarily due to an increase in the ~~additional~~interest rates on outstanding debt, ~~issued to finance~~specifically commercial paper, during the ~~G&K acquisition.~~nine months ended February 28, 2023.

Cintas’ effective tax rate ~~for continuing operations~~ was ~~29.8%~~19.7% and ~~31.5%~~15.8% for the ~~six~~nine months ended ~~November 30, 2017~~February 28, 2023 and ~~2016,~~2022, respectively. The effective tax rate ~~for~~in both periods was ~~largely~~ impacted by certain discrete items, ~~(primarily~~primarily the tax accounting for stock-based ~~compensation).~~compensation. In addition, the effective tax rate for the nine months ended February 28, 2022 included a one-time tax benefit from a gain on an equity method investment transaction.

Net income ~~from continuing operations~~ for the ~~six~~nine months ended ~~November 30, 2017~~February 28, 2023, increased ~~$40.7~~$60.5 million, or ~~15.8%~~6.4%, compared to the ~~six~~nine months ended ~~November 30, 2016.~~February 28, 2022. Diluted earnings per share ~~from continuing operations~~ was ~~$2.69~~$9.65 for the ~~six~~nine months ended ~~November 30, 2017,~~February 28, 2023, which was an increase of ~~14.0%~~9.2% compared to the same period in the prior fiscal year. Diluted earnings per share ~~from continuing operations~~ increased due to the increase in ~~earnings~~net income combined with the decrease in diluted weighted average common shares outstanding. The decrease in diluted weighted average common shares outstanding resulted from ~~continuing operations.~~purchasing an aggregate of approximately 2.7 million shares of common stock under the board approved share buyback programs since the beginning of the third quarter of fiscal 2022 through the third quarter of fiscal 2023.

Uniform Rental and Facility Services Reportable Operating Segment

~~Six~~Nine Months Ended ~~November 30, 2017~~February 28, 2023 Compared to ~~Six~~Nine Months Ended ~~November 30, 2016~~February 28, 2022

Uniform Rental and Facility Services reportable operating segment revenue increased ~~from $1,994.3~~11.5% to $5,123.9 million for the nine months ended February 28, 2023, compared to ~~$2,619.8~~$4,596.8 million for the same period of the prior fiscal year. Organic revenue growth for this reportable operating segment was 11.4%. The cost of uniform rental and facility services increased $274.8 million, or ~~31.4%~~11.3%, for the ~~six~~nine months ended ~~November 30, 2017,~~February 28, 2023 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%.~~year. The reportable operating segment’s gross margin was ~~$1,189.0~~$2,418.4 million, or ~~45.4%~~47.2% of revenue, ~~which was~~for the ~~same~~nine months ended February 28, 2023, compared to the gross margin asof 47.1% for the ~~prior year's first half gross margin.~~nine months ended February 28, 2022. The ~~increase~~improvement in gross margin was athe result of ~~new business sold by sales representatives, penetration~~efficiencies in labor and improved leverage of ~~additional products and services into existing customers and continuous improvement in process efficiency that was~~fixed costs, partially offset by ~~lower margin business attributed~~investments in material cost to ~~the recent G&K acquisition.~~support increased revenue growth.

Selling and administrative expenses for the Uniform Rental and Facility Services reportable operating segment increased ~~$211.4~~$181.4 million, increasing as a percent to ~~28.6% of~~ revenue for the nine months ended February 28, 2023 to 25.9%, compared to ~~27.0% in~~24.9% for the ~~first six months~~same period of the prior fiscal year. ~~This increase in expense was due primarily to increased labor and employee-partner related expenses incurred~~The change as a ~~result~~percent of revenue was primarily due to the ~~G&K acquisition, increased amortization expense related to intangibles acquired as a result~~previously mentioned one-time gain on an equity method investment transaction of $30.2 million recorded in the ~~G&K acquisition and an investment in an enterprise resource planning system.~~nine months ended February 28, 2022.

Income before income taxes increased ~~$61.0~~$70.9 million, or ~~16.9%~~6.9%, for the Uniform Rental and Facility Services reportable operating segment for the ~~six~~nine months ended ~~November 30, 2017~~February 28, 2023, compared to the same period in the prior fiscal year. Income before income taxes was ~~16.1%~~21.3% of the reportable operating segment’s revenue, ~~which was a 200 basis point decrease~~ compared to 22.3% for the ~~first half of the prior fiscal year of 18.1%. This decrease was~~nine months ended February 28, 2022. The change in percent to revenue is due to the ~~increase~~one-time gain on an equity method investment transaction recorded 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.~~nine months ended February 28, 2022.

First Aid and Safety Services Reportable Operating Segment

~~Six~~Nine Months Ended ~~November 30, 2017~~February 28, 2023 Compared to ~~Six~~Nine Months Ended ~~November 30, 2016~~February 28, 2022

First Aid and Safety Services reportable operating segment revenue increased from ~~$249.6~~$614.2 million to ~~$279.7~~$701.7 million, or ~~12.0%~~14.2%, for the ~~six~~nine months ended ~~November 30, 2017~~February 28, 2023, over the same period in the prior fiscal year. ~~Revenue increased organically by 11.4% as a result of increased sales volume. Total~~Organic revenue growth for this reportable operating segment was 12.8%. First Aid and Safety Services reportable operating segment revenue was positively impacted by ~~0.6%~~1.6% due to acquisitions and negatively impacted by 0.2% due to foreign currency exchange rate fluctuations. This increase in ~~the six months ended November 30, 2017 compared to the six months ended November 30, 2016. Growth~~revenue was driven by many factors including increases in 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~~$4.3 million, or ~~9.4%~~1.3%, for the ~~six~~nine months ended ~~November 30, 2017, over~~February 28, 2023, from the ~~six~~nine months ended ~~November 30, 2016,~~February 28, 2022, due to higher sales volume. The gross margin as a percent of revenue was ~~47.2%~~50.5% for the ~~six~~nine months ended ~~November 30, 2017,~~February 28, 2023, which iswas an increase of ~~130~~630 basis points compared to the gross margin as a percent of revenue of ~~45.9%~~44.2% in the same period of the prior fiscal year. The ~~increase was driven primarily by improved sourcing, leveraging~~

Table of ~~existing warehouses and optimization of delivery routes, as a result~~Contents

change in gross margin from the same period of the ~~ZEE Medical Inc. (ZEE) acquisition.~~prior fiscal year was primarily driven by favorable changes in the sales mix as well as improved leverage of fixed costs.

Selling and administrative expenses increased ~~$6.3~~$23.7 million, but decreased as a percent of revenue to 31.5%, for the nine months ended February 28, 2023, compared to 32.1% for the ~~first half of the prior fiscal year.~~nine months ended February 28, 2022. The ~~increase was due primarily to increased labor. Selling and administrative~~decrease in 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~~was primarily due efficiencies realized 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.~~expenses.

Income before income taxes for the First Aid and Safety Services reportable operating segment ~~increased $11.1 million to $37.4~~was $133.6 million for the ~~six~~nine months ended ~~November 30, 2017,~~February 28, 2023, compared to $74.1 million for 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.~~year. Income before income taxes, at ~~13.4%~~19.0% of the reportable operating segment’s revenue, ~~was a 290~~increased 690 basis ~~point increase~~points compared to the same period ~~last~~of the prior fiscal year due to the ~~reasons previously mentioned.~~improvements in both gross margin and selling and administrative expenses.

~~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 ~~six~~nine months ended ~~November 30, 2017~~February 28:


(In thousands)	2023		2022

Net cash provided by operating activities	$	1,044,191	$	987,055
Net cash used in investing activities	$	(268,611)	$	(316,311)
Net cash used in financing activities	$	(774,593)	$	(1,078,574)

Cash and cash equivalents at the end of the period	$	88,563	$	84,136

Cash and ~~2016:~~

(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,~~ cash equivalents ~~and marketable securities~~ as of ~~November 30, 2017~~February 28, 2023 and ~~2016~~2022, include ~~$133.1~~$40.4 million and ~~$94.6~~$38.4 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.~~ U.S.

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.

We expect our cash flows from operating activities to remain sufficient to provide us with adequate levels of liquidity. In addition, we have access to $2.0 billion of debt capacity from our amended and restated revolving credit facility. We believe the Company has sufficient liquidity to operate in the current business environment for at least the next 12 months and the foreseeable future thereafter. Acquisitions, repurchases of our common stock and dividends remain strategic objectives, but they will be dependent on the economic outlook and liquidity of the Company.

Net cash provided by operating activities was ~~$379.0~~$1,044.2 million for the ~~six~~nine months ended ~~November 30, 2017,~~February 28, 2023, compared to $987.1 million for the nine months ended February 28, 2022. The change from the prior fiscal year was primarily due to an increase ~~of $77.3 million compared to the six months ended November 30, 2016. The increase was the result of higher~~in net income ~~offset by~~and favorable changes in working ~~capital.~~capital, specifically current income taxes, accrued liabilities and accounts payable. These improvements were partially offset by unfavorable changes in working capital, specifically, accounts receivable, inventories and capitalized contract costs, which resulted from the growth in revenue.

Net cash used in investing activities includes capital expenditures, purchases of investments, proceeds from ~~the~~ sale of ~~businesses~~operating assets and cash paid for acquisitions of businesses. Capital expenditures were ~~$132.5~~$224.1 million and ~~$155.2~~$165.9 million for the ~~six~~nine months ended ~~November 30, 2017~~February 28, 2023 and ~~2016,~~2022, respectively. Capital expenditures in ~~fiscal 2018 primarily relate to expansion efforts in~~the nine months ended February 28, 2023, included $155.9 million for the Uniform Rental and Facility Services reportable operating segment ~~representing $111.4~~and $47.6 million offor the ~~current~~First Aid and Safety Services reportable operating segment. The increase in capital expenditures during the nine months ended February 28, 2023 over the same period in the prior fiscal year ~~amount.~~is due to an investment in the operating segments to support continued market penetration and revenue growth. Cash paid for acquisitions of businesses was ~~$1.1~~$33.0 million and ~~$17.8~~$150.8 million for the ~~six~~nine months ended ~~November 30, 2017~~February 28, 2023 and ~~2016,~~2022, respectively. The acquisitions during both the ~~six~~nine months ended ~~November 30, 2017~~February 28, 2023 and 2022, occurred in our Uniform Rental and Facility Services reportable operating segment, our First Aid and

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Safety Services reportable operating segment and our Fire Protection ~~business,~~operating segment, which is included in All Other. ~~For~~During the ~~six~~nine months ended ~~November 30, 2017, investing activities included~~February 28, 2022, the Company received proceeds of ~~$127.8~~$15.3 million ~~related to~~from the sale of ~~Discontinued Services.~~certain operating assets, net of cash disposed in the Uniform Direct Sales operating segment, which is included in All Other. Net cash used in investing activities also includes ~~net proceeds from purchases and redemptions of marketable securities and investments of $0.4~~$4.6 million and ~~$54.7~~$6.0 million ~~for~~of purchases of investments during the ~~six~~nine months ended ~~November 30, 2017~~February 28, 2023 and ~~2016,~~2022, respectively.

Net cash used in financing activities was ~~$309.5~~$774.6 million and ~~$203.1~~$1,078.6 million for the ~~six~~nine months ended~~November 30, 2017~~ February 28, 2023 and ~~2016,~~2022, respectively. The decrease in cash used in financing activities was primarily due to the decrease in share buyback activity and debt payments partially offset by the increase in dividends paid in the nine months ended February 28, 2023.

On ~~August 4, 2015,~~October 29, 2019, we announced that the Board of Directors authorized a ~~$500.0 million~~$1.0 billion share buyback ~~program. During~~program, which was completed during the ~~six months ended November 30, 2016, under~~first quarter of fiscal 2022. On July 27, 2021, Cintas announced that the ~~August 4, 2015~~Board of Directors authorized a $1.5 billion share buyback ~~plan, we purchased 0.1 million shares at~~program, which does not have an ~~average price~~expiration date. From the inception of ~~$94.11 per~~the July 27, 2021 share ~~for a total purchase price of $3.7 million. This completed the August 4, 2015~~buyback program through ~~which~~February 28, 2023, Cintas purchased a total of ~~5.7~~2.7 million shares of Cintas common stock at an average price of ~~$87.89~~$385.62 per share for a total purchase price of ~~$500.0 million.~~$1.0 billion. On ~~August 2, 2016, we~~July 26, 2022, Cintas announced that the Board of Directors authorized a new ~~$500.0 million~~$1.0 billion share buyback program, which does not have an expiration date. ~~As of November 30, 2017, no share buybacks have occurred under~~

The following table summarizes the ~~August 2, 2016~~buyback activity by program ~~and there were no share buybacks under this program subsequent to November 30, 2017 through January 5, 2018. In addition,~~ for the ~~six~~nine months ended ~~November 30, 2017, Cintas acquired 0.3 million shares~~February 28:


	2023					2022
Buyback Activity (In thousands except per share data)	Shares	Avg. Price per Share		Purchase Price		Shares	Avg. Price per Share		Purchase Price

October 29, 2019	—	$	—	$	—	1,590	$	365.41	$	581,220
July 27, 2021	544	395.97		215,434		1,386	388.03		537,655
July 26, 2022	—	—		—		—	—		—
	544	$	395.97	$	215,434	2,976	$	375.94	$	1,118,875

Shares acquired for taxes due (1)	375	$	414.23	$	155,483	261	$	394.84	$	102,966

Total repurchase of Cintas common stock				$	370,917				$	1,221,841

(1) Shares of Cintas common stock acquired for employee payroll taxes due on options exercised and vested restricted stock ~~awards that vested~~awards.

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Our Board of Directors declared the following dividends:


Paid Dividends
Declaration Date (In millions except per share data)	Record Date	Payment Date	Dividend Per Share		Total Amount

Nine months ended February 28, 2023
April 12, 2022	May 16, 2022	June 15, 2022	$	0.95	$	97.7
July 26, 2022	August 15, 2022	September 15, 2022	1.15		117.3
October 25, 2022	November 15, 2022	December 15, 2022	1.15		117.4

			$	3.25	$	332.4

Nine months ended February 28, 2022
April 13, 2021	May 15, 2021	June 15, 2021	$	0.75	$	79.1
July 27, 2021	August 13, 2021	September 15, 2021	0.95		98.8
October 26, 2021	November 15, 2021	December 15, 2021	0.95		99.0

			$	2.65	$	276.9

Accrued Dividends

As of February 28, 2023
January 10, 2023 (1)	February 15, 2023	March 15, 2023	$	1.15	$	117.5

As of February 28, 2022

January 12, 2022 (1)	February 15, 2022	March 15, 2022	$	0.95	$	98.2

(1) The dividends declared during the ~~six~~three months ended ~~November 30, 2017. These shares~~February 28, 2023 and 2022 were ~~acquired~~included in current accrued liabilities on the consolidated condensed balance sheet at ~~an average price~~February 28, 2023 and 2022.

Any future dividend declarations, including the amount of ~~$129.01 per share for a total purchase price~~any dividends, are at the discretion of ~~$35.7 million.~~the Board of Directors and dependent upon then-existing conditions, including the Company's consolidated operating results and consolidated financial condition, capital requirements, contractual restrictions, business prospects and other factors that the Board of Directors may deem relevant.

During the ~~six~~nine months ended ~~November 30, 2016,~~February 28, 2023, Cintas paid ~~$13.5~~a net $62.2 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.~~

commercial paper. During the ~~six~~nine months ended ~~November 30, 2017,~~February 28, 2022, Cintas ~~made payments of $50.5~~issued a net $559.2 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~~June 1, ~~2017,~~2021, in accordance with the terms of the notes, Cintas paid the ~~$300.0~~$250.0 million aggregate principal amount of ~~6.13%~~its 4.30%, 10-year senior notes that matured on that date with cash on ~~hand and $265.0 million in proceeds from the issuance~~hand.

Table of ~~commercial paper.~~Contents

The following table summarizes Cintas' outstanding debt:


(In thousands)	Interest Rate			Fiscal Year Issued	Fiscal Year Maturity	February 28, 2023		May 31, 2022

Debt due within one year
Commercial paper	4.79	%	(1)	2023	2023	$	199,000	$	261,200
Senior notes (2)	2.78	%		2013	2023	50,054		50,380
Debt issuance costs						(1)		(6)
Total debt due within one year						$	249,053	$	311,574

Debt due after one year
Senior notes (3)	3.11	%		2015	2025	$	50,714	$	50,965
Senior notes	3.45	%		2022	2025	400,000		400,000
Senior notes	3.70	%		2017	2027	1,000,000		1,000,000
Senior notes	4.00	%		2022	2032	800,000		800,000
Senior notes	6.15	%		2007	2037	250,000		250,000

Debt issuance costs						(14,762)		(17,033)
Total debt due after one year						$	2,485,952	$	2,483,932

(In thousands)
Interest
Rate

Fiscal Year
Issued

Fiscal Year
Maturity

November 30,
2017

May 31,
2017

Debt due within one year
Senior notes 6.13 % 2008 2018 $ 300,000
$ 300,000
Commercial paper 1.24 %
⁽¹⁾
Various Various —
50,500
Current portion of term loan 2.00 %
⁽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 notes 4.30 % 2012 2022 $ 250,000
$ 250,000
Senior notes 2.90 % 2017 2022 650,000
650,000
Senior notes 3.25 % 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 notes 3.70 % 2017 2027 1,000,000
1,000,000
Senior notes 6.15 % 2007 2037 250,000
250,000
Long-term portion of term loan 2.00 %
⁽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.~~February 28, 2023.

⁽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⁾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 on September 16, 2016. The amendment increased the capacity of the~~has a revolving credit facility ~~from $450.0 million to $600.0 million and added~~with a ~~$250.0 million term loan facility. The existing term loan facility was paid in full during the first quarter~~capacity of ~~fiscal 2018.~~$2.0 billion. 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 new term loan~~ of up to ~~$250.0~~$500.0 million in the aggregate, subject to customary conditions. The maturity date of the revolving credit ~~agreement~~facility is ~~September 15, 2021.~~March 23, 2027. As of ~~November 30, 2017,~~February 28, 2023, there was no$199.0 million of commercial paper outstanding with a weighted average interest rate of 4.79% and maturity dates less than 90 days and no borrowings on our revolving credit facility. As of May 31, ~~2017,~~2022, there was ~~$50.5~~$261.2 million of commercial paper outstanding with a weighted average interest rate of ~~1.24%~~1.20% and maturity dates less than 3090 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 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. ~~Our~~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, 2023, our ratings were as follows:

Rating Agency

Outlook

Commercial
Paper

Long-term
Debt

~~Rating Agency~~

~~Outlook~~

~~Commercial Paper~~

~~Long-term Debt~~

Standard & Poor’s

Stable

A-2

~~BBB+~~A-

Moody’s Investors Service

Stable

P-2

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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,~~

Financial and Nonfinancial Disclosure About Issuers and Guarantors of Cintas’ Senior Notes

Cintas Corporation No. 2 (Corp. 2) is 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 believeindirectly, wholly owned principal operating subsidiary of Cintas. Corp. 2 is 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 evaluating the impact~~issuer of the ~~Act,~~$2,550.0 million aggregate principal amount of senior notes outstanding as of February 28, 2023, which ~~will~~are 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 ~~remeasuring~~summarized financial information of Cintas Corporation (Issuer), Corp. 2 and subsidiary guarantors (together, the ~~deferred tax assets~~Obligor 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 earnings~~follows:


	Nine Months Ended
Summarized Consolidated Condensed Statements of Income (In thousands)	February 28, 2023		February 28, 2022

Net sales to unrelated parties	$	6,173,518	$	5,445,091
Net sales to non-guarantors	$	10,942	$	6,019
Operating income	$	1,295,304	$	1,143,398
Net income	$	975,010	$	912,248


Summarized Consolidated Condensed Balance Sheets (In thousands)	February 28, 2023		May 31, 2022

ASSETS
Receivables due from non-obligor subsidiaries	$	6,757	$	11,759
Total other current assets	$	2,702,118	$	2,427,494
Total other noncurrent assets	$	5,160,280	$	5,081,265

LIABILITIES
Amounts due to non-obligor subsidiaries	$	717	$	11,383
Current liabilities	$	1,350,475	$	1,388,310
Noncurrent liabilities	$	3,390,352	$	3,346,851

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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.~~Other Contingencies

~~LITIGATION AND OTHER CONTINGENCIES~~

Cintas is subject to 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 ~~operation~~operations or consolidated cash flows of Cintas. Cintas is also party to additional litigation not considered in the ordinary course of business. See Note 12 entitled Litigation and Other Contingencies of “Notes to Consolidated Condensed Financial Statements” for a detailed discussion of such additional litigation.

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; inflationary pressures and fluctuations in costs of materials and labor, including increased medical costs; interest rate volatility; 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; our ability to meet our goals relating to environmental, social and governance (ESG) opportunities, improvements and efficiencies; the cost, results and ongoing assessment of internal controls for financial ~~reporting required by~~reporting; the ~~Sarbanes-Oxley Act~~effect of ~~2002; costs 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 global health 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, ~~2017~~2022 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.

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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 2830 of our Annual Report on Form 10-K for the year ended May 31, ~~2017~~.2022.

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’ President and 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, 2023. Based on such evaluation, Cintas’ management, including Cintas’ President and 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, 2023, 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’s~~Securities 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, 2023, that have materially affected, or are reasonably likely to materially affect, Cintas' internal control over financial reporting.

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Part II. Other Information

ITEM 1.

LEGAL PROCEEDINGS

We discuss material legal proceedings (other than ordinary routine litigation incidental to our business) pending against us in “Part I, Item 1. Financial Statements,” in Note 12 entitled Litigation and Other Contingencies of “Notes to Consolidated Condensed Financial Statements.” We refer you to and incorporate by reference into this Part II, Item 1 that discussion for important information concerning those legal proceedings.

ITEM 2. ~~Unregistered Sales of Equity Securities and Use of Proceeds.~~

UNREGISTERED SALES OF EQUITY

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
Total 4,450
$ 147.76
—
$ 500.0
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, 2022 (2)	14,257	$	457.04	—	$	1,461.2
January 1 - 31, 2023 (3)	22,011	$	447.05	—	$	1,461.2
February 1 - 28, 2023 (4)	13,276	$	442.81	—	$	1,461.2
Total	49,544	$	448.79	—	$	1,461.2

(1) On ~~August 2, 2016,~~July 27, 2021, Cintas announced that the Board of Directors authorized a ~~$500.0 million~~$1.5 billion share buyback program, which does not have an expiration date. From the inception of the July 27, 2021 share buyback program through February 28, 2023, Cintas has purchased a total of 2.7 million shares of Cintas common stock at an average price of $385.62 per share for a total purchase price of $1.0 billion. On July 26, 2022, Cintas announced that the Board of Directors authorized a new $1.0 billion share buyback program, which does not have an expiration date. There were no share buybacks under the July 26, 2022 share buyback program through February 28, 2023.

⁽²⁾During ~~September 2017,~~December 2022, Cintas acquired ~~957~~14,257 shares of Cintas common stock in trade for employee payroll taxes due on options exercised and restricted stock awards that vested during the fiscal year. These shares were acquired at an average price of ~~$136.10~~$457.04 per share for a total purchase price of ~~$0.1~~$6.5 million.

⁽³⁾During ~~October 2017,~~January 2023, Cintas acquired ~~1,261~~22,011 shares of Cintas common stock in trade for employee payroll taxes due on options exercised and restricted stock awards that vested during the fiscal year. These shares were acquired at an average price of ~~$149.04~~$447.05 per share for a total purchase price of ~~$0.2~~$9.8 million.

⁽⁴⁾During ~~November 2017,~~February 2023, Cintas acquired ~~2,232~~13,276 shares of Cintas common stock in trade for employee payroll taxes due on options exercised and restricted stock awards that vested during the fiscal year. These shares were acquired at an average price of ~~$152.03~~$442.81 per share for a total purchase price of ~~$0.3~~$5.9 million.

~~Item 5. Other Information.~~

On October 17, 2017, Cintas declared an annual cash dividend of $1.62 per share on outstanding common stock, a 21.8% increase over the annual dividend paid in the prior year. The dividend was paid on December 8, 2017, to shareholders of record as of November 10, 2017.

~~Item 6. Exhibits.~~

Table of Contents

ITEM 6.

EXHIBITS



~~10.1~~		~~Amendment No. 1 to Cintas Corporation 2016 Equity and Incentive Compensation Plan~~
~~31.1~~22		Subsidiary Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize Securities of the Registrant (Incorporated by reference to Exhibit 22 to Cintas' Annual Report on Form 10-K for the year ended May 31, 2022)
31.1		Certification of Principal Executive Officer required by Rule 13a-14(a)
31.2		Certification of Principal Financial Officer required by Rule 13a-14(a)
32.1		Section 1350 Certification of Chief Executive Officer
32.2		Section 1350 Certification of Chief Financial Officer
~~101.INS~~101		~~XBRL Instance Document~~The following financial statements from Cintas' Quarterly Report on Form 10-Q for the period ended February 28, 2023, 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.SCH~~104		Cover Page Interactive Data File (formatted as Inline XBRL ~~Taxonomy Extension Schema Document~~
~~101.CAL~~and contained in Exhibit 101)	~~XBRL Taxonomy Extension Calculation Linkbase Document~~
~~101.DEF~~	~~XBRL Taxonomy Extension Definition Linkbase Document~~
~~101.LAB~~	~~XBRL Taxonomy Extension Label Linkbase Document~~
~~101.PRE~~	~~XBRL Taxonomy Extension Presentation Linkbase Document~~

Table of Contents

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, 2018~~April 6, 2023

/s/

J. Michael Hansen

~~Senior~~Executive Vice President and Chief Financial Officer

(Principal Financial and Accounting Officer)



~~( X )~~☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	February 28, 2023



~~WASHINGTON~~Washington						31-1188630
(State or ~~other jurisdiction~~Other Jurisdiction of Incorporation or Organization)						(~~I.R.S.~~IRS Employer Identification Number)


~~incorporation or organization)~~6800 Cintas Boulevard		~~Identification No.)~~
P.O. Box 625737
Cincinnati,	Ohio	45262-5737
(Address of Principal Executive Offices)		(Zip Code)



Class						Outstanding ~~December~~March 31, ~~2017~~2023
Common Stock, no par value						~~106,488,799~~101,701,804


(In thousands except per share data)	February 28, 2023		May 31, 2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	88,563	$	90,471

Accounts receivable, net	1,133,096		1,006,220
Inventories, net	531,270		472,150
Uniforms and other rental items in service	999,029		916,706
Income taxes, current	2,990		21,708
Prepaid expenses and other current assets	155,208		124,728
Total current assets	2,910,156		2,631,983

Property and equipment, net	1,358,181		1,323,673

Investments	241,796		242,873
Goodwill	3,043,578		3,042,976
Service contracts, net	357,146		391,638
Operating lease right-of-use assets, net	178,524		170,003
Other assets, net	376,620		344,110
	$	8,466,001	$	8,147,256

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	281,649	$	251,504
Accrued compensation and related liabilities	203,726		236,992
Accrued liabilities	610,863		588,948

Operating lease liabilities, current	42,970		43,872
Debt due within one year	249,053		311,574
Total current liabilities	1,388,261		1,432,890

Long-term liabilities:
Debt due after one year	2,485,952		2,483,932
Deferred income taxes	496,778		473,777
Operating lease liabilities	139,107		129,064
Accrued liabilities	322,647		319,397
Total long-term liabilities	3,444,484		3,406,170

Shareholders’ equity:
Preferred stock, no par value:	—		—
100,000 shares authorized, none outstanding
Common stock, no par value, and paid-in capital:	1,981,610		1,771,917
425,000,000 shares authorized
FY 2023: 192,031,528 shares issued and 101,672,333 shares outstanding
FY 2022: 190,837,921 shares issued and 101,711,215 shares outstanding

Retained earnings	9,368,678		8,719,163
Treasury stock:	(7,793,136)		(7,290,801)
FY 2023: 90,359,195 shares
FY 2022: 89,126,706 shares
Accumulated other comprehensive income	76,104		107,917
Total shareholders’ equity	3,633,256		3,308,196
	$	8,466,001	$	8,147,256



~~( )~~☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to



	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



	November 30, 2017			May 31, 2017
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	236,002		$	169,266
Marketable securities	22,732			22,219
Accounts receivable, net	763,555			736,008
Inventories, net	272,830			278,218
Uniforms and other rental items in service	674,572			635,702
Income taxes, current	35,700			44,320
Prepaid expenses and other current assets	38,058			30,132
Assets held for sale	—			38,613
Total current assets	2,043,449			1,954,478

Property and equipment, net	1,353,159			1,323,501

Investments	175,663			164,788
Goodwill	2,811,796			2,782,335
Service contracts, net	565,574			586,988
Other assets, net	29,160			31,967
	$	6,978,801		$	6,844,057

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	162,981		$	177,051
Accrued compensation and related liabilities	113,430			149,635
Accrued liabilities	577,960			429,809
Debt due within one year	300,000			362,900
Liabilities held for sale	—			11,457
Total current liabilities	1,154,371			1,130,852

Long-term liabilities:
Debt due after one year	2,534,222			2,770,624
Deferred income taxes	539,043			469,328
Accrued liabilities	198,132			170,460
Total long-term liabilities	3,271,397			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 capital	192,191			223,924
Retained earnings	5,349,539			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’ equity	2,553,033			2,302,793
	$	6,978,801		$	6,844,057


	Common Stock and Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income			Treasury Stock				Total Shareholders' Equity
(In thousands)	Shares	Amount						Shares		Amount

Balance at June 1, 2022	190,838	$	1,771,917	$	8,719,163	$	107,917		(89,127)		$	(7,290,801)	$	3,308,196
Net income	—	—		351,689		—			—		—		351,689
Comprehensive loss, net of tax	—	—		—		(19,793)			—		—		(19,793)
Dividends	—	—		(117,461)		—			—		—		(117,461)
Stock-based compensation	—	26,282		—		—			—		—		26,282
Vesting of stock-based compensation awards	273	—		—		—			—		—		—
Stock options exercised	543	80,638		—		—			(193)		(79,591)		1,047
Repurchase of common stock	—	—		—		—			(802)		(320,334)		(320,334)


Balance at August 31, 2022	191,654	$	1,878,837	$	8,953,391	$	88,124		(90,122)		$	(7,690,726)	$	3,229,626
Net income	—	—		324,293		—			—		—		324,293
Comprehensive loss, net of tax	—	—		—		(4,028)			—		—		(4,028)
Dividends	—	—		(117,338)		—			—		—		(117,338)
Stock-based compensation	—	25,255		—		—			—		—		25,255
Vesting of stock-based compensation awards	9	—		—		—			—		—		—
Stock options exercised	194	29,053		—		—			(66)		(27,975)		1,078
Repurchase of common stock	—	—		—		—			(68)		(28,348)		(28,348)
Balance at November 30, 2022	191,857	$	1,933,145	$	9,160,346	$	84,096		(90,256)		$	(7,747,049)	$	3,430,538
Net income	—	—		325,827		—			—		—		325,827
Comprehensive loss, net of tax	—	—		—		(7,992)			—		—		(7,992)
Dividends	—	—		(117,495)		—			—		—		(117,495)
Stock-based compensation	—	23,797		—		—			—		—		23,797
Vesting of stock-based compensation awards	3	—		—		—			—		—		—
Stock options exercised	172	24,668		—		—			(54)		(23,852)		816
Repurchase of common stock	—	—		—		—			(49)		(22,235)		(22,235)

Balance at February 28, 2023	192,032	$	1,981,610	$	9,368,678	$	76,104		(90,359)		$	(7,793,136)	$	3,633,256


	Common Stock and Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Treasury Stock				Total Shareholders' Equity
(In thousands)	Shares	Amount						Shares		Amount

Balance at June 1, 2021	189,071	$	1,516,202	$	7,877,015	$	30,888		(85,010)		$	(5,736,258)	$	3,687,847
Net income	—	—		331,179		—			—		—		331,179
Comprehensive loss, net of tax	—	—		—		(61,154)			—		—		(61,154)
Dividends	—	—		(98,826)		—			—		—		(98,826)
Stock-based compensation	—	36,496		—		—			—		—		36,496
Vesting of stock-based compensation awards	493	—		—		—			—		—		—
Stock options exercised	564	72,896		—		—			—		—		72,896
Repurchase of common stock	—	—		—		—			(1,788)		(659,235)		(659,235)
Balance at August 31, 2021	190,128	$	1,625,594	$	8,109,368	$	(30,266)		(86,798)		$	(6,395,493)	$	3,309,203
Net income	—	—		294,669		—			—		—		294,669
Comprehensive income, net of tax	—	—		—		3,008			—		—		3,008
Dividends	—	—		(98,961)		—			—		—		(98,961)
Stock-based compensation	—	24,397		—		—			—		—		24,397
Vesting of stock-based compensation awards	31	—		—		—			—		—		—
Stock options exercised	317	36,302		—		—			—		—		36,302
Repurchase of common stock	—	—		—		—			(13)		(5,491)		(5,491)
Balance at November 30, 2021	190,476	$	1,686,293	$	8,305,076	$	(27,258)		(86,811)		$	(6,400,984)	$	3,563,127
Net income	—	—		315,448		—			—		—		315,448
Comprehensive income, net of tax	—	—		—		39,405			—		—		39,405
Dividends	—	—		(98,197)		—			—		—		(98,197)
Stock-based compensation	—	22,794		—		—			—		—		22,794
Vesting of stock-based compensation awards	2	—		—		—			—		—		—
Stock options exercised	215	20,438		—		—			(30)		(12,000)		8,438
Repurchase of common stock	—	—		—		—			(1,436)		(557,115)		(557,115)
Balance at February 28, 2022	190,693	$	1,729,525	$	8,522,327	$	12,147		(88,277)		$	(6,970,099)	$	3,293,900



	February 28, 2023	May 31, 2022

Weighted-average remaining lease term - operating leases	5.43 years	5.40 years
Weighted-average discount rate - operating leases	2.75%	2.20%


(In thousands)

2023 (remaining three months)	$	12,310
2024	45,627
2025	37,790
2026	30,830
2027	22,314
Thereafter	47,856
Total payments	196,727
Less interest	(14,650)
Total present value of lease payments	$	182,077


	As of February 28, 2023
(In thousands)	Level 1		Level 2		Level 3		Fair Value

Cash and cash equivalents	$	88,563	$	—	$	—	$	88,563




Other assets, net:
Interest rate lock agreements	—		70,071		—		70,071
Total assets at fair value	$	88,563	$	70,071	$	—	$	158,634


	As of November 30, 2017									As of May 31, 2022
(In thousands)	Level 1		Level 2		Level 3		Fair Value		(In thousands)	Level 1		Level 2		Level 3		Fair Value

Cash and cash equivalents	$	236,002	$	—	$	—	$	236,002	Cash and cash equivalents	$	90,471	$	—	$	—	$	90,471
Marketable securities:
Canadian treasury securities	—		22,732		—		22,732

Other assets, net:									Other assets, net:
Interest rate lock agreements									Interest rate lock agreements	—		56,877		—		56,877
Total assets at fair value	$	236,002	$	22,732	$	—	$	258,734	Total assets at fair value	$	90,471	$	56,877	$	—	$	147,348



	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



	Three Months Ended				Nine Months Ended
Basic Earnings per Share (In thousands except per share data)	February 28, 2023		February 28, 2022		February 28, 2023		February 28, 2022

Net income	$	325,827	$	315,448	$	1,001,809	$	941,296
Less: net income allocated to participating securities	1,351		1,581		4,155		4,706
Net income available to common shareholders	$	324,476	$	313,867	$	997,654	$	936,590
Basic weighted average common shares outstanding	101,714		103,388		101,589		103,438

Basic earnings per share	$	3.19	$	3.04	$	9.82	$	9.05



	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

Income from continuing operations	$	137,737	$	121,950	$	298,845	$	258,158
Less: income from continuing operations allocated to participating securities	2,111		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 outstanding	106,340		104,957		106,039		104,719

Basic earnings per share from continuing operations	$	1.27	$	1.15	$	2.77	$	2.42



	Three Months Ended				Nine Months Ended
Diluted Earnings per Share (In thousands except per share data)	February 28, 2023		February 28, 2022		February 28, 2023		February 28, 2022

Net income	$	325,827	$	315,448	$	1,001,809	$	941,296
Less: net income allocated to participating securities	1,351		1,581		4,155		4,706
Net income available to common shareholders	$	324,476	$	313,867	$	997,654	$	936,590
Basic weighted average common shares outstanding	101,714		103,388		101,589		103,438
Effect of dilutive securities – employee stock options	1,704		2,253		1,774		2,458
Diluted weighted average common shares outstanding	103,418		105,641		103,363		105,896

Diluted earnings per share	$	3.14	$	2.97	$	9.65	$	8.84



	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 securities	2,111		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 outstanding	106,340		104,957		106,039		104,719
Effect of dilutive securities – employee stock options	3,478		2,690		2,899		2,559
Diluted weighted average common shares outstanding	109,818		107,647		108,938		107,278

Diluted earnings per share from continuing operations	$	1.24	$	1.12	$	2.69	$	2.36


Goodwill (in thousands)	Uniform Rental and Facility Services		First Aid and Safety Services		All Other		Total

Balance as of June 1, 2022	$	2,635,099	$	285,769	$	122,108	$	3,042,976
Goodwill acquired	13,370		6,642		756		20,768

Foreign currency translation	(18,466)		(1,636)		(64)		(20,166)
Balance as of February 28, 2023	$	2,630,003	$	290,775	$	122,800	$	3,043,578



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 translation	927		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			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
Balance as of June 1, 2022													Balance as of June 1, 2022	$	349,634	$	24,144	$	17,860	$	391,638
Service contracts acquired	32			411			533			976			Service contracts acquired	5,679		1,823		1,154		8,656
Service contracts amortization	(21,946		)	(1,927		)	(2,364		)	(26,237		)	Service contracts amortization	(32,454)		(3,845)		(3,267)		(39,566)
Foreign currency translation	3,748			99			—			3,847			Foreign currency translation	(3,432)		(150)		—		(3,582)
Balance as of November 30, 2017	$	511,757		$	28,645		$	25,172		$	565,574
Balance as of February 28, 2023													Balance as of February 28, 2023	$	319,427	$	21,972	$	15,747	$	357,146



	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
Other	35,711		7,876		27,835
Total other assets	$	76,624	$	47,464	$	29,160


Fiscal Year (In thousands)

2023 (remaining three months)	$	37,864
2024	142,394
2025	127,831
2026	107,040
2027	87,552
Thereafter	203,474
Total future amortization expense	$	706,155


	February 28, 2023			May 31, 2022
Fiscal Year of Issuance (in thousands)		Other assets, net			Other assets, net

2022		$	25,654		$	18,331
2020		$	44,417		$	38,546



(In thousands)

Cash consideration for common stock	$	1,901,845		⁽¹⁾
Cash consideration for share-based awards	62,257			⁽²⁾
Cash consideration for G&K revolving debt	124,180			⁽³⁾
Cash consideration for transaction expenses	24,529			⁽⁴⁾
Total consideration	2,112,811
Cash acquired	(34,393		)	⁽⁵⁾
Net consideration transferred	$	2,078,418



Assets
Accounts receivable	$	95,846
Inventories	30,254
Uniforms and other rental items in service	93,659
Income taxes, current	15,873
Prepaid expenses and other current assets	43,235
Property and equipment	254,035
Goodwill	1,520,295
Service contracts	519,000
Trade names	17,000
Other assets	15,585
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



Identifiable intangible assets	Preliminary Valuation		Amortization Period

Service contracts	$	519,000	15 years
Trade names	17,000		3 years
Total	$	536,000



(In thousands)	Foreign Currency			Unrealized Income on Cash Flow Hedges			Other			Total

Balance at June 1, 2017	$	(12,726	)	$	11,382		$	(1,685	)	$	(3,029	)
Other comprehensive income before reclassifications	35,184			—			20			35,204
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, 2017	22,458			11,210			(1,665		)	32,003
Other comprehensive loss before reclassifications	(11,374		)	—			(20		)	(11,394		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			(172		)	—			(172		)
Net current period other comprehensive loss	(11,374		)	(172		)	(20		)	(11,566		)
Balance at November 30, 2017	$	11,084		$	11,038		$	(1,685	)	$	20,437



(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	)



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



	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 affiliates	137,737			—			—			—			(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 income	137,737			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 taxes	137,737			30,058			166,569			10,672			(138,663		)	206,373
Income taxes	—			11,449			54,414			2,798			(25		)	68,636
Income from continuing operations	137,737			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



(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		$	—