Cover
Cover - shares | 3 Months Ended | |
Aug. 31, 2019 | Sep. 30, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Aug. 31, 2019 | |
Document Transition Report | false | |
Entity File Number | 0-11399 | |
Entity Registrant Name | Cintas Corp | |
Entity Central Index Key | 0000723254 | |
Current Fiscal Year End Date | --05-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Incorporation, State or Country Code | WA | |
Entity Tax Identification Number | 31-1188630 | |
Entity Address, Address Line One | 6800 Cintas Boulevard | |
Entity Address, Address Line Two | P.O. Box 625737 | |
Entity Address, City or Town | Cincinnati, | |
Entity Address, State or Province | OH | |
Entity Address, Postal Zip Code | 45262-5737 | |
City Area Code | 513 | |
Local Phone Number | 459-1200 | |
Title of 12(b) Security | Common stock, no par value | |
Trading Symbol | CTAS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 103,499,651 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2018 | |
Revenue: | ||
Total revenue | $ 1,811,139 | $ 1,697,975 |
Costs and expenses: | ||
Selling and administrative expenses | 542,996 | 504,634 |
G&K Services, Inc. integration expenses | 0 | 4,850 |
Operating income | 306,146 | 265,228 |
Interest income | (162) | (496) |
Interest expense | 27,321 | 24,304 |
Income before income taxes | 278,987 | 241,420 |
Income taxes | 28,175 | 28,873 |
Income from continuing operations | 250,812 | 212,547 |
Loss from discontinued operations, net of tax benefit of $10 | 0 | (32) |
Net income | $ 250,812 | $ 212,515 |
Basic earnings per share: | ||
Continuing operations (in dollars per share) | $ 2.40 | $ 1.96 |
Discontinued operations (in dollars per share) | 0 | 0 |
Basic earnings per share (in dollars per share) | 2.40 | 1.96 |
Diluted earnings per share: | ||
Continuing operations (in dollars per share) | 2.32 | 1.89 |
Discontinued operations (in dollars per share) | 0 | 0 |
Diluted earnings per share (in dollars per share) | $ 2.32 | $ 1.89 |
Uniform Rental and Facility Services | ||
Revenue: | ||
Total revenue | $ 1,454,527 | $ 1,374,938 |
Costs and expenses: | ||
Cost of revenue | 768,676 | 746,453 |
Other | ||
Revenue: | ||
Total revenue | 356,612 | 323,037 |
Costs and expenses: | ||
Cost of revenue | $ 193,321 | $ 176,810 |
Consolidated Condensed Statem_2
Consolidated Condensed Statements of Income (Parenthetical) $ in Thousands | 3 Months Ended |
Aug. 31, 2018USD ($) | |
Income Statement [Abstract] | |
Tax benefit from discontinued operations | $ 10 |
Consolidated Condensed Statem_3
Consolidated Condensed Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 250,812 | $ 212,515 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 6,724 | (3,019) |
Change in fair value of interest rate lock agreements | (29,903) | (3,168) |
Amortization of interest rate lock agreements | (295) | (295) |
Other comprehensive loss | (23,474) | (6,482) |
Comprehensive income | $ 227,338 | $ 206,033 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets - USD ($) $ in Thousands | Aug. 31, 2019 | May 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 102,131 | $ 96,645 |
Accounts receivable, net | 917,535 | 910,120 |
Inventories, net | 336,290 | 334,589 |
Uniforms and other rental items in service | 796,187 | 784,133 |
Income taxes, current | 0 | 7,475 |
Prepaid expenses and other current assets | 137,675 | 103,318 |
Total current assets | 2,289,818 | 2,236,280 |
Property and equipment, net | 1,422,351 | 1,430,685 |
Investments | 208,987 | 192,346 |
Goodwill | 2,849,613 | 2,842,441 |
Service contracts, net | 482,977 | 494,595 |
Operating lease right-of-use assets, net | 163,089 | |
Other assets, net | 245,065 | 240,315 |
Total assets | 7,661,900 | 7,436,662 |
Current liabilities: | ||
Accounts payable | 237,242 | 226,020 |
Accrued compensation and related liabilities | 99,200 | 155,509 |
Accrued liabilities | 395,416 | 433,940 |
Income taxes, current | 9,238 | 0 |
Operating lease liabilities, current | 43,010 | |
Debt due within one year | 338,776 | 312,264 |
Total current liabilities | 1,122,882 | 1,127,733 |
Long-term liabilities: | ||
Debt due after one year | 2,538,057 | 2,537,507 |
Deferred income taxes | 436,755 | 438,179 |
Operating lease liabilities | 125,684 | |
Accrued liabilities | 387,816 | 330,522 |
Total long-term liabilities | 3,488,312 | 3,306,208 |
Shareholders’ equity: | ||
Preferred stock, no par value: 100,000 shares authorized, none outstanding | 0 | 0 |
Common stock, no par value: 425,000,000 shares authorized, FY 2020: 185,952,964 shares issued and 103,364,545 shares outstanding; FY 2019: 184,790,626 shares issued and 103,284,401 shares outstanding | 1,036,125 | 840,328 |
Paid-in capital | 110,441 | 227,928 |
Retained earnings | 6,939,240 | 6,691,236 |
Treasury stock: FY 2019: 82,588,419 shares, FY 2018: 81,506,225 shares | (4,974,449) | (4,717,619) |
Accumulated other comprehensive loss | (60,651) | (39,152) |
Total shareholders’ equity | 3,050,706 | 3,002,721 |
Total liabilities and shareholders' equity | $ 7,661,900 | $ 7,436,662 |
Consolidated Condensed Balanc_2
Consolidated Condensed Balance Sheets (Parenthetical) - shares | Aug. 31, 2019 | May 31, 2019 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized (in shares) | 100,000 | 100,000 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, authorized (in shares) | 425,000,000 | 425,000,000 |
Common stock, issued (in shares) | 185,952,964 | 184,790,626 |
Common stock, outstanding (in shares) | 103,364,545 | 103,284,401 |
Treasury stock (in shares) | 82,588,419 | 81,506,225 |
Consolidated Condensed Statem_4
Consolidated Condensed Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Paid-In Capital | Retained Earnings | Other Accumulated Comprehensive Loss | Treasury Stock |
Balance (shares) at May. 31, 2018 | 182,723 | 76,397 | ||||
Balance at May. 31, 2018 | $ 3,016,526 | $ 618,464 | $ 245,211 | $ 5,837,827 | $ 16,343 | $ (3,701,319) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 212,515 | 212,515 | ||||
Comprehensive loss, net of tax | (6,482) | (6,482) | ||||
Dividends | 1 | 1 | ||||
Stock-based compensation | 46,172 | 46,172 | ||||
Vesting of stock-based compensation awards (shares) | 739 | |||||
Vesting of stock-based compensation awards | $ 151,012 | (151,012) | ||||
Stock options exercised, net of shares surrendered (in shares) | 594 | |||||
Stock options exercised, net of shares surrendered | 27,512 | $ 27,512 | ||||
Repurchase of common stock (shares) | (689) | |||||
Repurchase of common stock | (139,468) | $ (139,468) | ||||
Balance (shares) at Aug. 31, 2018 | 184,056 | 77,086 | ||||
Balance at Aug. 31, 2018 | 3,345,968 | $ 796,988 | 140,371 | 6,239,535 | 9,861 | $ (3,840,787) |
Balance (shares) at May. 31, 2019 | 184,791 | 81,506 | ||||
Balance at May. 31, 2019 | 3,002,721 | $ 840,328 | 227,928 | 6,691,236 | (39,152) | $ (4,717,619) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 250,812 | 250,812 | ||||
Comprehensive loss, net of tax | (23,474) | (23,474) | ||||
Stock-based compensation | 40,395 | 40,395 | ||||
Vesting of stock-based compensation awards (shares) | 605 | |||||
Vesting of stock-based compensation awards | $ 157,882 | (157,882) | ||||
Stock options exercised, net of shares surrendered (in shares) | 557 | |||||
Stock options exercised, net of shares surrendered | 37,915 | $ 37,915 | ||||
Repurchase of common stock (shares) | (1,082) | |||||
Repurchase of common stock | (256,830) | $ (256,830) | ||||
Balance (shares) at Aug. 31, 2019 | 185,953 | 82,588 | ||||
Balance at Aug. 31, 2019 | $ 3,050,706 | $ 1,036,125 | $ 110,441 | $ 6,939,240 | $ (60,651) | $ (4,974,449) |
Consolidated Condensed Statem_5
Consolidated Condensed Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 250,812 | $ 212,515 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 56,726 | 52,745 |
Amortization of intangible assets and capitalized contract costs | 35,268 | 33,550 |
Stock-based compensation | 40,395 | 46,172 |
Deferred income taxes | 7,910 | 9,022 |
Change in current assets and liabilities, net of acquisitions of businesses: | ||
Accounts receivable, net | (6,636) | (15,051) |
Inventories, net | (1,726) | (34,629) |
Uniforms and other rental items in service | (11,305) | (23,019) |
Prepaid expenses and other current assets and capitalized contract costs | (41,928) | (46,930) |
Accounts payable | 13,357 | (329) |
Accrued compensation and related liabilities | (58,718) | (56,186) |
Accrued liabilities and other | (24,082) | (27,556) |
Income taxes, current | 16,828 | 12,681 |
Net cash provided by operating activities | 276,901 | 162,985 |
Cash flows from investing activities: | ||
Capital expenditures | (64,743) | (64,528) |
Proceeds from redemption of marketable securities | 0 | 1,558 |
Purchase of investments | (9,391) | 0 |
Acquisitions of businesses, net of cash acquired | (3,896) | (7,613) |
Other, net | (109) | (202) |
Net cash used in investing activities | (78,139) | (70,785) |
Cash flows from financing activities: | ||
Issuance of commercial paper, net | 26,500 | 0 |
Proceeds from exercise of stock-based compensation awards | 37,915 | 27,512 |
Repurchase of common stock | (256,830) | (139,468) |
Other, net | (1,192) | (552) |
Net cash used in financing activities | (193,607) | (112,508) |
Effect of exchange rate changes on cash and cash equivalents | 331 | (60) |
Net increase (decrease) in cash and cash equivalents | 5,486 | (20,368) |
Cash and cash equivalents at beginning of period | 96,645 | 138,724 |
Cash and cash equivalents at end of period | $ 102,131 | $ 118,356 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Aug. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated condensed financial statements of Cintas Corporation (Cintas, the Company, we, us or our) included herein have been prepared by Cintas, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. While we believe that the disclosures are adequately presented, we suggest that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2019 . A summary of our significant accounting policies is presented beginning on page 41 of that report. There have been no material changes in the accounting policies followed by Cintas during the current fiscal year other than the adoption of new accounting pronouncements discussed below. Interim results are subject to variations and are not necessarily indicative of the results of operations for a full fiscal year. In the opinion of management, adjustments (which include only normal recurring adjustments) necessary for a fair statement of the consolidated results of the interim periods shown have been made. Inventories, net are measured at the lower of cost (first-in, first-out) or net realizable value. Inventory is comprised of the following: (In thousands) August 31, May 31, Raw materials $ 16,541 $ 17,812 Work in process 25,618 28,820 Finished goods 294,131 287,957 $ 336,290 $ 334,589 Inventories are recorded net of reserves for obsolete inventory of $33.4 million and $32.7 million at August 31, 2019 and May 31, 2019 , respectively. New Accounting Pronouncements Effective June 1, 2019, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842)” using a modified retrospective transition approach. Topic 842 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Topic 842 provided a number of optional practical expedients in transition, and we have determined to use certain of these practical expedients upon our adoption of Topic 842. Specifically, the Company elected the package of practical expedients permitted under Topic 842, which allows a lessee to carryforward their population of existing leases, the classification of each lease, as well as the treatment of initial direct lease costs as of the period of adoption. The Company also elected the practical expedient related to lease and non-lease components, as an accounting policy election for the fleet and vehicle asset classes, which allows a lessee to not separate non-lease from lease components and instead account for consideration paid in a contract as a single lease component. In addition, the Company elected the short-term lease recognition exemption for all leases with a term of 12 months or less, which means it will not recognize right-of-use assets or lease liabilities for these leases. The adoption of Topic 842, on June 1, 2019, resulted in the Company recognizing right-of-use assets, net of $168.0 million and corresponding lease liabilities of $173.4 million . The adoption of Topic 842 did not have a material impact on the Company's consolidated condensed statements of income or consolidated condensed statements of cash flows. Effective June 1, 2019, Cintas adopted ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." ASU 2018-02 allows companies to elect to reclassify the disproportionate income tax effects resulting from the Tax Cuts and Jobs Act (Tax Act) on items within accumulated other comprehensive income to retained earnings. The adoption of ASU 2018-02, on a prospective basis, resulted in a $2.0 million reclassification adjustment of the stranded tax effects from retained earnings to accumulated other comprehensive loss that was determined using a specific identification method. In April 2019, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 will replace the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In connection with recognizing credit losses on receivables and other financial instruments, Cintas will be required to use a forward-looking expected loss model rather than the incurred loss model. This standard is effective for annual periods beginning after December 15, 2019, with early adoption permitted. The adoption of this standard will be through a cumulative-effect adjustment to retained earnings as of the effective date. Cintas is currently evaluating the impact that ASU 2016-13 will have on its consolidated condensed financial statements. In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates the two-step process that required identification of potential impairment and a separate measure of the actual impairment. Goodwill impairment charges, if any, would be determined by the difference between a reporting unit's carrying value and its fair value (impairment loss is limited to the carrying value). This standard is effective for annual or any interim goodwill impairment tests beginning after December 15, 2019. The adoption of this standard is not expected to have an impact on the consolidated condensed financial statements. No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on Cintas' consolidated condensed financial statements. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Aug. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The following table presents Cintas' total revenue disaggregated by service type: Three Months Ended August 31, August 31, (In thousands) Revenue % Revenue % Uniform Rental and Facility Services $ 1,454,527 80.3 % $ 1,374,938 81.0 % First Aid and Safety Services 172,090 9.5 % 153,417 9.0 % Fire Protection Services 110,126 6.1 % 98,109 5.8 % Uniform Direct Sales 74,396 4.1 % 71,511 4.2 % Total revenue $ 1,811,139 100.0 % $ 1,697,975 100.0 % Fire Protection Services and Uniform Direct Sales are recorded within the All Other segment disclosed in Note 12 entitled Segment Information. Revenue Recognition Policy More than 95% of the Company's revenues are derived from fees for route servicing of Uniform Rental and Facility Services, First Aid and Safety Services and Fire Protection Services, performed by a Cintas employee-partner, at the customer's location of business. Revenues from our route servicing customer contracts represent a single-performance obligation. The Company recognizes these revenues over time as services are performed based on the nature of services provided and contractual rates (input method). The Company's remaining revenues, primarily within the Uniform Direct Sales operating segment, and representing less than 5% of the Company's total revenues, are recognized when the obligations under the terms of a contract with a customer are satisfied. This generally occurs when the goods are transferred to the customer. Revenue recorded is presented net of sales and other taxes we collect on behalf of governmental authorities. Shipping and handling costs charged to customers are treated as fulfillment activities and are recorded in both revenue and cost of sales at the time control is transferred to the customer. Certain of our customer contracts, primarily within our Uniform Direct Sales business, include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration paid to a customer based on performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company's actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company's performance period generally corresponds with the monthly invoice period. No constraints on our revenue recognition were applied during the three months ended August 31, 2019 or 2018. The Company reassesses these estimates during each reporting period. Cintas maintains a liability for these discounts and rebates within accrued liabilities on the consolidated condensed balance sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. Cintas capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue in accordance with Accounting Standards Codification (ASC) Topic 606, Revenue (ASC 606). These assets are included in other assets, net on the consolidated condensed balance sheet. Additionally, in accordance with ASC 606, certain Uniform Direct Sales customer contracts contain a provision with an enforceable right of payment and the underlying product has no alternative use to Cintas. Consequently, when both aforementioned provisions are prevalent in a customer contract, the revenue is recorded for finished goods that the customer is obligated to purchase under the termination terms of the contract. Costs to Obtain a Contract The Company capitalizes commission expenses paid to our employee-partners when the commissions are deemed to be incremental for obtaining the route servicing customer contract. The deferred commissions are amortized on a straight-line basis over the expected period of benefit. We review the deferred commission balances for impairment on an ongoing basis. Deferred commissions are classified as current or noncurrent based on the timing of when we expect to recognize the expense. The current portion is included in prepaid expenses and other current assets and the noncurrent portion is included in other assets, net on the Company's consolidated condensed balance sheets. As of August 31, 2019 , the current and noncurrent assets related to deferred commissions totaled $71.3 million and $212.0 million , respectively. As of May 31, 2019, the current and noncurrent assets related to deferred commissions totaled $69.6 million and $206.0 million , respectively. We recorded amortization expense related to deferred commissions of $18.8 million and $17.1 million during the three months ended August 31, 2019 |
Leases
Leases | 3 Months Ended |
Aug. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases Cintas has operating leases for certain operating facilities, vehicles and equipment, which provide the right to use the underlying asset and require lease payments over the term of the lease. Each new contract is evaluated to determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. All identified leases are recorded on the consolidated condensed balance sheet with a corresponding operating lease right-of-use asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the consolidated condensed balance sheet. Operating lease right-of-use assets, net and operating lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term and include options to extend or terminate the lease when they are reasonably certain to be exercised. The present value of lease payments is determined primarily using the incremental borrowing rate based on the information available at lease commencement date. Lease expense for operating leases is recorded on a straight-line basis over the lease term and variable lease costs are recorded as incurred. Both lease expense and variable lease costs are primarily recorded in Cost of uniform rental and facility services and other on the Company's consolidated condensed statements of income. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. The following table presents the operating lease cost and information related to the operating lease right-of-use assets, net and operating lease liabilities for the three months ended August 31, 2019: (In thousands, except lease term and discount rate) Lease cost Operating lease costs including short-term lease expense and variable lease costs, which were immaterial in the quarter $ 17,200 Operating cash flow impacts Cash paid for amounts included in the measurement of operating lease liabilities $ 12,342 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 6,828 Weighted-average remaining lease term - operating leases 5.36 years Weighted-average discount rate - operating leases 2.68% The contractual future minimum lease payments of Cintas' operating lease liabilities by fiscal year are as follows as of August 31, 2019: (In thousands) 2020 (remaining nine months) $ 35,753 2021 40,981 2022 31,877 2023 24,487 2024 15,691 Thereafter 33,065 Total payments 181,854 Less interest (13,160 ) Total present value of lease payments $ 168,694 |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Aug. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements All financial instruments that are measured at fair value on a recurring basis (at least annually) have been classified within the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the consolidated condensed balance sheet date. These financial instruments measured at fair value on a recurring basis are summarized below: As of August 31, 2019 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 102,131 $ — $ — $ 102,131 Total assets at fair value $ 102,131 $ — $ — $ 102,131 Long-term accrued liabilities: Interest rate lock agreements $ — $ 76,141 $ — $ 76,141 Total liabilities at fair value $ — $ 76,141 $ — $ 76,141 As of May 31, 2019 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 96,645 $ — $ — $ 96,645 Total assets at fair value $ 96,645 $ — $ — $ 96,645 Long-term accrued liabilities: Interest rate lock agreements $ — $ 36,393 $ — $ 36,393 Total liabilities at fair value $ — $ 36,393 $ — $ 36,393 Cintas’ cash and cash equivalents are generally classified within Level 1 of the fair value hierarchy. Financial instruments classified as Level 1 are based on quoted market prices in active markets. The types of financial instruments Cintas classifies within Level 1 include most bank deposits and money market securities. Cintas does not adjust the quoted market price for such financial instruments. Interest, realized gains and losses and declines in value determined to be other than temporary on available-for-sale securities are included in interest income or expense. The cost of the securities sold is based on the specific identification method. There were no outstanding marketable securities as of August 31, 2019 or May 31, 2019. As of August 31, 2019 and May 31, 2019, long-term accrued liabilities included the fair value of outstanding interest rate lock agreements. The fair values of Cintas' interest rate lock agreements are based on similar exchange traded derivatives (market approach) and are, therefore, included within Level 2 of the fair value hierarchy. The fair value was determined by comparing the locked rates against the benchmarked treasury rate. All other amounts included in long-term accrued liabilities are not recorded at fair value. The methods described above may produce a fair value that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while Cintas believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the consolidated condensed balance sheet dates. |
Investments
Investments | 3 Months Ended |
Aug. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Investments at August 31, 2019 of $209.0 million include the cash surrender value of insurance policies of $187.4 million , equity method investments of $18.4 million and cost method investments of $3.2 million . Investments at May 31, 2019 of $192.3 million include the cash surrender value of insurance policies of $170.5 million , equity method investments of $18.6 million and cost method investments of $3.2 million . Investments are generally evaluated for impairment on an annual basis or when indicators of impairment exist. For the three months ended August 31, 2019 and 2018 , no |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Aug. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The following tables set forth the computation of basic and diluted earnings per share from continuing operations using the two-class method for amounts attributable to Cintas’ common shares: Three Months Ended Basic Earnings per Share from Continuing Operations (in thousands except per share data) August 31, August 31, Income from continuing operations $ 250,812 $ 212,547 Less: income from continuing operations allocated to participating securities 2,016 2,945 Income from continuing operations available to common shareholders $ 248,796 $ 209,602 Basic weighted average common shares outstanding 103,543 106,835 Basic earnings per share from continuing operations $ 2.40 $ 1.96 Three Months Ended Diluted Earnings per Share from Continuing Operations (in thousands except per share data) August 31, August 31, Income from continuing operations $ 250,812 $ 212,547 Less: income from continuing operations allocated to participating securities 2,016 2,945 Income from continuing operations available to common shareholders $ 248,796 $ 209,602 Basic weighted average common shares outstanding 103,543 106,835 Effect of dilutive securities – employee stock options 3,540 3,813 Diluted weighted average common shares outstanding 107,083 110,648 Diluted earnings per share from continuing operations $ 2.32 $ 1.89 There were no amounts recorded in discontinued operations for the three months ended August 31, 2019. For the three months ended August 31, 2018, both basic and diluted earnings per share from discontinued operations rounded to zero . For the three months ended August 31, 2019 and 2018 , options granted to purchase 0.2 million and 0.3 million shares of Cintas common stock, respectively, were excluded from the computation of diluted earnings per share. The exercise prices of these options were greater than the average market price of the common stock (anti-dilutive). On October 30, 2018, Cintas announced that the Board of Directors authorized a $1.0 billion share buyback program, which does not have an expiration date. For the three months ended August 31, 2019, we purchased 0.8 million shares of Cintas common stock at an average price of $230.66 per share for a total purchase price of $193.1 million . There were no share buybacks in the period subsequent to August 31, 2019 through October 8, 2019 . From the inception of the October 30, 2018 share buyback program through October 8, 2019 , Cintas has purchased a total of 3.5 million shares of Cintas common stock at an average price of $209.82 for a total purchase price of $736.5 million . For the three months ended August 31, 2019 , Cintas acquired 0.2 million shares of Cintas common stock for employee payroll taxes dues on restricted stock awards that vested during the three months ended August 31, 2019 . These shares were acquired at an average price of $260.83 per share for a total purchase price of $63.7 million |
Goodwill, Service Contracts and
Goodwill, Service Contracts and Other Assets | 3 Months Ended |
Aug. 31, 2019 | |
Goodwill, Service Contracts and Other Assets [Abstract] | |
Goodwill, Service Contracts and Other Assets | Goodwill, Service Contracts and Other Assets Changes in the carrying amount of goodwill and service contracts for the three months ended August 31, 2019 , by reportable operating segment and All Other, are as follows: Goodwill (in thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Total Balance as of June 1, 2019 $ 2,496,402 $ 243,459 $ 102,580 $ 2,842,441 Goodwill acquired — 164 3,022 3,186 Foreign currency translation 3,675 296 15 3,986 Balance as of August 31, 2019 $ 2,500,077 $ 243,919 $ 105,617 $ 2,849,613 Service Contracts (in thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Total Balance as of June 1, 2019 $ 445,016 $ 23,380 $ 26,199 $ 494,595 Service contracts acquired — 325 1,133 1,458 Service contracts amortization (11,783 ) (970 ) (1,378 ) (14,131 ) Foreign currency translation 1,030 25 — 1,055 Balance as of August 31, 2019 $ 434,263 $ 22,760 $ 25,954 $ 482,977 Information regarding Cintas’ service contracts and other assets is as follows: As of August 31, 2019 (In thousands) Carrying Amount Accumulated Amortization Net Service contracts $ 931,682 $ 448,705 $ 482,977 Capitalized contract costs (1) $ 301,854 $ 89,840 $ 212,014 Noncompete and consulting agreements 42,494 40,740 1,754 Other 50,684 19,387 31,297 Total other assets $ 395,032 $ 149,967 $ 245,065 As of May 31, 2019 (In thousands) Carrying Amount Accumulated Amortization Net Service contracts $ 928,635 $ 434,040 $ 494,595 Capitalized contract costs (2) $ 277,016 $ 71,062 $ 205,954 Noncompete and consulting agreements 42,308 40,524 1,784 Other 50,306 17,729 32,577 Total other assets $ 369,630 $ 129,315 $ 240,315 (1) The current portion of capitalized contract costs, included in prepaid expenses and other current assets on the consolidated condensed balance sheet as of August 31, 2019 , is $71.3 million . (2) The current portion of capitalized contract costs, included in prepaid expenses and other current assets on the consolidated condensed balance sheet as of May 31, 2019 , is $69.6 million . Amortization expense for service contracts and other assets for continuing operations was $34.6 million and $33.0 million for the three months ended August 31, 2019 and 2018 , respectively. The estimated future amortization expense for service contracts and other assets, excluding any future acquisitions and commissions to be earned, as of August 31, 2019 is as follows: Fiscal Year (In thousands) 2020 (remaining nine months) $ 100,846 2021 120,954 2022 109,078 2023 90,379 2024 79,144 Thereafter 274,800 Total future amortization expense $ 775,201 |
Debt, Derivatives and Hedging A
Debt, Derivatives and Hedging Activities | 3 Months Ended |
Aug. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt, Derivatives and Hedging Activities | Debt, Derivatives and Hedging Activities Cintas' outstanding debt is summarized as follows: (In thousands) Interest Rate Fiscal Year Issued Fiscal Year Maturity August 31, 2019 May 31, 2019 Debt due within one year Commercial paper 2.36 % (1) 2020 2020 $ 139,000 $ 112,500 Term loan 2.88 % (1) 2019 2020 200,000 200,000 Debt issuance costs (224 ) (236 ) Total debt due within one year $ 338,776 $ 312,264 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 51,576 51,684 Senior notes (3) 3.11 % 2015 2025 51,889 51,973 Senior notes 3.70 % 2017 2027 1,000,000 1,000,000 Senior notes 6.15 % 2007 2037 250,000 250,000 Debt issuance costs (15,408 ) (16,150 ) Total debt due after one year $ 2,538,057 $ 2,537,507 (1) Variable rate debt instrument. The rate presented is the variable borrowing rate at August 31, 2019 . (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% . Cintas' senior notes, excluding the G&K senior notes assumed with the acquisition of G&K in fiscal 2017 and term loan, are recorded at cost, net of debt issuance costs. The fair value of the long-term debt is estimated using Level 2 inputs based on general market prices. The carrying value and fair value of Cintas' debt as of August 31, 2019 were $2,889.0 million and $3,115.0 million , respectively, and as of May 31, 2019 were $2,866.2 million and $2,998.7 million , respectively. During the three months ended August 31, 2019, Cintas issued $26.5 million , net of commercial paper. The credit agreement that supports our commercial paper program was amended and restated on May 24, 2019. The amendment increased the capacity of the revolving credit facility from $600.0 million to $1.0 billion and created a new term loan of $200.0 million . The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under either the revolving credit facility or the term loan of up to $250.0 million in the aggregate, subject to customary conditions. The maturity date of the revolving credit facility is May 23, 2024, and the maturity date of the term loan in May 23, 2020, which can be extended 12 months , annually, for up to four years . As of August 31, 2019 and May 31, 2019 there was $139.0 million and $112.5 million of commercial paper outstanding with maturity dates less than 30 days and with a weighted average interest rates of 2.36% and 2.68% , respectively. There were no borrowings on our revolving credit facility as of August 31, 2019 and May 31, 2019 . Cintas uses interest rate locks to manage our overall interest expense as interest rate locks effectively change the interest rate of specific debt issuances. The interest rate locks are entered into to protect against unfavorable movements in the benchmark treasury rate related to forecasted debt issuances. Cintas used interest rate lock agreements to hedge against movements in the treasury rates at the time Cintas issued its senior notes in fiscal 2007, fiscal 2012, fiscal 2013 and fiscal 2017. The amortization of the cash flow hedges resulted in a decrease to other comprehensive income of $0.3 million for both the three months ended August 31, 2019 and 2018 . During fiscal 2019, Cintas entered into interest rate lock agreements with a notional value of $500.0 million for a forecasted debt issuance. As of August 31, 2019 and May 31, 2019, the fair value of these interest rate locks was a liability of $76.1 million and $36.4 million , respectively, and were recorded in long-term accrued liabilities and in other comprehensive income, net of tax. These interest rate locks had no impact on net income or cash flows from continuing operations for the three months ended August 31, 2019 or 2018. Cintas has certain covenants related to debt agreements. These covenants limit Cintas’ 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 consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) and interest coverage ratios. Cross-default provisions exist between certain debt instruments. If a default of a significant covenant were to occur, the default could result in an acceleration of the maturity of the indebtedness, impair liquidity and limit the ability to raise future capital. As of August 31, 2019, Cintas was in compliance with all debt covenants. |
Income Taxes
Income Taxes | 3 Months Ended |
Aug. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In the normal course of business, Cintas provides for uncertain tax positions and the related interest and adjusts its unrecognized tax benefits and accrued interest accordingly. As of August 31, 2019 and May 31, 2019 , recorded unrecognized tax benefits were $38.6 million and $37.3 million , respectively, and are included in long-term accrued liabilities on the consolidated condensed balance sheet. The majority of Cintas' operations are in North America. Cintas is required to file federal income tax returns, as well as state income tax returns in a majority of the domestic states and also in certain Canadian provinces. At times, Cintas is subject to audits in these jurisdictions. The audits, by nature, are sometimes complex and can require several years to resolve. The final resolution of any such tax audit could result in either a reduction in Cintas' accruals or an increase in its income tax provision, either of which could have an impact on the consolidated results of operations in any given period. All U.S. federal income tax returns are closed to audit through fiscal 2015. Cintas is currently in various audits in certain foreign jurisdictions and certain domestic states. The years under foreign and domestic state audits cover fiscal years back to 2013. Based on the resolution of the various audits and other potential regulatory developments, it is reasonably possible that the balance of unrecognized tax benefits would not change for the fiscal year ending May 31, 2020. Cintas’ effective tax rate for continuing operations was 10.1% and 12.0% for the three months ended August 31, 2019 and 2018 |
Pension Plans
Pension Plans | 3 Months Ended |
Aug. 31, 2019 | |
Retirement Benefits [Abstract] | |
Pension Plans | Pension Plans In conjunction with the acquisition of G&K in fiscal 2017, Cintas assumed G&K's noncontributory frozen defined benefit pension plan (the Pension Plan) that covers substantially all 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 is included in long-term accrued liabilities on the consolidated condensed balance sheets. Unrecognized differences between actual amounts and estimates based on actuarial assumptions are included in accumulated other comprehensive income in our consolidated condensed balance sheets. 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 benefit cost are summarized as follows: Three Months Ended (In thousands) August 31, 2019 August 31, 2018 Interest cost $ 720 $ 781 Expected return on assets (740 ) (721 ) Net periodic benefit cost $ (20 ) $ 60 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Aug. 31, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss), net of tax: (In thousands) Foreign Currency Unrealized Loss on Interest Rate Hedges Other Total Balance at June 1, 2019 $ (15,022 ) $ (18,389 ) $ (5,741 ) $ (39,152 ) Other comprehensive income (loss) before reclassifications 6,724 (29,903 ) — (23,179 ) Amounts reclassified from accumulated other comprehensive income (loss) — (295 ) — (295 ) Net current period other comprehensive income (loss) 6,724 (30,198 ) — (23,474 ) Cumulative effect of change in accounting principle (1) — 2,058 (83 ) 1,975 Balance at August 31, 2019 $ (8,298 ) $ (46,529 ) $ (5,824 ) $ (60,651 ) (1) See new accounting pronouncements in Note 1 entitled Basis of Presentation for more information. (In thousands) Foreign Currency Unrealized Income on Interest Rate Hedges Other Total Balance at June 1, 2018 $ 6,550 $ 10,449 $ (656 ) $ 16,343 Other comprehensive loss before reclassifications (3,019 ) (3,168 ) — (6,187 ) Amounts reclassified from accumulated other comprehensive income (loss) — (295 ) — (295 ) Net current period other comprehensive loss (3,019 ) (3,463 ) — (6,482 ) Balance at August 31, 2018 $ 3,531 $ 6,986 $ (656 ) $ 9,861 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 (In thousands) August 31, 2019 August 31, 2018 Amortization of interest rate locks $ 474 $ 474 Interest expense Tax expense (179 ) (179 ) Income taxes Amortization of interest rate locks, net of tax $ 295 $ 295 Net income |
Segment Information
Segment Information | 3 Months Ended |
Aug. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information 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 Fire Protection Services and its 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 As of and for the three months Revenue $ 1,454,527 $ 172,090 $ 184,522 $ — $ 1,811,139 Income (loss) before income taxes $ 269,011 $ 24,769 $ 12,366 $ (27,159 ) $ 278,987 Total assets $ 6,607,453 $ 536,652 $ 416,282 $ 101,513 $ 7,661,900 As of and for the three months Revenue $ 1,374,938 $ 153,417 $ 169,620 $ — $ 1,697,975 Income (loss) before income taxes $ 231,534 $ 21,983 $ 11,711 $ (23,808 ) $ 241,420 Total assets $ 6,298,849 $ 486,965 $ 383,034 $ 118,356 $ 7,287,204 (1) |
G&K Services, Inc. Integration
G&K Services, Inc. Integration Expenses | 3 Months Ended |
Aug. 31, 2019 | |
Business Combinations [Abstract] | |
G&K Services, Inc. Integration Expenses | G&K Services, Inc. Integration Expenses As a result of the acquisition of G&K in fiscal 2017, the Company incurred $4.9 million in expenses during the three months ended August 31, 2018, which represented integration expenses directly related to the acquisition, primarily facility closure expenses. No such costs were incurred during the three months ended August 31, 2019. As of August 31, 2019 and May 31, 2019, employee termination benefits included in accrued compensation and related liabilities on the consolidated condensed balance sheet was $2.7 million and $2.8 million , respectively. The amount of employee termination benefits paid during the three months ended August 31, 2019 and 2018 was $0.1 million and $2.4 million |
Supplemental Guarantor Informat
Supplemental Guarantor Information | 3 Months Ended |
Aug. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Supplemental Guarantor Information | 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 $139.0 million aggregate principal amount of commercial paper, term loan of $200.0 million and the $2,550.0 million aggregate principal amount of senior notes outstanding as of August 31, 2019 , 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. 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 August 31, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Corporation Consolidated Revenue: Uniform rental and facility services $ — $ 1,158,891 $ 190,735 $ 105,394 $ (493 ) $ 1,454,527 Other — 582,976 97 23,246 (249,707 ) 356,612 Equity in net income of affiliates 250,812 — — — (250,812 ) — Total revenue 250,812 1,741,867 190,832 128,640 (501,012 ) 1,811,139 Costs and expenses (income): Cost of uniform rental and facility services — 621,881 111,734 65,595 (30,534 ) 768,676 Cost of other — 403,484 (22,677 ) 17,699 (205,185 ) 193,321 Selling and administrative expenses — 599,403 (84,257 ) 34,454 (6,604 ) 542,996 Operating income 250,812 117,099 186,032 10,892 (258,689 ) 306,146 Interest (income) expense — (150 ) 1 (14 ) 1 (162 ) Interest expense (income) — 27,360 (53 ) 14 — 27,321 Income before income taxes 250,812 89,889 186,084 10,892 (258,690 ) 278,987 Income taxes — 8,201 16,978 3,021 (25 ) 28,175 Net income $ 250,812 $ 81,688 $ 169,106 $ 7,871 $ (258,665 ) $ 250,812 Consolidating Condensed Income Statement Three Months Ended August 31, 2018 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Corporation Consolidated Revenue: Uniform rental and facility services $ — $ 1,139,129 $ 183,163 $ 99,683 $ (47,037 ) $ 1,374,938 Other — 491,290 43 24,332 (192,628 ) 323,037 Equity in net income of affiliates 212,547 — — — (212,547 ) — Total revenue 212,547 1,630,419 183,206 124,015 (452,212 ) 1,697,975 Costs and expenses (income): Cost of uniform rental and facility services — 643,741 109,550 64,013 (70,851 ) 746,453 Cost of other — 341,333 (22,029 ) 18,142 (160,636 ) 176,810 Selling and administrative expenses — 544,910 (64,621 ) 34,363 (10,018 ) 504,634 G&K Services, Inc. integration expenses — 2,676 1,863 311 — 4,850 Operating income 212,547 97,759 158,443 7,186 (210,707 ) 265,228 Interest income — (209 ) (272 ) (16 ) 1 (496 ) Interest expense (income) — 24,661 (362 ) 5 — 24,304 Income before income taxes 212,547 73,307 159,077 7,197 (210,708 ) 241,420 Income taxes — 10,663 16,044 2,187 (21 ) 28,873 Income from continuing operations 212,547 62,644 143,033 5,010 (210,687 ) 212,547 Loss from discontinued operations, net of tax (32 ) (32 ) — — 32 (32 ) Net income $ 212,515 $ 62,612 $ 143,033 $ 5,010 $ (210,655 ) $ 212,515 Consolidating Condensed Statement of Comprehensive Income Three Months Ended August 31, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Corporation Consolidated Net income $ 250,812 $ 81,688 $ 169,106 $ 7,871 $ (258,665 ) $ 250,812 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments 6,724 — — 6,724 (6,724 ) 6,724 Change in fair value of interest rate lock agreements (29,903 ) (29,903 ) — — 29,903 (29,903 ) Amortization of interest rate lock agreements (295 ) (295 ) — — 295 (295 ) Other comprehensive (loss) income (23,474 ) (30,198 ) — 6,724 23,474 (23,474 ) Comprehensive income $ 227,338 $ 51,490 $ 169,106 $ 14,595 $ (235,191 ) $ 227,338 Consolidating Condensed Statement of Comprehensive Income Three Months Ended August 31, 2018 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Corporation Consolidated Net income $ 212,515 $ 62,612 $ 143,033 $ 5,010 $ (210,655 ) $ 212,515 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments (3,019 ) — — (3,019 ) 3,019 (3,019 ) Change in fair value of interest rate lock agreements (3,168 ) (3,168 ) — — 3,168 (3,168 ) Amortization of interest rate lock agreements (295 ) (295 ) — — 295 (295 ) Other comprehensive loss (6,482 ) (3,463 ) — (3,019 ) 6,482 (6,482 ) Comprehensive income $ 206,033 $ 59,149 $ 143,033 $ 1,991 $ (204,173 ) $ 206,033 Consolidating Condensed Balance Sheet As of August 31, 2019 (In thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 61,965 $ 14,788 $ 25,378 $ — $ 102,131 Accounts receivable, net — 734,268 113,838 69,429 — 917,535 Inventories, net — 287,373 28,178 20,739 — 336,290 Uniforms and other rental items in service — 657,277 91,592 61,534 (14,216 ) 796,187 Prepaid expenses and other current assets — 82,635 35,907 19,133 — 137,675 Total current assets — 1,823,518 284,303 196,213 (14,216 ) 2,289,818 Property and equipment, net — 958,285 367,853 96,213 — 1,422,351 Investments (1) 321,083 3,588,963 981,713 1,718,870 (6,401,642 ) 208,987 Goodwill — — 2,589,592 260,133 (112 ) 2,849,613 Service contracts, net — 416,583 — 66,394 — 482,977 Operating lease right-of-use assets, net — 133,401 13,904 15,784 — 163,089 Other assets, net 2,264,376 216,985 5,606,035 1,507 (7,843,838 ) 245,065 $ 2,585,459 $ 7,137,735 $ 9,843,400 $ 2,355,114 $ (14,259,808 ) $ 7,661,900 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ (465,247 ) $ (2,099,057 ) $ 2,818,307 $ (54,052 ) $ 37,291 $ 237,242 Accrued compensation and related liabilities — 59,152 31,311 8,737 — 99,200 Accrued liabilities — 86,128 290,891 18,397 — 395,416 Income taxes, current — 235 14,236 (5,233 ) — 9,238 Operating lease liabilities, current — 34,255 4,320 4,435 — 43,010 Debt due within one year — 338,776 — — — 338,776 Total current liabilities (465,247 ) (1,580,511 ) 3,159,065 (27,716 ) 37,291 1,122,882 Long-term liabilities: Debt due after one year — 2,538,057 — — — 2,538,057 Deferred income taxes — 306,142 99,774 30,839 — 436,755 Operating lease liabilities — 103,847 10,093 11,744 — 125,684 Accrued liabilities — 156,466 214,977 16,373 — 387,816 Total long-term liabilities — 3,104,512 324,844 58,956 — 3,488,312 Total shareholders’ equity 3,050,706 5,613,734 6,359,491 2,323,874 (14,297,099 ) 3,050,706 $ 2,585,459 $ 7,137,735 $ 9,843,400 $ 2,355,114 $ (14,259,808 ) $ 7,661,900 (1) Investments include inter-company investment activity. Corp 2 and Subsidiary Guarantors hold $ 19.6 million and $ 189.4 million , respectively, of the $ 209.0 million consolidated net investments. Consolidating Condensed Balance Sheet As of May 31, 2019 (In thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 54,963 $ 13,151 $ 28,531 $ — $ 96,645 Accounts receivable, net — 719,914 121,803 68,403 — 910,120 Inventories, net — 278,666 35,081 20,842 — 334,589 Uniforms and other rental items in service — 645,862 90,458 60,061 (12,248 ) 784,133 Income taxes, current — (9,728 ) 11,722 5,481 — 7,475 Prepaid expenses and other current assets — 81,117 20,334 1,867 — 103,318 Total current assets — 1,770,794 292,549 185,185 (12,248 ) 2,236,280 Property and equipment, net — 948,830 369,006 112,849 — 1,430,685 Investments (1) 321,083 3,589,234 964,802 1,716,870 (6,399,643 ) 192,346 Goodwill — — 2,586,406 256,147 (112 ) 2,842,441 Service contracts, net — 427,437 — 67,158 — 494,595 Other assets, net 2,216,391 211,102 5,424,413 1,716 (7,613,307 ) 240,315 $ 2,537,474 $ 6,947,397 $ 9,637,176 $ 2,339,925 $ (14,025,310 ) $ 7,436,662 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ (465,247 ) $ (2,090,954 ) $ 2,793,558 $ (48,769 ) $ 37,432 $ 226,020 Accrued compensation and related liabilities — 117,404 26,870 11,235 — 155,509 Accrued liabilities — 84,296 328,267 21,377 — 433,940 Debt due within one year — 312,264 — — — 312,264 Total current liabilities (465,247 ) (1,576,990 ) 3,148,695 (16,157 ) 37,432 1,127,733 Long-term liabilities: Debt due after one year — 2,537,507 — — — 2,537,507 Deferred income taxes — 307,334 100,162 30,683 — 438,179 Accrued liabilities — 116,469 197,934 16,119 — 330,522 Total long-term liabilities — 2,961,310 298,096 46,802 — 3,306,208 Total shareholders’ equity 3,002,721 5,563,077 6,190,385 2,309,280 (14,062,742 ) 3,002,721 $ 2,537,474 $ 6,947,397 $ 9,637,176 $ 2,339,925 $ (14,025,310 ) $ 7,436,662 (1) Investments include inter-company investment activity. Corp 2 and Subsidiary Guarantors hold $19.8 million and $172.5 million , respectively, of the $192.3 million consolidated net investments. Consolidating Condensed Statement of Cash Flows Three Months Ended August 31, 2019 (In thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 250,812 $ 81,688 $ 169,106 $ 7,871 $ (258,665 ) $ 250,812 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation — 37,056 16,032 3,638 — 56,726 Amortization of intangible assets and capitalized contract costs — 31,949 1,279 2,040 — 35,268 Stock-based compensation 40,395 — — — — 40,395 Deferred income taxes — 8,652 (382 ) (360 ) — 7,910 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (14,317 ) 7,965 (284 ) — (6,636 ) Inventories, net — (8,686 ) 7,359 (399 ) — (1,726 ) Uniforms and other rental items in service — (11,416 ) (1,135 ) (722 ) 1,968 (11,305 ) Prepaid expenses and other current assets and capitalized contract costs — (26,355 ) (15,462 ) (111 ) — (41,928 ) Accounts payable — (8,103 ) 28,923 (7,322 ) (141 ) 13,357 Accrued compensation and related liabilities — (58,252 ) 2,120 (2,586 ) — (58,718 ) Accrued liabilities and other — 5,833 (27,074 ) (2,841 ) — (24,082 ) Income taxes, current — (9,493 ) 25,974 347 — 16,828 Net cash provided by (used in) operating activities 291,207 28,556 214,705 (729 ) (256,838 ) 276,901 Cash flows from investing activities: Capital expenditures — (46,605 ) (14,916 ) (3,222 ) — (64,743 ) Redemptions (purchases) of investments — 271 (9,662 ) — — (9,391 ) Acquisitions of businesses, net of cash acquired — (3,896 ) — — — (3,896 ) Other, net (72,292 ) 3,368 (188,490 ) 467 256,838 (109 ) Net cash used in investing activities (72,292 ) (46,862 ) (213,068 ) (2,755 ) 256,838 (78,139 ) Cash flows from financing activities: Issuance of commercial paper, net — 26,500 — — — 26,500 Proceeds from exercise of stock-based compensation awards 37,915 — — — — 37,915 Repurchase of common stock (256,830 ) — — — — (256,830 ) Other, net — (1,192 ) — — — (1,192 ) Net cash (used in) provided by financing activities (218,915 ) 25,308 — — — (193,607 ) Effect of exchange rate changes on cash and cash equivalents — — — 331 — 331 Net increase (decrease) in cash and cash equivalents — 7,002 1,637 (3,153 ) — 5,486 Cash and cash equivalents at beginning of period — 54,963 13,151 28,531 — 96,645 Cash and cash equivalents at end of period $ — $ 61,965 $ 14,788 $ 25,378 $ — $ 102,131 Consolidating Condensed Statement of Cash Flows Three Months Ended August 31, 2018 (In thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 212,515 $ 62,612 $ 143,033 $ 5,010 $ (210,655 ) $ 212,515 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation — 33,866 15,427 3,452 — 52,745 Amortization of intangible assets and capitalized contract costs — 30,156 1,278 2,116 — 33,550 Stock-based compensation 46,172 — — — — 46,172 Deferred income taxes — 5,388 2,122 1,512 — 9,022 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (12,891 ) 3,381 (5,541 ) — (15,051 ) Inventories, net — (37,207 ) 2,700 660 (782 ) (34,629 ) Uniforms and other rental items in service — (10,800 ) (7,904 ) (2,936 ) (1,379 ) (23,019 ) Prepaid expenses and other current assets and capitalized contract costs — (25,060 ) (21,838 ) (32 ) — (46,930 ) Accounts payable — 41,784 (37,657 ) (4,758 ) 302 (329 ) Accrued compensation and related liabilities — (41,910 ) (10,982 ) (3,294 ) — (56,186 ) Accrued liabilities and other — 2,305 (26,295 ) (3,566 ) — (27,556 ) Income taxes, current — 5,022 8,474 (815 ) — 12,681 Net cash provided by (used in) operating activities 258,687 53,265 71,739 (8,192 ) (212,514 ) 162,985 Cash flows from investing activities: Capital expenditures — (43,966 ) (17,979 ) (2,583 ) — (64,528 ) Proceeds from redemption of marketable securities — 1,554 4 — — 1,558 Acquisitions of businesses, net of cash acquired — (7,613 ) — — — (7,613 ) Other, net (146,731 ) (4,048 ) (65,509 ) 2,582 213,504 (202 ) Net cash used in investing activities (146,731 ) (54,073 ) (83,484 ) (1 ) 213,504 (70,785 ) Cash flows from financing activities: Proceeds from exercise of stock-based compensation awards 27,512 — — — — 27,512 Repurchase of common stock (139,468 ) — — — — (139,468 ) Other, net — 2,909 — (2,471 ) (990 ) (552 ) Net cash (used in) provided by financing activities (111,956 ) 2,909 — (2,471 ) (990 ) (112,508 ) Effect of exchange rate changes on cash and cash equivalents — — — (60 ) — (60 ) Net increase (decrease) in cash and cash equivalents — 2,101 (11,745 ) (10,724 ) — (20,368 ) Cash and cash equivalents at beginning of period — 44,499 60,310 33,915 — 138,724 Cash and cash equivalents at end of period $ — $ 46,600 $ 48,565 $ 23,191 $ — $ 118,356 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Aug. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Effective June 1, 2019, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-02, “Leases (Topic 842)” using a modified retrospective transition approach. Topic 842 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Topic 842 provided a number of optional practical expedients in transition, and we have determined to use certain of these practical expedients upon our adoption of Topic 842. Specifically, the Company elected the package of practical expedients permitted under Topic 842, which allows a lessee to carryforward their population of existing leases, the classification of each lease, as well as the treatment of initial direct lease costs as of the period of adoption. The Company also elected the practical expedient related to lease and non-lease components, as an accounting policy election for the fleet and vehicle asset classes, which allows a lessee to not separate non-lease from lease components and instead account for consideration paid in a contract as a single lease component. In addition, the Company elected the short-term lease recognition exemption for all leases with a term of 12 months or less, which means it will not recognize right-of-use assets or lease liabilities for these leases. The adoption of Topic 842, on June 1, 2019, resulted in the Company recognizing right-of-use assets, net of $168.0 million and corresponding lease liabilities of $173.4 million . The adoption of Topic 842 did not have a material impact on the Company's consolidated condensed statements of income or consolidated condensed statements of cash flows. Effective June 1, 2019, Cintas adopted ASU 2018-02, "Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income." ASU 2018-02 allows companies to elect to reclassify the disproportionate income tax effects resulting from the Tax Cuts and Jobs Act (Tax Act) on items within accumulated other comprehensive income to retained earnings. The adoption of ASU 2018-02, on a prospective basis, resulted in a $2.0 million reclassification adjustment of the stranded tax effects from retained earnings to accumulated other comprehensive loss that was determined using a specific identification method. In April 2019, the FASB issued ASU 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 will replace the incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. In connection with recognizing credit losses on receivables and other financial instruments, Cintas will be required to use a forward-looking expected loss model rather than the incurred loss model. This standard is effective for annual periods beginning after December 15, 2019, with early adoption permitted. The adoption of this standard will be through a cumulative-effect adjustment to retained earnings as of the effective date. Cintas is currently evaluating the impact that ASU 2016-13 will have on its consolidated condensed financial statements. In January 2017, the FASB issued ASU 2017-04, “Simplifying the Test for Goodwill Impairment.” ASU 2017-04 eliminates the two-step process that required identification of potential impairment and a separate measure of the actual impairment. Goodwill impairment charges, if any, would be determined by the difference between a reporting unit's carrying value and its fair value (impairment loss is limited to the carrying value). This standard is effective for annual or any interim goodwill impairment tests beginning after December 15, 2019. The adoption of this standard is not expected to have an impact on the consolidated condensed financial statements. No other new accounting pronouncement recently issued or newly effective had or is expected to have a material impact on Cintas' consolidated condensed financial statements. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 3 Months Ended |
Aug. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventory | Inventory is comprised of the following: (In thousands) August 31, May 31, Raw materials $ 16,541 $ 17,812 Work in process 25,618 28,820 Finished goods 294,131 287,957 $ 336,290 $ 334,589 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Aug. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Sources of Revenue | The following table presents Cintas' total revenue disaggregated by service type: Three Months Ended August 31, August 31, (In thousands) Revenue % Revenue % Uniform Rental and Facility Services $ 1,454,527 80.3 % $ 1,374,938 81.0 % First Aid and Safety Services 172,090 9.5 % 153,417 9.0 % Fire Protection Services 110,126 6.1 % 98,109 5.8 % Uniform Direct Sales 74,396 4.1 % 71,511 4.2 % Total revenue $ 1,811,139 100.0 % $ 1,697,975 100.0 % |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Aug. 31, 2019 | |
Leases [Abstract] | |
Contractual Future Minimum Lease Payments of Operating Lease Liabilities | The contractual future minimum lease payments of Cintas' operating lease liabilities by fiscal year are as follows as of August 31, 2019: (In thousands) 2020 (remaining nine months) $ 35,753 2021 40,981 2022 31,877 2023 24,487 2024 15,691 Thereafter 33,065 Total payments 181,854 Less interest (13,160 ) Total present value of lease payments $ 168,694 |
Operating Lease Cost and Additional Lease Information | The following table presents the operating lease cost and information related to the operating lease right-of-use assets, net and operating lease liabilities for the three months ended August 31, 2019: (In thousands, except lease term and discount rate) Lease cost Operating lease costs including short-term lease expense and variable lease costs, which were immaterial in the quarter $ 17,200 Operating cash flow impacts Cash paid for amounts included in the measurement of operating lease liabilities $ 12,342 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 6,828 Weighted-average remaining lease term - operating leases 5.36 years Weighted-average discount rate - operating leases 2.68% |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Aug. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Financial Instruments Measured on a Recurring Basis | These financial instruments measured at fair value on a recurring basis are summarized below: As of August 31, 2019 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 102,131 $ — $ — $ 102,131 Total assets at fair value $ 102,131 $ — $ — $ 102,131 Long-term accrued liabilities: Interest rate lock agreements $ — $ 76,141 $ — $ 76,141 Total liabilities at fair value $ — $ 76,141 $ — $ 76,141 As of May 31, 2019 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 96,645 $ — $ — $ 96,645 Total assets at fair value $ 96,645 $ — $ — $ 96,645 Long-term accrued liabilities: Interest rate lock agreements $ — $ 36,393 $ — $ 36,393 Total liabilities at fair value $ — $ 36,393 $ — $ 36,393 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Aug. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following tables set forth the computation of basic and diluted earnings per share from continuing operations using the two-class method for amounts attributable to Cintas’ common shares: Three Months Ended Basic Earnings per Share from Continuing Operations (in thousands except per share data) August 31, August 31, Income from continuing operations $ 250,812 $ 212,547 Less: income from continuing operations allocated to participating securities 2,016 2,945 Income from continuing operations available to common shareholders $ 248,796 $ 209,602 Basic weighted average common shares outstanding 103,543 106,835 Basic earnings per share from continuing operations $ 2.40 $ 1.96 Three Months Ended Diluted Earnings per Share from Continuing Operations (in thousands except per share data) August 31, August 31, Income from continuing operations $ 250,812 $ 212,547 Less: income from continuing operations allocated to participating securities 2,016 2,945 Income from continuing operations available to common shareholders $ 248,796 $ 209,602 Basic weighted average common shares outstanding 103,543 106,835 Effect of dilutive securities – employee stock options 3,540 3,813 Diluted weighted average common shares outstanding 107,083 110,648 Diluted earnings per share from continuing operations $ 2.32 $ 1.89 |
Goodwill, Service Contracts a_2
Goodwill, Service Contracts and Other Assets (Tables) | 3 Months Ended |
Aug. 31, 2019 | |
Goodwill, Service Contracts and Other Assets [Abstract] | |
Changes in Carrying Amount of Goodwill by Operating Segment | Changes in the carrying amount of goodwill and service contracts for the three months ended August 31, 2019 , by reportable operating segment and All Other, are as follows: Goodwill (in thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Total Balance as of June 1, 2019 $ 2,496,402 $ 243,459 $ 102,580 $ 2,842,441 Goodwill acquired — 164 3,022 3,186 Foreign currency translation 3,675 296 15 3,986 Balance as of August 31, 2019 $ 2,500,077 $ 243,919 $ 105,617 $ 2,849,613 |
Changes in the Carrying Amount of Service Contracts by Operating Segment | Service Contracts (in thousands) Uniform Rental and Facility Services First Aid and Safety Services All Other Total Balance as of June 1, 2019 $ 445,016 $ 23,380 $ 26,199 $ 494,595 Service contracts acquired — 325 1,133 1,458 Service contracts amortization (11,783 ) (970 ) (1,378 ) (14,131 ) Foreign currency translation 1,030 25 — 1,055 Balance as of August 31, 2019 $ 434,263 $ 22,760 $ 25,954 $ 482,977 |
Information Regarding Service Contracts and Other Assets | Information regarding Cintas’ service contracts and other assets is as follows: As of August 31, 2019 (In thousands) Carrying Amount Accumulated Amortization Net Service contracts $ 931,682 $ 448,705 $ 482,977 Capitalized contract costs (1) $ 301,854 $ 89,840 $ 212,014 Noncompete and consulting agreements 42,494 40,740 1,754 Other 50,684 19,387 31,297 Total other assets $ 395,032 $ 149,967 $ 245,065 As of May 31, 2019 (In thousands) Carrying Amount Accumulated Amortization Net Service contracts $ 928,635 $ 434,040 $ 494,595 Capitalized contract costs (2) $ 277,016 $ 71,062 $ 205,954 Noncompete and consulting agreements 42,308 40,524 1,784 Other 50,306 17,729 32,577 Total other assets $ 369,630 $ 129,315 $ 240,315 (1) The current portion of capitalized contract costs, included in prepaid expenses and other current assets on the consolidated condensed balance sheet as of August 31, 2019 , is $71.3 million . (2) The current portion of capitalized contract costs, included in prepaid expenses and other current assets on the consolidated condensed balance sheet as of May 31, 2019 , is $69.6 million . |
Estimated Future Amortization Expense | The estimated future amortization expense for service contracts and other assets, excluding any future acquisitions and commissions to be earned, as of August 31, 2019 is as follows: Fiscal Year (In thousands) 2020 (remaining nine months) $ 100,846 2021 120,954 2022 109,078 2023 90,379 2024 79,144 Thereafter 274,800 Total future amortization expense $ 775,201 |
Debt, Derivatives and Hedging_2
Debt, Derivatives and Hedging Activities (Tables) | 3 Months Ended |
Aug. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Debt Outstanding | Cintas' outstanding debt is summarized as follows: (In thousands) Interest Rate Fiscal Year Issued Fiscal Year Maturity August 31, 2019 May 31, 2019 Debt due within one year Commercial paper 2.36 % (1) 2020 2020 $ 139,000 $ 112,500 Term loan 2.88 % (1) 2019 2020 200,000 200,000 Debt issuance costs (224 ) (236 ) Total debt due within one year $ 338,776 $ 312,264 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 51,576 51,684 Senior notes (3) 3.11 % 2015 2025 51,889 51,973 Senior notes 3.70 % 2017 2027 1,000,000 1,000,000 Senior notes 6.15 % 2007 2037 250,000 250,000 Debt issuance costs (15,408 ) (16,150 ) Total debt due after one year $ 2,538,057 $ 2,537,507 (1) Variable rate debt instrument. The rate presented is the variable borrowing rate at August 31, 2019 . (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% . |
Pension Plans (Tables)
Pension Plans (Tables) | 3 Months Ended |
Aug. 31, 2019 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost are summarized as follows: Three Months Ended (In thousands) August 31, 2019 August 31, 2018 Interest cost $ 720 $ 781 Expected return on assets (740 ) (721 ) Net periodic benefit cost $ (20 ) $ 60 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Aug. 31, 2019 | |
Equity [Abstract] | |
Schedule of Changes in Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive income (loss), net of tax: (In thousands) Foreign Currency Unrealized Loss on Interest Rate Hedges Other Total Balance at June 1, 2019 $ (15,022 ) $ (18,389 ) $ (5,741 ) $ (39,152 ) Other comprehensive income (loss) before reclassifications 6,724 (29,903 ) — (23,179 ) Amounts reclassified from accumulated other comprehensive income (loss) — (295 ) — (295 ) Net current period other comprehensive income (loss) 6,724 (30,198 ) — (23,474 ) Cumulative effect of change in accounting principle (1) — 2,058 (83 ) 1,975 Balance at August 31, 2019 $ (8,298 ) $ (46,529 ) $ (5,824 ) $ (60,651 ) (1) See new accounting pronouncements in Note 1 entitled Basis of Presentation for more information. (In thousands) Foreign Currency Unrealized Income on Interest Rate Hedges Other Total Balance at June 1, 2018 $ 6,550 $ 10,449 $ (656 ) $ 16,343 Other comprehensive loss before reclassifications (3,019 ) (3,168 ) — (6,187 ) Amounts reclassified from accumulated other comprehensive income (loss) — (295 ) — (295 ) Net current period other comprehensive loss (3,019 ) (3,463 ) — (6,482 ) Balance at August 31, 2018 $ 3,531 $ 6,986 $ (656 ) $ 9,861 |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Loss | 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 (In thousands) August 31, 2019 August 31, 2018 Amortization of interest rate locks $ 474 $ 474 Interest expense Tax expense (179 ) (179 ) Income taxes Amortization of interest rate locks, net of tax $ 295 $ 295 Net income |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Aug. 31, 2019 | |
Segment Reporting [Abstract] | |
Information Related to Operating Segments | 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 As of and for the three months Revenue $ 1,454,527 $ 172,090 $ 184,522 $ — $ 1,811,139 Income (loss) before income taxes $ 269,011 $ 24,769 $ 12,366 $ (27,159 ) $ 278,987 Total assets $ 6,607,453 $ 536,652 $ 416,282 $ 101,513 $ 7,661,900 As of and for the three months Revenue $ 1,374,938 $ 153,417 $ 169,620 $ — $ 1,697,975 Income (loss) before income taxes $ 231,534 $ 21,983 $ 11,711 $ (23,808 ) $ 241,420 Total assets $ 6,298,849 $ 486,965 $ 383,034 $ 118,356 $ 7,287,204 (1) Corporate assets include cash and marketable securities in all periods. |
Supplemental Guarantor Inform_2
Supplemental Guarantor Information (Tables) | 3 Months Ended |
Aug. 31, 2019 | |
Condensed Financial Information Disclosure [Abstract] | |
Consolidating Condensed Income Statement | Consolidating Condensed Income Statement Three Months Ended August 31, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Corporation Consolidated Revenue: Uniform rental and facility services $ — $ 1,158,891 $ 190,735 $ 105,394 $ (493 ) $ 1,454,527 Other — 582,976 97 23,246 (249,707 ) 356,612 Equity in net income of affiliates 250,812 — — — (250,812 ) — Total revenue 250,812 1,741,867 190,832 128,640 (501,012 ) 1,811,139 Costs and expenses (income): Cost of uniform rental and facility services — 621,881 111,734 65,595 (30,534 ) 768,676 Cost of other — 403,484 (22,677 ) 17,699 (205,185 ) 193,321 Selling and administrative expenses — 599,403 (84,257 ) 34,454 (6,604 ) 542,996 Operating income 250,812 117,099 186,032 10,892 (258,689 ) 306,146 Interest (income) expense — (150 ) 1 (14 ) 1 (162 ) Interest expense (income) — 27,360 (53 ) 14 — 27,321 Income before income taxes 250,812 89,889 186,084 10,892 (258,690 ) 278,987 Income taxes — 8,201 16,978 3,021 (25 ) 28,175 Net income $ 250,812 $ 81,688 $ 169,106 $ 7,871 $ (258,665 ) $ 250,812 Consolidating Condensed Income Statement Three Months Ended August 31, 2018 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Corporation Consolidated Revenue: Uniform rental and facility services $ — $ 1,139,129 $ 183,163 $ 99,683 $ (47,037 ) $ 1,374,938 Other — 491,290 43 24,332 (192,628 ) 323,037 Equity in net income of affiliates 212,547 — — — (212,547 ) — Total revenue 212,547 1,630,419 183,206 124,015 (452,212 ) 1,697,975 Costs and expenses (income): Cost of uniform rental and facility services — 643,741 109,550 64,013 (70,851 ) 746,453 Cost of other — 341,333 (22,029 ) 18,142 (160,636 ) 176,810 Selling and administrative expenses — 544,910 (64,621 ) 34,363 (10,018 ) 504,634 G&K Services, Inc. integration expenses — 2,676 1,863 311 — 4,850 Operating income 212,547 97,759 158,443 7,186 (210,707 ) 265,228 Interest income — (209 ) (272 ) (16 ) 1 (496 ) Interest expense (income) — 24,661 (362 ) 5 — 24,304 Income before income taxes 212,547 73,307 159,077 7,197 (210,708 ) 241,420 Income taxes — 10,663 16,044 2,187 (21 ) 28,873 Income from continuing operations 212,547 62,644 143,033 5,010 (210,687 ) 212,547 Loss from discontinued operations, net of tax (32 ) (32 ) — — 32 (32 ) Net income $ 212,515 $ 62,612 $ 143,033 $ 5,010 $ (210,655 ) $ 212,515 |
Consolidating Condensed Statement of Comprehensive Income | Consolidating Condensed Statement of Comprehensive Income Three Months Ended August 31, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Corporation Consolidated Net income $ 250,812 $ 81,688 $ 169,106 $ 7,871 $ (258,665 ) $ 250,812 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments 6,724 — — 6,724 (6,724 ) 6,724 Change in fair value of interest rate lock agreements (29,903 ) (29,903 ) — — 29,903 (29,903 ) Amortization of interest rate lock agreements (295 ) (295 ) — — 295 (295 ) Other comprehensive (loss) income (23,474 ) (30,198 ) — 6,724 23,474 (23,474 ) Comprehensive income $ 227,338 $ 51,490 $ 169,106 $ 14,595 $ (235,191 ) $ 227,338 Consolidating Condensed Statement of Comprehensive Income Three Months Ended August 31, 2018 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Corporation Consolidated Net income $ 212,515 $ 62,612 $ 143,033 $ 5,010 $ (210,655 ) $ 212,515 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments (3,019 ) — — (3,019 ) 3,019 (3,019 ) Change in fair value of interest rate lock agreements (3,168 ) (3,168 ) — — 3,168 (3,168 ) Amortization of interest rate lock agreements (295 ) (295 ) — — 295 (295 ) Other comprehensive loss (6,482 ) (3,463 ) — (3,019 ) 6,482 (6,482 ) Comprehensive income $ 206,033 $ 59,149 $ 143,033 $ 1,991 $ (204,173 ) $ 206,033 |
Consolidating Condensed Balance Sheet | Consolidating Condensed Balance Sheet As of August 31, 2019 (In thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 61,965 $ 14,788 $ 25,378 $ — $ 102,131 Accounts receivable, net — 734,268 113,838 69,429 — 917,535 Inventories, net — 287,373 28,178 20,739 — 336,290 Uniforms and other rental items in service — 657,277 91,592 61,534 (14,216 ) 796,187 Prepaid expenses and other current assets — 82,635 35,907 19,133 — 137,675 Total current assets — 1,823,518 284,303 196,213 (14,216 ) 2,289,818 Property and equipment, net — 958,285 367,853 96,213 — 1,422,351 Investments (1) 321,083 3,588,963 981,713 1,718,870 (6,401,642 ) 208,987 Goodwill — — 2,589,592 260,133 (112 ) 2,849,613 Service contracts, net — 416,583 — 66,394 — 482,977 Operating lease right-of-use assets, net — 133,401 13,904 15,784 — 163,089 Other assets, net 2,264,376 216,985 5,606,035 1,507 (7,843,838 ) 245,065 $ 2,585,459 $ 7,137,735 $ 9,843,400 $ 2,355,114 $ (14,259,808 ) $ 7,661,900 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ (465,247 ) $ (2,099,057 ) $ 2,818,307 $ (54,052 ) $ 37,291 $ 237,242 Accrued compensation and related liabilities — 59,152 31,311 8,737 — 99,200 Accrued liabilities — 86,128 290,891 18,397 — 395,416 Income taxes, current — 235 14,236 (5,233 ) — 9,238 Operating lease liabilities, current — 34,255 4,320 4,435 — 43,010 Debt due within one year — 338,776 — — — 338,776 Total current liabilities (465,247 ) (1,580,511 ) 3,159,065 (27,716 ) 37,291 1,122,882 Long-term liabilities: Debt due after one year — 2,538,057 — — — 2,538,057 Deferred income taxes — 306,142 99,774 30,839 — 436,755 Operating lease liabilities — 103,847 10,093 11,744 — 125,684 Accrued liabilities — 156,466 214,977 16,373 — 387,816 Total long-term liabilities — 3,104,512 324,844 58,956 — 3,488,312 Total shareholders’ equity 3,050,706 5,613,734 6,359,491 2,323,874 (14,297,099 ) 3,050,706 $ 2,585,459 $ 7,137,735 $ 9,843,400 $ 2,355,114 $ (14,259,808 ) $ 7,661,900 (1) Investments include inter-company investment activity. Corp 2 and Subsidiary Guarantors hold $ 19.6 million and $ 189.4 million , respectively, of the $ 209.0 million consolidated net investments. Consolidating Condensed Balance Sheet As of May 31, 2019 (In thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ 54,963 $ 13,151 $ 28,531 $ — $ 96,645 Accounts receivable, net — 719,914 121,803 68,403 — 910,120 Inventories, net — 278,666 35,081 20,842 — 334,589 Uniforms and other rental items in service — 645,862 90,458 60,061 (12,248 ) 784,133 Income taxes, current — (9,728 ) 11,722 5,481 — 7,475 Prepaid expenses and other current assets — 81,117 20,334 1,867 — 103,318 Total current assets — 1,770,794 292,549 185,185 (12,248 ) 2,236,280 Property and equipment, net — 948,830 369,006 112,849 — 1,430,685 Investments (1) 321,083 3,589,234 964,802 1,716,870 (6,399,643 ) 192,346 Goodwill — — 2,586,406 256,147 (112 ) 2,842,441 Service contracts, net — 427,437 — 67,158 — 494,595 Other assets, net 2,216,391 211,102 5,424,413 1,716 (7,613,307 ) 240,315 $ 2,537,474 $ 6,947,397 $ 9,637,176 $ 2,339,925 $ (14,025,310 ) $ 7,436,662 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ (465,247 ) $ (2,090,954 ) $ 2,793,558 $ (48,769 ) $ 37,432 $ 226,020 Accrued compensation and related liabilities — 117,404 26,870 11,235 — 155,509 Accrued liabilities — 84,296 328,267 21,377 — 433,940 Debt due within one year — 312,264 — — — 312,264 Total current liabilities (465,247 ) (1,576,990 ) 3,148,695 (16,157 ) 37,432 1,127,733 Long-term liabilities: Debt due after one year — 2,537,507 — — — 2,537,507 Deferred income taxes — 307,334 100,162 30,683 — 438,179 Accrued liabilities — 116,469 197,934 16,119 — 330,522 Total long-term liabilities — 2,961,310 298,096 46,802 — 3,306,208 Total shareholders’ equity 3,002,721 5,563,077 6,190,385 2,309,280 (14,062,742 ) 3,002,721 $ 2,537,474 $ 6,947,397 $ 9,637,176 $ 2,339,925 $ (14,025,310 ) $ 7,436,662 (1) Investments include inter-company investment activity. Corp 2 and Subsidiary Guarantors hold $19.8 million and $172.5 million , respectively, of the $192.3 million consolidated net investments. |
Consolidating Condensed Statement of Cash Flows | Consolidating Condensed Statement of Cash Flows Three Months Ended August 31, 2019 (In thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 250,812 $ 81,688 $ 169,106 $ 7,871 $ (258,665 ) $ 250,812 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation — 37,056 16,032 3,638 — 56,726 Amortization of intangible assets and capitalized contract costs — 31,949 1,279 2,040 — 35,268 Stock-based compensation 40,395 — — — — 40,395 Deferred income taxes — 8,652 (382 ) (360 ) — 7,910 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (14,317 ) 7,965 (284 ) — (6,636 ) Inventories, net — (8,686 ) 7,359 (399 ) — (1,726 ) Uniforms and other rental items in service — (11,416 ) (1,135 ) (722 ) 1,968 (11,305 ) Prepaid expenses and other current assets and capitalized contract costs — (26,355 ) (15,462 ) (111 ) — (41,928 ) Accounts payable — (8,103 ) 28,923 (7,322 ) (141 ) 13,357 Accrued compensation and related liabilities — (58,252 ) 2,120 (2,586 ) — (58,718 ) Accrued liabilities and other — 5,833 (27,074 ) (2,841 ) — (24,082 ) Income taxes, current — (9,493 ) 25,974 347 — 16,828 Net cash provided by (used in) operating activities 291,207 28,556 214,705 (729 ) (256,838 ) 276,901 Cash flows from investing activities: Capital expenditures — (46,605 ) (14,916 ) (3,222 ) — (64,743 ) Redemptions (purchases) of investments — 271 (9,662 ) — — (9,391 ) Acquisitions of businesses, net of cash acquired — (3,896 ) — — — (3,896 ) Other, net (72,292 ) 3,368 (188,490 ) 467 256,838 (109 ) Net cash used in investing activities (72,292 ) (46,862 ) (213,068 ) (2,755 ) 256,838 (78,139 ) Cash flows from financing activities: Issuance of commercial paper, net — 26,500 — — — 26,500 Proceeds from exercise of stock-based compensation awards 37,915 — — — — 37,915 Repurchase of common stock (256,830 ) — — — — (256,830 ) Other, net — (1,192 ) — — — (1,192 ) Net cash (used in) provided by financing activities (218,915 ) 25,308 — — — (193,607 ) Effect of exchange rate changes on cash and cash equivalents — — — 331 — 331 Net increase (decrease) in cash and cash equivalents — 7,002 1,637 (3,153 ) — 5,486 Cash and cash equivalents at beginning of period — 54,963 13,151 28,531 — 96,645 Cash and cash equivalents at end of period $ — $ 61,965 $ 14,788 $ 25,378 $ — $ 102,131 Consolidating Condensed Statement of Cash Flows Three Months Ended August 31, 2018 (In thousands) Cintas Corporation Corp. 2 Subsidiary Guarantors Non- Guarantors Eliminations Cintas Corporation Consolidated Cash flows from operating activities: Net income $ 212,515 $ 62,612 $ 143,033 $ 5,010 $ (210,655 ) $ 212,515 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation — 33,866 15,427 3,452 — 52,745 Amortization of intangible assets and capitalized contract costs — 30,156 1,278 2,116 — 33,550 Stock-based compensation 46,172 — — — — 46,172 Deferred income taxes — 5,388 2,122 1,512 — 9,022 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (12,891 ) 3,381 (5,541 ) — (15,051 ) Inventories, net — (37,207 ) 2,700 660 (782 ) (34,629 ) Uniforms and other rental items in service — (10,800 ) (7,904 ) (2,936 ) (1,379 ) (23,019 ) Prepaid expenses and other current assets and capitalized contract costs — (25,060 ) (21,838 ) (32 ) — (46,930 ) Accounts payable — 41,784 (37,657 ) (4,758 ) 302 (329 ) Accrued compensation and related liabilities — (41,910 ) (10,982 ) (3,294 ) — (56,186 ) Accrued liabilities and other — 2,305 (26,295 ) (3,566 ) — (27,556 ) Income taxes, current — 5,022 8,474 (815 ) — 12,681 Net cash provided by (used in) operating activities 258,687 53,265 71,739 (8,192 ) (212,514 ) 162,985 Cash flows from investing activities: Capital expenditures — (43,966 ) (17,979 ) (2,583 ) — (64,528 ) Proceeds from redemption of marketable securities — 1,554 4 — — 1,558 Acquisitions of businesses, net of cash acquired — (7,613 ) — — — (7,613 ) Other, net (146,731 ) (4,048 ) (65,509 ) 2,582 213,504 (202 ) Net cash used in investing activities (146,731 ) (54,073 ) (83,484 ) (1 ) 213,504 (70,785 ) Cash flows from financing activities: Proceeds from exercise of stock-based compensation awards 27,512 — — — — 27,512 Repurchase of common stock (139,468 ) — — — — (139,468 ) Other, net — 2,909 — (2,471 ) (990 ) (552 ) Net cash (used in) provided by financing activities (111,956 ) 2,909 — (2,471 ) (990 ) (112,508 ) Effect of exchange rate changes on cash and cash equivalents — — — (60 ) — (60 ) Net increase (decrease) in cash and cash equivalents — 2,101 (11,745 ) (10,724 ) — (20,368 ) Cash and cash equivalents at beginning of period — 44,499 60,310 33,915 — 138,724 Cash and cash equivalents at end of period $ — $ 46,600 $ 48,565 $ 23,191 $ — $ 118,356 |
Basis of Presentation - Schedul
Basis of Presentation - Schedule of Inventory (Details) - USD ($) $ in Thousands | Aug. 31, 2019 | May 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 16,541 | $ 17,812 |
Work in process | 25,618 | 28,820 |
Finished goods | 294,131 | 287,957 |
Inventories, net | $ 336,290 | $ 334,589 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands | Jun. 01, 2019 | Aug. 31, 2019 | May 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Reserve for obsolete inventory | $ 33,400 | $ 32,700 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets, net | 163,089 | ||
Operating lease liabilities | $ 168,694 | ||
Other Accumulated Comprehensive Loss | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Reclassification adjustment for stranded income tax effects | $ 2,000 | ||
Retained Earnings | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Reclassification adjustment for stranded income tax effects | (2,000) | ||
Accounting Standards Update 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets, net | 168,000 | ||
Operating lease liabilities | $ 173,400 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Sources of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 1,811,139 | $ 1,697,975 |
Uniform Rental and Facility Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,454,527 | 1,374,938 |
First Aid and Safety Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 172,090 | 153,417 |
Fire Protection Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 110,126 | 98,109 |
Uniform Direct Sales | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 74,396 | $ 71,511 |
Revenue | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of revenue | 100.00% | 100.00% |
Revenue | Uniform Rental and Facility Services | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of revenue | 80.30% | 81.00% |
Revenue | First Aid and Safety Services | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of revenue | 9.50% | 9.00% |
Revenue | Fire Protection Services | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of revenue | 6.10% | 5.80% |
Revenue | Uniform Direct Sales | ||
Disaggregation of Revenue [Line Items] | ||
Percentage of revenue | 4.10% | 4.20% |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Aug. 31, 2019 | Aug. 31, 2018 | May 31, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Deferred commissions, current | $ 71.3 | $ 69.6 | |
Deferred commissions, noncurrent | 212 | $ 206 | |
Amortization of deferred commissions | $ 18.8 | $ 17.1 | |
Revenue | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Percentage of revenue | 100.00% | 100.00% | |
Uniform Rental and Facility Services, First Aid and Safety Services and Fire Protection Services | Revenue | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Percentage of revenue | 95.00% | ||
Uniform Direct Sales | Revenue | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Percentage of revenue | 5.00% |
Leases - Operating Lease Cost a
Leases - Operating Lease Cost and Additional Lease Information (Details) $ in Thousands | 3 Months Ended |
Aug. 31, 2019USD ($) | |
Lease cost | |
Operating lease costs including short-term lease expense and variable lease costs, which were immaterial in the quarter | $ 17,200 |
Operating cash flow impacts | |
Cash paid for amounts included in the measurement of operating lease liabilities | 12,342 |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ 6,828 |
Weighted-average remaining lease term - operating leases | 5 years 4 months 9 days |
Weighted-average discount rate - operating leases | 2.68% |
Leases - Contractual Future Min
Leases - Contractual Future Minimum Lease Payments (Details) $ in Thousands | Aug. 31, 2019USD ($) |
Leases [Abstract] | |
2020 (remaining nine months) | $ 35,753 |
2021 | 40,981 |
2022 | 31,877 |
2023 | 24,487 |
2024 | 15,691 |
Thereafter | 33,065 |
Total payments | 181,854 |
Less interest | (13,160) |
Total present value of lease payments | $ 168,694 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Instruments on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Aug. 31, 2019 | May 31, 2019 |
Fair value on a recurring basis | ||
Cash and cash equivalents | $ 102,131 | $ 96,645 |
Total assets at fair value | 102,131 | 96,645 |
Long-term accrued liabilities: | ||
Total liabilities at fair value | 76,141 | 36,393 |
Interest rate lock agreements | ||
Long-term accrued liabilities: | ||
Interest rate lock agreements | 76,141 | 36,393 |
Level 1 | ||
Fair value on a recurring basis | ||
Cash and cash equivalents | 102,131 | 96,645 |
Total assets at fair value | 102,131 | 96,645 |
Long-term accrued liabilities: | ||
Total liabilities at fair value | 0 | 0 |
Level 1 | Interest rate lock agreements | ||
Long-term accrued liabilities: | ||
Interest rate lock agreements | 0 | 0 |
Level 2 | ||
Fair value on a recurring basis | ||
Cash and cash equivalents | 0 | 0 |
Total assets at fair value | 0 | 0 |
Long-term accrued liabilities: | ||
Total liabilities at fair value | 76,141 | 36,393 |
Level 2 | Interest rate lock agreements | ||
Long-term accrued liabilities: | ||
Interest rate lock agreements | 76,141 | 36,393 |
Level 3 | ||
Fair value on a recurring basis | ||
Cash and cash equivalents | 0 | 0 |
Total assets at fair value | 0 | 0 |
Long-term accrued liabilities: | ||
Total liabilities at fair value | 0 | 0 |
Level 3 | Interest rate lock agreements | ||
Long-term accrued liabilities: | ||
Interest rate lock agreements | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | Aug. 31, 2019 | May 31, 2019 |
Fair Value Disclosures [Abstract] | ||
Marketable securities | $ 0 | $ 0 |
Investments (Details)
Investments (Details) - USD ($) | 3 Months Ended | ||
Aug. 31, 2019 | Aug. 31, 2018 | May 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |||
Investments | $ 208,987,000 | $ 192,346,000 | |
Cash surrender value of insurance policies | 187,400,000 | 170,500,000 | |
Equity method investments | 18,400,000 | 18,600,000 | |
Cost method investments | 3,200,000 | $ 3,200,000 | |
Losses due to impairment | $ 0 | $ 0 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2018 | |
Basic Earnings per Share from Continuing Operations | ||
Income from continuing operations | $ 250,812 | $ 212,547 |
Less: income from continuing operations allocated to participating securities | 2,016 | 2,945 |
Income from continuing operations available to common shareholders | $ 248,796 | $ 209,602 |
Basic weighted average common shares outstanding (in shares) | 103,543 | 106,835 |
Basic earnings per share from continuing operations (in dollars per share) | $ 2.40 | $ 1.96 |
Diluted Earnings per Share from Continuing Operations | ||
Income from continuing operations | $ 250,812 | $ 212,547 |
Less: income from continuing operations allocated to participating securities | 2,016 | 2,945 |
Income from continuing operations available to common shareholders | $ 248,796 | $ 209,602 |
Basic weighted average common shares outstanding (in shares) | 103,543 | 106,835 |
Effect of dilutive securities - employee stock options (in shares) | 3,540 | 3,813 |
Diluted weighted average common shares outstanding (in shares) | 107,083 | 110,648 |
Diluted earnings per share from continuing operations (in dollars per share) | $ 2.32 | $ 1.89 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions | 3 Months Ended | 11 Months Ended | ||
Aug. 31, 2019 | Aug. 31, 2018 | Oct. 08, 2019 | Oct. 30, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Basic earnings from discontinued operations (in dollars per share) | $ 0 | $ 0 | ||
Diluted earnings from discontinued operations (in dollars per share) | $ 0 | $ 0 | ||
Options granted and excluded from the computation of diluted earnings per share (in shares) | 0.2 | 0.3 | ||
Stock purchased under share buyback | $ 256,830,000 | $ 139,468,000 | ||
Employee Payroll Taxes Due on Restricted Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock purchased under share buyback (shares) | 0.2 | |||
Stock purchased under share buyback, average price per share (in dollars per share) | $ 260.83 | |||
Stock purchased under share buyback | $ 63,700,000 | |||
October 30, 2018 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Share buyback program, authorized amount | $ 1,000,000,000 | |||
Stock purchased under share buyback (shares) | 0.8 | |||
Stock purchased under share buyback, average price per share (in dollars per share) | $ 230.66 | |||
Stock purchased under share buyback | $ 193,100,000 | |||
Subsequent Event | October 30, 2018 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Stock purchased under share buyback (shares) | 3.5 | |||
Stock purchased under share buyback, average price per share (in dollars per share) | $ 209.82 | |||
Stock purchased under share buyback | $ 736,500,000 |
Goodwill, Service Contracts a_3
Goodwill, Service Contracts and Other Assets - Goodwill (Details) $ in Thousands | 3 Months Ended |
Aug. 31, 2019USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 2,842,441 |
Goodwill acquired | 3,186 |
Foreign currency translation | 3,986 |
Ending balance | 2,849,613 |
Uniform Rental and Facility Services | |
Goodwill [Roll Forward] | |
Beginning balance | 2,496,402 |
Goodwill acquired | 0 |
Foreign currency translation | 3,675 |
Ending balance | 2,500,077 |
First Aid and Safety Services | |
Goodwill [Roll Forward] | |
Beginning balance | 243,459 |
Goodwill acquired | 164 |
Foreign currency translation | 296 |
Ending balance | 243,919 |
All Other | |
Goodwill [Roll Forward] | |
Beginning balance | 102,580 |
Goodwill acquired | 3,022 |
Foreign currency translation | 15 |
Ending balance | $ 105,617 |
Goodwill, Service Contracts a_4
Goodwill, Service Contracts and Other Assets - Service Contracts (Details) $ in Thousands | 3 Months Ended |
Aug. 31, 2019USD ($) | |
Service contracts [Roll Forward] | |
Beginning balance | $ 494,595 |
Service contracts acquired | 1,458 |
Service contracts amortization | (14,131) |
Foreign currency translation | 1,055 |
Ending balance | 482,977 |
Uniform Rental and Facility Services | |
Service contracts [Roll Forward] | |
Beginning balance | 445,016 |
Service contracts acquired | 0 |
Service contracts amortization | (11,783) |
Foreign currency translation | 1,030 |
Ending balance | 434,263 |
First Aid and Safety Services | |
Service contracts [Roll Forward] | |
Beginning balance | 23,380 |
Service contracts acquired | 325 |
Service contracts amortization | (970) |
Foreign currency translation | 25 |
Ending balance | 22,760 |
All Other | |
Service contracts [Roll Forward] | |
Beginning balance | 26,199 |
Service contracts acquired | 1,133 |
Service contracts amortization | (1,378) |
Foreign currency translation | 0 |
Ending balance | $ 25,954 |
Goodwill, Service Contracts a_5
Goodwill, Service Contracts and Other Assets - Information Regarding Service Contracts and Other Assets (Details) - USD ($) $ in Thousands | Aug. 31, 2019 | May 31, 2019 |
Information regarding service contracts and other assets | ||
Service contracts, net | $ 482,977 | $ 494,595 |
Other assets, carrying amount | 395,032 | 369,630 |
Other assets, accumulated amortization | 149,967 | 129,315 |
Other assets, net | 245,065 | 240,315 |
Capitalized contract costs | ||
Information regarding service contracts and other assets | ||
Other assets, carrying amount | 301,854 | 277,016 |
Other assets, accumulated amortization | 89,840 | 71,062 |
Other assets, net | 212,014 | 205,954 |
Other assets current | 71,300 | 69,600 |
Noncompete and consulting agreements | ||
Information regarding service contracts and other assets | ||
Other assets, carrying amount | 42,494 | 42,308 |
Other assets, accumulated amortization | 40,740 | 40,524 |
Other assets, net | 1,754 | 1,784 |
Other | ||
Information regarding service contracts and other assets | ||
Other assets, carrying amount | 50,684 | 50,306 |
Other assets, accumulated amortization | 19,387 | 17,729 |
Other assets, net | 31,297 | 32,577 |
Service Contracts | ||
Information regarding service contracts and other assets | ||
Service contracts, carrying amount | 931,682 | 928,635 |
Service contracts, accumulated amortization | 448,705 | 434,040 |
Service contracts, net | $ 482,977 | $ 494,595 |
Goodwill, Service Contracts a_6
Goodwill, Service Contracts and Other Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2018 | |
Goodwill, Service Contracts and Other Assets [Abstract] | ||
Amortization expense for service contracts and other assets | $ 34,600 | $ 33,000 |
2020 (remaining nine months) | 100,846 | |
2021 | 120,954 | |
2022 | 109,078 | |
2023 | 90,379 | |
2024 | 79,144 | |
Thereafter | 274,800 | |
Total future amortization expense | $ 775,201 |
Debt, Derivatives and Hedging_3
Debt, Derivatives and Hedging Activities - Summary of Debt Outstanding (Details) - USD ($) | Aug. 31, 2019 | May 31, 2019 |
Debt due within one year | ||
Debt due within one year | $ 338,776,000 | $ 312,264,000 |
Debt issuance costs | (224,000) | (236,000) |
Debt due after one year | ||
Debt issuance costs | (15,408,000) | (16,150,000) |
Total debt due after one year | 2,538,057,000 | 2,537,507,000 |
Term loan due 2020 | ||
Debt due within one year | ||
Debt due within one year | $ 200,000,000 | 200,000,000 |
Debt due after one year | ||
Variable borrowing rate | 2.88% | |
Senior notes | ||
Debt due after one year | ||
Face value | $ 2,550,000,000 | |
Senior notes | Senior Notes, 4.30%, 2022 Maturity | ||
Debt due after one year | ||
Debt due after one year, gross | $ 250,000,000 | 250,000,000 |
Stated interest rate | 4.30% | |
Senior notes | Senior Notes, 2.90%, 2022 Maturity | ||
Debt due after one year | ||
Debt due after one year, gross | $ 650,000,000 | 650,000,000 |
Stated interest rate | 2.90% | |
Senior notes | Senior Notes, 3.25%, 2023 Maturity | ||
Debt due after one year | ||
Debt due after one year, gross | $ 300,000,000 | 300,000,000 |
Stated interest rate | 3.25% | |
Senior notes | Senior Notes, 2.78%, 2023 Maturity | ||
Debt due after one year | ||
Debt due after one year, gross | $ 51,576,000 | 51,684,000 |
Stated interest rate | 2.78% | |
Senior notes | Senior Notes, 2.78%, 2023 Maturity | G&K Services | ||
Debt due after one year | ||
Stated interest rate | 3.73% | |
Face value | $ 50,000,000 | |
Senior notes | Senior Notes, 3.11%, 2025 Maturity | ||
Debt due after one year | ||
Debt due after one year, gross | $ 51,889,000 | 51,973,000 |
Stated interest rate | 3.11% | |
Senior notes | Senior Notes, 3.11%, 2025 Maturity | G&K Services | ||
Debt due after one year | ||
Stated interest rate | 3.88% | |
Face value | $ 50,000,000 | |
Senior notes | Senior Notes, 3.70%, 2027 Maturity | ||
Debt due after one year | ||
Debt due after one year, gross | $ 1,000,000,000 | 1,000,000,000 |
Stated interest rate | 3.70% | |
Senior notes | Senior Notes, 6.15%, 2037 Maturity | ||
Debt due after one year | ||
Debt due after one year, gross | $ 250,000,000 | 250,000,000 |
Stated interest rate | 6.15% | |
Commercial paper | ||
Debt due within one year | ||
Debt due within one year | $ 139,000,000 | $ 112,500,000 |
Debt due after one year | ||
Variable borrowing rate | 2.36% | 2.68% |
Debt, Derivatives and Hedging_4
Debt, Derivatives and Hedging Activities - Narrative (Details) - USD ($) | 3 Months Ended | ||||
Aug. 31, 2019 | Aug. 31, 2018 | May 31, 2019 | May 24, 2019 | May 23, 2019 | |
Debt Instrument [Line Items] | |||||
Debt, carrying value | $ 2,889,000,000 | $ 2,866,200,000 | |||
Debt, fair value | 3,115,000,000 | 2,998,700,000 | |||
Debt due within one year | 338,776,000 | 312,264,000 | |||
Amortization of interest rate lock agreements | (300,000) | $ (300,000) | |||
Treasury Lock | |||||
Debt Instrument [Line Items] | |||||
Notional amount | 500,000,000 | ||||
Interest rate lock agreements | $ 76,100,000 | 36,400,000 | |||
Term loan due 2020 | |||||
Debt Instrument [Line Items] | |||||
Variable borrowing rate | 2.88% | ||||
Revolving credit facility | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility, maximum borrowing capacity with accordion feature | $ 1,000,000,000 | $ 600,000,000 | |||
Revolving credit facility amount outstanding | $ 0 | 0 | |||
Revolving credit facility | Term loan due 2020 | |||||
Debt Instrument [Line Items] | |||||
Revolving credit facility, maximum borrowing capacity with accordion feature | 200,000,000 | ||||
Annual extension term | 12 months | ||||
Extension term | 4 years | ||||
Credit agreement | |||||
Debt Instrument [Line Items] | |||||
Debt amendment, increase limit (up to) | $ 250,000,000 | ||||
Commercial paper | |||||
Debt Instrument [Line Items] | |||||
Issuance of commercial paper, net | $ 26,500,000 | ||||
Debt due within one year | $ 139,000,000 | $ 112,500,000 | |||
Variable borrowing rate | 2.36% | 2.68% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Aug. 31, 2019 | Aug. 31, 2018 | May 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Unrecognized tax benefits | $ 38.6 | $ 37.3 | |
Effective tax rate | 10.10% | 12.00% |
Pension Plans (Details)
Pension Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Interest cost | $ 720 | $ 781 |
Expected return on assets | (740) | (721) |
Net periodic benefit cost | $ (20) | $ 60 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Schedule of Changes in Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Aug. 31, 2019 | Aug. 31, 2018 | Jun. 01, 2019 | Jun. 01, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance | $ 3,002,721 | $ 3,016,526 | ||
Other comprehensive income (loss) before reclassifications | (23,179) | (6,187) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (295) | (295) | ||
Other comprehensive loss | (23,474) | (6,482) | ||
Cumulative effect of change in accounting principle | $ (833) | $ 189,192 | ||
Balance | 3,050,706 | 3,345,968 | ||
Foreign Currency | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance | (15,022) | 6,550 | ||
Other comprehensive income (loss) before reclassifications | 6,724 | (3,019) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | ||
Other comprehensive loss | 6,724 | (3,019) | ||
Cumulative effect of change in accounting principle | 0 | |||
Balance | (8,298) | 3,531 | ||
Unrealized Loss on Interest Rate Hedges | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance | (18,389) | 10,449 | ||
Other comprehensive income (loss) before reclassifications | (29,903) | (3,168) | ||
Amounts reclassified from accumulated other comprehensive income (loss) | (295) | (295) | ||
Other comprehensive loss | (30,198) | (3,463) | ||
Cumulative effect of change in accounting principle | 2,058 | |||
Balance | (46,529) | 6,986 | ||
Other | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance | (5,741) | (656) | ||
Other comprehensive income (loss) before reclassifications | 0 | 0 | ||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | ||
Other comprehensive loss | 0 | 0 | ||
Cumulative effect of change in accounting principle | (83) | |||
Balance | (5,824) | (656) | ||
Total | ||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||
Balance | (39,152) | 16,343 | ||
Other comprehensive loss | (23,474) | (6,482) | ||
Cumulative effect of change in accounting principle | $ 1,975 | |||
Balance | $ (60,651) | $ 9,861 |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (Loss) - Schedule of Reclassifications Out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest expense | $ 27,321 | $ 24,304 |
Income taxes | (28,175) | (28,873) |
Net income | 250,812 | 212,547 |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Unrealized Loss on Interest Rate Hedges | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Income taxes | (179) | (179) |
Net income | 295 | 295 |
Amount Reclassified from Accumulated Other Comprehensive Income (Loss) | Unrealized Loss on Interest Rate Hedges | Interest Rate Locks | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest expense | $ 474 | $ 474 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 3 Months Ended |
Aug. 31, 2019segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segment Information - Informati
Segment Information - Information Related to Operating Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Aug. 31, 2019 | Aug. 31, 2018 | May 31, 2019 | |
Segment Reporting Information | |||
Revenue | $ 1,811,139 | $ 1,697,975 | |
Income (loss) before income taxes | 278,987 | 241,420 | |
Total assets | 7,661,900 | 7,287,204 | $ 7,436,662 |
Operating Segments | Uniform Rental and Facility Services | |||
Segment Reporting Information | |||
Revenue | 1,454,527 | 1,374,938 | |
Income (loss) before income taxes | 269,011 | 231,534 | |
Total assets | 6,607,453 | 6,298,849 | |
Operating Segments | First Aid and Safety Services | |||
Segment Reporting Information | |||
Revenue | 172,090 | 153,417 | |
Income (loss) before income taxes | 24,769 | 21,983 | |
Total assets | 536,652 | 486,965 | |
Operating Segments | All Other | |||
Segment Reporting Information | |||
Revenue | 184,522 | 169,620 | |
Income (loss) before income taxes | 12,366 | 11,711 | |
Total assets | 416,282 | 383,034 | |
Corporate | |||
Segment Reporting Information | |||
Revenue | 0 | 0 | |
Income (loss) before income taxes | (27,159) | (23,808) | |
Total assets | $ 101,513 | $ 118,356 |
G&K Services, Inc. Integratio_2
G&K Services, Inc. Integration Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Aug. 31, 2019 | Aug. 31, 2018 | May 31, 2019 | |
Business Acquisition [Line Items] | |||
Integration related costs | $ 0 | $ 4,850 | |
G&K Services | |||
Business Acquisition [Line Items] | |||
Integration related costs | 0 | 4,900 | |
Accrued employee termination benefits | 2,700 | $ 2,800 | |
Payments for employee termination benefits | $ 100 | $ 2,400 |
Supplemental Guarantor Inform_3
Supplemental Guarantor Information - Narrative (Details) | Aug. 31, 2019USD ($) |
Debt Instrument [Line Items] | |
Commercial paper | $ 139,000,000 |
Credit Agreement | Term Loan Facility | |
Debt Instrument [Line Items] | |
Term loan | 200,000,000 |
Senior notes | |
Debt Instrument [Line Items] | |
Senior notes | $ 2,550,000,000 |
Supplemental Guarantor Inform_4
Supplemental Guarantor Information - Income Statement (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2018 | |
Revenue: | ||
Revenue | $ 1,811,139 | $ 1,697,975 |
Equity in net income of affiliates | 0 | 0 |
Total revenue | 1,811,139 | 1,697,975 |
Costs and expenses (income): | ||
Selling and administrative expenses | 542,996 | 504,634 |
G&K Services, Inc. integration expenses | 0 | 4,850 |
Operating income | 306,146 | 265,228 |
Interest (income) expense | (162) | (496) |
Interest expense (income) | 27,321 | 24,304 |
Income before income taxes | 278,987 | 241,420 |
Income taxes | 28,175 | 28,873 |
Income from continuing operations | 250,812 | 212,547 |
Income from discontinued operations, net of tax | 0 | (32) |
Net income | 250,812 | 212,515 |
Eliminations | ||
Revenue: | ||
Equity in net income of affiliates | (250,812) | (212,547) |
Total revenue | (501,012) | (452,212) |
Costs and expenses (income): | ||
Selling and administrative expenses | (6,604) | (10,018) |
G&K Services, Inc. integration expenses | 0 | |
Operating income | (258,689) | (210,707) |
Interest (income) expense | 1 | 1 |
Interest expense (income) | 0 | 0 |
Income before income taxes | (258,690) | (210,708) |
Income taxes | (25) | (21) |
Income from continuing operations | (258,665) | (210,687) |
Income from discontinued operations, net of tax | 32 | |
Net income | (258,665) | (210,655) |
Cintas Corporation | Reportable Legal Entities | ||
Revenue: | ||
Equity in net income of affiliates | 250,812 | 212,547 |
Total revenue | 250,812 | 212,547 |
Costs and expenses (income): | ||
Selling and administrative expenses | 0 | 0 |
G&K Services, Inc. integration expenses | 0 | |
Operating income | 250,812 | 212,547 |
Interest (income) expense | 0 | 0 |
Interest expense (income) | 0 | 0 |
Income before income taxes | 250,812 | 212,547 |
Income taxes | 0 | 0 |
Income from continuing operations | 250,812 | 212,547 |
Income from discontinued operations, net of tax | (32) | |
Net income | 250,812 | 212,515 |
Corp. 2 | Reportable Legal Entities | ||
Revenue: | ||
Equity in net income of affiliates | 0 | 0 |
Total revenue | 1,741,867 | 1,630,419 |
Costs and expenses (income): | ||
Selling and administrative expenses | 599,403 | 544,910 |
G&K Services, Inc. integration expenses | 2,676 | |
Operating income | 117,099 | 97,759 |
Interest (income) expense | (150) | (209) |
Interest expense (income) | 27,360 | 24,661 |
Income before income taxes | 89,889 | 73,307 |
Income taxes | 8,201 | 10,663 |
Income from continuing operations | 81,688 | 62,644 |
Income from discontinued operations, net of tax | (32) | |
Net income | 81,688 | 62,612 |
Subsidiary Guarantors | Reportable Legal Entities | ||
Revenue: | ||
Equity in net income of affiliates | 0 | 0 |
Total revenue | 190,832 | 183,206 |
Costs and expenses (income): | ||
Selling and administrative expenses | (84,257) | (64,621) |
G&K Services, Inc. integration expenses | 1,863 | |
Operating income | 186,032 | 158,443 |
Interest (income) expense | 1 | (272) |
Interest expense (income) | (53) | (362) |
Income before income taxes | 186,084 | 159,077 |
Income taxes | 16,978 | 16,044 |
Income from continuing operations | 169,106 | 143,033 |
Income from discontinued operations, net of tax | 0 | |
Net income | 169,106 | 143,033 |
Non- Guarantors | Reportable Legal Entities | ||
Revenue: | ||
Equity in net income of affiliates | 0 | 0 |
Total revenue | 128,640 | 124,015 |
Costs and expenses (income): | ||
Selling and administrative expenses | 34,454 | 34,363 |
G&K Services, Inc. integration expenses | 311 | |
Operating income | 10,892 | 7,186 |
Interest (income) expense | (14) | (16) |
Interest expense (income) | 14 | 5 |
Income before income taxes | 10,892 | 7,197 |
Income taxes | 3,021 | 2,187 |
Income from continuing operations | 7,871 | 5,010 |
Income from discontinued operations, net of tax | 0 | |
Net income | 7,871 | 5,010 |
Uniform Rental and Facility Services | ||
Revenue: | ||
Revenue | 1,454,527 | 1,374,938 |
Cost of revenue | 768,676 | 746,453 |
Uniform Rental and Facility Services | Eliminations | ||
Revenue: | ||
Revenue | (493) | (47,037) |
Cost of revenue | (30,534) | (70,851) |
Uniform Rental and Facility Services | Cintas Corporation | Reportable Legal Entities | ||
Revenue: | ||
Revenue | 0 | 0 |
Cost of revenue | 0 | 0 |
Uniform Rental and Facility Services | Corp. 2 | Reportable Legal Entities | ||
Revenue: | ||
Revenue | 1,158,891 | 1,139,129 |
Cost of revenue | 621,881 | 643,741 |
Uniform Rental and Facility Services | Subsidiary Guarantors | Reportable Legal Entities | ||
Revenue: | ||
Revenue | 190,735 | 183,163 |
Cost of revenue | 111,734 | 109,550 |
Uniform Rental and Facility Services | Non- Guarantors | Reportable Legal Entities | ||
Revenue: | ||
Revenue | 105,394 | 99,683 |
Cost of revenue | 65,595 | 64,013 |
Other | ||
Revenue: | ||
Revenue | 356,612 | 323,037 |
Cost of revenue | 193,321 | 176,810 |
Other | Eliminations | ||
Revenue: | ||
Revenue | (249,707) | (192,628) |
Cost of revenue | (205,185) | (160,636) |
Other | Cintas Corporation | Reportable Legal Entities | ||
Revenue: | ||
Revenue | 0 | 0 |
Cost of revenue | 0 | 0 |
Other | Corp. 2 | Reportable Legal Entities | ||
Revenue: | ||
Revenue | 582,976 | 491,290 |
Cost of revenue | 403,484 | 341,333 |
Other | Subsidiary Guarantors | Reportable Legal Entities | ||
Revenue: | ||
Revenue | 97 | 43 |
Cost of revenue | (22,677) | (22,029) |
Other | Non- Guarantors | Reportable Legal Entities | ||
Revenue: | ||
Revenue | 23,246 | 24,332 |
Cost of revenue | $ 17,699 | $ 18,142 |
Supplemental Guarantor Inform_5
Supplemental Guarantor Information - Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2018 | |
Condensed Consolidating Financial Statements | ||
Net income | $ 250,812 | $ 212,515 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 6,724 | (3,019) |
Change in fair value of interest rate lock agreements | (29,903) | (3,168) |
Amortization of interest rate lock agreements | (295) | (295) |
Other comprehensive loss | (23,474) | (6,482) |
Comprehensive income | 227,338 | 206,033 |
Eliminations | ||
Condensed Consolidating Financial Statements | ||
Net income | (258,665) | (210,655) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | (6,724) | 3,019 |
Change in fair value of interest rate lock agreements | 29,903 | 3,168 |
Amortization of interest rate lock agreements | 295 | 295 |
Other comprehensive loss | 23,474 | 6,482 |
Comprehensive income | (235,191) | (204,173) |
Cintas Corporation | Reportable Legal Entities | ||
Condensed Consolidating Financial Statements | ||
Net income | 250,812 | 212,515 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 6,724 | (3,019) |
Change in fair value of interest rate lock agreements | (29,903) | (3,168) |
Amortization of interest rate lock agreements | (295) | (295) |
Other comprehensive loss | (23,474) | (6,482) |
Comprehensive income | 227,338 | 206,033 |
Corp. 2 | Reportable Legal Entities | ||
Condensed Consolidating Financial Statements | ||
Net income | 81,688 | 62,612 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 0 | 0 |
Change in fair value of interest rate lock agreements | (29,903) | (3,168) |
Amortization of interest rate lock agreements | (295) | (295) |
Other comprehensive loss | (30,198) | (3,463) |
Comprehensive income | 51,490 | 59,149 |
Subsidiary Guarantors | Reportable Legal Entities | ||
Condensed Consolidating Financial Statements | ||
Net income | 169,106 | 143,033 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 0 | 0 |
Change in fair value of interest rate lock agreements | 0 | 0 |
Amortization of interest rate lock agreements | 0 | 0 |
Other comprehensive loss | 0 | 0 |
Comprehensive income | 169,106 | 143,033 |
Non- Guarantors | Reportable Legal Entities | ||
Condensed Consolidating Financial Statements | ||
Net income | 7,871 | 5,010 |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustments | 6,724 | (3,019) |
Change in fair value of interest rate lock agreements | 0 | 0 |
Amortization of interest rate lock agreements | 0 | 0 |
Other comprehensive loss | 6,724 | (3,019) |
Comprehensive income | $ 14,595 | $ 1,991 |
Supplemental Guarantor Inform_6
Supplemental Guarantor Information - Balance Sheet (Details) - USD ($) $ in Thousands | Aug. 31, 2019 | May 31, 2019 | Aug. 31, 2018 | May 31, 2018 |
Current assets: | ||||
Cash and cash equivalents | $ 102,131 | $ 96,645 | ||
Accounts receivable, net | 917,535 | 910,120 | ||
Inventories, net | 336,290 | 334,589 | ||
Uniforms and other rental items in service | 796,187 | 784,133 | ||
Income taxes, current | 0 | 7,475 | ||
Prepaid expenses and other current assets | 137,675 | 103,318 | ||
Total current assets | 2,289,818 | 2,236,280 | ||
Property and equipment, net | 1,422,351 | 1,430,685 | ||
Investments | 208,987 | 192,346 | ||
Goodwill | 2,849,613 | 2,842,441 | ||
Service contracts, net | 482,977 | 494,595 | ||
Operating lease right-of-use assets, net | 163,089 | |||
Other assets, net | 245,065 | 240,315 | ||
Total assets | 7,661,900 | 7,436,662 | $ 7,287,204 | |
Current liabilities: | ||||
Accounts payable | 237,242 | 226,020 | ||
Accrued compensation and related liabilities | 99,200 | 155,509 | ||
Accrued liabilities | 395,416 | 433,940 | ||
Income taxes, current | 9,238 | 0 | ||
Operating lease liabilities, current | 43,010 | |||
Debt due within one year | 338,776 | 312,264 | ||
Total current liabilities | 1,122,882 | 1,127,733 | ||
Long-term liabilities: | ||||
Debt due after one year | 2,538,057 | 2,537,507 | ||
Deferred income taxes | 436,755 | 438,179 | ||
Operating lease liabilities | 125,684 | |||
Accrued liabilities | 387,816 | 330,522 | ||
Total long-term liabilities | 3,488,312 | 3,306,208 | ||
Total shareholders’ equity | 3,050,706 | 3,002,721 | $ 3,345,968 | $ 3,016,526 |
Total liabilities and shareholders' equity | 7,661,900 | 7,436,662 | ||
Eliminations | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Uniforms and other rental items in service | (14,216) | (12,248) | ||
Income taxes, current | 0 | |||
Prepaid expenses and other current assets | 0 | 0 | ||
Total current assets | (14,216) | (12,248) | ||
Property and equipment, net | 0 | 0 | ||
Investments | (6,401,642) | (6,399,643) | ||
Goodwill | (112) | (112) | ||
Service contracts, net | 0 | 0 | ||
Operating lease right-of-use assets, net | 0 | |||
Other assets, net | (7,843,838) | (7,613,307) | ||
Total assets | (14,259,808) | (14,025,310) | ||
Current liabilities: | ||||
Accounts payable | 37,291 | 37,432 | ||
Accrued compensation and related liabilities | 0 | 0 | ||
Accrued liabilities | 0 | 0 | ||
Income taxes, current | 0 | |||
Operating lease liabilities, current | 0 | |||
Debt due within one year | 0 | 0 | ||
Total current liabilities | 37,291 | 37,432 | ||
Long-term liabilities: | ||||
Debt due after one year | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Operating lease liabilities | 0 | |||
Accrued liabilities | 0 | 0 | ||
Total long-term liabilities | 0 | 0 | ||
Total shareholders’ equity | (14,297,099) | (14,062,742) | ||
Total liabilities and shareholders' equity | (14,259,808) | (14,025,310) | ||
Cintas Corporation | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Accounts receivable, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Uniforms and other rental items in service | 0 | 0 | ||
Income taxes, current | 0 | |||
Prepaid expenses and other current assets | 0 | 0 | ||
Total current assets | 0 | 0 | ||
Property and equipment, net | 0 | 0 | ||
Investments | 321,083 | 321,083 | ||
Goodwill | 0 | 0 | ||
Service contracts, net | 0 | 0 | ||
Operating lease right-of-use assets, net | 0 | |||
Other assets, net | 2,264,376 | 2,216,391 | ||
Total assets | 2,585,459 | 2,537,474 | ||
Current liabilities: | ||||
Accounts payable | (465,247) | (465,247) | ||
Accrued compensation and related liabilities | 0 | 0 | ||
Accrued liabilities | 0 | 0 | ||
Income taxes, current | 0 | |||
Operating lease liabilities, current | 0 | |||
Debt due within one year | 0 | 0 | ||
Total current liabilities | (465,247) | (465,247) | ||
Long-term liabilities: | ||||
Debt due after one year | 0 | 0 | ||
Deferred income taxes | 0 | 0 | ||
Operating lease liabilities | 0 | |||
Accrued liabilities | 0 | 0 | ||
Total long-term liabilities | 0 | 0 | ||
Total shareholders’ equity | 3,050,706 | 3,002,721 | ||
Total liabilities and shareholders' equity | 2,585,459 | 2,537,474 | ||
Corp. 2 | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 61,965 | 54,963 | ||
Accounts receivable, net | 734,268 | 719,914 | ||
Inventories, net | 287,373 | 278,666 | ||
Uniforms and other rental items in service | 657,277 | 645,862 | ||
Income taxes, current | (9,728) | |||
Prepaid expenses and other current assets | 82,635 | 81,117 | ||
Total current assets | 1,823,518 | 1,770,794 | ||
Property and equipment, net | 958,285 | 948,830 | ||
Investments | 3,588,963 | 3,589,234 | ||
Goodwill | 0 | 0 | ||
Service contracts, net | 416,583 | 427,437 | ||
Operating lease right-of-use assets, net | 133,401 | |||
Other assets, net | 216,985 | 211,102 | ||
Total assets | 7,137,735 | 6,947,397 | ||
Current liabilities: | ||||
Accounts payable | (2,099,057) | (2,090,954) | ||
Accrued compensation and related liabilities | 59,152 | 117,404 | ||
Accrued liabilities | 86,128 | 84,296 | ||
Income taxes, current | 235 | |||
Operating lease liabilities, current | 34,255 | |||
Debt due within one year | 338,776 | 312,264 | ||
Total current liabilities | (1,580,511) | (1,576,990) | ||
Long-term liabilities: | ||||
Debt due after one year | 2,538,057 | 2,537,507 | ||
Deferred income taxes | 306,142 | 307,334 | ||
Operating lease liabilities | 103,847 | |||
Accrued liabilities | 156,466 | 116,469 | ||
Total long-term liabilities | 3,104,512 | 2,961,310 | ||
Total shareholders’ equity | 5,613,734 | 5,563,077 | ||
Total liabilities and shareholders' equity | 7,137,735 | 6,947,397 | ||
Investments, including intercompany investments | 19,600 | 19,800 | ||
Subsidiary Guarantors | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 14,788 | 13,151 | ||
Accounts receivable, net | 113,838 | 121,803 | ||
Inventories, net | 28,178 | 35,081 | ||
Uniforms and other rental items in service | 91,592 | 90,458 | ||
Income taxes, current | 11,722 | |||
Prepaid expenses and other current assets | 35,907 | 20,334 | ||
Total current assets | 284,303 | 292,549 | ||
Property and equipment, net | 367,853 | 369,006 | ||
Investments | 981,713 | 964,802 | ||
Goodwill | 2,589,592 | 2,586,406 | ||
Service contracts, net | 0 | 0 | ||
Operating lease right-of-use assets, net | 13,904 | |||
Other assets, net | 5,606,035 | 5,424,413 | ||
Total assets | 9,843,400 | 9,637,176 | ||
Current liabilities: | ||||
Accounts payable | 2,818,307 | 2,793,558 | ||
Accrued compensation and related liabilities | 31,311 | 26,870 | ||
Accrued liabilities | 290,891 | 328,267 | ||
Income taxes, current | 14,236 | |||
Operating lease liabilities, current | 4,320 | |||
Debt due within one year | 0 | 0 | ||
Total current liabilities | 3,159,065 | 3,148,695 | ||
Long-term liabilities: | ||||
Debt due after one year | 0 | 0 | ||
Deferred income taxes | 99,774 | 100,162 | ||
Operating lease liabilities | 10,093 | |||
Accrued liabilities | 214,977 | 197,934 | ||
Total long-term liabilities | 324,844 | 298,096 | ||
Total shareholders’ equity | 6,359,491 | 6,190,385 | ||
Total liabilities and shareholders' equity | 9,843,400 | 9,637,176 | ||
Investments, including intercompany investments | 189,400 | 172,500 | ||
Non- Guarantors | Reportable Legal Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 25,378 | 28,531 | ||
Accounts receivable, net | 69,429 | 68,403 | ||
Inventories, net | 20,739 | 20,842 | ||
Uniforms and other rental items in service | 61,534 | 60,061 | ||
Income taxes, current | 5,481 | |||
Prepaid expenses and other current assets | 19,133 | 1,867 | ||
Total current assets | 196,213 | 185,185 | ||
Property and equipment, net | 96,213 | 112,849 | ||
Investments | 1,718,870 | 1,716,870 | ||
Goodwill | 260,133 | 256,147 | ||
Service contracts, net | 66,394 | 67,158 | ||
Operating lease right-of-use assets, net | 15,784 | |||
Other assets, net | 1,507 | 1,716 | ||
Total assets | 2,355,114 | 2,339,925 | ||
Current liabilities: | ||||
Accounts payable | (54,052) | (48,769) | ||
Accrued compensation and related liabilities | 8,737 | 11,235 | ||
Accrued liabilities | 18,397 | 21,377 | ||
Income taxes, current | (5,233) | |||
Operating lease liabilities, current | 4,435 | |||
Debt due within one year | 0 | 0 | ||
Total current liabilities | (27,716) | (16,157) | ||
Long-term liabilities: | ||||
Debt due after one year | 0 | 0 | ||
Deferred income taxes | 30,839 | 30,683 | ||
Operating lease liabilities | 11,744 | |||
Accrued liabilities | 16,373 | 16,119 | ||
Total long-term liabilities | 58,956 | 46,802 | ||
Total shareholders’ equity | 2,323,874 | 2,309,280 | ||
Total liabilities and shareholders' equity | $ 2,355,114 | $ 2,339,925 |
Supplemental Guarantor Inform_7
Supplemental Guarantor Information - Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Aug. 31, 2019 | Aug. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 250,812 | $ 212,515 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 56,726 | 52,745 |
Amortization of intangible assets and capitalized contract costs | 35,268 | 33,550 |
Stock-based compensation | 40,395 | 46,172 |
Deferred income taxes | 7,910 | 9,022 |
Change in current assets and liabilities, net of acquisitions of businesses: | ||
Accounts receivable, net | (6,636) | (15,051) |
Inventories, net | (1,726) | (34,629) |
Uniforms and other rental items in service | (11,305) | (23,019) |
Prepaid expenses and other current assets and capitalized contract costs | (41,928) | (46,930) |
Accounts payable | 13,357 | (329) |
Accrued compensation and related liabilities | (58,718) | (56,186) |
Accrued liabilities and other | (24,082) | (27,556) |
Income taxes, current | 16,828 | 12,681 |
Net cash provided by operating activities | 276,901 | 162,985 |
Cash flows from investing activities: | ||
Capital expenditures | (64,743) | (64,528) |
Proceeds from redemption of marketable securities | 0 | 1,558 |
Purchase of investments | (9,391) | 0 |
Acquisitions of businesses, net of cash acquired | (3,896) | (7,613) |
Other, net | (109) | (202) |
Net cash used in investing activities | (78,139) | (70,785) |
Cash flows from financing activities: | ||
Issuance of commercial paper, net | 26,500 | 0 |
Proceeds from exercise of stock-based compensation awards | 37,915 | 27,512 |
Repurchase of common stock | (256,830) | (139,468) |
Other, net | (1,192) | (552) |
Net cash used in financing activities | (193,607) | (112,508) |
Effect of exchange rate changes on cash and cash equivalents | 331 | (60) |
Net increase (decrease) in cash and cash equivalents | 5,486 | (20,368) |
Cash and cash equivalents at beginning of period | 96,645 | 138,724 |
Cash and cash equivalents at end of period | 102,131 | 118,356 |
Eliminations | ||
Cash flows from operating activities: | ||
Net income | (258,665) | (210,655) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 0 | 0 |
Amortization of intangible assets and capitalized contract costs | 0 | 0 |
Stock-based compensation | 0 | 0 |
Deferred income taxes | 0 | 0 |
Change in current assets and liabilities, net of acquisitions of businesses: | ||
Accounts receivable, net | 0 | 0 |
Inventories, net | 0 | (782) |
Uniforms and other rental items in service | 1,968 | (1,379) |
Prepaid expenses and other current assets and capitalized contract costs | 0 | 0 |
Accounts payable | (141) | 302 |
Accrued compensation and related liabilities | 0 | 0 |
Accrued liabilities and other | 0 | 0 |
Income taxes, current | 0 | 0 |
Net cash provided by operating activities | (256,838) | (212,514) |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Proceeds from redemption of marketable securities | 0 | |
Purchase of investments | 0 | |
Acquisitions of businesses, net of cash acquired | 0 | 0 |
Other, net | 256,838 | 213,504 |
Net cash used in investing activities | 256,838 | 213,504 |
Cash flows from financing activities: | ||
Issuance of commercial paper, net | 0 | |
Proceeds from exercise of stock-based compensation awards | 0 | 0 |
Repurchase of common stock | 0 | 0 |
Other, net | 0 | (990) |
Net cash used in financing activities | 0 | (990) |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Cintas Corporation | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net income | 250,812 | 212,515 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 0 | 0 |
Amortization of intangible assets and capitalized contract costs | 0 | 0 |
Stock-based compensation | 40,395 | 46,172 |
Deferred income taxes | 0 | 0 |
Change in current assets and liabilities, net of acquisitions of businesses: | ||
Accounts receivable, net | 0 | 0 |
Inventories, net | 0 | 0 |
Uniforms and other rental items in service | 0 | 0 |
Prepaid expenses and other current assets and capitalized contract costs | 0 | 0 |
Accounts payable | 0 | 0 |
Accrued compensation and related liabilities | 0 | 0 |
Accrued liabilities and other | 0 | 0 |
Income taxes, current | 0 | 0 |
Net cash provided by operating activities | 291,207 | 258,687 |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Proceeds from redemption of marketable securities | 0 | |
Purchase of investments | 0 | |
Acquisitions of businesses, net of cash acquired | 0 | 0 |
Other, net | (72,292) | (146,731) |
Net cash used in investing activities | (72,292) | (146,731) |
Cash flows from financing activities: | ||
Issuance of commercial paper, net | 0 | |
Proceeds from exercise of stock-based compensation awards | 37,915 | 27,512 |
Repurchase of common stock | (256,830) | (139,468) |
Other, net | 0 | 0 |
Net cash used in financing activities | (218,915) | (111,956) |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 |
Corp. 2 | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net income | 81,688 | 62,612 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 37,056 | 33,866 |
Amortization of intangible assets and capitalized contract costs | 31,949 | 30,156 |
Stock-based compensation | 0 | 0 |
Deferred income taxes | 8,652 | 5,388 |
Change in current assets and liabilities, net of acquisitions of businesses: | ||
Accounts receivable, net | (14,317) | (12,891) |
Inventories, net | (8,686) | (37,207) |
Uniforms and other rental items in service | (11,416) | (10,800) |
Prepaid expenses and other current assets and capitalized contract costs | (26,355) | (25,060) |
Accounts payable | (8,103) | 41,784 |
Accrued compensation and related liabilities | (58,252) | (41,910) |
Accrued liabilities and other | 5,833 | 2,305 |
Income taxes, current | (9,493) | 5,022 |
Net cash provided by operating activities | 28,556 | 53,265 |
Cash flows from investing activities: | ||
Capital expenditures | (46,605) | (43,966) |
Proceeds from redemption of marketable securities | 1,554 | |
Purchase of investments | 271 | |
Acquisitions of businesses, net of cash acquired | (3,896) | (7,613) |
Other, net | 3,368 | (4,048) |
Net cash used in investing activities | (46,862) | (54,073) |
Cash flows from financing activities: | ||
Issuance of commercial paper, net | 26,500 | |
Proceeds from exercise of stock-based compensation awards | 0 | 0 |
Repurchase of common stock | 0 | 0 |
Other, net | (1,192) | 2,909 |
Net cash used in financing activities | 25,308 | 2,909 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 7,002 | 2,101 |
Cash and cash equivalents at beginning of period | 54,963 | 44,499 |
Cash and cash equivalents at end of period | 61,965 | 46,600 |
Subsidiary Guarantors | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net income | 169,106 | 143,033 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 16,032 | 15,427 |
Amortization of intangible assets and capitalized contract costs | 1,279 | 1,278 |
Stock-based compensation | 0 | 0 |
Deferred income taxes | (382) | 2,122 |
Change in current assets and liabilities, net of acquisitions of businesses: | ||
Accounts receivable, net | 7,965 | 3,381 |
Inventories, net | 7,359 | 2,700 |
Uniforms and other rental items in service | (1,135) | (7,904) |
Prepaid expenses and other current assets and capitalized contract costs | (15,462) | (21,838) |
Accounts payable | 28,923 | (37,657) |
Accrued compensation and related liabilities | 2,120 | (10,982) |
Accrued liabilities and other | (27,074) | (26,295) |
Income taxes, current | 25,974 | 8,474 |
Net cash provided by operating activities | 214,705 | 71,739 |
Cash flows from investing activities: | ||
Capital expenditures | (14,916) | (17,979) |
Proceeds from redemption of marketable securities | 4 | |
Purchase of investments | (9,662) | |
Acquisitions of businesses, net of cash acquired | 0 | 0 |
Other, net | (188,490) | (65,509) |
Net cash used in investing activities | (213,068) | (83,484) |
Cash flows from financing activities: | ||
Issuance of commercial paper, net | 0 | |
Proceeds from exercise of stock-based compensation awards | 0 | 0 |
Repurchase of common stock | 0 | 0 |
Other, net | 0 | 0 |
Net cash used in financing activities | 0 | 0 |
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 |
Net increase (decrease) in cash and cash equivalents | 1,637 | (11,745) |
Cash and cash equivalents at beginning of period | 13,151 | 60,310 |
Cash and cash equivalents at end of period | 14,788 | 48,565 |
Non- Guarantors | Reportable Legal Entities | ||
Cash flows from operating activities: | ||
Net income | 7,871 | 5,010 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 3,638 | 3,452 |
Amortization of intangible assets and capitalized contract costs | 2,040 | 2,116 |
Stock-based compensation | 0 | 0 |
Deferred income taxes | (360) | 1,512 |
Change in current assets and liabilities, net of acquisitions of businesses: | ||
Accounts receivable, net | (284) | (5,541) |
Inventories, net | (399) | 660 |
Uniforms and other rental items in service | (722) | (2,936) |
Prepaid expenses and other current assets and capitalized contract costs | (111) | (32) |
Accounts payable | (7,322) | (4,758) |
Accrued compensation and related liabilities | (2,586) | (3,294) |
Accrued liabilities and other | (2,841) | (3,566) |
Income taxes, current | 347 | (815) |
Net cash provided by operating activities | (729) | (8,192) |
Cash flows from investing activities: | ||
Capital expenditures | (3,222) | (2,583) |
Proceeds from redemption of marketable securities | 0 | |
Purchase of investments | 0 | |
Acquisitions of businesses, net of cash acquired | 0 | 0 |
Other, net | 467 | 2,582 |
Net cash used in investing activities | (2,755) | (1) |
Cash flows from financing activities: | ||
Issuance of commercial paper, net | 0 | |
Proceeds from exercise of stock-based compensation awards | 0 | 0 |
Repurchase of common stock | 0 | 0 |
Other, net | 0 | (2,471) |
Net cash used in financing activities | 0 | (2,471) |
Effect of exchange rate changes on cash and cash equivalents | 331 | (60) |
Net increase (decrease) in cash and cash equivalents | (3,153) | (10,724) |
Cash and cash equivalents at beginning of period | 28,531 | 33,915 |
Cash and cash equivalents at end of period | $ 25,378 | $ 23,191 |
Uncategorized Items - ctas-2019
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (2,808,000) |