Cover Page
Cover Page - shares | 9 Months Ended | |
Feb. 29, 2020 | Mar. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Feb. 29, 2020 | |
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 | Q3 | |
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 | 104,050,202 |
Consolidated Condensed Statemen
Consolidated Condensed Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Revenue: | ||||
Total revenue | $ 1,810,648 | $ 1,682,330 | $ 5,465,536 | $ 5,098,573 |
Costs and expenses: | ||||
Selling and administrative expenses | 509,743 | 476,099 | 1,570,666 | 1,472,404 |
G&K Services, Inc. integration expenses | 0 | 799 | 0 | 13,496 |
Operating income | 314,652 | 278,255 | 955,262 | 819,123 |
Gain on sale of a cost method investment | 0 | 0 | 0 | 69,373 |
Interest income | (347) | (70) | (792) | (957) |
Interest expense | 25,943 | 26,770 | 79,441 | 75,954 |
Income before income taxes | 289,056 | 251,555 | 876,613 | 813,499 |
Income taxes | 54,536 | 50,632 | 144,838 | 157,035 |
Income from continuing operations | 234,520 | 200,923 | 731,775 | 656,464 |
Income (loss) from discontinued operations, net of tax expense of $772, tax benefit of $107 and tax expense of $768, respectively | 0 | 2,411 | (323) | 2,398 |
Net income | $ 234,520 | $ 203,334 | $ 731,452 | $ 658,862 |
Basic earnings per share: | ||||
Continuing operations (in dollars per share) | $ 2.23 | $ 1.89 | $ 6.98 | $ 6.10 |
Discontinued operations (in dollars per share) | 0 | 0.02 | 0 | 0.02 |
Basic earnings per share (in dollars per share) | 2.23 | 1.91 | 6.98 | 6.12 |
Diluted earnings per share: | ||||
Continuing operations (in dollars per share) | 2.16 | 1.83 | 6.76 | 5.91 |
Discontinued operations (in dollars per share) | 0 | 0.02 | 0 | 0.02 |
Diluted earnings per share (in dollars per share) | 2.16 | 1.85 | 6.76 | 5.93 |
Dividends declared per share (in dollars per share) | $ 0 | $ 0 | $ 2.55 | $ 2.05 |
Uniform Rental and Facility Services | ||||
Revenue: | ||||
Total revenue | $ 1,448,021 | $ 1,358,322 | $ 4,372,524 | $ 4,124,038 |
Costs and expenses: | ||||
Cost of revenue | 784,930 | 748,971 | 2,338,543 | 2,256,543 |
Other | ||||
Revenue: | ||||
Total revenue | 362,627 | 324,008 | 1,093,012 | 974,535 |
Costs and expenses: | ||||
Cost of revenue | $ 201,323 | $ 178,206 | $ 601,065 | $ 537,007 |
Consolidated Condensed Statem_2
Consolidated Condensed Statements of Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Income Statement [Abstract] | |||
Income (loss) from discontinued operations, income tax expense (benefit) | $ 772 | $ (107) | $ 768 |
Consolidated Condensed Statem_3
Consolidated Condensed Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Feb. 29, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | Feb. 29, 2020 | Feb. 28, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||||||
Net income | $ 234,520 | $ 246,120 | $ 250,812 | $ 203,334 | $ 243,013 | $ 212,515 | $ 731,452 | $ 658,862 |
Other comprehensive (loss) income, net of tax: | ||||||||
Foreign currency translation adjustments | (4,039) | 5,025 | 4,098 | (8,617) | ||||
Change in fair value of interest rate lock agreements | (53,582) | (8,183) | (60,724) | (6,430) | ||||
Amortization of interest rate lock agreements | (358) | (295) | (1,011) | (884) | ||||
Other comprehensive loss | (57,979) | $ 23,816 | $ (23,474) | (3,453) | $ (5,996) | $ (6,482) | (57,637) | (15,931) |
Comprehensive income | $ 176,541 | $ 199,881 | $ 673,815 | $ 642,931 |
Consolidated Condensed Balance
Consolidated Condensed Balance Sheets - USD ($) $ in Thousands | Feb. 29, 2020 | May 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 234,441 | $ 96,645 |
Accounts receivable, net | 942,853 | 910,120 |
Inventories, net | 352,924 | 334,589 |
Uniforms and other rental items in service | 818,486 | 784,133 |
Income taxes, current | 23,485 | 7,475 |
Prepaid expenses and other current assets | 125,517 | 103,318 |
Total current assets | 2,497,706 | 2,236,280 |
Property and equipment, net | 1,434,866 | 1,430,685 |
Investments | 212,798 | 192,346 |
Goodwill | 2,873,996 | 2,842,441 |
Service contracts, net | 464,852 | 494,595 |
Operating lease right-of-use assets, net | 165,169 | |
Other assets, net | 252,593 | 240,315 |
Total assets | 7,901,980 | 7,436,662 |
Current liabilities: | ||
Accounts payable | 243,248 | 226,020 |
Accrued compensation and related liabilities | 148,912 | 155,509 |
Accrued liabilities | 430,643 | 433,940 |
Operating lease liabilities, current | 44,043 | |
Debt due within one year | 199,800 | 312,264 |
Total current liabilities | 1,066,646 | 1,127,733 |
Long-term liabilities: | ||
Debt due after one year | 2,539,156 | 2,537,507 |
Deferred income taxes | 423,677 | 438,179 |
Operating lease liabilities | 126,994 | |
Accrued liabilities | 421,198 | 330,522 |
Total long-term liabilities | 3,511,025 | 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: 186,298,161 shares issued and 103,702,675 shares outstanding; FY 2019: 184,790,626 shares issued and 103,284,401 shares outstanding | 1,092,074 | 840,328 |
Paid-in capital | 154,157 | 227,928 |
Retained earnings | 7,151,838 | 6,691,236 |
Treasury stock: FY 2019: 82,595,486 shares, FY 2018: 81,506,225 shares | (4,978,946) | (4,717,619) |
Accumulated other comprehensive loss | (94,814) | (39,152) |
Total shareholders’ equity | 3,324,309 | 3,002,721 |
Total liabilities and shareholders' equity | $ 7,901,980 | $ 7,436,662 |
Consolidated Condensed Balanc_2
Consolidated Condensed Balance Sheets (Parenthetical) - shares | Feb. 29, 2020 | 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) | 186,631,553 | 184,790,626 |
Common stock, outstanding (in shares) | 104,026,576 | 103,284,401 |
Treasury stock (in shares) | 82,604,977 | 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 Income (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 income (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 | 0 | $ 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, 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 | 658,862 | |||||
Comprehensive income (loss), net of tax | (15,931) | |||||
Balance (shares) at Feb. 28, 2019 | 184,559 | 79,627 | ||||
Balance at Feb. 28, 2019 | 3,179,492 | $ 826,175 | 197,327 | 6,465,121 | 412 | $ (4,309,543) |
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) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 243,013 | 243,013 | ||||
Comprehensive income (loss), net of tax | (5,996) | (5,996) | ||||
Dividends | (220,792) | (220,792) | ||||
Stock-based compensation | 28,612 | 28,612 | ||||
Vesting of stock-based compensation awards (shares) | 11 | |||||
Vesting of stock-based compensation awards | 0 | $ 2,146 | (2,146) | |||
Stock options exercised, net of shares surrendered (in shares) | 86 | |||||
Stock options exercised, net of shares surrendered | 5,100 | $ 5,100 | ||||
Repurchase of common stock (shares) | (1,943) | |||||
Repurchase of common stock | (368,661) | $ (368,661) | ||||
Balance (shares) at Nov. 30, 2018 | 184,153 | 79,029 | ||||
Balance at Nov. 30, 2018 | 3,027,244 | $ 804,234 | 166,837 | 6,261,756 | 3,865 | $ (4,209,448) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 203,334 | 203,334 | ||||
Comprehensive income (loss), net of tax | (3,453) | (3,453) | ||||
Dividends | 31 | 31 | ||||
Stock-based compensation | 30,769 | 30,769 | ||||
Vesting of stock-based compensation awards (shares) | 2 | |||||
Vesting of stock-based compensation awards | 0 | $ 279 | (279) | |||
Stock options exercised, net of shares surrendered (in shares) | 404 | |||||
Stock options exercised, net of shares surrendered | 21,662 | $ 21,662 | ||||
Repurchase of common stock (shares) | (598) | |||||
Repurchase of common stock | (100,095) | $ (100,095) | ||||
Balance (shares) at Feb. 28, 2019 | 184,559 | 79,627 | ||||
Balance at Feb. 28, 2019 | 3,179,492 | $ 826,175 | 197,327 | 6,465,121 | 412 | $ (4,309,543) |
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 income (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 | 0 | $ 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) |
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 | 731,452 | |||||
Comprehensive income (loss), net of tax | (57,637) | |||||
Balance (shares) at Feb. 29, 2020 | 186,632 | 82,605 | ||||
Balance at Feb. 29, 2020 | 3,324,309 | $ 1,092,074 | 154,157 | 7,151,838 | (94,814) | $ (4,978,946) |
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) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 246,120 | 246,120 | ||||
Comprehensive income (loss), net of tax | 23,816 | 23,816 | ||||
Dividends | (268,050) | (268,050) | ||||
Stock-based compensation | 29,003 | 29,003 | ||||
Vesting of stock-based compensation awards (shares) | 21 | |||||
Vesting of stock-based compensation awards | 0 | $ 5,403 | (5,403) | |||
Stock options exercised, net of shares surrendered (in shares) | 324 | |||||
Stock options exercised, net of shares surrendered | 25,286 | $ 25,286 | ||||
Repurchase of common stock (shares) | (7) | |||||
Repurchase of common stock | (1,911) | $ (1,911) | ||||
Balance (shares) at Nov. 30, 2019 | 186,298 | 82,595 | ||||
Balance at Nov. 30, 2019 | 3,104,970 | $ 1,066,814 | 134,041 | 6,917,310 | (36,835) | $ (4,976,360) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 234,520 | 234,520 | ||||
Comprehensive income (loss), net of tax | (57,979) | (57,979) | ||||
Dividends | 8 | 8 | ||||
Stock-based compensation | 27,030 | 27,030 | ||||
Vesting of stock-based compensation awards (shares) | 25 | |||||
Vesting of stock-based compensation awards | 0 | $ 6,914 | (6,914) | |||
Stock options exercised, net of shares surrendered (in shares) | 309 | |||||
Stock options exercised, net of shares surrendered | 18,346 | $ 18,346 | ||||
Repurchase of common stock (shares) | (10) | |||||
Repurchase of common stock | (2,586) | $ (2,586) | ||||
Balance (shares) at Feb. 29, 2020 | 186,632 | 82,605 | ||||
Balance at Feb. 29, 2020 | $ 3,324,309 | $ 1,092,074 | $ 154,157 | $ 7,151,838 | $ (94,814) | $ (4,978,946) |
Consolidated Condensed Statem_5
Consolidated Condensed Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Feb. 29, 2020 | Feb. 28, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 731,452 | $ 658,862 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 175,261 | 164,380 |
Amortization of intangible assets and capitalized contract costs | 107,232 | 101,949 |
Stock-based compensation | 96,428 | 105,553 |
Gain on sale of a cost method investment | 0 | (69,373) |
Gain on sale of business | 0 | (2,419) |
Deferred income taxes | 5,013 | 25,079 |
Change in current assets and liabilities, net of acquisitions of businesses: | ||
Accounts receivable, net | (31,135) | (61,102) |
Inventories, net | (17,780) | (70,716) |
Uniforms and other rental items in service | (33,732) | (72,336) |
Prepaid expenses and other current assets and capitalized contract costs | (95,169) | (85,123) |
Accounts payable | 14,271 | 79 |
Accrued compensation and related liabilities | (4,792) | (3,866) |
Accrued liabilities and other | 3,426 | 3,614 |
Income taxes, current | (15,926) | (23,864) |
Net cash provided by operating activities | 934,549 | 670,717 |
Cash flows from investing activities: | ||
Capital expenditures | (189,379) | (207,805) |
Purchases of investments | (10,461) | (17,544) |
Proceeds from sale of assets | 13,300 | 0 |
Proceeds from sale of a cost method investment | 0 | 73,342 |
Proceeds from sale of business | 0 | 3,200 |
Acquisitions of businesses, net of cash acquired | (47,850) | (7,403) |
Other, net | (2,090) | (6,804) |
Net cash used in investing activities | (236,480) | (163,014) |
Cash flows from financing activities: | ||
(Payments) issuance of commercial paper, net | (112,500) | 217,500 |
Proceeds from exercise of stock-based compensation awards | 81,547 | 54,274 |
Dividends paid | (268,042) | (220,760) |
Repurchase of common stock | (261,327) | (608,224) |
Other, net | 30 | (8,088) |
Net cash used in financing activities | (560,292) | (565,298) |
Effect of exchange rate changes on cash and cash equivalents | 19 | (270) |
Net increase (decrease) in cash and cash equivalents | 137,796 | (57,865) |
Cash and cash equivalents at beginning of period | 96,645 | 138,724 |
Cash and cash equivalents at end of period | $ 234,441 | $ 80,859 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Feb. 29, 2020 | |
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 valued at the lower of cost (first-in, first-out) or net realizable value. Inventory is comprised of the following: (In thousands) February 29, May 31, Raw materials $ 14,308 $ 17,812 Work in process 27,224 28,820 Finished goods 311,392 287,957 $ 352,924 $ 334,589 Inventories are recorded net of reserves for obsolete inventory of $34.1 million and $32.7 million at February 29, 2020 and May 31, 2019, respectively. The inventory obsolescence reserve is determined by specific identification, as well as an estimate based on Cintas' historical rates of obsolescence. Once a specific inventory item is written down to the lower of cost or net realizable value, a new cost basis has been established, and that inventory item cannot subsequently be marked up. 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 class, 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 accounts receivable and other financial instruments, Cintas will be required to use a forward-looking expected loss model rather than the incurred loss model. ASU 2016-13 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 will adopt this standard on June 1, 2020 and 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). ASU 2017-04 is effective for annual or any interim goodwill impairment tests beginning after December 15, 2019. The adoption of ASU 2017-04 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 | 9 Months Ended |
Feb. 29, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The following table presents Cintas' total revenue disaggregated by operating segment: Three Months Ended Nine Months Ended February 29, February 28, February 29, February 28, (In thousands) Revenue % Revenue % Revenue % Revenue % Uniform Rental and $ 1,448,021 80.0 % $ 1,358,322 80.7 % $ 4,372,524 80.0 % $ 4,124,038 80.9 % First Aid and Safety 170,541 9.4 % 149,170 8.9 % 512,299 9.4 % 455,935 8.9 % Fire Protection 107,127 5.9 % 99,688 5.9 % 323,988 5.9 % 293,980 5.8 % Uniform Direct 84,959 4.7 % 75,150 4.5 % 256,725 4.7 % 224,620 4.4 % Total revenue $ 1,810,648 100.0 % $ 1,682,330 100.0 % $ 5,465,536 100.0 % $ 5,098,573 100.0 % Fire Protection Services and Uniform Direct Sales are recorded within All Other disclosed in Note 12 entitled Segment Information. Revenue Recognition Policy More than 95% of the Company's revenue is derived from fees for route servicing of Uniform Rental and Facility Services, First Aid and Safety Services and Fire Protection Services, performed by a Cintas employee-partner, at the customer's location of business. Revenues from our route servicing customer contracts represent a single-performance obligation. The Company recognizes these revenues over time as services are performed based on the nature of services provided and contractual rates (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 operating segment, include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration paid to a customer based on performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company's actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company's performance period generally corresponds with the monthly invoice period. No constraints on our revenue recognition were applied during the three or nine months ended February 29, 2020 or February 28, 2019. The Company reassesses these estimates during each reporting period. Cintas maintains a liability for these discounts and rebates within accrued liabilities on the consolidated condensed balance sheets. Variable consideration also includes consideration paid to a customer at the beginning of a contract. Cintas capitalizes this consideration and amortizes it over the life of the contract as a reduction to revenue in accordance with Accounting Standards Codification (ASC) 606, "Revenue" (Topic 606). These assets are included in other assets, net on the consolidated condensed balance sheet. Additionally, in accordance with Topic 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 |
Leases
Leases | 9 Months Ended |
Feb. 29, 2020 | |
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. Operating lease costs, including short-term lease expense and variable lease costs, which were immaterial in each period, were $18.0 million and $52.9 million, respectively, for the three and nine months ended February 29, 2020. The following table provides supplemental information related to the Company's consolidated condensed statement of cash flows for the nine months ended February 29, 2020: (In thousands) Cash paid for amounts included in the measurement of operating lease liabilities $ 38,292 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 33,382 Other information related to the operating lease right-of-use assets, net and operating lease liabilities was as follows at February, 29, 2020: Weighted-average remaining lease term - operating leases 5.26 years Weighted-average discount rate - operating leases 2.69% The contractual future minimum lease payments of Cintas' operating lease liabilities by fiscal year are as follows as of February 29, 2020: (In thousands) 2020 (remaining three months) $ 12,511 2021 46,151 2022 37,123 2023 28,719 2024 19,488 Thereafter 40,169 Total payments 184,161 Less interest (13,124) Total present value of lease payments $ 171,037 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Feb. 29, 2020 | |
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 February 29, 2020 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 234,441 $ — $ — $ 234,441 Total assets at fair value $ 234,441 $ — $ — $ 234,441 Long-term accrued liabilities: Interest rate lock agreements $ — $ 116,909 $ — $ 116,909 Total liabilities at fair value $ — $ 116,909 $ — $ 116,909 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. The fair values of outstanding interest rate lock agreements are included in long-term accrued liabilities at February 29, 2020 and May 31, 2019. 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. No other amounts included in long-term accrued liabilities are 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. In addition to assets and liabilities that are recorded at fair value on a recurring basis, Cintas records assets and liabilities at fair value on a nonrecurring basis as required under GAAP. The assets and liabilities measured at fair value on a nonrecurring basis primarily relate to assets and liabilities acquired in a business acquisition. During the nine months ended February 29, 2020 and February 28, 2019, there were no material business acquisitions. |
Investments
Investments | 9 Months Ended |
Feb. 29, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Investments at February 29, 2020 of $212.8 million include the cash surrender value of insurance policies of $190.2 million, equity method investments of $19.4 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 and nine months ended February 29, 2020 and February 28, 2019, no impairment losses were recorded. During the nine months ended February 28, 2019, Cintas sold a cost method investment to a third party. Proceeds from the one-time sale were $73.3 million, which resulted in a pre-tax gain of $69.4 million. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Feb. 29, 2020 | |
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. Cintas uses the two-class method to calculate basic and diluted earnings per share as a result of outstanding participating securities in the form of restricted stock awards. Three Months Ended Nine Months Ended Basic Earnings per Share from Continuing Operations (in thousands except per share data) February 29, February 28, February 29, February 28, Income from continuing operations $ 234,520 $ 200,923 $ 731,775 $ 656,464 Less: income from continuing operations allocated to participating securities 2,193 2,783 6,864 8,977 Income from continuing operations available to common shareholders $ 232,327 $ 198,140 $ 724,911 $ 647,487 Basic weighted average common shares outstanding 104,245 105,080 103,840 106,147 Basic earnings per share from continuing operations $ 2.23 $ 1.89 $ 6.98 $ 6.10 Three Months Ended Nine Months Ended Diluted Earnings per Share from Continuing Operations (in thousands except per share data) February 29, February 28, February 29, February 28, Income from continuing operations $ 234,520 $ 200,923 $ 731,775 $ 656,464 Less: income from continuing operations allocated to participating securities 2,193 2,783 6,864 8,977 Income from continuing operations available to common shareholders $ 232,327 $ 198,140 $ 724,911 $ 647,487 Basic weighted average common shares outstanding 104,245 105,080 103,840 106,147 Effect of dilutive securities – employee stock options 3,343 3,082 3,440 3,436 Diluted weighted average common shares outstanding 107,588 108,162 107,280 109,583 Diluted earnings per share from continuing operations $ 2.16 $ 1.83 $ 6.76 $ 5.91 For both the three and nine months ended February 29, 2020, both basic and diluted earnings per share from discontinued operations rounded to zero. For both the three and nine months ended February 28, 2019, both basic and diluted earnings per share from discontinued operations were $0.02. For the three months ended February 29, 2020 and February 28, 2019, options granted to purchase 0.2 million and 0.7 million shares of Cintas common stock, respectively, were excluded from the computation of diluted earnings per share. For the nine months ended February 29, 2020 and February 28, 2019, options granted to purchase 0.2 million and 0.5 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. There were no share buybacks for the three months ended February 29, 2020. For the nine months ended February 29, 2020, 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. Additionally, on October 29, 2019, we announced that the Board of Directors authorized a new $1.0 billion share buyback program, which does not have an expiration date. There have been no share buybacks under this new share buyback program. In the period subsequent to February 29, 2020, through March 31, 2020, we purchased 0.8 million shares of Cintas common stock under the October 30, 2018 share buyback program at an average price of $263.07 for a total purchase price of $202.6 million. From the inception of the October 30, 2018 share buyback program through March 31, 2020, Cintas has purchased a total of $4.3 million shares of Cintas common stock at an average price of $219.40 for a total purchase price of $939.1 million. |
Goodwill, Service Contracts and
Goodwill, Service Contracts and Other Assets | 9 Months Ended |
Feb. 29, 2020 | |
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 nine months ended February 29, 2020, by reportable operating segment and All Other, are as follows: Goodwill (in thousands) Uniform Rental First Aid All Total Balance as of June 1, 2019 $ 2,496,402 $ 243,459 $ 102,580 $ 2,842,441 Goodwill acquired 18,362 164 10,639 29,165 Foreign currency translation 2,205 177 8 2,390 Balance as of February 29, 2020 $ 2,516,969 $ 243,800 $ 113,227 $ 2,873,996 Service Contracts (in thousands) Uniform Rental First Aid All Total Balance as of June 1, 2019 $ 445,016 $ 23,380 $ 26,199 $ 494,595 Service contracts acquired 8,619 325 3,074 12,018 Service contracts amortization (35,472) (2,910) (4,072) (42,454) Foreign currency translation 675 18 — 693 Balance as of February 29, 2020 $ 418,838 $ 20,813 $ 25,201 $ 464,852 Information regarding Cintas’ service contracts and other assets is as follows: As of February 29, 2020 (In thousands) Carrying Accumulated Net Service contracts $ 941,606 $ 476,754 $ 464,852 Capitalized contract costs (1) $ 349,988 $ 128,722 $ 221,266 Noncompete and consulting agreements 43,573 41,143 2,430 Other 51,491 22,594 28,897 Total other assets $ 445,052 $ 192,459 $ 252,593 As of May 31, 2019 (In thousands) Carrying Accumulated 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 February 29, 2020, is $74.5 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 $35.7 million and $33.7 million for the three months ended February 29, 2020 and February 28, 2019, respectively. For the nine months ended February 29, 2020 and February 28, 2019, amortization expense for service contracts and other assets for continuing operations was $105.6 million and $99.9 million, respectively. The estimated future amortization expense for service contracts and other assets, excluding any future acquisitions and commissions to be earned, as of February 29, 2020 is as follows: Fiscal Year (In thousands) 2020 (remaining three months) $ 34,641 2021 129,941 2022 118,066 2023 98,914 2024 87,387 Thereafter 297,951 Total future amortization expense $ 766,900 |
Debt, Derivatives and Hedging A
Debt, Derivatives and Hedging Activities | 9 Months Ended |
Feb. 29, 2020 | |
Debt Disclosure [Abstract] | |
Debt, Derivatives and Hedging Activities | Debt, Derivatives and Hedging Activities Cintas' outstanding debt is summarized as follows: (In thousands) Interest Fiscal Year Fiscal Year February 29, May 31, Debt due within one year Commercial paper 2.68 % (1) 2019 2020 $ — $ 112,500 Term loan 2.25 % (2) 2019 2020 200,000 200,000 Debt issuance costs (200) (236) Total debt due within one year $ 199,800 $ 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 (3) 2.78 % 2013 2023 51,359 51,684 Senior notes (4) 3.11 % 2015 2025 51,721 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 (13,924) (16,150) Total debt due after one year $ 2,539,156 $ 2,537,507 (1) Variable rate debt instrument. The rate presented is the variable borrowing rate at May 31, 2019. (2) Variable rate debt instrument. The rate presented is the variable borrowing rate at February 29, 2020. (3) 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%. (4) 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 February 29, 2020 were $2,750.0 million and $3,028.5 million, respectively, and as of May 31, 2019 were $2,866.2 million and $2,998.7 million, respectively. During the nine months ended February 29, 2020, Cintas paid a net total of $112.5 million 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 is May 23, 2020, which can be extended 12 months, annually, for up to four years. As of February 29, 2020, there was no commercial paper outstanding and no borrowings on our revolving credit facility. As of May 31, 2019, there was $112.5 million of commercial paper outstanding with maturity dates less than 30 days and with a weighted average interest rate of 2.68% and no borrowings on our revolving credit facility. 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 an increase to other comprehensive loss of $0.4 million and $0.3 million for the three months ended February 29, 2020 and February 28, 2019, respectively. For the nine months ended February 29, 2020 and February 28, 2019, the amortization of the cash flow hedges resulted in a increase to other comprehensive loss of $1.0 million and $0.9 million, respectively. During the nine months ended February 29, 2020, Cintas entered into interest rate lock agreements with a notional value of $700.0 million for a forecasted debt issuance in connection with the upcoming debt maturities. As of February 29, 2020, the fair values of these interest rate locks were a liability of $27.1 million and were recorded in long-term accrued liabilities and in other comprehensive loss, net of tax. During fiscal 2019, Cintas entered into interest rate lock agreements with a notional value of $500.0 million for a forecasted debt issuance in connection with the upcoming debt maturities. As of February 29, 2020 and May 31, 2019, the fair values of these interest rate locks were a liability of $89.8 million and $36.4 million, respectively, and were recorded in long-term accrued liabilities and in other comprehensive loss, net of tax. These interest rate locks had no impact on net income or cash flows from continuing operations for the three and nine months ended February 29, 2020 or February 28, 2019. 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 February 29, 2020, Cintas was in compliance with all debt covenants. |
Income Taxes
Income Taxes | 9 Months Ended |
Feb. 29, 2020 | |
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 February 29, 2020 and May 31, 2019, recorded unrecognized tax benefits were $34.4 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 2016. Cintas is currently in various audits in certain foreign jurisdictions and certain domestic states. The years under foreign and domestic state audits cover fiscal years back to 2013. Based on the resolution of the various audits and other potential regulatory developments, it is reasonably possible that the balance of unrecognized tax benefits would not change for the fiscal year ending May 31, 2020. |
Pension Plans
Pension Plans | 9 Months Ended |
Feb. 29, 2020 | |
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 Nine Months Ended (In thousands) February 29, February 28, February 29, February 28, Interest cost $ 720 $ 781 $ 2,161 $ 2,343 Expected return on assets (740) (720) (2,221) (2,161) Net periodic benefit cost $ (20) $ 61 $ (60) $ 182 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Feb. 29, 2020 | |
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 Unrealized Loss on 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) Other comprehensive income before reclassifications 1,413 22,761 — 24,174 Amounts reclassified from accumulated other comprehensive income (loss) — (358) — (358) Net current period other comprehensive income 1,413 22,403 — 23,816 Balance at November 30, 2019 (6,885) (24,126) (5,824) (36,835) Other comprehensive loss before reclassifications (4,039) (53,582) — (57,621) Amounts reclassified from accumulated other comprehensive income (loss) — (358) — (358) Net current period other comprehensive loss (4,039) (53,940) — (57,979) Balance at February 29, 2020 $ (10,924) $ (78,066) $ (5,824) $ (94,814) (1) See new accounting pronouncements in Note 1 entitled Basis of Presentation for more information. (In thousands) Foreign Unrealized Income on 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 Other comprehensive (loss) income before reclassifications (10,623) 4,921 — (5,702) Amounts reclassified from accumulated other comprehensive income (loss) — (294) — (294) Net current period other comprehensive (loss) income (10,623) 4,627 — (5,996) Balance at November 30, 2018 (7,092) 11,613 (656) 3,865 Other comprehensive (loss) income before reclassifications 5,025 (8,183) — (3,158) Amounts reclassified from accumulated other comprehensive income (loss) — (295) — (295) Net current period other comprehensive income (loss) 5,025 (8,478) — (3,453) Balance at February 28, 2019 $ (2,067) $ 3,135 $ (656) $ 412 The following table summarizes the reclassifications out of accumulated other comprehensive income (loss): Details about Accumulated Amount Reclassified from Accumulated Other Affected Line in Three Months Ended Nine Months Ended (In thousands) February 29, February 28, February 29, February 28, Amortization of interest rate locks $ 474 $ 474 $ 1,422 $ 1,422 Interest expense Tax expense (116) (179) (411) (538) Income taxes Amortization of interest rate locks, net of tax $ 358 $ 295 $ 1,011 $ 884 Net income |
Segment Information
Segment Information | 9 Months Ended |
Feb. 29, 2020 | |
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 the Fire Protection Services operating segment and the Uniform Direct Sale operating segment, is included in All Other. Cintas evaluates the performance of each operating segment based on several factors of which the primary financial measures are operating segment revenue and income before income taxes. The accounting policies of the operating segments are the same as those described in Note 1 entitled Basis of Presentation. Information related to the operations of Cintas’ reportable operating segments and All Other is set forth below: (In thousands) Uniform Rental First Aid All Corporate (1) Total For the three months ended February 29, 2020 Revenue $ 1,448,021 $ 170,541 $ 192,086 $ — $ 1,810,648 Income (loss) before income taxes $ 271,629 $ 24,692 $ 18,331 $ (25,596) $ 289,056 For the three months ended February 28, 2019 Revenue $ 1,358,322 $ 149,170 $ 174,838 $ — $ 1,682,330 Income (loss) before income taxes $ 239,138 $ 21,622 $ 17,495 $ (26,700) $ 251,555 As of and for the nine months ended February 29, 2020 Revenue $ 4,372,524 $ 512,299 $ 580,713 $ — $ 5,465,536 Income (loss) before income taxes $ 826,999 $ 74,102 $ 54,161 $ (78,649) $ 876,613 Total assets $ 6,695,002 $ 552,455 $ 420,082 $ 234,441 $ 7,901,980 As of and for the nine months ended February 28, 2019 Revenue $ 4,124,038 $ 455,935 $ 518,600 $ — $ 5,098,573 Income (loss) before income taxes $ 713,563 $ 64,933 $ 40,627 $ (5,624) $ 813,499 Total assets $ 6,451,590 $ 508,865 $ 392,359 $ 80,859 $ 7,433,673 |
G&K Services, Inc. Integration
G&K Services, Inc. Integration Expenses | 9 Months Ended |
Feb. 29, 2020 | |
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 $0.8 million and $13.5 million in expenses during the three and nine months ended February 28, 2019, respectively, which represented integration expenses directly related to the acquisition, primarily facility closure expenses. No such costs were incurred during the three or nine months ended February 29, 2020. As of February 29, 2020 and May 31, 2019, employee termination benefits included in accrued compensation and related liabilities on the consolidated condensed balance sheet was $2.2 million and $2.8 million, respectively. The amount of employee termination benefits paid during the three and nine months ended February 29, 2020 was $0.3 million and $0.6 million, respectively. During the three and nine months ended February 28, 2019, the amount of employee termination benefits paid was $0.5 million and $3.8 million, respectively. We anticipate the remaining accrued employee termination benefits will be paid by the end of this fiscal year. |
Supplemental Guarantor Informat
Supplemental Guarantor Information | 9 Months Ended |
Feb. 29, 2020 | |
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 obligor for the term loan of $200.0 million and the $2,550.0 million aggregate principal amount of senior notes outstanding as of February 29, 2020, 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 February 29, 2020 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Revenue: Uniform rental and facility services $ — $ 1,150,780 $ 189,333 $ 108,599 $ (691) $ 1,448,021 Other — 578,950 64 22,319 (238,706) 362,627 Equity in net income of affiliates 234,520 — — — (234,520) — Total revenue 234,520 1,729,730 189,397 130,918 (473,917) 1,810,648 Costs and expenses (income): Cost of uniform rental and facility services — 634,638 112,865 70,279 (32,852) 784,930 Cost of other — 408,832 (25,807) 17,003 (198,705) 201,323 Selling and administrative expenses — 576,433 (94,155) 35,171 (7,706) 509,743 Operating income 234,520 109,827 196,494 8,465 (234,654) 314,652 Interest income — (131) (195) (22) 1 (347) Interest expense (income) — 26,033 (91) 1 — 25,943 Income before income taxes 234,520 83,925 196,780 8,486 (234,655) 289,056 Income taxes — 15,717 36,380 2,464 (25) 54,536 Net income $ 234,520 $ 68,208 $ 160,400 $ 6,022 $ (234,630) $ 234,520 Consolidating Condensed Income Statement Three Months Ended February 28, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Revenue: Uniform rental and facility services $ — $ 1,092,594 $ 176,787 $ 99,866 $ (10,925) $ 1,358,322 Other — 519,294 44 21,982 (217,312) 324,008 Equity in net income of affiliates 200,923 — — — (200,923) — Total revenue 200,923 1,611,888 176,831 121,848 (429,160) 1,682,330 Costs and expenses (income): Cost of uniform rental and facility services — 612,167 111,103 64,976 (39,275) 748,971 Cost of other — 373,168 (25,811) 15,649 (184,800) 178,206 Selling and administrative expenses — 527,720 (74,507) 31,042 (8,156) 476,099 G&K Services, Inc. integration — (141) (379) 1,319 — 799 Operating income 200,923 98,974 166,425 8,862 (196,929) 278,255 Interest (income) expense — (56) 1 (18) 3 (70) Interest expense (income) — 26,872 (104) 2 — 26,770 Income before income taxes 200,923 72,158 166,528 8,878 (196,932) 251,555 Income taxes — 12,330 35,665 2,656 (19) 50,632 Income from continuing operations 200,923 59,828 130,863 6,222 (196,913) 200,923 Income from discontinued operations, 2,411 2,411 — — (2,411) 2,411 Net income $ 203,334 $ 62,239 $ 130,863 $ 6,222 $ (199,324) $ 203,334 Consolidating Condensed Income Statement Nine Months Ended February 29, 2020 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Revenue: Uniform rental and facility services $ — $ 3,477,631 $ 574,536 $ 322,188 $ (1,831) $ 4,372,524 Other — 1,768,466 332 69,925 (745,711) 1,093,012 Equity in net income of affiliates 731,775 — — — (731,775) — Total revenue 731,775 5,246,097 574,868 392,113 (1,479,317) 5,465,536 Costs and expenses (income): Cost of uniform rental and facility services — 1,891,754 337,104 205,236 (95,551) 2,338,543 Cost of other — 1,240,092 (75,346) 53,656 (617,337) 601,065 Selling and administrative expenses — 1,767,258 (277,575) 102,365 (21,382) 1,570,666 Operating income 731,775 346,993 590,685 30,856 (745,047) 955,262 Interest income — (438) (302) (56) 4 (792) Interest expense (income) — 79,657 (231) 15 — 79,441 Income before income taxes 731,775 267,774 591,218 30,897 (745,051) 876,613 Income taxes — 42,578 94,010 8,336 (86) 144,838 Income from continuing operations 731,775 225,196 497,208 22,561 (744,965) 731,775 Loss from discontinued operations, net of tax (323) (323) — — 323 (323) Net income $ 731,452 $ 224,873 $ 497,208 $ 22,561 $ (744,642) $ 731,452 Consolidating Condensed Income Statement Nine Months Ended February 28, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Revenue: Uniform rental and facility services $ — $ 3,365,841 $ 542,826 $ 301,379 $ (86,008) $ 4,124,038 Other — 1,532,665 137 72,232 (630,499) 974,535 Equity in net income of affiliates 656,464 — — — (656,464) — Total revenue 656,464 4,898,506 542,963 373,611 (1,372,971) 5,098,573 Costs and expenses (income): Cost of uniform rental and facility services — 1,896,767 332,208 194,305 (166,737) 2,256,543 Cost of other — 1,090,265 (74,973) 53,110 (531,395) 537,007 Selling and administrative expenses — 1,608,906 (207,745) 97,964 (26,721) 1,472,404 G&K Services, Inc. integration — 8,508 2,754 2,234 — 13,496 Operating income 656,464 294,060 490,719 25,998 (648,118) 819,123 Gain on sale of a cost method — — 69,373 — — 69,373 Interest income — (559) (364) (39) 5 (957) Interest expense (income) — 76,579 (639) 14 — 75,954 Income before income taxes 656,464 218,040 561,095 26,023 (648,123) 813,499 Income taxes — 42,159 107,497 7,456 (77) 157,035 Income from continuing operations 656,464 175,881 453,598 18,567 (648,046) 656,464 Income from discontinued operations, 2,398 2,398 — — (2,398) 2,398 Net income $ 658,862 $ 178,279 $ 453,598 $ 18,567 $ (650,444) $ 658,862 Consolidating Condensed Statement of Comprehensive Income Three Months Ended February 29, 2020 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Net income $ 234,520 $ 68,208 $ 160,400 $ 6,022 $ (234,630) $ 234,520 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments (4,039) — — (4,039) 4,039 (4,039) Change in fair value of interest rate lock agreements (53,582) (53,582) — — 53,582 (53,582) Amortization of interest rate lock agreements (358) (358) — — 358 (358) Other comprehensive loss (57,979) (53,940) — (4,039) 57,979 (57,979) Comprehensive income $ 176,541 $ 14,268 $ 160,400 $ 1,983 $ (176,651) $ 176,541 Consolidating Condensed Statement of Comprehensive Income Three Months Ended February 28, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Net income $ 203,334 $ 62,239 $ 130,863 $ 6,222 $ (199,324) $ 203,334 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments 5,025 — — 5,025 (5,025) 5,025 Change in fair value of interest (8,183) (8,183) — — 8,183 (8,183) Amortization of interest rate lock agreements (295) (295) — — 295 (295) Other comprehensive (loss) (3,453) (8,478) — 5,025 3,453 (3,453) Comprehensive income $ 199,881 $ 53,761 $ 130,863 $ 11,247 $ (195,871) $ 199,881 Consolidating Condensed Statement of Comprehensive Income Nine Months Ended February 29, 2020 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Net income $ 731,452 $ 224,873 $ 497,208 $ 22,561 $ (744,642) $ 731,452 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments 4,098 — — 4,098 (4,098) 4,098 Change in fair value of interest rate lock agreements (60,724) (60,724) — — 60,724 (60,724) Amortization of interest rate lock agreements (1,011) (1,011) — — 1,011 (1,011) Other comprehensive (loss) (57,637) (61,735) — 4,098 57,637 (57,637) Comprehensive income $ 673,815 $ 163,138 $ 497,208 $ 26,659 $ (687,005) $ 673,815 Consolidating Condensed Statement of Comprehensive Income Nine Months Ended February 28, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Net income $ 658,862 $ 178,279 $ 453,598 $ 18,567 $ (650,444) $ 658,862 Other comprehensive loss, net of tax: Foreign currency translation adjustments (8,617) — — (8,617) 8,617 (8,617) Change in fair value of interest (6,430) (6,430) — — 6,430 (6,430) Amortization of interest rate lock agreements (884) (884) — — 884 (884) Other comprehensive loss (15,931) (7,314) — (8,617) 15,931 (15,931) Comprehensive income $ 642,931 $ 170,965 $ 453,598 $ 9,950 $ (634,513) $ 642,931 Consolidating Condensed Balance Sheet As of February 29, 2020 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas ASSETS Current assets: Cash and cash equivalents $ — $ 56,577 $ 152,528 $ 25,336 $ — $ 234,441 Accounts receivable, net — 744,013 127,338 71,502 — 942,853 Inventories, net — 304,972 27,382 20,570 — 352,924 Uniforms and other rental — 678,365 95,211 62,178 (17,268) 818,486 Income taxes, current — 2,135 17,456 3,894 — 23,485 Prepaid expenses and — 85,754 37,876 1,887 — 125,517 Total current assets — 1,871,816 457,791 185,367 (17,268) 2,497,706 Property and equipment, net — 980,850 351,800 102,216 — 1,434,866 Investments (1) 321,083 3,755,219 984,460 1,344,134 (6,192,098) 212,798 Goodwill — — 2,615,570 258,538 (112) 2,873,996 Service contracts, net — 402,393 — 62,459 — 464,852 Operating lease right-of-use — 136,339 15,547 13,283 — 165,169 Other assets, net 2,537,979 226,623 5,782,580 1,078 (8,295,667) 252,593 $ 2,859,062 $ 7,373,240 $ 10,207,748 $ 1,967,075 $ (14,505,145) $ 7,901,980 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ (465,247) $ (2,100,124) $ 2,821,104 $ (49,552) $ 37,067 $ 243,248 Accrued compensation and related liabilities — 97,236 41,698 9,978 — 148,912 Accrued liabilities — 85,636 329,595 15,412 — 430,643 Operating lease liabilities, — 35,108 4,784 4,151 — 44,043 Debt due within one year — 199,800 — — — 199,800 Total current liabilities (465,247) (1,682,344) 3,197,181 (20,011) 37,067 1,066,646 Long-term liabilities: Debt due after one year — 2,539,156 — — — 2,539,156 Deferred income taxes — 295,861 96,423 31,393 — 423,677 Operating lease liabilities — 105,948 11,494 9,552 — 126,994 Accrued liabilities — 189,728 214,926 16,544 — 421,198 Total long-term liabilities — 3,130,693 322,843 57,489 — 3,511,025 Total shareholders’ equity 3,324,309 5,924,891 6,687,724 1,929,597 (14,542,212) 3,324,309 $ 2,859,062 $ 7,373,240 $ 10,207,748 $ 1,967,075 $ (14,505,145) $ 7,901,980 (1) Investments include inter-company investment activity. Corp 2 and Subsidiary Guarantors hold $20.6 million and $192.2 million, respectively, of the $212.8 million consolidated net investments. Consolidating Condensed Balance Sheet As of May 31, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas 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 — 645,862 90,458 60,061 (12,248) 784,133 Income taxes, current — (9,728) 11,722 5,481 — 7,475 Prepaid expenses and — 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 Nine Months Ended February 29, 2020 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Cash flows from operating activities: Net income $ 731,452 $ 224,873 $ 497,208 $ 22,561 $ (744,642) $ 731,452 Adjustments to reconcile net income to net cash provided by operating activities Depreciation — 115,229 49,181 10,851 — 175,261 Amortization of intangible assets and — 97,267 3,838 6,127 — 107,232 Stock-based compensation 96,428 — — — — 96,428 Deferred income taxes — 8,319 (3,735) 429 — 5,013 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (23,027) (5,536) (2,572) — (31,135) Inventories, net — (25,914) 8,346 (212) — (17,780) Uniforms and other rental items in service — (32,368) (4,754) (1,630) 5,020 (33,732) Prepaid expenses and other current — (77,609) (17,543) (17) — (95,169) Accounts payable — 24,315 (9,136) (543) (365) 14,271 Accrued compensation and related liabilities — (20,168) 14,343 1,033 — (4,792) Accrued liabilities and other — (7,377) 13,777 (2,974) — 3,426 Income taxes, current — (11,863) (5,733) 1,670 — (15,926) Net cash provided by operating activities 827,880 271,677 540,256 34,723 (739,987) 934,549 Cash flows from investing activities: Capital expenditures — (140,144) (32,026) (17,209) — (189,379) Purchases of investments — (793) (9,668) — — (10,461) Proceeds from sale of assets — — — 13,300 — 13,300 Acquisitions of businesses, net of cash acquired — (47,777) — (73) — (47,850) Other, net (380,159) 31,121 (359,185) (33,854) 739,987 (2,090) Net cash used in investing activities (380,159) (157,593) (400,879) (37,836) 739,987 (236,480) Cash flows from financing activities: Payments of commercial paper, net — (112,500) — — — (112,500) Proceeds from exercise of stock-based compensation awards 81,547 — — — — 81,547 Dividends paid (267,941) — — (101) — (268,042) Repurchase of common stock (261,327) — — — — (261,327) Other, net — 30 — — — 30 Net cash used in financing activities (447,721) (112,470) — (101) — (560,292) Effect of exchange rate changes on cash and cash equivalents — — — 19 — 19 Net increase (decrease) in cash and cash — 1,614 139,377 (3,195) — 137,796 Cash and cash equivalents at beginning of period — 54,963 13,151 28,531 — 96,645 Cash and cash equivalents at end of period $ — $ 56,577 $ 152,528 $ 25,336 $ — $ 234,441 Consolidating Condensed Statement of Cash Flows Nine Months Ended February 28, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Cash flows from operating activities: Net income $ 658,862 $ 178,279 $ 453,598 $ 18,567 $ (650,444) $ 658,862 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation — 106,577 47,116 10,687 — 164,380 Amortization of intangible assets and — 91,912 3,801 6,236 — 101,949 Stock-based compensation 105,553 — — — — 105,553 Gain on sale of a cost method investment — — (69,373) — — (69,373) Gain on sale of business — (2,419) — — — (2,419) Deferred income taxes — 16,059 5,654 3,366 — 25,079 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (51,317) 2,522 (8,027) (4,280) (61,102) Inventories, net — (64,014) 1,395 (4,317) (3,780) (70,716) Uniforms and other rental items in service — (51,696) (12,329) (8,311) — (72,336) Prepaid expenses and other current — (74,606) (10,067) (450) — (85,123) Accounts payable — (205,528) 204,336 1,632 (361) 79 Accrued compensation and related liabilities — 1,832 (4,143) (1,555) — (3,866) Accrued liabilities and other — (274) 4,567 (679) — 3,614 Income taxes, current — 7,059 (24,957) (5,966) — (23,864) Net cash provided by (used in) operating activities 764,415 (48,136) 602,120 11,183 (658,865) 670,717 Cash flows from investing activities: Capital expenditures — (147,744) (44,151) (15,910) — (207,805) Purchases of investments — (1,938) (16,356) — 750 (17,544) Proceeds from sale of a cost method investment — — 73,342 — — 73,342 Proceeds from sale of business — 3,200 — — — 3,200 Acquisitions of businesses, net of cash acquired — (7,403) — — — (7,403) Other, net 10,201 (5,216) (663,791) (6,113) 658,115 (6,804) Net cash provided by (used in) investing activities 10,201 (159,101) (650,956) (22,023) 658,865 (163,014) Cash flows from financing activities: Issuance of commercial paper, net — 217,500 — — — 217,500 Proceeds from exercise of stock-based compensation awards 54,274 — — — — 54,274 Dividends paid (220,666) — — (94) — (220,760) Repurchase of common stock (608,224) — — — — (608,224) Other, net — (8,088) — — — (8,088) Net cash (used in) provided by financing activities (774,616) 209,412 — (94) — (565,298) Effect of exchange rate changes on cash and cash equivalents — — — (270) — (270) Net increase (decrease) in cash and cash equivalents — 2,175 (48,836) (11,204) — (57,865) Cash and cash equivalents at beginning of period — 44,499 60,310 33,915 — 138,724 Cash and cash equivalents at end of period $ — $ 46,674 $ 11,474 $ 22,711 $ — $ 80,859 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Feb. 29, 2020 | |
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 class, 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 accounts receivable and other financial instruments, Cintas will be required to use a forward-looking expected loss model rather than the incurred loss model. ASU 2016-13 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 will adopt this standard on June 1, 2020 and 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). ASU 2017-04 is effective for annual or any interim goodwill impairment tests beginning after December 15, 2019. The adoption of ASU 2017-04 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) | 9 Months Ended |
Feb. 29, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Inventory | Inventory is comprised of the following: (In thousands) February 29, May 31, Raw materials $ 14,308 $ 17,812 Work in process 27,224 28,820 Finished goods 311,392 287,957 $ 352,924 $ 334,589 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Total Revenue Disaggregated by Operating Segment | The following table presents Cintas' total revenue disaggregated by operating segment: Three Months Ended Nine Months Ended February 29, February 28, February 29, February 28, (In thousands) Revenue % Revenue % Revenue % Revenue % Uniform Rental and $ 1,448,021 80.0 % $ 1,358,322 80.7 % $ 4,372,524 80.0 % $ 4,124,038 80.9 % First Aid and Safety 170,541 9.4 % 149,170 8.9 % 512,299 9.4 % 455,935 8.9 % Fire Protection 107,127 5.9 % 99,688 5.9 % 323,988 5.9 % 293,980 5.8 % Uniform Direct 84,959 4.7 % 75,150 4.5 % 256,725 4.7 % 224,620 4.4 % Total revenue $ 1,810,648 100.0 % $ 1,682,330 100.0 % $ 5,465,536 100.0 % $ 5,098,573 100.0 % |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Leases [Abstract] | |
Operating Lease Cost and Additional Lease Information | The following table provides supplemental information related to the Company's consolidated condensed statement of cash flows for the nine months ended February 29, 2020: (In thousands) Cash paid for amounts included in the measurement of operating lease liabilities $ 38,292 Operating lease right-of-use assets obtained in exchange for new operating lease liabilities $ 33,382 Other information related to the operating lease right-of-use assets, net and operating lease liabilities was as follows at February, 29, 2020: Weighted-average remaining lease term - operating leases 5.26 years Weighted-average discount rate - operating leases 2.69% |
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 February 29, 2020: (In thousands) 2020 (remaining three months) $ 12,511 2021 46,151 2022 37,123 2023 28,719 2024 19,488 Thereafter 40,169 Total payments 184,161 Less interest (13,124) Total present value of lease payments $ 171,037 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
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 February 29, 2020 (In thousands) Level 1 Level 2 Level 3 Fair Value Cash and cash equivalents $ 234,441 $ — $ — $ 234,441 Total assets at fair value $ 234,441 $ — $ — $ 234,441 Long-term accrued liabilities: Interest rate lock agreements $ — $ 116,909 $ — $ 116,909 Total liabilities at fair value $ — $ 116,909 $ — $ 116,909 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) | 9 Months Ended |
Feb. 29, 2020 | |
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. Cintas uses the two-class method to calculate basic and diluted earnings per share as a result of outstanding participating securities in the form of restricted stock awards. Three Months Ended Nine Months Ended Basic Earnings per Share from Continuing Operations (in thousands except per share data) February 29, February 28, February 29, February 28, Income from continuing operations $ 234,520 $ 200,923 $ 731,775 $ 656,464 Less: income from continuing operations allocated to participating securities 2,193 2,783 6,864 8,977 Income from continuing operations available to common shareholders $ 232,327 $ 198,140 $ 724,911 $ 647,487 Basic weighted average common shares outstanding 104,245 105,080 103,840 106,147 Basic earnings per share from continuing operations $ 2.23 $ 1.89 $ 6.98 $ 6.10 Three Months Ended Nine Months Ended Diluted Earnings per Share from Continuing Operations (in thousands except per share data) February 29, February 28, February 29, February 28, Income from continuing operations $ 234,520 $ 200,923 $ 731,775 $ 656,464 Less: income from continuing operations allocated to participating securities 2,193 2,783 6,864 8,977 Income from continuing operations available to common shareholders $ 232,327 $ 198,140 $ 724,911 $ 647,487 Basic weighted average common shares outstanding 104,245 105,080 103,840 106,147 Effect of dilutive securities – employee stock options 3,343 3,082 3,440 3,436 Diluted weighted average common shares outstanding 107,588 108,162 107,280 109,583 Diluted earnings per share from continuing operations $ 2.16 $ 1.83 $ 6.76 $ 5.91 |
Goodwill, Service Contracts a_2
Goodwill, Service Contracts and Other Assets (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
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 nine months ended February 29, 2020, by reportable operating segment and All Other, are as follows: Goodwill (in thousands) Uniform Rental First Aid All Total Balance as of June 1, 2019 $ 2,496,402 $ 243,459 $ 102,580 $ 2,842,441 Goodwill acquired 18,362 164 10,639 29,165 Foreign currency translation 2,205 177 8 2,390 Balance as of February 29, 2020 $ 2,516,969 $ 243,800 $ 113,227 $ 2,873,996 |
Changes in the Carrying Amount of Service Contracts by Operating Segment | Service Contracts (in thousands) Uniform Rental First Aid All Total Balance as of June 1, 2019 $ 445,016 $ 23,380 $ 26,199 $ 494,595 Service contracts acquired 8,619 325 3,074 12,018 Service contracts amortization (35,472) (2,910) (4,072) (42,454) Foreign currency translation 675 18 — 693 Balance as of February 29, 2020 $ 418,838 $ 20,813 $ 25,201 $ 464,852 |
Information Regarding Service Contracts and Other Assets | Information regarding Cintas’ service contracts and other assets is as follows: As of February 29, 2020 (In thousands) Carrying Accumulated Net Service contracts $ 941,606 $ 476,754 $ 464,852 Capitalized contract costs (1) $ 349,988 $ 128,722 $ 221,266 Noncompete and consulting agreements 43,573 41,143 2,430 Other 51,491 22,594 28,897 Total other assets $ 445,052 $ 192,459 $ 252,593 As of May 31, 2019 (In thousands) Carrying Accumulated 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 February 29, 2020, is $74.5 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 February 29, 2020 is as follows: Fiscal Year (In thousands) 2020 (remaining three months) $ 34,641 2021 129,941 2022 118,066 2023 98,914 2024 87,387 Thereafter 297,951 Total future amortization expense $ 766,900 |
Debt, Derivatives and Hedging_2
Debt, Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Outstanding Debt | Cintas' outstanding debt is summarized as follows: (In thousands) Interest Fiscal Year Fiscal Year February 29, May 31, Debt due within one year Commercial paper 2.68 % (1) 2019 2020 $ — $ 112,500 Term loan 2.25 % (2) 2019 2020 200,000 200,000 Debt issuance costs (200) (236) Total debt due within one year $ 199,800 $ 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 (3) 2.78 % 2013 2023 51,359 51,684 Senior notes (4) 3.11 % 2015 2025 51,721 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 (13,924) (16,150) Total debt due after one year $ 2,539,156 $ 2,537,507 (1) Variable rate debt instrument. The rate presented is the variable borrowing rate at May 31, 2019. (2) Variable rate debt instrument. The rate presented is the variable borrowing rate at February 29, 2020. (3) 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%. |
Pension Plans (Tables)
Pension Plans (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The components of net periodic benefit cost are summarized as follows: Three Months Ended Nine Months Ended (In thousands) February 29, February 28, February 29, February 28, Interest cost $ 720 $ 781 $ 2,161 $ 2,343 Expected return on assets (740) (720) (2,221) (2,161) Net periodic benefit cost $ (20) $ 61 $ (60) $ 182 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
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 Unrealized Loss on 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) Other comprehensive income before reclassifications 1,413 22,761 — 24,174 Amounts reclassified from accumulated other comprehensive income (loss) — (358) — (358) Net current period other comprehensive income 1,413 22,403 — 23,816 Balance at November 30, 2019 (6,885) (24,126) (5,824) (36,835) Other comprehensive loss before reclassifications (4,039) (53,582) — (57,621) Amounts reclassified from accumulated other comprehensive income (loss) — (358) — (358) Net current period other comprehensive loss (4,039) (53,940) — (57,979) Balance at February 29, 2020 $ (10,924) $ (78,066) $ (5,824) $ (94,814) (1) See new accounting pronouncements in Note 1 entitled Basis of Presentation for more information. (In thousands) Foreign Unrealized Income on 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 Other comprehensive (loss) income before reclassifications (10,623) 4,921 — (5,702) Amounts reclassified from accumulated other comprehensive income (loss) — (294) — (294) Net current period other comprehensive (loss) income (10,623) 4,627 — (5,996) Balance at November 30, 2018 (7,092) 11,613 (656) 3,865 Other comprehensive (loss) income before reclassifications 5,025 (8,183) — (3,158) Amounts reclassified from accumulated other comprehensive income (loss) — (295) — (295) Net current period other comprehensive income (loss) 5,025 (8,478) — (3,453) Balance at February 28, 2019 $ (2,067) $ 3,135 $ (656) $ 412 |
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 Amount Reclassified from Accumulated Other Affected Line in Three Months Ended Nine Months Ended (In thousands) February 29, February 28, February 29, February 28, Amortization of interest rate locks $ 474 $ 474 $ 1,422 $ 1,422 Interest expense Tax expense (116) (179) (411) (538) Income taxes Amortization of interest rate locks, net of tax $ 358 $ 295 $ 1,011 $ 884 Net income |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Segment Reporting [Abstract] | |
Information Related to Operating Segments | Information related to the operations of Cintas’ reportable operating segments and All Other is set forth below: (In thousands) Uniform Rental First Aid All Corporate (1) Total For the three months ended February 29, 2020 Revenue $ 1,448,021 $ 170,541 $ 192,086 $ — $ 1,810,648 Income (loss) before income taxes $ 271,629 $ 24,692 $ 18,331 $ (25,596) $ 289,056 For the three months ended February 28, 2019 Revenue $ 1,358,322 $ 149,170 $ 174,838 $ — $ 1,682,330 Income (loss) before income taxes $ 239,138 $ 21,622 $ 17,495 $ (26,700) $ 251,555 As of and for the nine months ended February 29, 2020 Revenue $ 4,372,524 $ 512,299 $ 580,713 $ — $ 5,465,536 Income (loss) before income taxes $ 826,999 $ 74,102 $ 54,161 $ (78,649) $ 876,613 Total assets $ 6,695,002 $ 552,455 $ 420,082 $ 234,441 $ 7,901,980 As of and for the nine months ended February 28, 2019 Revenue $ 4,124,038 $ 455,935 $ 518,600 $ — $ 5,098,573 Income (loss) before income taxes $ 713,563 $ 64,933 $ 40,627 $ (5,624) $ 813,499 Total assets $ 6,451,590 $ 508,865 $ 392,359 $ 80,859 $ 7,433,673 |
Supplemental Guarantor Inform_2
Supplemental Guarantor Information (Tables) | 9 Months Ended |
Feb. 29, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Consolidating Condensed Income Statement | Consolidating Condensed Income Statement Three Months Ended February 29, 2020 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Revenue: Uniform rental and facility services $ — $ 1,150,780 $ 189,333 $ 108,599 $ (691) $ 1,448,021 Other — 578,950 64 22,319 (238,706) 362,627 Equity in net income of affiliates 234,520 — — — (234,520) — Total revenue 234,520 1,729,730 189,397 130,918 (473,917) 1,810,648 Costs and expenses (income): Cost of uniform rental and facility services — 634,638 112,865 70,279 (32,852) 784,930 Cost of other — 408,832 (25,807) 17,003 (198,705) 201,323 Selling and administrative expenses — 576,433 (94,155) 35,171 (7,706) 509,743 Operating income 234,520 109,827 196,494 8,465 (234,654) 314,652 Interest income — (131) (195) (22) 1 (347) Interest expense (income) — 26,033 (91) 1 — 25,943 Income before income taxes 234,520 83,925 196,780 8,486 (234,655) 289,056 Income taxes — 15,717 36,380 2,464 (25) 54,536 Net income $ 234,520 $ 68,208 $ 160,400 $ 6,022 $ (234,630) $ 234,520 Consolidating Condensed Income Statement Three Months Ended February 28, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Revenue: Uniform rental and facility services $ — $ 1,092,594 $ 176,787 $ 99,866 $ (10,925) $ 1,358,322 Other — 519,294 44 21,982 (217,312) 324,008 Equity in net income of affiliates 200,923 — — — (200,923) — Total revenue 200,923 1,611,888 176,831 121,848 (429,160) 1,682,330 Costs and expenses (income): Cost of uniform rental and facility services — 612,167 111,103 64,976 (39,275) 748,971 Cost of other — 373,168 (25,811) 15,649 (184,800) 178,206 Selling and administrative expenses — 527,720 (74,507) 31,042 (8,156) 476,099 G&K Services, Inc. integration — (141) (379) 1,319 — 799 Operating income 200,923 98,974 166,425 8,862 (196,929) 278,255 Interest (income) expense — (56) 1 (18) 3 (70) Interest expense (income) — 26,872 (104) 2 — 26,770 Income before income taxes 200,923 72,158 166,528 8,878 (196,932) 251,555 Income taxes — 12,330 35,665 2,656 (19) 50,632 Income from continuing operations 200,923 59,828 130,863 6,222 (196,913) 200,923 Income from discontinued operations, 2,411 2,411 — — (2,411) 2,411 Net income $ 203,334 $ 62,239 $ 130,863 $ 6,222 $ (199,324) $ 203,334 Consolidating Condensed Income Statement Nine Months Ended February 29, 2020 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Revenue: Uniform rental and facility services $ — $ 3,477,631 $ 574,536 $ 322,188 $ (1,831) $ 4,372,524 Other — 1,768,466 332 69,925 (745,711) 1,093,012 Equity in net income of affiliates 731,775 — — — (731,775) — Total revenue 731,775 5,246,097 574,868 392,113 (1,479,317) 5,465,536 Costs and expenses (income): Cost of uniform rental and facility services — 1,891,754 337,104 205,236 (95,551) 2,338,543 Cost of other — 1,240,092 (75,346) 53,656 (617,337) 601,065 Selling and administrative expenses — 1,767,258 (277,575) 102,365 (21,382) 1,570,666 Operating income 731,775 346,993 590,685 30,856 (745,047) 955,262 Interest income — (438) (302) (56) 4 (792) Interest expense (income) — 79,657 (231) 15 — 79,441 Income before income taxes 731,775 267,774 591,218 30,897 (745,051) 876,613 Income taxes — 42,578 94,010 8,336 (86) 144,838 Income from continuing operations 731,775 225,196 497,208 22,561 (744,965) 731,775 Loss from discontinued operations, net of tax (323) (323) — — 323 (323) Net income $ 731,452 $ 224,873 $ 497,208 $ 22,561 $ (744,642) $ 731,452 Consolidating Condensed Income Statement Nine Months Ended February 28, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Revenue: Uniform rental and facility services $ — $ 3,365,841 $ 542,826 $ 301,379 $ (86,008) $ 4,124,038 Other — 1,532,665 137 72,232 (630,499) 974,535 Equity in net income of affiliates 656,464 — — — (656,464) — Total revenue 656,464 4,898,506 542,963 373,611 (1,372,971) 5,098,573 Costs and expenses (income): Cost of uniform rental and facility services — 1,896,767 332,208 194,305 (166,737) 2,256,543 Cost of other — 1,090,265 (74,973) 53,110 (531,395) 537,007 Selling and administrative expenses — 1,608,906 (207,745) 97,964 (26,721) 1,472,404 G&K Services, Inc. integration — 8,508 2,754 2,234 — 13,496 Operating income 656,464 294,060 490,719 25,998 (648,118) 819,123 Gain on sale of a cost method — — 69,373 — — 69,373 Interest income — (559) (364) (39) 5 (957) Interest expense (income) — 76,579 (639) 14 — 75,954 Income before income taxes 656,464 218,040 561,095 26,023 (648,123) 813,499 Income taxes — 42,159 107,497 7,456 (77) 157,035 Income from continuing operations 656,464 175,881 453,598 18,567 (648,046) 656,464 Income from discontinued operations, 2,398 2,398 — — (2,398) 2,398 Net income $ 658,862 $ 178,279 $ 453,598 $ 18,567 $ (650,444) $ 658,862 |
Consolidating Condensed Statement of Comprehensive Income | Consolidating Condensed Statement of Comprehensive Income Three Months Ended February 29, 2020 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Net income $ 234,520 $ 68,208 $ 160,400 $ 6,022 $ (234,630) $ 234,520 Other comprehensive (loss) income, net of tax: Foreign currency translation adjustments (4,039) — — (4,039) 4,039 (4,039) Change in fair value of interest rate lock agreements (53,582) (53,582) — — 53,582 (53,582) Amortization of interest rate lock agreements (358) (358) — — 358 (358) Other comprehensive loss (57,979) (53,940) — (4,039) 57,979 (57,979) Comprehensive income $ 176,541 $ 14,268 $ 160,400 $ 1,983 $ (176,651) $ 176,541 Consolidating Condensed Statement of Comprehensive Income Three Months Ended February 28, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Net income $ 203,334 $ 62,239 $ 130,863 $ 6,222 $ (199,324) $ 203,334 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments 5,025 — — 5,025 (5,025) 5,025 Change in fair value of interest (8,183) (8,183) — — 8,183 (8,183) Amortization of interest rate lock agreements (295) (295) — — 295 (295) Other comprehensive (loss) (3,453) (8,478) — 5,025 3,453 (3,453) Comprehensive income $ 199,881 $ 53,761 $ 130,863 $ 11,247 $ (195,871) $ 199,881 Consolidating Condensed Statement of Comprehensive Income Nine Months Ended February 29, 2020 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Net income $ 731,452 $ 224,873 $ 497,208 $ 22,561 $ (744,642) $ 731,452 Other comprehensive income (loss), net of tax: Foreign currency translation adjustments 4,098 — — 4,098 (4,098) 4,098 Change in fair value of interest rate lock agreements (60,724) (60,724) — — 60,724 (60,724) Amortization of interest rate lock agreements (1,011) (1,011) — — 1,011 (1,011) Other comprehensive (loss) (57,637) (61,735) — 4,098 57,637 (57,637) Comprehensive income $ 673,815 $ 163,138 $ 497,208 $ 26,659 $ (687,005) $ 673,815 Consolidating Condensed Statement of Comprehensive Income Nine Months Ended February 28, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Net income $ 658,862 $ 178,279 $ 453,598 $ 18,567 $ (650,444) $ 658,862 Other comprehensive loss, net of tax: Foreign currency translation adjustments (8,617) — — (8,617) 8,617 (8,617) Change in fair value of interest (6,430) (6,430) — — 6,430 (6,430) Amortization of interest rate lock agreements (884) (884) — — 884 (884) Other comprehensive loss (15,931) (7,314) — (8,617) 15,931 (15,931) Comprehensive income $ 642,931 $ 170,965 $ 453,598 $ 9,950 $ (634,513) $ 642,931 |
Consolidating Condensed Balance Sheet | Consolidating Condensed Balance Sheet As of February 29, 2020 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas ASSETS Current assets: Cash and cash equivalents $ — $ 56,577 $ 152,528 $ 25,336 $ — $ 234,441 Accounts receivable, net — 744,013 127,338 71,502 — 942,853 Inventories, net — 304,972 27,382 20,570 — 352,924 Uniforms and other rental — 678,365 95,211 62,178 (17,268) 818,486 Income taxes, current — 2,135 17,456 3,894 — 23,485 Prepaid expenses and — 85,754 37,876 1,887 — 125,517 Total current assets — 1,871,816 457,791 185,367 (17,268) 2,497,706 Property and equipment, net — 980,850 351,800 102,216 — 1,434,866 Investments (1) 321,083 3,755,219 984,460 1,344,134 (6,192,098) 212,798 Goodwill — — 2,615,570 258,538 (112) 2,873,996 Service contracts, net — 402,393 — 62,459 — 464,852 Operating lease right-of-use — 136,339 15,547 13,283 — 165,169 Other assets, net 2,537,979 226,623 5,782,580 1,078 (8,295,667) 252,593 $ 2,859,062 $ 7,373,240 $ 10,207,748 $ 1,967,075 $ (14,505,145) $ 7,901,980 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ (465,247) $ (2,100,124) $ 2,821,104 $ (49,552) $ 37,067 $ 243,248 Accrued compensation and related liabilities — 97,236 41,698 9,978 — 148,912 Accrued liabilities — 85,636 329,595 15,412 — 430,643 Operating lease liabilities, — 35,108 4,784 4,151 — 44,043 Debt due within one year — 199,800 — — — 199,800 Total current liabilities (465,247) (1,682,344) 3,197,181 (20,011) 37,067 1,066,646 Long-term liabilities: Debt due after one year — 2,539,156 — — — 2,539,156 Deferred income taxes — 295,861 96,423 31,393 — 423,677 Operating lease liabilities — 105,948 11,494 9,552 — 126,994 Accrued liabilities — 189,728 214,926 16,544 — 421,198 Total long-term liabilities — 3,130,693 322,843 57,489 — 3,511,025 Total shareholders’ equity 3,324,309 5,924,891 6,687,724 1,929,597 (14,542,212) 3,324,309 $ 2,859,062 $ 7,373,240 $ 10,207,748 $ 1,967,075 $ (14,505,145) $ 7,901,980 (1) Investments include inter-company investment activity. Corp 2 and Subsidiary Guarantors hold $20.6 million and $192.2 million, respectively, of the $212.8 million consolidated net investments. Consolidating Condensed Balance Sheet As of May 31, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas 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 — 645,862 90,458 60,061 (12,248) 784,133 Income taxes, current — (9,728) 11,722 5,481 — 7,475 Prepaid expenses and — 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 Nine Months Ended February 29, 2020 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Cash flows from operating activities: Net income $ 731,452 $ 224,873 $ 497,208 $ 22,561 $ (744,642) $ 731,452 Adjustments to reconcile net income to net cash provided by operating activities Depreciation — 115,229 49,181 10,851 — 175,261 Amortization of intangible assets and — 97,267 3,838 6,127 — 107,232 Stock-based compensation 96,428 — — — — 96,428 Deferred income taxes — 8,319 (3,735) 429 — 5,013 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (23,027) (5,536) (2,572) — (31,135) Inventories, net — (25,914) 8,346 (212) — (17,780) Uniforms and other rental items in service — (32,368) (4,754) (1,630) 5,020 (33,732) Prepaid expenses and other current — (77,609) (17,543) (17) — (95,169) Accounts payable — 24,315 (9,136) (543) (365) 14,271 Accrued compensation and related liabilities — (20,168) 14,343 1,033 — (4,792) Accrued liabilities and other — (7,377) 13,777 (2,974) — 3,426 Income taxes, current — (11,863) (5,733) 1,670 — (15,926) Net cash provided by operating activities 827,880 271,677 540,256 34,723 (739,987) 934,549 Cash flows from investing activities: Capital expenditures — (140,144) (32,026) (17,209) — (189,379) Purchases of investments — (793) (9,668) — — (10,461) Proceeds from sale of assets — — — 13,300 — 13,300 Acquisitions of businesses, net of cash acquired — (47,777) — (73) — (47,850) Other, net (380,159) 31,121 (359,185) (33,854) 739,987 (2,090) Net cash used in investing activities (380,159) (157,593) (400,879) (37,836) 739,987 (236,480) Cash flows from financing activities: Payments of commercial paper, net — (112,500) — — — (112,500) Proceeds from exercise of stock-based compensation awards 81,547 — — — — 81,547 Dividends paid (267,941) — — (101) — (268,042) Repurchase of common stock (261,327) — — — — (261,327) Other, net — 30 — — — 30 Net cash used in financing activities (447,721) (112,470) — (101) — (560,292) Effect of exchange rate changes on cash and cash equivalents — — — 19 — 19 Net increase (decrease) in cash and cash — 1,614 139,377 (3,195) — 137,796 Cash and cash equivalents at beginning of period — 54,963 13,151 28,531 — 96,645 Cash and cash equivalents at end of period $ — $ 56,577 $ 152,528 $ 25,336 $ — $ 234,441 Consolidating Condensed Statement of Cash Flows Nine Months Ended February 28, 2019 (In thousands) Cintas Corp. 2 Subsidiary Non- Eliminations Cintas Cash flows from operating activities: Net income $ 658,862 $ 178,279 $ 453,598 $ 18,567 $ (650,444) $ 658,862 Adjustments to reconcile net income to net cash provided by (used in) operating activities Depreciation — 106,577 47,116 10,687 — 164,380 Amortization of intangible assets and — 91,912 3,801 6,236 — 101,949 Stock-based compensation 105,553 — — — — 105,553 Gain on sale of a cost method investment — — (69,373) — — (69,373) Gain on sale of business — (2,419) — — — (2,419) Deferred income taxes — 16,059 5,654 3,366 — 25,079 Changes in current assets and liabilities, net of acquisitions of businesses: Accounts receivable, net — (51,317) 2,522 (8,027) (4,280) (61,102) Inventories, net — (64,014) 1,395 (4,317) (3,780) (70,716) Uniforms and other rental items in service — (51,696) (12,329) (8,311) — (72,336) Prepaid expenses and other current — (74,606) (10,067) (450) — (85,123) Accounts payable — (205,528) 204,336 1,632 (361) 79 Accrued compensation and related liabilities — 1,832 (4,143) (1,555) — (3,866) Accrued liabilities and other — (274) 4,567 (679) — 3,614 Income taxes, current — 7,059 (24,957) (5,966) — (23,864) Net cash provided by (used in) operating activities 764,415 (48,136) 602,120 11,183 (658,865) 670,717 Cash flows from investing activities: Capital expenditures — (147,744) (44,151) (15,910) — (207,805) Purchases of investments — (1,938) (16,356) — 750 (17,544) Proceeds from sale of a cost method investment — — 73,342 — — 73,342 Proceeds from sale of business — 3,200 — — — 3,200 Acquisitions of businesses, net of cash acquired — (7,403) — — — (7,403) Other, net 10,201 (5,216) (663,791) (6,113) 658,115 (6,804) Net cash provided by (used in) investing activities 10,201 (159,101) (650,956) (22,023) 658,865 (163,014) Cash flows from financing activities: Issuance of commercial paper, net — 217,500 — — — 217,500 Proceeds from exercise of stock-based compensation awards 54,274 — — — — 54,274 Dividends paid (220,666) — — (94) — (220,760) Repurchase of common stock (608,224) — — — — (608,224) Other, net — (8,088) — — — (8,088) Net cash (used in) provided by financing activities (774,616) 209,412 — (94) — (565,298) Effect of exchange rate changes on cash and cash equivalents — — — (270) — (270) Net increase (decrease) in cash and cash equivalents — 2,175 (48,836) (11,204) — (57,865) Cash and cash equivalents at beginning of period — 44,499 60,310 33,915 — 138,724 Cash and cash equivalents at end of period $ — $ 46,674 $ 11,474 $ 22,711 $ — $ 80,859 |
Basis of Presentation - Schedul
Basis of Presentation - Schedule of Inventory (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | May 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 14,308 | $ 17,812 |
Work in process | 27,224 | 28,820 |
Finished goods | 311,392 | 287,957 |
Inventories, net | $ 352,924 | $ 334,589 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) - USD ($) $ in Thousands | Jun. 01, 2019 | Feb. 29, 2020 | May 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Reserve for obsolete inventory | $ 34,100 | $ 32,700 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease right-of-use assets, net | 165,169 | ||
Operating lease liabilities | $ 171,037 | ||
Other Accumulated Comprehensive Income (Loss) | |||
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 - Total Rev
Revenue Recognition - Total Revenue Disaggregated by Operating Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 1,810,648 | $ 1,682,330 | $ 5,465,536 | $ 5,098,573 |
Uniform Rental and Facility Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 1,448,021 | 1,358,322 | 4,372,524 | 4,124,038 |
First Aid and Safety Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 170,541 | 149,170 | 512,299 | 455,935 |
Fire Protection Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 107,127 | 99,688 | 323,988 | 293,980 |
Uniform Direct Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 84,959 | $ 75,150 | $ 256,725 | $ 224,620 |
Revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Revenue | Uniform Rental and Facility Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of revenue | 80.00% | 80.70% | 80.00% | 80.90% |
Revenue | First Aid and Safety Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of revenue | 9.40% | 8.90% | 9.40% | 8.90% |
Revenue | Fire Protection Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of revenue | 5.90% | 5.90% | 5.90% | 5.80% |
Revenue | Uniform Direct Sales | ||||
Disaggregation of Revenue [Line Items] | ||||
Percentage of revenue | 4.70% | 4.50% | 4.70% | 4.40% |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | May 31, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Deferred commissions, current | $ 74.5 | $ 74.5 | $ 69.6 | ||
Deferred commissions, noncurrent | 221.3 | 221.3 | $ 206 | ||
Amortization of deferred commissions | $ 19.7 | $ 18 | $ 57.7 | $ 52.7 | |
Revenue | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Percentage of revenue | 100.00% | 100.00% | 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 | 9 Months Ended |
Feb. 29, 2020USD ($) | Feb. 29, 2020USD ($) | |
Leases [Abstract] | ||
Operating lease costs | $ 18,000 | $ 52,900 |
Other information related to operating leases | ||
Cash paid for amounts included in the measurement of operating lease liabilities | 38,292 | |
Operating lease right-of-use assets obtained in exchange for new operating lease liabilities | $ 33,382 | |
Weighted-average remaining lease term - operating leases | 5 years 3 months 3 days | 5 years 3 months 3 days |
Weighted-average discount rate - operating leases | 2.69% | 2.69% |
Leases - Contractual Future Min
Leases - Contractual Future Minimum Lease Payments (Details) $ in Thousands | Feb. 29, 2020USD ($) |
Leases [Abstract] | |
2020 (remaining three months) | $ 12,511 |
2021 | 46,151 |
2022 | 37,123 |
2023 | 28,719 |
2024 | 19,488 |
Thereafter | 40,169 |
Total payments | 184,161 |
Less interest | (13,124) |
Total present value of lease payments | $ 171,037 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Instruments on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Feb. 29, 2020 | May 31, 2019 |
Fair value on a recurring basis | ||
Cash and cash equivalents | $ 234,441 | $ 96,645 |
Total assets at fair value | 234,441 | 96,645 |
Long-term accrued liabilities: | ||
Total liabilities at fair value | 116,909 | 36,393 |
Interest rate lock agreements | ||
Long-term accrued liabilities: | ||
Interest rate lock agreements | 116,909 | 36,393 |
Level 1 | ||
Fair value on a recurring basis | ||
Cash and cash equivalents | 234,441 | 96,645 |
Total assets at fair value | 234,441 | 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 | 116,909 | 36,393 |
Level 2 | Interest rate lock agreements | ||
Long-term accrued liabilities: | ||
Interest rate lock agreements | 116,909 | 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 |
Investments (Details)
Investments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | May 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |||||
Investments | $ 212,798,000 | $ 212,798,000 | $ 192,346,000 | ||
Cash surrender value of insurance policies | 190,200,000 | 190,200,000 | 170,500,000 | ||
Equity method investments | 19,400,000 | 19,400,000 | 18,600,000 | ||
Cost method investments | 3,200,000 | 3,200,000 | $ 3,200,000 | ||
Losses due to impairment | 0 | $ 0 | 0 | $ 0 | |
Proceeds from sale of a cost method investment | 0 | 73,342,000 | |||
Gain on sale of a cost method investment | $ 0 | $ 0 | $ 0 | $ 69,373,000 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Basic Earnings per Share from Continuing Operations | ||||
Income from continuing operations | $ 234,520 | $ 200,923 | $ 731,775 | $ 656,464 |
Less: income from continuing operations allocated to participating securities | 2,193 | 2,783 | 6,864 | 8,977 |
Income from continuing operations available to common shareholders | $ 232,327 | $ 198,140 | $ 724,911 | $ 647,487 |
Basic weighted average common shares outstanding (in shares) | 104,245 | 105,080 | 103,840 | 106,147 |
Basic earnings per share from continuing operations (in dollars per share) | $ 2.23 | $ 1.89 | $ 6.98 | $ 6.10 |
Diluted Earnings per Share from Continuing Operations | ||||
Income from continuing operations | $ 234,520 | $ 200,923 | $ 731,775 | $ 656,464 |
Less: income from continuing operations allocated to participating securities | 2,193 | 2,783 | 6,864 | 8,977 |
Income from continuing operations available to common shareholders | $ 232,327 | $ 198,140 | $ 724,911 | $ 647,487 |
Basic weighted average common shares outstanding (in shares) | 104,245 | 105,080 | 103,840 | 106,147 |
Effect of dilutive securities - employee stock options (in shares) | 3,343 | 3,082 | 3,440 | 3,436 |
Diluted weighted average common shares outstanding (in shares) | 107,588 | 108,162 | 107,280 | 109,583 |
Diluted earnings per share from continuing operations (in dollars per share) | $ 2.16 | $ 1.83 | $ 6.76 | $ 5.91 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 17 Months Ended | ||||||||
Mar. 31, 2020 | Feb. 29, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | Feb. 29, 2020 | Feb. 28, 2019 | Mar. 31, 2020 | Oct. 29, 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 | $ 0.02 | $ 0 | $ 0.02 | ||||||||
Diluted earnings from discontinued operations (in dollars per share) | $ 0 | $ 0.02 | $ 0 | $ 0.02 | ||||||||
Options granted and excluded from the computation of diluted earnings per share (in shares) | 200,000 | 700,000 | 200,000 | 500,000 | ||||||||
Stock purchased under share buyback | $ 2,586,000 | $ 1,911,000 | $ 256,830,000 | $ 100,095,000 | $ 368,661,000 | $ 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) | 100,000 | 300,000 | ||||||||||
Stock purchased under share buyback, average price per share (in dollars per share) | $ 278.21 | $ 261.48 | ||||||||||
Stock purchased under share buyback | $ 2,500,000 | $ 68,400,000 | ||||||||||
October 30, 2018 Plan | ||||||||||||
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 | 800,000 | ||||||||||
Stock purchased under share buyback, average price per share (in dollars per share) | $ 230.66 | |||||||||||
Stock purchased under share buyback | $ 193,100,000 | |||||||||||
October 29, 2019 Plan | ||||||||||||
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 | 0 | ||||||||||
Subsequent Event | October 30, 2018 Plan | ||||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||||||||
Stock purchased under share buyback (shares) | 800,000 | 4,300,000 | ||||||||||
Stock purchased under share buyback, average price per share (in dollars per share) | $ 263.07 | $ 219.40 | ||||||||||
Stock purchased under share buyback | $ 202,600,000 | $ 939,100,000 |
Goodwill, Service Contracts a_3
Goodwill, Service Contracts and Other Assets - Goodwill (Details) $ in Thousands | 9 Months Ended |
Feb. 29, 2020USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 2,842,441 |
Goodwill acquired | 29,165 |
Foreign currency translation | 2,390 |
Ending balance | 2,873,996 |
Uniform Rental and Facility Services | |
Goodwill [Roll Forward] | |
Beginning balance | 2,496,402 |
Goodwill acquired | 18,362 |
Foreign currency translation | 2,205 |
Ending balance | 2,516,969 |
First Aid and Safety Services | |
Goodwill [Roll Forward] | |
Beginning balance | 243,459 |
Goodwill acquired | 164 |
Foreign currency translation | 177 |
Ending balance | 243,800 |
All Other | |
Goodwill [Roll Forward] | |
Beginning balance | 102,580 |
Goodwill acquired | 10,639 |
Foreign currency translation | 8 |
Ending balance | $ 113,227 |
Goodwill, Service Contracts a_4
Goodwill, Service Contracts and Other Assets - Service Contracts (Details) $ in Thousands | 9 Months Ended |
Feb. 29, 2020USD ($) | |
Service contracts [Roll Forward] | |
Beginning balance | $ 494,595 |
Service contracts acquired | 12,018 |
Service contracts amortization | (42,454) |
Foreign currency translation | 693 |
Ending balance | 464,852 |
Uniform Rental and Facility Services | |
Service contracts [Roll Forward] | |
Beginning balance | 445,016 |
Service contracts acquired | 8,619 |
Service contracts amortization | (35,472) |
Foreign currency translation | 675 |
Ending balance | 418,838 |
First Aid and Safety Services | |
Service contracts [Roll Forward] | |
Beginning balance | 23,380 |
Service contracts acquired | 325 |
Service contracts amortization | (2,910) |
Foreign currency translation | 18 |
Ending balance | 20,813 |
All Other | |
Service contracts [Roll Forward] | |
Beginning balance | 26,199 |
Service contracts acquired | 3,074 |
Service contracts amortization | (4,072) |
Foreign currency translation | 0 |
Ending balance | $ 25,201 |
Goodwill, Service Contracts a_5
Goodwill, Service Contracts and Other Assets - Information Regarding Service Contracts and Other Assets (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | May 31, 2019 |
Information regarding service contracts and other assets | ||
Service contracts, net | $ 464,852 | $ 494,595 |
Other assets, carrying amount | 445,052 | 369,630 |
Other assets, accumulated amortization | 192,459 | 129,315 |
Other assets, net | 252,593 | 240,315 |
Capitalized contract costs | ||
Information regarding service contracts and other assets | ||
Other assets, carrying amount | 349,988 | 277,016 |
Other assets, accumulated amortization | 128,722 | 71,062 |
Other assets, net | 221,266 | 205,954 |
Other assets current | 74,500 | 69,600 |
Noncompete and consulting agreements | ||
Information regarding service contracts and other assets | ||
Other assets, carrying amount | 43,573 | 42,308 |
Other assets, accumulated amortization | 41,143 | 40,524 |
Other assets, net | 2,430 | 1,784 |
Other | ||
Information regarding service contracts and other assets | ||
Other assets, carrying amount | 51,491 | 50,306 |
Other assets, accumulated amortization | 22,594 | 17,729 |
Other assets, net | 28,897 | 32,577 |
Service Contracts | ||
Information regarding service contracts and other assets | ||
Service contracts, carrying amount | 941,606 | 928,635 |
Service contracts, accumulated amortization | 476,754 | 434,040 |
Service contracts, net | $ 464,852 | $ 494,595 |
Goodwill, Service Contracts a_6
Goodwill, Service Contracts and Other Assets - Estimated Future Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Goodwill, Service Contracts and Other Assets [Abstract] | ||||
Amortization expense for service contracts and other assets | $ 35,700 | $ 33,700 | $ 105,600 | $ 99,900 |
2020 (remaining three months) | 34,641 | 34,641 | ||
2021 | 129,941 | 129,941 | ||
2022 | 118,066 | 118,066 | ||
2023 | 98,914 | 98,914 | ||
2024 | 87,387 | 87,387 | ||
Thereafter | 297,951 | 297,951 | ||
Total future amortization expense | $ 766,900 | $ 766,900 |
Debt, Derivatives and Hedging_3
Debt, Derivatives and Hedging Activities - Summary of Debt Outstanding (Details) - USD ($) | Feb. 29, 2020 | May 31, 2019 |
Debt due within one year | ||
Debt due within one year | $ 199,800,000 | $ 312,264,000 |
Debt issuance costs | (200,000) | (236,000) |
Debt due after one year | ||
Debt issuance costs | (13,924,000) | (16,150,000) |
Total debt due after one year | 2,539,156,000 | 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 | 2.25% | |
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 | $ 51,359,000 | 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 | $ 51,721,000 | 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 | $ 0 | $ 112,500,000 |
Debt due after one year | ||
Variable borrowing rate | 2.68% |
Debt, Derivatives and Hedging_4
Debt, Derivatives and Hedging Activities - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | May 31, 2019 | May 24, 2019 | May 23, 2019 | |
Debt Instrument [Line Items] | |||||||
Debt, carrying value | $ 2,750,000,000 | $ 2,750,000,000 | $ 2,866,200,000 | ||||
Debt, fair value | 3,028,500,000 | 3,028,500,000 | 2,998,700,000 | ||||
(Payments) issuance of commercial paper, net | (112,500,000) | $ 217,500,000 | |||||
Debt due within one year | 199,800,000 | 199,800,000 | 312,264,000 | ||||
Amortization of interest rate lock agreements - increase (decrease) to other comprehensive income | (400,000) | $ (300,000) | (1,000,000) | $ (900,000) | |||
Treasury Lock | |||||||
Debt Instrument [Line Items] | |||||||
Notional amount | 700,000,000 | 700,000,000 | 500,000,000 | ||||
Interest rate lock asset | 27,100,000 | 27,100,000 | |||||
Interest rate lock liability | $ 89,800,000 | $ 89,800,000 | 36,400,000 | ||||
Term loan due 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Variable borrowing rate | 2.25% | 2.25% | |||||
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 | 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] | |||||||
(Payments) issuance of commercial paper, net | $ (112,500,000) | ||||||
Debt due within one year | $ 112,500,000 | ||||||
Variable borrowing rate | 2.68% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | May 31, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Unrecognized tax benefits | $ 34.4 | $ 34.4 | $ 37.3 | ||
Effective tax rate | 18.90% | 20.10% | 16.50% | 19.30% |
Pension Plans (Details)
Pension Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Retirement Benefits [Abstract] | ||||
Interest cost | $ 720 | $ 781 | $ 2,161 | $ 2,343 |
Expected return on assets | (740) | (720) | (2,221) | (2,161) |
Net periodic benefit cost | $ (20) | $ 61 | $ (60) | $ 182 |
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 | 9 Months Ended | ||||||||
Feb. 29, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | Feb. 29, 2020 | Feb. 28, 2019 | Jun. 01, 2019 | Jun. 01, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||||||
Balance | $ 3,104,970 | $ 3,050,706 | $ 3,002,721 | $ 3,027,244 | $ 3,345,968 | $ 3,016,526 | $ 3,002,721 | $ 3,016,526 | ||
Other comprehensive income (loss) before reclassifications | (57,621) | 24,174 | (23,179) | (3,158) | (5,702) | (6,187) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | (358) | (358) | (295) | (295) | (294) | (295) | ||||
Other comprehensive loss | (57,979) | 23,816 | (23,474) | (3,453) | (5,996) | (6,482) | (57,637) | (15,931) | ||
Cumulative effect of change in accounting principle | $ (833) | $ 189,192 | ||||||||
Balance | 3,324,309 | 3,104,970 | 3,050,706 | 3,179,492 | 3,027,244 | 3,345,968 | 3,324,309 | 3,179,492 | ||
Foreign Currency | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||||||
Balance | (6,885) | (8,298) | (15,022) | (7,092) | 3,531 | 6,550 | (15,022) | 6,550 | ||
Other comprehensive income (loss) before reclassifications | (4,039) | 1,413 | 6,724 | 5,025 | (10,623) | (3,019) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Other comprehensive loss | (4,039) | 1,413 | 6,724 | 5,025 | (10,623) | (3,019) | ||||
Cumulative effect of change in accounting principle | 0 | |||||||||
Balance | (10,924) | (6,885) | (8,298) | (2,067) | (7,092) | 3,531 | (10,924) | (2,067) | ||
Unrealized Loss on Interest Rate Hedges | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||||||
Balance | (24,126) | (46,529) | (18,389) | 11,613 | 6,986 | 10,449 | (18,389) | 10,449 | ||
Other comprehensive income (loss) before reclassifications | (53,582) | 22,761 | (29,903) | (8,183) | 4,921 | (3,168) | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | (358) | (358) | (295) | (295) | (294) | (295) | ||||
Other comprehensive loss | (53,940) | 22,403 | (30,198) | (8,478) | 4,627 | (3,463) | ||||
Cumulative effect of change in accounting principle | 2,058 | |||||||||
Balance | (78,066) | (24,126) | (46,529) | 3,135 | 11,613 | 6,986 | (78,066) | 3,135 | ||
Other | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||||||
Balance | (5,824) | (5,824) | (5,741) | (656) | (656) | (656) | (5,741) | (656) | ||
Other comprehensive income (loss) before reclassifications | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Other comprehensive loss | 0 | 0 | 0 | 0 | 0 | 0 | ||||
Cumulative effect of change in accounting principle | (83) | |||||||||
Balance | (5,824) | (5,824) | (5,824) | (656) | (656) | (656) | (5,824) | (656) | ||
Total | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||||||||||
Balance | (36,835) | (60,651) | (39,152) | 3,865 | 9,861 | 16,343 | (39,152) | 16,343 | ||
Other comprehensive loss | (57,979) | 23,816 | (23,474) | (3,453) | (5,996) | (6,482) | ||||
Cumulative effect of change in accounting principle | $ 1,975 | |||||||||
Balance | $ (94,814) | $ (36,835) | $ (60,651) | $ 412 | $ 3,865 | $ 9,861 | $ (94,814) | $ 412 |
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 | 9 Months Ended | ||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Interest expense | $ 25,943 | $ 26,770 | $ 79,441 | $ 75,954 |
Income taxes | (54,536) | (50,632) | (144,838) | (157,035) |
Net income | 234,520 | 200,923 | 731,775 | 656,464 |
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 | (116) | (179) | (411) | (538) |
Net income | 358 | 295 | 1,011 | 884 |
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 | $ 1,422 | $ 1,422 |
Segment Information - Narrative
Segment Information - Narrative (Details) | 9 Months Ended |
Feb. 29, 2020segment | |
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 | 9 Months Ended | |||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | May 31, 2019 | |
Segment Reporting Information | |||||
Revenue | $ 1,810,648 | $ 1,682,330 | $ 5,465,536 | $ 5,098,573 | |
Income (loss) before income taxes | 289,056 | 251,555 | 876,613 | 813,499 | |
Total assets | 7,901,980 | 7,433,673 | 7,901,980 | 7,433,673 | $ 7,436,662 |
Operating Segments | Uniform Rental and Facility Services | |||||
Segment Reporting Information | |||||
Revenue | 1,448,021 | 1,358,322 | 4,372,524 | 4,124,038 | |
Income (loss) before income taxes | 271,629 | 239,138 | 826,999 | 713,563 | |
Total assets | 6,695,002 | 6,451,590 | 6,695,002 | 6,451,590 | |
Operating Segments | First Aid and Safety Services | |||||
Segment Reporting Information | |||||
Revenue | 170,541 | 149,170 | 512,299 | 455,935 | |
Income (loss) before income taxes | 24,692 | 21,622 | 74,102 | 64,933 | |
Total assets | 552,455 | 508,865 | 552,455 | 508,865 | |
Operating Segments | All Other | |||||
Segment Reporting Information | |||||
Revenue | 192,086 | 174,838 | 580,713 | 518,600 | |
Income (loss) before income taxes | 18,331 | 17,495 | 54,161 | 40,627 | |
Total assets | 420,082 | 392,359 | 420,082 | 392,359 | |
Corporate | |||||
Segment Reporting Information | |||||
Revenue | 0 | 0 | 0 | 0 | |
Income (loss) before income taxes | (25,596) | (26,700) | (78,649) | (5,624) | |
Total assets | $ 234,441 | $ 80,859 | $ 234,441 | $ 80,859 |
G&K Services, Inc. Integratio_2
G&K Services, Inc. Integration Expenses (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2020 | Feb. 28, 2019 | Feb. 29, 2020 | Feb. 28, 2019 | May 31, 2019 | |
Business Acquisition [Line Items] | |||||
Integration related costs | $ 0 | $ 799,000 | $ 0 | $ 13,496,000 | |
G&K Services | |||||
Business Acquisition [Line Items] | |||||
Integration related costs | 0 | 800,000 | 0 | 13,500,000 | |
Accrued employee termination benefits | 2,200,000 | 2,200,000 | $ 2,800,000 | ||
Payments for employee termination benefits | $ 300,000 | $ 500,000 | $ 600,000 | $ 3,800,000 |
Supplemental Guarantor Inform_3
Supplemental Guarantor Information - Narrative (Details) | Feb. 29, 2020USD ($) |
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 | 9 Months Ended | ||||||
Feb. 29, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | Feb. 29, 2020 | Feb. 28, 2019 | |
Revenue: | ||||||||
Revenue | $ 1,810,648 | $ 1,682,330 | $ 5,465,536 | $ 5,098,573 | ||||
Equity in net income of affiliates | 0 | 0 | 0 | 0 | ||||
Total revenue | 1,810,648 | 1,682,330 | 5,465,536 | 5,098,573 | ||||
Costs and expenses (income): | ||||||||
Selling and administrative expenses | 509,743 | 476,099 | 1,570,666 | 1,472,404 | ||||
G&K Services, Inc. integration expenses | 0 | 799 | 0 | 13,496 | ||||
Operating income | 314,652 | 278,255 | 955,262 | 819,123 | ||||
Gain on sale of a cost method investment | 0 | 0 | 0 | 69,373 | ||||
Interest income | (347) | (70) | (792) | (957) | ||||
Interest expense (income) | 25,943 | 26,770 | 79,441 | 75,954 | ||||
Income before income taxes | 289,056 | 251,555 | 876,613 | 813,499 | ||||
Income taxes | 54,536 | 50,632 | 144,838 | 157,035 | ||||
Income from continuing operations | 234,520 | 200,923 | 731,775 | 656,464 | ||||
Income (loss) from discontinued operations, net of tax | 0 | 2,411 | (323) | 2,398 | ||||
Net income | 234,520 | $ 246,120 | $ 250,812 | 203,334 | $ 243,013 | $ 212,515 | 731,452 | 658,862 |
Eliminations | ||||||||
Revenue: | ||||||||
Equity in net income of affiliates | (234,520) | (200,923) | (731,775) | (656,464) | ||||
Total revenue | (473,917) | (429,160) | (1,479,317) | (1,372,971) | ||||
Costs and expenses (income): | ||||||||
Selling and administrative expenses | (7,706) | (8,156) | (21,382) | (26,721) | ||||
G&K Services, Inc. integration expenses | 0 | 0 | ||||||
Operating income | (234,654) | (196,929) | (745,047) | (648,118) | ||||
Gain on sale of a cost method investment | 0 | |||||||
Interest income | 1 | 3 | 4 | 5 | ||||
Interest expense (income) | 0 | 0 | 0 | 0 | ||||
Income before income taxes | (234,655) | (196,932) | (745,051) | (648,123) | ||||
Income taxes | (25) | (19) | (86) | (77) | ||||
Income from continuing operations | (196,913) | (744,965) | (648,046) | |||||
Income (loss) from discontinued operations, net of tax | (2,411) | 323 | (2,398) | |||||
Net income | (234,630) | (199,324) | (744,642) | (650,444) | ||||
Cintas Corporation | Reportable Legal Entities | ||||||||
Revenue: | ||||||||
Equity in net income of affiliates | 234,520 | 200,923 | 731,775 | 656,464 | ||||
Total revenue | 234,520 | 200,923 | 731,775 | 656,464 | ||||
Costs and expenses (income): | ||||||||
Selling and administrative expenses | 0 | 0 | 0 | 0 | ||||
G&K Services, Inc. integration expenses | 0 | 0 | ||||||
Operating income | 234,520 | 200,923 | 731,775 | 656,464 | ||||
Gain on sale of a cost method investment | 0 | |||||||
Interest income | 0 | 0 | 0 | 0 | ||||
Interest expense (income) | 0 | 0 | 0 | 0 | ||||
Income before income taxes | 234,520 | 200,923 | 731,775 | 656,464 | ||||
Income taxes | 0 | 0 | 0 | 0 | ||||
Income from continuing operations | 200,923 | 731,775 | 656,464 | |||||
Income (loss) from discontinued operations, net of tax | 2,411 | (323) | 2,398 | |||||
Net income | 234,520 | 203,334 | 731,452 | 658,862 | ||||
Corp. 2 | Reportable Legal Entities | ||||||||
Revenue: | ||||||||
Equity in net income of affiliates | 0 | 0 | 0 | 0 | ||||
Total revenue | 1,729,730 | 1,611,888 | 5,246,097 | 4,898,506 | ||||
Costs and expenses (income): | ||||||||
Selling and administrative expenses | 576,433 | 527,720 | 1,767,258 | 1,608,906 | ||||
G&K Services, Inc. integration expenses | (141) | 8,508 | ||||||
Operating income | 109,827 | 98,974 | 346,993 | 294,060 | ||||
Gain on sale of a cost method investment | 0 | |||||||
Interest income | (131) | (56) | (438) | (559) | ||||
Interest expense (income) | 26,033 | 26,872 | 79,657 | 76,579 | ||||
Income before income taxes | 83,925 | 72,158 | 267,774 | 218,040 | ||||
Income taxes | 15,717 | 12,330 | 42,578 | 42,159 | ||||
Income from continuing operations | 59,828 | 225,196 | 175,881 | |||||
Income (loss) from discontinued operations, net of tax | 2,411 | (323) | 2,398 | |||||
Net income | 68,208 | 62,239 | 224,873 | 178,279 | ||||
Subsidiary Guarantors | Reportable Legal Entities | ||||||||
Revenue: | ||||||||
Equity in net income of affiliates | 0 | 0 | 0 | 0 | ||||
Total revenue | 189,397 | 176,831 | 574,868 | 542,963 | ||||
Costs and expenses (income): | ||||||||
Selling and administrative expenses | (94,155) | (74,507) | (277,575) | (207,745) | ||||
G&K Services, Inc. integration expenses | (379) | 2,754 | ||||||
Operating income | 196,494 | 166,425 | 590,685 | 490,719 | ||||
Gain on sale of a cost method investment | 69,373 | |||||||
Interest income | (195) | 1 | (302) | (364) | ||||
Interest expense (income) | (91) | (104) | (231) | (639) | ||||
Income before income taxes | 196,780 | 166,528 | 591,218 | 561,095 | ||||
Income taxes | 36,380 | 35,665 | 94,010 | 107,497 | ||||
Income from continuing operations | 130,863 | 497,208 | 453,598 | |||||
Income (loss) from discontinued operations, net of tax | 0 | 0 | 0 | |||||
Net income | 160,400 | 130,863 | 497,208 | 453,598 | ||||
Non- Guarantors | Reportable Legal Entities | ||||||||
Revenue: | ||||||||
Equity in net income of affiliates | 0 | 0 | 0 | 0 | ||||
Total revenue | 130,918 | 121,848 | 392,113 | 373,611 | ||||
Costs and expenses (income): | ||||||||
Selling and administrative expenses | 35,171 | 31,042 | 102,365 | 97,964 | ||||
G&K Services, Inc. integration expenses | 1,319 | 2,234 | ||||||
Operating income | 8,465 | 8,862 | 30,856 | 25,998 | ||||
Gain on sale of a cost method investment | 0 | |||||||
Interest income | (22) | (18) | (56) | (39) | ||||
Interest expense (income) | 1 | 2 | 15 | 14 | ||||
Income before income taxes | 8,486 | 8,878 | 30,897 | 26,023 | ||||
Income taxes | 2,464 | 2,656 | 8,336 | 7,456 | ||||
Income from continuing operations | 6,222 | 22,561 | 18,567 | |||||
Income (loss) from discontinued operations, net of tax | 0 | 0 | 0 | |||||
Net income | 6,022 | 6,222 | 22,561 | 18,567 | ||||
Uniform Rental and Facility Services | ||||||||
Revenue: | ||||||||
Revenue | 1,448,021 | 1,358,322 | 4,372,524 | 4,124,038 | ||||
Cost of revenue | 784,930 | 748,971 | 2,338,543 | 2,256,543 | ||||
Uniform Rental and Facility Services | Eliminations | ||||||||
Revenue: | ||||||||
Revenue | (691) | (10,925) | (1,831) | (86,008) | ||||
Cost of revenue | (32,852) | (39,275) | (95,551) | (166,737) | ||||
Uniform Rental and Facility Services | Cintas Corporation | Reportable Legal Entities | ||||||||
Revenue: | ||||||||
Revenue | 0 | 0 | 0 | 0 | ||||
Cost of revenue | 0 | 0 | 0 | 0 | ||||
Uniform Rental and Facility Services | Corp. 2 | Reportable Legal Entities | ||||||||
Revenue: | ||||||||
Revenue | 1,150,780 | 1,092,594 | 3,477,631 | 3,365,841 | ||||
Cost of revenue | 634,638 | 612,167 | 1,891,754 | 1,896,767 | ||||
Uniform Rental and Facility Services | Subsidiary Guarantors | Reportable Legal Entities | ||||||||
Revenue: | ||||||||
Revenue | 189,333 | 176,787 | 574,536 | 542,826 | ||||
Cost of revenue | 112,865 | 111,103 | 337,104 | 332,208 | ||||
Uniform Rental and Facility Services | Non- Guarantors | Reportable Legal Entities | ||||||||
Revenue: | ||||||||
Revenue | 108,599 | 99,866 | 322,188 | 301,379 | ||||
Cost of revenue | 70,279 | 64,976 | 205,236 | 194,305 | ||||
Other | ||||||||
Revenue: | ||||||||
Revenue | 362,627 | 324,008 | 1,093,012 | 974,535 | ||||
Cost of revenue | 201,323 | 178,206 | 601,065 | 537,007 | ||||
Other | Eliminations | ||||||||
Revenue: | ||||||||
Revenue | (238,706) | (217,312) | (745,711) | (630,499) | ||||
Cost of revenue | (198,705) | (184,800) | (617,337) | (531,395) | ||||
Other | Cintas Corporation | Reportable Legal Entities | ||||||||
Revenue: | ||||||||
Revenue | 0 | 0 | 0 | 0 | ||||
Cost of revenue | 0 | 0 | 0 | 0 | ||||
Other | Corp. 2 | Reportable Legal Entities | ||||||||
Revenue: | ||||||||
Revenue | 578,950 | 519,294 | 1,768,466 | 1,532,665 | ||||
Cost of revenue | 408,832 | 373,168 | 1,240,092 | 1,090,265 | ||||
Other | Subsidiary Guarantors | Reportable Legal Entities | ||||||||
Revenue: | ||||||||
Revenue | 64 | 44 | 332 | 137 | ||||
Cost of revenue | (25,807) | (25,811) | (75,346) | (74,973) | ||||
Other | Non- Guarantors | Reportable Legal Entities | ||||||||
Revenue: | ||||||||
Revenue | 22,319 | 21,982 | 69,925 | 72,232 | ||||
Cost of revenue | $ 17,003 | $ 15,649 | $ 53,656 | $ 53,110 |
Supplemental Guarantor Inform_5
Supplemental Guarantor Information - Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Feb. 29, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | Feb. 29, 2020 | Feb. 28, 2019 | |
Condensed Consolidating Financial Statements | ||||||||
Net income | $ 234,520 | $ 246,120 | $ 250,812 | $ 203,334 | $ 243,013 | $ 212,515 | $ 731,452 | $ 658,862 |
Other comprehensive (loss) income, net of tax: | ||||||||
Foreign currency translation adjustments | (4,039) | 5,025 | 4,098 | (8,617) | ||||
Change in fair value of interest rate lock agreements | (53,582) | (8,183) | (60,724) | (6,430) | ||||
Amortization of interest rate lock agreements | (358) | (295) | (1,011) | (884) | ||||
Other comprehensive loss | (57,979) | $ 23,816 | $ (23,474) | (3,453) | $ (5,996) | $ (6,482) | (57,637) | (15,931) |
Comprehensive income | 176,541 | 199,881 | 673,815 | 642,931 | ||||
Eliminations | ||||||||
Condensed Consolidating Financial Statements | ||||||||
Net income | (234,630) | (199,324) | (744,642) | (650,444) | ||||
Other comprehensive (loss) income, net of tax: | ||||||||
Foreign currency translation adjustments | 4,039 | (5,025) | (4,098) | 8,617 | ||||
Change in fair value of interest rate lock agreements | 53,582 | 8,183 | 60,724 | 6,430 | ||||
Amortization of interest rate lock agreements | 358 | 295 | 1,011 | 884 | ||||
Other comprehensive loss | 57,979 | 3,453 | 57,637 | 15,931 | ||||
Comprehensive income | (176,651) | (195,871) | (687,005) | (634,513) | ||||
Cintas Corporation | Reportable Legal Entities | ||||||||
Condensed Consolidating Financial Statements | ||||||||
Net income | 234,520 | 203,334 | 731,452 | 658,862 | ||||
Other comprehensive (loss) income, net of tax: | ||||||||
Foreign currency translation adjustments | (4,039) | 5,025 | 4,098 | (8,617) | ||||
Change in fair value of interest rate lock agreements | (53,582) | (8,183) | (60,724) | (6,430) | ||||
Amortization of interest rate lock agreements | (358) | (295) | (1,011) | (884) | ||||
Other comprehensive loss | (57,979) | (3,453) | (57,637) | (15,931) | ||||
Comprehensive income | 176,541 | 199,881 | 673,815 | 642,931 | ||||
Corp. 2 | Reportable Legal Entities | ||||||||
Condensed Consolidating Financial Statements | ||||||||
Net income | 68,208 | 62,239 | 224,873 | 178,279 | ||||
Other comprehensive (loss) income, net of tax: | ||||||||
Foreign currency translation adjustments | 0 | 0 | 0 | 0 | ||||
Change in fair value of interest rate lock agreements | (53,582) | (8,183) | (60,724) | (6,430) | ||||
Amortization of interest rate lock agreements | (358) | (295) | (1,011) | (884) | ||||
Other comprehensive loss | (53,940) | (8,478) | (61,735) | (7,314) | ||||
Comprehensive income | 14,268 | 53,761 | 163,138 | 170,965 | ||||
Subsidiary Guarantors | Reportable Legal Entities | ||||||||
Condensed Consolidating Financial Statements | ||||||||
Net income | 160,400 | 130,863 | 497,208 | 453,598 | ||||
Other comprehensive (loss) income, net of tax: | ||||||||
Foreign currency translation adjustments | 0 | 0 | 0 | 0 | ||||
Change in fair value of interest rate lock agreements | 0 | 0 | 0 | 0 | ||||
Amortization of interest rate lock agreements | 0 | 0 | 0 | 0 | ||||
Other comprehensive loss | 0 | 0 | 0 | 0 | ||||
Comprehensive income | 160,400 | 130,863 | 497,208 | 453,598 | ||||
Non- Guarantors | Reportable Legal Entities | ||||||||
Condensed Consolidating Financial Statements | ||||||||
Net income | 6,022 | 6,222 | 22,561 | 18,567 | ||||
Other comprehensive (loss) income, net of tax: | ||||||||
Foreign currency translation adjustments | (4,039) | 5,025 | 4,098 | (8,617) | ||||
Change in fair value of interest rate lock agreements | 0 | 0 | 0 | 0 | ||||
Amortization of interest rate lock agreements | 0 | 0 | 0 | 0 | ||||
Other comprehensive loss | (4,039) | 5,025 | 4,098 | (8,617) | ||||
Comprehensive income | $ 1,983 | $ 11,247 | $ 26,659 | $ 9,950 |
Supplemental Guarantor Inform_6
Supplemental Guarantor Information - Balance Sheet (Details) - USD ($) $ in Thousands | Feb. 29, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | May 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | May 31, 2018 |
Current assets: | ||||||||
Cash and cash equivalents | $ 234,441 | $ 96,645 | ||||||
Accounts receivable, net | 942,853 | 910,120 | ||||||
Inventories, net | 352,924 | 334,589 | ||||||
Uniforms and other rental items in service | 818,486 | 784,133 | ||||||
Income taxes, current | 23,485 | 7,475 | ||||||
Prepaid expenses and other current assets | 125,517 | 103,318 | ||||||
Total current assets | 2,497,706 | 2,236,280 | ||||||
Property and equipment, net | 1,434,866 | 1,430,685 | ||||||
Investments | 212,798 | 192,346 | ||||||
Goodwill | 2,873,996 | 2,842,441 | ||||||
Service contracts, net | 464,852 | 494,595 | ||||||
Operating lease right-of-use assets, net | 165,169 | |||||||
Other assets, net | 252,593 | 240,315 | ||||||
Total assets | 7,901,980 | 7,436,662 | $ 7,433,673 | |||||
Current liabilities: | ||||||||
Accounts payable | 243,248 | 226,020 | ||||||
Accrued compensation and related liabilities | 148,912 | 155,509 | ||||||
Accrued liabilities | 430,643 | 433,940 | ||||||
Operating lease liabilities, current | 44,043 | |||||||
Debt due within one year | 199,800 | 312,264 | ||||||
Total current liabilities | 1,066,646 | 1,127,733 | ||||||
Long-term liabilities: | ||||||||
Debt due after one year | 2,539,156 | 2,537,507 | ||||||
Deferred income taxes | 423,677 | 438,179 | ||||||
Operating lease liabilities | 126,994 | |||||||
Accrued liabilities | 421,198 | 330,522 | ||||||
Total long-term liabilities | 3,511,025 | 3,306,208 | ||||||
Total shareholders’ equity | 3,324,309 | $ 3,104,970 | $ 3,050,706 | 3,002,721 | $ 3,179,492 | $ 3,027,244 | $ 3,345,968 | $ 3,016,526 |
Total liabilities and shareholders' equity | 7,901,980 | 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 | (17,268) | (12,248) | ||||||
Income taxes, current | 0 | 0 | ||||||
Prepaid expenses and other current assets | 0 | 0 | ||||||
Total current assets | (17,268) | (12,248) | ||||||
Property and equipment, net | 0 | 0 | ||||||
Investments | (6,192,098) | (6,399,643) | ||||||
Goodwill | (112) | (112) | ||||||
Service contracts, net | 0 | 0 | ||||||
Operating lease right-of-use assets, net | 0 | |||||||
Other assets, net | (8,295,667) | (7,613,307) | ||||||
Total assets | (14,505,145) | (14,025,310) | ||||||
Current liabilities: | ||||||||
Accounts payable | 37,067 | 37,432 | ||||||
Accrued compensation and related liabilities | 0 | 0 | ||||||
Accrued liabilities | 0 | 0 | ||||||
Operating lease liabilities, current | 0 | |||||||
Debt due within one year | 0 | 0 | ||||||
Total current liabilities | 37,067 | 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 | (14,542,212) | (14,062,742) | ||||||
Total liabilities and shareholders' equity | (14,505,145) | (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 | 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 | 2,537,979 | 2,216,391 | ||||||
Total assets | 2,859,062 | 2,537,474 | ||||||
Current liabilities: | ||||||||
Accounts payable | (465,247) | (465,247) | ||||||
Accrued compensation and related liabilities | 0 | 0 | ||||||
Accrued liabilities | 0 | 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 | 3,324,309 | 3,002,721 | ||||||
Total liabilities and shareholders' equity | 2,859,062 | 2,537,474 | ||||||
Corp. 2 | Reportable Legal Entities | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 56,577 | 54,963 | ||||||
Accounts receivable, net | 744,013 | 719,914 | ||||||
Inventories, net | 304,972 | 278,666 | ||||||
Uniforms and other rental items in service | 678,365 | 645,862 | ||||||
Income taxes, current | 2,135 | (9,728) | ||||||
Prepaid expenses and other current assets | 85,754 | 81,117 | ||||||
Total current assets | 1,871,816 | 1,770,794 | ||||||
Property and equipment, net | 980,850 | 948,830 | ||||||
Investments | 3,755,219 | 3,589,234 | ||||||
Goodwill | 0 | 0 | ||||||
Service contracts, net | 402,393 | 427,437 | ||||||
Operating lease right-of-use assets, net | 136,339 | |||||||
Other assets, net | 226,623 | 211,102 | ||||||
Total assets | 7,373,240 | 6,947,397 | ||||||
Current liabilities: | ||||||||
Accounts payable | (2,100,124) | (2,090,954) | ||||||
Accrued compensation and related liabilities | 97,236 | 117,404 | ||||||
Accrued liabilities | 85,636 | 84,296 | ||||||
Operating lease liabilities, current | 35,108 | |||||||
Debt due within one year | 199,800 | 312,264 | ||||||
Total current liabilities | (1,682,344) | (1,576,990) | ||||||
Long-term liabilities: | ||||||||
Debt due after one year | 2,539,156 | 2,537,507 | ||||||
Deferred income taxes | 295,861 | 307,334 | ||||||
Operating lease liabilities | 105,948 | |||||||
Accrued liabilities | 189,728 | 116,469 | ||||||
Total long-term liabilities | 3,130,693 | 2,961,310 | ||||||
Total shareholders’ equity | 5,924,891 | 5,563,077 | ||||||
Total liabilities and shareholders' equity | 7,373,240 | 6,947,397 | ||||||
Investments, including intercompany investments | 20,600 | 19,800 | ||||||
Subsidiary Guarantors | Reportable Legal Entities | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 152,528 | 13,151 | ||||||
Accounts receivable, net | 127,338 | 121,803 | ||||||
Inventories, net | 27,382 | 35,081 | ||||||
Uniforms and other rental items in service | 95,211 | 90,458 | ||||||
Income taxes, current | 17,456 | 11,722 | ||||||
Prepaid expenses and other current assets | 37,876 | 20,334 | ||||||
Total current assets | 457,791 | 292,549 | ||||||
Property and equipment, net | 351,800 | 369,006 | ||||||
Investments | 984,460 | 964,802 | ||||||
Goodwill | 2,615,570 | 2,586,406 | ||||||
Service contracts, net | 0 | 0 | ||||||
Operating lease right-of-use assets, net | 15,547 | |||||||
Other assets, net | 5,782,580 | 5,424,413 | ||||||
Total assets | 10,207,748 | 9,637,176 | ||||||
Current liabilities: | ||||||||
Accounts payable | 2,821,104 | 2,793,558 | ||||||
Accrued compensation and related liabilities | 41,698 | 26,870 | ||||||
Accrued liabilities | 329,595 | 328,267 | ||||||
Operating lease liabilities, current | 4,784 | |||||||
Debt due within one year | 0 | 0 | ||||||
Total current liabilities | 3,197,181 | 3,148,695 | ||||||
Long-term liabilities: | ||||||||
Debt due after one year | 0 | 0 | ||||||
Deferred income taxes | 96,423 | 100,162 | ||||||
Operating lease liabilities | 11,494 | |||||||
Accrued liabilities | 214,926 | 197,934 | ||||||
Total long-term liabilities | 322,843 | 298,096 | ||||||
Total shareholders’ equity | 6,687,724 | 6,190,385 | ||||||
Total liabilities and shareholders' equity | 10,207,748 | 9,637,176 | ||||||
Investments, including intercompany investments | 192,200 | 172,500 | ||||||
Non- Guarantors | Reportable Legal Entities | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 25,336 | 28,531 | ||||||
Accounts receivable, net | 71,502 | 68,403 | ||||||
Inventories, net | 20,570 | 20,842 | ||||||
Uniforms and other rental items in service | 62,178 | 60,061 | ||||||
Income taxes, current | 3,894 | 5,481 | ||||||
Prepaid expenses and other current assets | 1,887 | 1,867 | ||||||
Total current assets | 185,367 | 185,185 | ||||||
Property and equipment, net | 102,216 | 112,849 | ||||||
Investments | 1,344,134 | 1,716,870 | ||||||
Goodwill | 258,538 | 256,147 | ||||||
Service contracts, net | 62,459 | 67,158 | ||||||
Operating lease right-of-use assets, net | 13,283 | |||||||
Other assets, net | 1,078 | 1,716 | ||||||
Total assets | 1,967,075 | 2,339,925 | ||||||
Current liabilities: | ||||||||
Accounts payable | (49,552) | (48,769) | ||||||
Accrued compensation and related liabilities | 9,978 | 11,235 | ||||||
Accrued liabilities | 15,412 | 21,377 | ||||||
Operating lease liabilities, current | 4,151 | |||||||
Debt due within one year | 0 | 0 | ||||||
Total current liabilities | (20,011) | (16,157) | ||||||
Long-term liabilities: | ||||||||
Debt due after one year | 0 | 0 | ||||||
Deferred income taxes | 31,393 | 30,683 | ||||||
Operating lease liabilities | 9,552 | |||||||
Accrued liabilities | 16,544 | 16,119 | ||||||
Total long-term liabilities | 57,489 | 46,802 | ||||||
Total shareholders’ equity | 1,929,597 | 2,309,280 | ||||||
Total liabilities and shareholders' equity | $ 1,967,075 | $ 2,339,925 |
Supplemental Guarantor Inform_7
Supplemental Guarantor Information - Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Feb. 29, 2020 | Nov. 30, 2019 | Aug. 31, 2019 | Feb. 28, 2019 | Nov. 30, 2018 | Aug. 31, 2018 | Feb. 29, 2020 | Feb. 28, 2019 | |
Cash flows from operating activities: | ||||||||
Net income | $ 234,520 | $ 246,120 | $ 250,812 | $ 203,334 | $ 243,013 | $ 212,515 | $ 731,452 | $ 658,862 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 175,261 | 164,380 | ||||||
Amortization of intangible assets and capitalized contract costs | 107,232 | 101,949 | ||||||
Stock-based compensation | 96,428 | 105,553 | ||||||
Gain on sale of a cost method investment | 0 | 0 | 0 | (69,373) | ||||
Gain on sale of business | 0 | (2,419) | ||||||
Deferred income taxes | 5,013 | 25,079 | ||||||
Change in current assets and liabilities, net of acquisitions of businesses: | ||||||||
Accounts receivable, net | (31,135) | (61,102) | ||||||
Inventories, net | (17,780) | (70,716) | ||||||
Uniforms and other rental items in service | (33,732) | (72,336) | ||||||
Prepaid expenses and other current assets and capitalized contract costs | (95,169) | (85,123) | ||||||
Accounts payable | 14,271 | 79 | ||||||
Accrued compensation and related liabilities | (4,792) | (3,866) | ||||||
Accrued liabilities and other | 3,426 | 3,614 | ||||||
Income taxes, current | (15,926) | (23,864) | ||||||
Net cash provided by operating activities | 934,549 | 670,717 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (189,379) | (207,805) | ||||||
Purchases of investments | (10,461) | (17,544) | ||||||
Proceeds from sale of assets | 13,300 | 0 | ||||||
Proceeds from sale of a cost method investment | 0 | 73,342 | ||||||
Proceeds from sale of business | 0 | 3,200 | ||||||
Acquisitions of businesses, net of cash acquired | (47,850) | (7,403) | ||||||
Other, net | (2,090) | (6,804) | ||||||
Net cash used in investing activities | (236,480) | (163,014) | ||||||
Cash flows from financing activities: | ||||||||
(Payments) issuance of commercial paper, net | (112,500) | 217,500 | ||||||
Proceeds from exercise of stock-based compensation awards | 81,547 | 54,274 | ||||||
Dividends paid | (268,042) | (220,760) | ||||||
Repurchase of common stock | (261,327) | (608,224) | ||||||
Other, net | 30 | (8,088) | ||||||
Net cash used in financing activities | (560,292) | (565,298) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 19 | (270) | ||||||
Net increase (decrease) in cash and cash equivalents | 137,796 | (57,865) | ||||||
Cash and cash equivalents at beginning of period | 96,645 | 138,724 | 96,645 | 138,724 | ||||
Cash and cash equivalents at end of period | 234,441 | 80,859 | 234,441 | 80,859 | ||||
Eliminations | ||||||||
Cash flows from operating activities: | ||||||||
Net income | (234,630) | (199,324) | (744,642) | (650,444) | ||||
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 | ||||||
Gain on sale of a cost method investment | 0 | |||||||
Gain on sale of business | 0 | |||||||
Deferred income taxes | 0 | 0 | ||||||
Change in current assets and liabilities, net of acquisitions of businesses: | ||||||||
Accounts receivable, net | 0 | (4,280) | ||||||
Inventories, net | 0 | (3,780) | ||||||
Uniforms and other rental items in service | 5,020 | 0 | ||||||
Prepaid expenses and other current assets and capitalized contract costs | 0 | 0 | ||||||
Accounts payable | (365) | (361) | ||||||
Accrued compensation and related liabilities | 0 | 0 | ||||||
Accrued liabilities and other | 0 | 0 | ||||||
Income taxes, current | 0 | 0 | ||||||
Net cash provided by operating activities | (739,987) | (658,865) | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | 0 | 0 | ||||||
Purchases of investments | 0 | 750 | ||||||
Proceeds from sale of assets | 0 | |||||||
Proceeds from sale of a cost method investment | 0 | |||||||
Proceeds from sale of business | 0 | |||||||
Acquisitions of businesses, net of cash acquired | 0 | 0 | ||||||
Other, net | 739,987 | 658,115 | ||||||
Net cash used in investing activities | 739,987 | 658,865 | ||||||
Cash flows from financing activities: | ||||||||
(Payments) issuance of commercial paper, net | 0 | 0 | ||||||
Proceeds from exercise of stock-based compensation awards | 0 | 0 | ||||||
Dividends paid | 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 | 0 | 0 | ||||||
Cash and cash equivalents at beginning of period | 0 | 0 | 0 | 0 | ||||
Cash and cash equivalents at end of period | 0 | 0 | 0 | 0 | ||||
Cintas Corporation | Reportable Legal Entities | ||||||||
Cash flows from operating activities: | ||||||||
Net income | 234,520 | 203,334 | 731,452 | 658,862 | ||||
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 | 96,428 | 105,553 | ||||||
Gain on sale of a cost method investment | 0 | |||||||
Gain on sale of business | 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 | 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 | 827,880 | 764,415 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | 0 | 0 | ||||||
Purchases of investments | 0 | 0 | ||||||
Proceeds from sale of assets | 0 | |||||||
Proceeds from sale of a cost method investment | 0 | |||||||
Proceeds from sale of business | 0 | |||||||
Acquisitions of businesses, net of cash acquired | 0 | 0 | ||||||
Other, net | (380,159) | 10,201 | ||||||
Net cash used in investing activities | (380,159) | 10,201 | ||||||
Cash flows from financing activities: | ||||||||
(Payments) issuance of commercial paper, net | 0 | 0 | ||||||
Proceeds from exercise of stock-based compensation awards | 81,547 | 54,274 | ||||||
Dividends paid | (267,941) | (220,666) | ||||||
Repurchase of common stock | (261,327) | (608,224) | ||||||
Other, net | 0 | 0 | ||||||
Net cash used in financing activities | (447,721) | (774,616) | ||||||
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 | 0 | 0 | ||||
Cash and cash equivalents at end of period | 0 | 0 | 0 | 0 | ||||
Corp. 2 | Reportable Legal Entities | ||||||||
Cash flows from operating activities: | ||||||||
Net income | 68,208 | 62,239 | 224,873 | 178,279 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 115,229 | 106,577 | ||||||
Amortization of intangible assets and capitalized contract costs | 97,267 | 91,912 | ||||||
Stock-based compensation | 0 | 0 | ||||||
Gain on sale of a cost method investment | 0 | |||||||
Gain on sale of business | (2,419) | |||||||
Deferred income taxes | 8,319 | 16,059 | ||||||
Change in current assets and liabilities, net of acquisitions of businesses: | ||||||||
Accounts receivable, net | (23,027) | (51,317) | ||||||
Inventories, net | (25,914) | (64,014) | ||||||
Uniforms and other rental items in service | (32,368) | (51,696) | ||||||
Prepaid expenses and other current assets and capitalized contract costs | (77,609) | (74,606) | ||||||
Accounts payable | 24,315 | (205,528) | ||||||
Accrued compensation and related liabilities | (20,168) | 1,832 | ||||||
Accrued liabilities and other | (7,377) | (274) | ||||||
Income taxes, current | (11,863) | 7,059 | ||||||
Net cash provided by operating activities | 271,677 | (48,136) | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (140,144) | (147,744) | ||||||
Purchases of investments | (793) | (1,938) | ||||||
Proceeds from sale of assets | 0 | |||||||
Proceeds from sale of a cost method investment | 0 | |||||||
Proceeds from sale of business | 3,200 | |||||||
Acquisitions of businesses, net of cash acquired | (47,777) | (7,403) | ||||||
Other, net | 31,121 | (5,216) | ||||||
Net cash used in investing activities | (157,593) | (159,101) | ||||||
Cash flows from financing activities: | ||||||||
(Payments) issuance of commercial paper, net | (112,500) | 217,500 | ||||||
Proceeds from exercise of stock-based compensation awards | 0 | 0 | ||||||
Dividends paid | 0 | 0 | ||||||
Repurchase of common stock | 0 | 0 | ||||||
Other, net | 30 | (8,088) | ||||||
Net cash used in financing activities | (112,470) | 209,412 | ||||||
Effect of exchange rate changes on cash and cash equivalents | 0 | 0 | ||||||
Net increase (decrease) in cash and cash equivalents | 1,614 | 2,175 | ||||||
Cash and cash equivalents at beginning of period | 54,963 | 44,499 | 54,963 | 44,499 | ||||
Cash and cash equivalents at end of period | 56,577 | 46,674 | 56,577 | 46,674 | ||||
Subsidiary Guarantors | Reportable Legal Entities | ||||||||
Cash flows from operating activities: | ||||||||
Net income | 160,400 | 130,863 | 497,208 | 453,598 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 49,181 | 47,116 | ||||||
Amortization of intangible assets and capitalized contract costs | 3,838 | 3,801 | ||||||
Stock-based compensation | 0 | 0 | ||||||
Gain on sale of a cost method investment | (69,373) | |||||||
Gain on sale of business | 0 | |||||||
Deferred income taxes | (3,735) | 5,654 | ||||||
Change in current assets and liabilities, net of acquisitions of businesses: | ||||||||
Accounts receivable, net | (5,536) | 2,522 | ||||||
Inventories, net | 8,346 | 1,395 | ||||||
Uniforms and other rental items in service | (4,754) | (12,329) | ||||||
Prepaid expenses and other current assets and capitalized contract costs | (17,543) | (10,067) | ||||||
Accounts payable | (9,136) | 204,336 | ||||||
Accrued compensation and related liabilities | 14,343 | (4,143) | ||||||
Accrued liabilities and other | 13,777 | 4,567 | ||||||
Income taxes, current | (5,733) | (24,957) | ||||||
Net cash provided by operating activities | 540,256 | 602,120 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (32,026) | (44,151) | ||||||
Purchases of investments | (9,668) | (16,356) | ||||||
Proceeds from sale of assets | 0 | |||||||
Proceeds from sale of a cost method investment | 73,342 | |||||||
Proceeds from sale of business | 0 | |||||||
Acquisitions of businesses, net of cash acquired | 0 | 0 | ||||||
Other, net | (359,185) | (663,791) | ||||||
Net cash used in investing activities | (400,879) | (650,956) | ||||||
Cash flows from financing activities: | ||||||||
(Payments) issuance of commercial paper, net | 0 | 0 | ||||||
Proceeds from exercise of stock-based compensation awards | 0 | 0 | ||||||
Dividends paid | 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 | 139,377 | (48,836) | ||||||
Cash and cash equivalents at beginning of period | 13,151 | 60,310 | 13,151 | 60,310 | ||||
Cash and cash equivalents at end of period | 152,528 | 11,474 | 152,528 | 11,474 | ||||
Non- Guarantors | Reportable Legal Entities | ||||||||
Cash flows from operating activities: | ||||||||
Net income | 6,022 | 6,222 | 22,561 | 18,567 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation | 10,851 | 10,687 | ||||||
Amortization of intangible assets and capitalized contract costs | 6,127 | 6,236 | ||||||
Stock-based compensation | 0 | 0 | ||||||
Gain on sale of a cost method investment | 0 | |||||||
Gain on sale of business | 0 | |||||||
Deferred income taxes | 429 | 3,366 | ||||||
Change in current assets and liabilities, net of acquisitions of businesses: | ||||||||
Accounts receivable, net | (2,572) | (8,027) | ||||||
Inventories, net | (212) | (4,317) | ||||||
Uniforms and other rental items in service | (1,630) | (8,311) | ||||||
Prepaid expenses and other current assets and capitalized contract costs | (17) | (450) | ||||||
Accounts payable | (543) | 1,632 | ||||||
Accrued compensation and related liabilities | 1,033 | (1,555) | ||||||
Accrued liabilities and other | (2,974) | (679) | ||||||
Income taxes, current | 1,670 | (5,966) | ||||||
Net cash provided by operating activities | 34,723 | 11,183 | ||||||
Cash flows from investing activities: | ||||||||
Capital expenditures | (17,209) | (15,910) | ||||||
Purchases of investments | 0 | 0 | ||||||
Proceeds from sale of assets | 13,300 | |||||||
Proceeds from sale of a cost method investment | 0 | |||||||
Proceeds from sale of business | 0 | |||||||
Acquisitions of businesses, net of cash acquired | (73) | 0 | ||||||
Other, net | (33,854) | (6,113) | ||||||
Net cash used in investing activities | (37,836) | (22,023) | ||||||
Cash flows from financing activities: | ||||||||
(Payments) issuance of commercial paper, net | 0 | 0 | ||||||
Proceeds from exercise of stock-based compensation awards | 0 | 0 | ||||||
Dividends paid | (101) | (94) | ||||||
Repurchase of common stock | 0 | 0 | ||||||
Other, net | 0 | 0 | ||||||
Net cash used in financing activities | (101) | (94) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 19 | (270) | ||||||
Net increase (decrease) in cash and cash equivalents | (3,195) | (11,204) | ||||||
Cash and cash equivalents at beginning of period | $ 28,531 | $ 33,915 | 28,531 | 33,915 | ||||
Cash and cash equivalents at end of period | $ 25,336 | $ 22,711 | $ 25,336 | $ 22,711 |
Uncategorized Items - ctas-2020
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 189,192,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (2,808,000) |