UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period endedAugust 31, 20212022
 OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                        to                                        
 Commission file number 0-11399
ctas-20220831_g1.jpg
Cintas Corporation
(Exact name of registrant as specified in its charter)
Washington31-1188630
(State or Other Jurisdiction of Incorporation or Organization)(IRS Employer Identification Number)
6800 Cintas Boulevard
P.O. Box 625737
Cincinnati,Ohio45262-5737
(Address of Principal Executive Offices)(Zip Code)
 
Registrant's Telephone Number, Including Area Code: (513) 459-1200
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading symbol(s)Name of each exchange on which registered
Common stock, no par valueCTASThe NASDAQ Stock Market LLC
(NASDAQ Global Select Market)
Indicate by checkmark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No
Indicate by checkmark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes No
Indicate by checkmark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer                 Accelerated Filer                                               Non-Accelerated Filer  
Smaller Reporting Company           Emerging Growth Company 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by checkmark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes No 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Class Outstanding September 30, 20212022
Common Stock, no par value 103,407,624101,545,323



CINTAS CORPORATION
TABLE OF CONTENTS

Page
August 31, 20212022 and May 31, 20212022
 



Table of Contents

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

Three Months Ended Three Months Ended
August 31, 2021August 31, 2020 August 31, 2022August 31, 2021
Revenue:Revenue:  Revenue:  
Uniform rental and facility servicesUniform rental and facility services$1,508,176 $1,394,411 Uniform rental and facility services$1,697,772 $1,508,176 
OtherOther388,774 352,164 Other468,682 388,774 
Total revenueTotal revenue1,896,950 1,746,575 Total revenue2,166,454 1,896,950 
Costs and expenses:Costs and expenses:  Costs and expenses:  
Cost of uniform rental and facility servicesCost of uniform rental and facility services779,301 715,412 Cost of uniform rental and facility services890,766 779,301 
Cost of otherCost of other214,893 204,962 Cost of other247,576 214,893 
Selling and administrative expensesSelling and administrative expenses508,655 476,495 Selling and administrative expenses587,992 508,655 
Operating incomeOperating income394,101 349,706 Operating income440,120 394,101 
Interest incomeInterest income(56)(64)Interest income(155)(56)
Interest expenseInterest expense21,854 24,550 Interest expense27,720 21,854 
Income before income taxesIncome before income taxes372,303 325,220 Income before income taxes412,555 372,303 
Income taxesIncome taxes41,124 25,215 Income taxes60,866 41,124 
Net incomeNet income$331,179 $300,005 Net income$351,689 $331,179 
Basic earnings per shareBasic earnings per share$3.19 $2.86 Basic earnings per share$3.45 $3.19 
Diluted earnings per shareDiluted earnings per share$3.11 $2.78 Diluted earnings per share$3.39 $3.11 
Dividends declared per shareDividends declared per share$0.95 $— Dividends declared per share$1.15 $0.95 
 
See accompanying notes.
3

Table of Contents

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

Three Months EndedThree Months Ended
August 31,
2021
August 31,
2020
August 31,
2022
August 31,
2021
Net incomeNet income$331,179 $300,005 Net income$351,689 $331,179 
Other comprehensive (loss) income, net of tax:Other comprehensive (loss) income, net of tax:Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustmentsForeign currency translation adjustments(24,016)26,946 Foreign currency translation adjustments(19,206)(24,016)
Change in fair value of interest rate lock agreements, net of tax
(benefit) expense of $(12,554) and $3,672, respectively
(36,679)10,842 
Amortization of interest rate lock agreements, net of tax benefit
of $148 and $116, respectively
(459)(358)
Change in fair value of interest rate lock agreements, net of tax
expense (benefit) of $320 and $(12,554), respectively
Change in fair value of interest rate lock agreements, net of tax
expense (benefit) of $320 and $(12,554), respectively
934 (36,679)
Amortization of interest rate lock agreements, net of tax expense
of $512 and $148, respectively
Amortization of interest rate lock agreements, net of tax expense
of $512 and $148, respectively
(1,521)(459)
Other comprehensive (loss) income, net of tax (benefit) expense of
$(12,406) and $3,788, respectively
(61,154)37,430 
Other comprehensive loss, net of tax expense (benefit)
of $832 and $(12,406), respectively
Other comprehensive loss, net of tax expense (benefit)
of $832 and $(12,406), respectively
(19,793)(61,154)
Comprehensive incomeComprehensive income$270,025 $337,435 Comprehensive income$331,896 $270,025 

See accompanying notes.






4

Table of Contents

CINTAS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(In thousands except share data)

August 31, 2021May 31,
2021
August 31,
2022
May 31,
2022
(Unaudited)  (Unaudited) 
ASSETSASSETS  ASSETS  
Current assets:Current assets:  Current assets:  
Cash and cash equivalentsCash and cash equivalents$79,749 $493,640 Cash and cash equivalents$74,558 $90,471 
Accounts receivable, netAccounts receivable, net927,360 901,710 Accounts receivable, net1,082,783 1,006,220 
Inventories, netInventories, net463,692 481,797 Inventories, net473,888 472,150 
Uniforms and other rental items in serviceUniforms and other rental items in service846,656 810,104 Uniforms and other rental items in service953,717 916,706 
Income taxes, currentIncome taxes, current11,249 22,282 Income taxes, current— 21,708 
Prepaid expenses and other current assetsPrepaid expenses and other current assets148,960 133,776 Prepaid expenses and other current assets162,844 124,728 
Total current assetsTotal current assets2,477,666 2,843,309 Total current assets2,747,790 2,631,983 
Property and equipment, netProperty and equipment, net1,301,233 1,318,438 Property and equipment, net1,329,131 1,323,673 
InvestmentsInvestments295,268 274,616 Investments239,335 242,873 
GoodwillGoodwill2,924,993 2,913,069 Goodwill3,037,278 3,042,976 
Service contracts, netService contracts, net403,982 408,445 Service contracts, net379,379 391,638 
Operating lease right-of-use assets, netOperating lease right-of-use assets, net159,289 168,532 Operating lease right-of-use assets, net174,697 170,003 
Other assets, netOther assets, net295,319 310,414 Other assets, net353,416 344,110 
$7,857,750 $8,236,823  $8,261,026 $8,147,256 
LIABILITIES AND SHAREHOLDERS’ EQUITYLIABILITIES AND SHAREHOLDERS’ EQUITY  LIABILITIES AND SHAREHOLDERS’ EQUITY  
Current liabilities:Current liabilities:  Current liabilities:  
Accounts payableAccounts payable$202,968 $230,786 Accounts payable$292,321 $251,504 
Accrued compensation and related liabilitiesAccrued compensation and related liabilities155,212 241,469 Accrued compensation and related liabilities176,865 236,992 
Accrued liabilitiesAccrued liabilities592,384 518,910 Accrued liabilities543,566 588,948 
Income taxes, currentIncome taxes, current35,783 — 
Operating lease liabilities, currentOperating lease liabilities, current43,308 43,850 Operating lease liabilities, current43,539 43,872 
Debt due within one yearDebt due within one year1,275,167 899,070 Debt due within one year507,467 311,574 
Total current liabilitiesTotal current liabilities2,269,039 1,934,085 Total current liabilities1,599,541 1,432,890 
Long-term liabilities:Long-term liabilities:  Long-term liabilities:  
Debt due after one yearDebt due after one year1,343,222 1,642,833 Debt due after one year2,484,602 2,483,932 
Deferred income taxesDeferred income taxes395,599 386,647 Deferred income taxes487,755 473,777 
Operating lease liabilitiesOperating lease liabilities122,291 130,774 Operating lease liabilities134,010 129,064 
Accrued liabilitiesAccrued liabilities418,396 454,637 Accrued liabilities325,492 319,397 
Total long-term liabilitiesTotal long-term liabilities2,279,508 2,614,891 Total long-term liabilities3,431,859 3,406,170 
Shareholders’ equity:Shareholders’ equity:  Shareholders’ equity:  
Preferred stock, no par value:Preferred stock, no par value:— — Preferred stock, no par value:— — 
100,000 shares authorized, none outstanding100,000 shares authorized, none outstanding100,000 shares authorized, none outstanding
Common stock, no par value, and paid-in capital:Common stock, no par value, and paid-in capital:1,625,594 1,516,202 Common stock, no par value, and paid-in capital:1,878,837 1,771,917 
425,000,000 shares authorized425,000,000 shares authorized  425,000,000 shares authorized  
FY 2022: 190,127,513 shares issued and 103,329,218 shares outstanding  
FY 2021: 189,071,185 shares issued and 104,061,391 shares outstanding
FY 2023: 191,654,188 shares issued and 101,532,642 shares outstandingFY 2023: 191,654,188 shares issued and 101,532,642 shares outstanding  
FY 2022: 190,837,921 shares issued and 101,711,215 shares outstandingFY 2022: 190,837,921 shares issued and 101,711,215 shares outstanding
Retained earningsRetained earnings8,109,368 7,877,015 Retained earnings8,953,391 8,719,163 
Treasury stock:Treasury stock:(6,395,493)(5,736,258)Treasury stock:(7,690,726)(7,290,801)
FY 2022: 86,798,295 shares  
FY 2021: 85,009,794 shares
Accumulated other comprehensive (loss) income(30,266)30,888 
FY 2023: 90,121,546 sharesFY 2023: 90,121,546 shares  
FY 2022: 89,126,706 sharesFY 2022: 89,126,706 shares
Accumulated other comprehensive incomeAccumulated other comprehensive income88,124 107,917 
Total shareholders’ equityTotal shareholders’ equity3,309,203 3,687,847 Total shareholders’ equity3,229,626 3,308,196 
$7,857,750 $8,236,823  $8,261,026 $8,147,256 
See accompanying notes.
5

Table of Contents


CINTAS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(In thousands)

Common Stock
and Paid-In Capital 
Retained
Earnings
Other
Accumulated
Comprehensive
Income (Loss)
Treasury Stock  Total
Shareholders'
Equity
Common Stock
and Paid-In Capital 
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury Stock  Total
Shareholders'
Equity
SharesAmountSharesAmountTotal
Shareholders'
Equity
SharesAmountRetained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
AmountTotal
Shareholders'
Equity
Balance at June 1, 2021189,071 $1,516,202 $7,877,015 $30,888 (85,010)$(5,736,258)$3,687,847 
Balance at June 1, 2022Balance at June 1, 2022190,838 $1,771,917 $8,719,163 $107,917 (89,127)$(7,290,801)$3,308,196 
Net incomeNet income— — 331,179 — — — 331,179 Net income— — 351,689 — — — 351,689 
Comprehensive loss, net of taxComprehensive loss, net of tax— — — (61,154)— — (61,154)Comprehensive loss, net of tax— — — (19,793)— — (19,793)
DividendsDividends— — (98,826)— — — (98,826)Dividends— — (117,461)— — — (117,461)
Stock-based compensationStock-based compensation— 36,496 — — — — 36,496 Stock-based compensation— 26,282 — — — — 26,282 
Vesting of stock-based compensation awardsVesting of stock-based compensation awards493 — — — — — — Vesting of stock-based compensation awards273 — — — — — — 
Stock options exercised, net of shares
surrendered
564 72,896 — — — — 72,896 
Stock options exercisedStock options exercised543 80,638 — — (193)(79,591)1,047 
Repurchase of common stockRepurchase of common stock— — — — (1,788)(659,235)(659,235)Repurchase of common stock— — — — (802)(320,334)(320,334)
Balance at August 31, 2021190,128 $1,625,594 $8,109,368 $(30,266)(86,798)$(6,395,493)$3,309,203 
Balance at August 31, 2022Balance at August 31, 2022191,654 $1,878,837 $8,953,391 $88,124 (90,122)$(7,690,726)$3,229,626 

Common Stock
and Paid-In Capital  
Retained
Earnings
Other
Accumulated
Comprehensive
Loss
Treasury Stock  Total
Shareholders'
Equity
Common Stock
and Paid-In Capital  
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury Stock  Total
Shareholders'
Equity
SharesAmountSharesAmountTotal
Shareholders'
Equity
SharesAmountRetained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
AmountTotal
Shareholders'
Equity
Balance at June 1, 2020186,793 $1,274,210 $7,296,509 $(153,380)(83,378)$(5,182,137)$3,235,202 
Balance at June 1, 2021Balance at June 1, 2021189,071 $1,516,202 $7,877,015 $30,888 (85,010)$(5,736,258)$3,687,847 
Net incomeNet income— — 300,005 — — — 300,005 Net income— — 331,179 — — — 331,179 
Comprehensive income, net of tax— — — 37,430 — — 37,430 
Comprehensive loss, net of taxComprehensive loss, net of tax— — — (61,154)— — (61,154)
DividendsDividends— — (98,826)— — — (98,826)
Stock-based compensationStock-based compensation— 29,055 — — — — 29,055 Stock-based compensation— 36,496 — — — — 36,496 
Vesting of stock-based compensation awardsVesting of stock-based compensation awards568 — — — — — — Vesting of stock-based compensation awards493 — — — — — — 
Stock options exercised, net of shares
surrendered
795 72,123 — — — — 72,123 
Stock options exercisedStock options exercised564 72,896 — — — — 72,896 
Repurchase of common stockRepurchase of common stock— — — — (230)(69,011)(69,011)Repurchase of common stock— — — — (1,788)(659,235)(659,235)
Balance at August 31, 2020188,156 $1,375,388 $7,596,514 $(115,950)(83,608)$(5,251,148)$3,604,804 
Balance at August 31, 2021Balance at August 31, 2021190,128 $1,625,594 $8,109,368 $(30,266)(86,798)$(6,395,493)$3,309,203 

See accompanying notes.
6

Table of Contents

CINTAS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)

Three Months Ended Three Months Ended
August 31, 2021August 31, 2020 August 31, 2022August 31, 2021
Cash flows from operating activities:Cash flows from operating activities:  Cash flows from operating activities:  
Net incomeNet income$331,179 $300,005 Net income$351,689 $331,179 
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:  Adjustments to reconcile net income to net cash provided by operating activities:  
DepreciationDepreciation60,955 60,574 Depreciation63,057 60,955 
Amortization of intangible assets and capitalized contract costsAmortization of intangible assets and capitalized contract costs36,994 35,605 Amortization of intangible assets and capitalized contract costs36,989 36,994 
Stock-based compensationStock-based compensation36,496 29,055 Stock-based compensation26,282 36,496 
Gain on sale of operating assetsGain on sale of operating assets(12,178)— Gain on sale of operating assets— (12,178)
Deferred income taxesDeferred income taxes22,887 (8,716)Deferred income taxes14,829 22,887 
Change in current assets and liabilities, net of acquisitions of businesses:Change in current assets and liabilities, net of acquisitions of businesses:  Change in current assets and liabilities, net of acquisitions of businesses:  
Accounts receivable, netAccounts receivable, net(27,742)7,118 Accounts receivable, net(79,397)(27,742)
Inventories, netInventories, net14,986 (77,944)Inventories, net(2,476)14,986 
Uniforms and other rental items in serviceUniforms and other rental items in service(39,274)16,552 Uniforms and other rental items in service(39,327)(39,274)
Prepaid expenses and other current assets and capitalized contract costsPrepaid expenses and other current assets and capitalized contract costs(36,724)(42,277)Prepaid expenses and other current assets and capitalized contract costs(63,641)(36,724)
Accounts payableAccounts payable(26,272)20,358 Accounts payable41,681 (26,272)
Accrued compensation and related liabilitiesAccrued compensation and related liabilities(85,834)(10,067)Accrued compensation and related liabilities(59,957)(85,834)
Accrued liabilities and otherAccrued liabilities and other(24,342)(14,297)Accrued liabilities and other(49,105)(24,342)
Income taxes, currentIncome taxes, current11,010 (3,674)Income taxes, current57,532 11,010 
Net cash provided by operating activitiesNet cash provided by operating activities262,141 312,292 Net cash provided by operating activities298,156 262,141 
Cash flows from investing activities:Cash flows from investing activities:  Cash flows from investing activities:  
Capital expendituresCapital expenditures(48,748)(30,876)Capital expenditures(70,016)(48,748)
Purchases of investmentsPurchases of investments(8,738)(4,940)Purchases of investments(5,930)(8,738)
Proceeds from sale of operating assets15,070 — 
Proceeds from sale of operating assets, net of cash disposedProceeds from sale of operating assets, net of cash disposed— 15,070 
Acquisitions of businesses, net of cash acquiredAcquisitions of businesses, net of cash acquired(35,725)(1,984)Acquisitions of businesses, net of cash acquired(7,060)(35,725)
Other, netOther, net(6,180)(2,142)Other, net(3,589)(6,180)
Net cash used in investing activitiesNet cash used in investing activities(84,321)(39,942)Net cash used in investing activities(86,595)(84,321)
Cash flows from financing activities:Cash flows from financing activities:  Cash flows from financing activities:  
Issuance of commercial paper, netIssuance of commercial paper, net326,000 — Issuance of commercial paper, net196,000 326,000 
Repayment of debtRepayment of debt(250,000)— Repayment of debt— (250,000)
Proceeds from exercise of stock-based compensation awardsProceeds from exercise of stock-based compensation awards72,896 72,123 Proceeds from exercise of stock-based compensation awards1,047 72,896 
Dividends paidDividends paid(79,135)— Dividends paid(97,655)(79,135)
Repurchase of common stockRepurchase of common stock(659,235)(69,011)Repurchase of common stock(320,334)(659,235)
Other, netOther, net(610)(869)Other, net(5,257)(610)
Net cash (used in) provided by financing activities(590,084)2,243 
Net cash used in financing activitiesNet cash used in financing activities(226,199)(590,084)
Effect of exchange rate changes on cash and cash equivalentsEffect of exchange rate changes on cash and cash equivalents(1,627)1,547 Effect of exchange rate changes on cash and cash equivalents(1,275)(1,627)
Net (decrease) increase in cash and cash equivalents(413,891)276,140 
Net decrease in cash and cash equivalentsNet decrease in cash and cash equivalents(15,913)(413,891)
Cash and cash equivalents at beginning of periodCash and cash equivalents at beginning of period493,640 145,402 Cash and cash equivalents at beginning of period90,471 493,640 
Cash and cash equivalents at end of periodCash and cash equivalents at end of period$79,749 $421,542 Cash and cash equivalents at end of period$74,558 $79,749 
See accompanying notes.
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Table of Contents

CINTAS CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited) 

Note 1 - Basis of Presentation
The consolidated condensed financial statements of Cintas Corporation (Cintas, the Company, we, us or our) included herein have been prepared by Cintas, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) have been condensed or omitted pursuant to such rules and regulations. While we believe that the disclosures are adequately presented, we suggest that these consolidated condensed financial statements be read in conjunction with the consolidated financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended May 31, 2021.2022 filed with the SEC on July 27, 2022. A summary of our significant accounting policies is presented beginning on page 4041 of that report. There have been no material changes in the accounting policies followed by Cintas during the current fiscal year. 

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)(In thousands)August 31, 2021May 31,
2021
(In thousands)August 31,
2022
May 31,
2022
Raw materialsRaw materials$15,732 $15,109 Raw materials$25,728 $19,071 
Work in processWork in process30,681 37,664 Work in process34,310 34,280 
Finished goodsFinished goods417,279 429,024 Finished goods413,850 418,799 
$463,692 $481,797  $473,888 $472,150 
Inventories are recorded net of reserves for obsolete inventory (excess and slow-moving) of $110.2$89.1 million and $111.0$100.3 million at August 31, 20212022 and May 31, 2021,2022, 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.
Reclassification of Prior Year Presentation
Certain prior year amounts have been reclassified for consistency with the current year presentation. The reclassification has been reflected in the consolidated condensed balance sheet and consolidated condensed statement of shareholders' equity for the fiscal year ended May 31, 2021 and the three months ended August 31, 2020, to combine common stock and paid-in capital for disclosure purposes. These reclassifications had no effect on the Company's reported results of operations.
New Accounting Pronouncements
In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 is part of the FASB’s overall simplification initiative to reduce costs and complexity of applying accounting standards while maintaining or improving the usefulness of the information provided to users of financial statements. ASU 2019-12 removes certain exceptions to the general principles of Accounting Standards Codification (ASC) 740, Income Taxes (ASC 740), in order to reduce the cost and complexity of its application in the areas of intraperiod tax allocation, deferred tax liabilities related to outside basis differences, year-to-date losses in interim periods and other areas within ASC 740. The Company adopted ASU 2019-12 on June 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s consolidated condensed financial statements currently but may in future periods.

No otherThere are no new accounting pronouncementpronouncements recently issued or newly effective that had, or isare expected to have, a material impact on Cintas' consolidated condensed financial statements.
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Note 2 - Revenue Recognition
The following table presents Cintas' total revenue disaggregated by operating segment for the three months ended August 31:
(In thousands)(In thousands)20212020(In thousands)20222021
Uniform Rental and Facility ServicesUniform Rental and Facility Services$1,508,176 79.5 %$1,394,411 79.8 %Uniform Rental and Facility Services$1,697,772 78.4 %$1,508,176 79.5 %
First Aid and Safety ServicesFirst Aid and Safety Services199,116 10.5 %204,481 11.7 %First Aid and Safety Services234,161 10.8 %199,116 10.5 %
Fire Protection ServicesFire Protection Services128,218 6.8 %108,065 6.2 %Fire Protection Services151,847 7.0 %128,218 6.8 %
Uniform Direct SalesUniform Direct Sales61,440 3.2 %39,618 2.3 %Uniform Direct Sales82,674 3.8 %61,440 3.2 %
Total revenueTotal revenue$1,896,950 100.0 %$1,746,575 100.0 %Total revenue$2,166,454 100.0 %$1,896,950 100.0 %

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

Revenue Recognition Policy
Approximately 95% of the Company's revenues arerevenue is derived from fees for route servicing of Uniform Rental and Facility Services, First Aid and Safety Services and Fire Protection Services customers, 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 revenues over time as services are performed, based on the nature of services provided and contractual rates (output method) or at a point in time when the performance obligation under the terms of the contract with a customer are satisfied, at the customer's location of business. The Company's remaining revenue, primarily within the Uniform Direct Sales operating segment, and representing approximately 5% of the Company's total revenue, is 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 include pricing terms and conditions that include components of variable consideration. The variable consideration is typically in the form of consideration paid to a customer based on performance metrics specified within the contract. Specifically, some contracts contain discounts or rebates that the customer can earn through the achievement of specified volume levels. Each component of variable consideration is earned based on the Company's actual performance during the measurement period specified within the contract. To determine the transaction price, the Company estimates the variable consideration using the most likely amount method, based on the specific contract provisions and known performance results during the relevant measurement period. When determining if variable consideration should be constrained, the Company considers whether factors outside its control could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal. The Company's performance period generally corresponds with the monthly invoice period. No constraints on our revenue recognition were applied during the three months ended August 31, 20212022 or 2020.2021. 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. These assets are included in prepaid expenses and other current assets and in other assets, net on the consolidated condensed balance sheets.

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

We are exposed to credit losses primarily through our trade receivables. We determine the allowance for credit losses using both an estimate, based on historical rates of collections, and reserves for specific accounts identified as uncollectible. The portion of the allowance that is an estimate based on Cintas' historical rates of collections is recorded for overdue amounts, beginning with a nominal percentage when the account is current and increasing substantially as the account ages. The amount provided as the account ages will differ slightly between the Uniform
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Rental and Facility Services reportable operating segment, the First Aid and Safety Services reportable operating segment and All Other because of differences in customers served and the nature of each business. We update our estimate of credit loss reserves quarterly, considering recent write-offs and collections information and underlying economic expectations.
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Costs to Obtain a Contract
The Company capitalizes commission expenses paid to our employee-partners when the commissions are deemed to be incremental for obtaining the route servicing customer contract. As permitted by ASCAccounting Standards Codification 606, "Revenue""Revenue from Contracts with Customers (Topic 606)", the Company has elected to apply the guidance to a portfolio of contracts (or performance obligations) with similar characteristics because the Company reasonably expects that the effects on the consolidated condensed financial statements of applying this guidance to the portfolio would not differ materially from applying this guidance to the individual contracts within the portfolio. The Company also continues to expense certain costs to obtain a contract if those costs do not meet the criteria of the standard or the amortization period of the asset would have been one year or less. The deferred commissions are amortized on a straight-line basis over the expected period of benefit. We review the deferred commission balances for impairment on an ongoing basis. Deferred commissions are classified as current or noncurrent based on the timing of when we expect to recognize the expense. The current portion is included in prepaid expenses and other current assets and the noncurrent portion is included in other assets, net on the Company's consolidated condensed balance sheets. As of August 31, 2021,2022, the current and noncurrent assets related to deferred commissions totaled $80.2$86.1 million and $227.2$239.2 million, respectively. As of May 31, 2021,2022, the current and noncurrent assets related to deferred commissions totaled $79.4$83.7 million and $227.1$232.2 million, respectively. We recorded amortization expense related to deferred commissions of $21.4$22.4 million and $20.4$21.4 million during the three months ended August 31, 20212022 and 2020,2021, respectively. These expenses are classified in selling and administrative expenses on the consolidated condensed statements of income.
Note 3 - Leases
Cintas has operating leases for certain operating facilities, vehicles and equipment, which provide the right to use the underlying asset and require lease payments over the term of the lease. Each new contract is evaluated to determine if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. All identified leases are recorded on the consolidated condensed balance sheet with a corresponding operating lease right-of-use asset, net, representing the right to use the underlying asset for the lease term and the operating lease liabilities representing the obligation to make lease payments arising from the lease. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the consolidated condensed balance sheet.

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

Operating lease costs, including short-term lease expense and variable lease costs which were $18.2immaterial in both periods, were $19.5 million and $17.1$18.1 million for the three months ended August 31, 2022 and 2021, and 2020, respectively. Short-term lease expense and variable lease costs are included within operating lease costs and immaterial for the three months ended August 31, 2021 and 2020.

The following table provides supplemental information related to the Company's consolidated condensed statements of cash flows for the three months ended August 31:
(In thousands)(In thousands)20212020(In thousands)20222021
Cash paid for amounts included in the measurement of operating lease liabilitiesCash paid for amounts included in the measurement of operating lease liabilities$11,913 $12,254 Cash paid for amounts included in the measurement of operating lease liabilities$12,608 $11,913 
Operating lease right-of-use assets obtained in exchange for new and renewed
operating lease liabilities
Operating lease right-of-use assets obtained in exchange for new and renewed
operating lease liabilities
$2,792 $9,317 Operating lease right-of-use assets obtained in exchange for new and renewed
operating lease liabilities
$15,836 $2,792 

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Other information related to the operating lease right-of-use assets, net and operating lease liabilities was as follows:
August 31,
2021
May 31,
2021
Weighted-average remaining lease term - operating leases5.22 years5.33 years
Weighted-average discount rate - operating leases2.29%2.32%
August 31,
2022
May 31,
2022
Weighted-average remaining lease term - operating leases5.38 years5.40 years
Weighted-average discount rate - operating leases2.37%2.20%
The contractual future minimum lease payments of Cintas' operating lease liabilities by fiscal year are as follows as of August 31, 2021:2022:
(In thousands)(In thousands)(In thousands)
2022 (remaining nine months)
$35,794 
202340,285 
2023 (remaining nine months)
2023 (remaining nine months)
$35,860 
2024202429,941 202440,851 
2025202522,509 202532,515 
2026202616,995 202625,800 
2027202718,342 
ThereafterThereafter30,336 Thereafter36,036 
Total paymentsTotal payments175,860 Total payments189,404 
Less interestLess interest(10,261)Less interest(11,855)
Total present value of lease paymentsTotal present value of lease payments$165,599 Total present value of lease payments$177,549 

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Note 4 - Fair Value Measurements
All financial instruments that are measured at fair value on a recurring basis (at least annually) have been classified within the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the consolidated condensed balance sheet date. These financial instruments measured at fair value on a recurring basis are summarized below: 
As of August 31, 2021As of August 31, 2022
(In thousands)(In thousands)Level 1Level 2Level 3Fair Value(In thousands)Level 1Level 2Level 3Fair Value
Cash and cash equivalentsCash and cash equivalents$79,749 $— $— $79,749 Cash and cash equivalents$74,558 $— $— $74,558 
Other assets, net:Other assets, net:Other assets, net:
Interest rate lock agreements Interest rate lock agreements— 18,335 — 18,335  Interest rate lock agreements— 58,131 — 58,131 
Total assets at fair valueTotal assets at fair value$79,749 $18,335 $— $98,084 Total assets at fair value$74,558 $58,131 $— $132,689 
Current accrued liabilities:
Interest rate lock agreements$— $88,736 $— $88,736 
Total liabilities at fair value$— $88,736 $— $88,736 
As of May 31, 2021As of May 31, 2022
(In thousands)(In thousands)Level 1Level 2Level 3Fair Value(In thousands)Level 1Level 2Level 3Fair Value
Cash and cash equivalentsCash and cash equivalents$493,640 $— $— $493,640 Cash and cash equivalents$90,471 $— $— $90,471 
Other assets, net:Other assets, net:Other assets, net:
Interest rate lock agreementsInterest rate lock agreements— 40,400 — 40,400 Interest rate lock agreements— 56,877 — 56,877 
Total assets at fair valueTotal assets at fair value$493,640 $40,400 $— $534,040 Total assets at fair value$90,471 $56,877 $— $147,348 
Long-term accrued liabilities:
Interest rate lock agreements$— $61,567 $— $61,567 
Total liabilities at fair value$— $61,567 $— $61,567 

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

The 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 other assets, net, current accrued liabilities or long-term accrued liabilities are recorded at fair value on a recurring basis.

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

In addition to assets and liabilities that are recorded at fair value on a recurring basis, Cintas records assets and liabilities at fair value on a nonrecurring basis as required under U.S. GAAP. The assets and liabilities measured at fair value on a nonrecurring basis primarily relate to assets and liabilities acquired in a business acquisition. The Company's acquisition which were not materialof the remaining interest of an equity method investment during the three months ended August 31, 2021 and 2020.fiscal 2022 was recorded at fair value. See Note 10 entitled Acquisitions for additional information.

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Note 5 - Investments
Cintas' investments are summarized as follows:
(In thousands)(In thousands)August 31,
2021
May 31,
2021
(In thousands)August 31,
2022
May 31,
2022
Cash surrender value of insurance policiesCash surrender value of insurance policies$274,721 $252,061 Cash surrender value of insurance policies$233,650 $237,136 
Equity method investments18,383 19,388 
Cost method investments2,164 3,167 
Other investmentsOther investments5,685 5,737 
Total investmentsTotal investments$295,268 $274,616 Total investments$239,335 $242,873 

Investments are generally evaluated for impairment on an annual basis or when indicators of impairment exist. For the three months ended August 31, 20212022 and 2020,2021, no impairment losses were recorded.

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Note 6 - Earnings Per Share 
Cintas uses the two-class method to calculate basic and diluted earnings per share as a result of outstanding participating securities in the form of restricted stock awards. The following tables set forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Cintas’ common shares for the three months ending August 31:
Basic Earnings per Share
(In thousands except per share data)
Basic Earnings per Share
(In thousands except per share data)
20212020
Basic Earnings per Share
(In thousands except per share data)
20222021
Net incomeNet income$331,179 $300,005 Net income$351,689 $331,179 
Less: income allocated to participating securitiesLess: income allocated to participating securities1,765 2,173 Less: income allocated to participating securities1,520 1,765 
Income available to common shareholdersIncome available to common shareholders$329,414 $297,832 Income available to common shareholders$350,169 $329,414 
Basic weighted average common shares outstandingBasic weighted average common shares outstanding103,295 104,110 Basic weighted average common shares outstanding101,428 103,295 
Basic earnings per shareBasic earnings per share$3.19 $2.86 Basic earnings per share$3.45 $3.19 
Diluted Earnings per Share
(In thousands except per share data)
Diluted Earnings per Share
(In thousands except per share data)
20212020
Diluted Earnings per Share
(In thousands except per share data)
20222021
Net incomeNet income$331,179 $300,005 Net income$351,689 $331,179 
Less: income allocated to participating securitiesLess: income allocated to participating securities1,765 2,173 Less: income allocated to participating securities1,520 1,765 
Income available to common shareholdersIncome available to common shareholders$329,414 $297,832 Income available to common shareholders$350,169 $329,414 
Basic weighted average common shares outstandingBasic weighted average common shares outstanding103,295 104,110 Basic weighted average common shares outstanding101,428 103,295 
Effect of dilutive securities – employee stock optionsEffect of dilutive securities – employee stock options2,649 3,019 Effect of dilutive securities – employee stock options1,909 2,649 
Diluted weighted average common shares outstandingDiluted weighted average common shares outstanding105,944 107,129 Diluted weighted average common shares outstanding103,337 105,944 
Diluted earnings per shareDiluted earnings per share$3.11 $2.78 Diluted earnings per share$3.39 $3.11 

For the three months ended August 31, 20212022 and 2020,2021, options granted to purchase 0.10.8 million and 0.20.1 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 29, 2019, Cintaswe announced that the Board of Directors authorized a $1.0 billion share buyback program, which was completed during the first quarter of fiscal 2022. From the inception of the October 29, 2019 share buyback program through July 2021, Cintas purchased a total of 2.8 million shares of Cintas common stock at an average price of $358.93 per share for a total purchase price of $1.0 billion. On July 27, 2021, Cintas announced that the Board of Directors authorized a new $1.5 billion share buyback program, which does not have an expiration date. From the inception of the July 27, 2021 share buyback program through August 31, 2022, Cintas purchased a total of 2.7 million shares of Cintas common stock at an average price of $385.66 per share for a total purchase price of $1.0 billion. On July 26, 2022, Cintas announced that the Board of Directors authorized a new $1.0 billion share buyback program, which does not have an expiration date.

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The following tables summarize the share buyback activity by program for the three months ended August 31:
20222021
20212020
Buyback Program
(In thousands except per share data)
SharesAvg. Price
per Share
Purchase
Price
SharesAvg. Price
per Share
Purchase
Price
Buyback Activity
(In thousands except per share data)
Buyback Activity
(In thousands except per share data)
SharesAvg. Price
per Share
Purchase
Price
SharesAvg. Price
per Share
Purchase
Price
October 29, 2019October 29, 20191,590 $365.41 $581,220 — $— $— October 29, 2019— $— $— 1,590 $365.41 $581,220 
July 27, 2021July 27, 2021— $— $— — $— $— July 27, 2021532 396.39 210,751 — — — 
July 26, 2022July 26, 2022— — — — — — 
1,590 $365.41 $581,220 — $— $— 532 $396.39 $210,751 1,590 $365.41 $581,220 
Shares acquired for taxes due (1)
Shares acquired for taxes due (1)
270 $405.93 $109,583 198 $394.19 $78,015 
Total repurchase of Cintas
common stock
Total repurchase of Cintas
common stock
$320,334 $659,235 
(1) Shares of Cintas common stock acquired for employee payroll taxes due on options exercised and vested restricted stock awards.

There were no share buybacks inIn addition to the period subsequent to August 31, 2021, through October 7, 2021 under any share buyback program.

Foractivity presented above, Cintas acquired shares of Cintas common stock, via non-cash transactions, in connection with net-share settlements of option exercises. During the three months ended August 31, 2021,2022, Cintas acquired 0.2 million shares of Cintas common stock for employee payroll taxes due on restricted stock awards that vested. These shares were acquiredvia such non-cash transactions at an average price of $394.19 per share$411.93 for a total purchase pricenon-cash value of $78.0$79.6 million. For the three months ended August 31, 2020, Cintas acquired 0.2 million shares of Cintas common stock for employee payroll taxes due on restricted stock awards that vested. These shares were acquired at an average price of $300.01 per share for a total purchase price of $69.0 million.



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Note 7 - Goodwill, Service Contracts and Other Assets, Net
Changes in the carrying amount of goodwill and service contracts for the three months ended August 31, 2021,2022, by reportable operating segment and All Other, are as follows:
Goodwill
(in thousands)
Goodwill
(in thousands)
Uniform Rental
 and Facility Services
First Aid
 and Safety Services
All
Other
Total
Goodwill
(in thousands)
Uniform Rental
 and Facility Services
First Aid
 and Safety Services
All
Other
Total
Balance as of June 1, 2021$2,547,510 $248,571 $116,988 $2,913,069 
Balance as of June 1, 2022Balance as of June 1, 2022$2,635,099 $285,769 $122,108 $3,042,976 
Goodwill acquiredGoodwill acquired24,512 — 41 24,553 Goodwill acquired652 3,283 484 4,419 
Foreign currency translationForeign currency translation(11,565)(1,024)(40)(12,629)Foreign currency translation(9,265)(820)(32)(10,117)
Balance as of August 31, 2021$2,560,457 $247,547 $116,989 $2,924,993 
Balance as of August 31, 2022Balance as of August 31, 2022$2,626,486 $288,232 $122,560 $3,037,278 

Service Contracts
(in thousands)
Service Contracts
(in thousands)
Uniform Rental
 and Facility Services
First Aid
 and Safety Services
All
Other
Total
Service Contracts
(in thousands)
Uniform Rental
 and Facility Services
First Aid
 and Safety Services
All
Other
Total
Balance as of June 1, 2021$369,141 $18,294 $21,010 $408,445 
Balance as of June 1, 2022Balance as of June 1, 2022$349,634 $24,144 $17,860 $391,638 
Service contracts acquiredService contracts acquired12,807 — 53 12,860 Service contracts acquired1,253 986 630 2,869 
Service contracts amortizationService contracts amortization(12,380)(991)(1,190)(14,561)Service contracts amortization(10,781)(1,250)(1,223)(13,254)
Foreign currency translationForeign currency translation(2,637)(125)— (2,762)Foreign currency translation(1,793)(81)— (1,874)
Balance as of August 31, 2021$366,931 $17,178 $19,873 $403,982 
Balance as of August 31, 2022Balance as of August 31, 2022$338,313 $23,799 $17,267 $379,379 
Information regarding Cintas’ service contracts and other assets, net is as follows:

As of August 31, 2021As of May 31, 2021 As of August 31, 2022As of May 31, 2022
(In thousands)(In thousands)Carrying
Amount
Accumulated
Amortization
NetCarrying
Amount
Accumulated
Amortization
Net(In thousands)Carrying
Amount
Accumulated
Amortization
NetCarrying
Amount
Accumulated
Amortization
Net
Service contractsService contracts$969,728 $565,746 $403,982 $961,942 $553,497 $408,445 Service contracts$1,000,115 $620,736 $379,379 $1,001,311 $609,673 $391,638 
Capitalized contract
costs (1)
Capitalized contract
costs (1)
$480,535 $253,298 $227,237 $459,079 $231,940 $227,139 
Capitalized contract
costs (1)
$580,949 $341,753 $239,196 $551,582 $319,358 $232,224 
Noncompete and
consulting agreements
Noncompete and
consulting agreements
45,783 42,601 3,182 44,683 42,408 2,275 Noncompete and
consulting agreements
50,944 44,191 6,753 50,637 43,775 6,862 
OtherOther89,293 24,393 64,900 105,371 24,371 81,000 Other128,491 21,024 107,467 125,941 20,917 105,024 
Total other assets$615,611 $320,292 $295,319 $609,133 $298,719 $310,414 
Total other assets, netTotal other assets, net$760,384 $406,968 $353,416 $728,160 $384,050 $344,110 
(1)    The current portion of capitalized contract costs, included in prepaid expenses and other current assets on the consolidated condensed balance sheets as of August 31, 20212022 and May 31, 2021,2022, is $80.2$86.1 million and $79.4$83.7 million, respectively.

Amortization expense for service contracts and other assets, was $36.5$36.4 million and $35.1$36.5 million for the three months ended August 31, 20212022 and 2020,2021, respectively. These expenses are recorded in selling and administrative expenses on the consolidated condensed statements of income. As of August 31, 2021,2022, the estimated future amortization expense for service contracts and other assets, excluding any future acquisitions and commissions to be earned, is as follows:
Fiscal Year (In thousands)
Fiscal Year (In thousands)
Fiscal Year (In thousands)
2022 (remaining nine months)
$104,871 
2023122,464 
2023 (remaining nine months)
2023 (remaining nine months)
$107,424 
20242024110,029 2024131,835 
2025202596,113 2025117,265 
2026202679,013 202697,896 
2027202779,275 
ThereafterThereafter204,245 Thereafter181,622 
Total future amortization expenseTotal future amortization expense$716,735 Total future amortization expense$715,317 
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Note 8 - Debt, Derivatives and Hedging Activities
Cintas' outstanding debt is summarized as follows:
(In thousands)(In thousands)Interest
 Rate
Fiscal Year
Issued
Fiscal Year
Maturity
August 31,
2021
May 31,
2021
(In thousands)Interest
 Rate
Fiscal Year
Issued
Fiscal Year
Maturity
August 31,
2022
May 31,
2022
Debt due within one yearDebt due within one yearDebt due within one year
Senior notes4.30 %20122022$— $250,000 
Senior notes2.90 %20172022650,000 650,000 
Senior notes3.25 %20132023300,000 — 
Commercial paperCommercial paper0.20 %(1)20222022326,000 — Commercial paper2.69 %(1)20232023$457,200 $261,200 
Senior notes (2)
Senior notes (2)
2.78 %2013202350,272 50,380 
Debt issuance costsDebt issuance costs(833)(930)Debt issuance costs(5)(6)
Total debt due within one yearTotal debt due within one year$1,275,167 $899,070 Total debt due within one year$507,467 $311,574 
Debt due after one yearDebt due after one yearDebt due after one year
Senior notes (3)
Senior notes (3)
3.11 %20152025$50,881 $50,965 
Senior notesSenior notes3.25 %20132023$— $300,000 Senior notes3.45 %20222025400,000 400,000 
Senior notes (2)
2.78 %2013202350,707 50,815 
Senior notes (3)
3.11 %2015202551,217 51,301 
Senior notesSenior notes3.70 %201720271,000,000 1,000,000 
Senior notesSenior notes3.70 %201720271,000,000 1,000,000 Senior notes4.00 %20222032800,000 800,000 
Senior notesSenior notes6.15 %20072037250,000 250,000 Senior notes6.15 %20072037250,000 250,000 
Debt issuance costsDebt issuance costs(8,702)(9,283)Debt issuance costs(16,279)(17,033)
Total debt due after one yearTotal debt due after one year$1,343,222 $1,642,833 Total debt due after one year$2,484,602 $2,483,932 
(1)    Variable rate debt instrument. The rate presented is the variable borrowing rate at August 31, 2021.2022.
(2)  Cintas assumed these senior notes with the acquisition of G&K Services, Inc. (G&K) in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.73%.
(3)    Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.88%.

Cintas' senior notes, excluding the G&K senior notes assumed with the acquisition of G&K in fiscal 2017, are recorded at cost, net of debt issuance costs. The fair value of the long-term debt is estimated using Level 2 inputs based on general market prices. The carrying value and fair value of Cintas' debt as of August 31, 20212022 were $2,626.0$3,007.2 million and $2,863.8$2,990.2 million, respectively, and as of May 31, 20212022 were $2,550.0$2,811.2 million and $2,788.8$2,862.2 million, respectively. On June 1, 2021, in accordance with the terms of the notes, Cintas paid the $250.0 million aggregate principal amount of its 4.30%, 10-year senior notes that matured on that date with cash on hand. During the three months ended August 31, 2022 and 2021, Cintas issued $196.0 million and $326.0 million, net of commercial paper, borrowings.respectively.

The credit agreement that supports our commercial paper program has a revolving credit facility with a capacity of $1.0$2.0 billion. The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under the revolving credit facility of up to $250.0$500.0 million in the aggregate, subject to customary conditions. The maturity date of the revolving credit facility is MayMarch 23, 2024.2027. As of August 31, 2021,2022, there was $326.0$457.2 million of commercial paper outstanding with maturity dates less than 30 days and with a weighted average interest rate of 0.20%2.69% and there wasmaturity dates less than 120 days and no borrowings on our revolving credit facility. As of May 31, 2021, there2022, there was no$261.2 million of commercial paper outstanding with a weighted average interest rate of 1.20% and maturity dates less than 120 days and no borrowings on our revolving credit facility. The fair value of the commercial paper, which approximates carrying value, is estimated using level 2 inputs based on general market prices and interest rates.

Cintas uses interest rate locks to manage its 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 agreementslocks, which represent cash flow hedges, to hedge against movements in the treasury rates at the time Cintas issued its senior notes in fiscal 2007, fiscal 2012,2013, fiscal 20132017 and fiscal 2017.2022. The amortization of the cash flow hedgesinterest rate locks resulted in a decrease to other comprehensive income of $1.5 million and $0.5 million and $0.4 millionfor the three months ended August 31, 2022 and 2021, and 2020, respectively. During fiscal 2020 and fiscal 2019, Cintas entered into interest rate lock agreements with a total


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During fiscal 2022 and fiscal 2020, Cintas entered into interest rate lock agreements for forecasted debt issuances. The aggregate notional value of $950.0 million andoutstanding cash flow hedges was $500.0 million respectively, for forecasted debt issuances in connection with upcoming debt maturities.

at both August 31, 2022 and May 31, 2022, respectively. The notional and fair values of the outstanding interest rate lock agreementslocks, for forecasted debt issuances, are summarized as follows:
August 31, 2021May 31, 2021August 31, 2022May 31, 2022
Fiscal Year of Issuance
(in thousands)
Fiscal Year of Issuance
(in thousands)
Notional
 Value
Other
assets, net
Current
accrued liabilities
Other
assets, net
Long-term
accrued liabilities
Fiscal Year of Issuance
(in thousands)
Other
assets, net
Other
assets, net
20222022$19,168 $18,331 
20202020$950,000 $18,335 $10,264 $40,400 $— 2020$38,963 $38,546 
2019$500,000 $— $78,472 $— $61,657 

The interest rate locks are also recorded in accumulated other comprehensive income, (loss), net of tax. These interest rate locks had no impact on net income or cash flows for the three months ended August 31, 20212022 or 2020.2021.

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. Cintas was in compliance with all of the debt covenants for all periods presented.

Note 9 - Income Taxes
In the normal course of business, Cintas provides for uncertain tax positions and the related interest and adjusts its unrecognized tax benefits and accrued interest accordingly. As of August 31, 20212022 and May 31, 2021,2022, recorded unrecognized tax benefits were $34.6$26.0 million and $34.2$30.8 million, respectively, and are included in long-term accrued liabilities on the consolidated condensed balance sheets.

The majority of Cintas' operations are in North America. Cintas is required to file U.S. 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 United StatesU.S. federal income tax returns are closed to audit through fiscal 2017.2018. 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 2014. 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, 2022.2023.

Cintas’ effective tax rate was 11.0%14.8% and 7.8%11.0% for the three months ended August 31, 20212022 and 2020,2021, respectively. The effective tax rate for all periods was impacted by certain discrete items (primarily the tax accounting for stock-based compensation).

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Note 10 - Pension PlansAcquisitions
In conjunction withOn December 10, 2021, Cintas acquired the remaining interest of an equity method investment. The acquisition operates as a component of G&KCintas' supply chain within the Uniform Rental and Facility Services reportable operating segment. The cash consideration transferred to acquire the remaining interest of the equity method investment was $48.0 million, net of cash acquired of $1.7 million. Under applicable accounting guidance, the Company was required to record its historical equity method investment at fair value ($43.5 million), resulting in a gain of $30.2 million, which was recorded as a reduction in selling and administrative expenses in fiscal 2017, Cintas assumed G&K's noncontributory defined benefit pension plan (the Pension Plan) that covers substantially all legacy G&K employees who were employed2022. The fair value of the historical equity method investment was determined using a combination of a market and income approach (discounted cash flow analysis). The key assumptions and estimates utilized in these approaches included market data and market multiples, discount rates, as well as future levels of July 1, 2005, except certain employees who were covered by union-administered plans. Benefitsrevenue growth and operating margins. The Company believes these assumptions and estimates are reasonable and based on the numberbest information available at the valuation date.
Cintas accounted for the acquisition using the acquisition method of yearsaccounting.The preliminary purchase price allocation was determined by management with the assistance of servicethird-party valuation specialists 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 sheets 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 (PBO). The PBO represents the actuarial present value of benefits expected to be paid upon retirement based on estimated future compensation levels. The measurement of the PBO is based on estimates of the Company’s estimatesfair value of assets acquired and actuarial valuations. 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 (loss) income on our consolidated condensed balance sheets. The difference between actual amounts and estimates based on actuarial assumptions are recognized in other comprehensive (loss) income, netassumed as of tax, in the period in which they occur. The Pension Plan assumptions are evaluated annually and are updated as deemed necessary.

The components of net periodic pension benefit are summarized as follows forDecember 10, 2021. During the three months ended August 31:
(In thousands)20212020
Interest cost$542 $512 
Expected return on assets(917)(731)
Amortization of net loss— 56 
Net periodic pension benefit$(375)$(163)
31, 2022, no material adjustments were made to the preliminary purchase price allocation. Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of the amount of goodwill are based on several strategic supply chain and synergistic benefits that will allow for Cintas to further vertically integrate the operations for certain product lines, and are expected to be realized from the acquisition. None of the goodwill is expected to be deductible for income tax purposes.

The allocation of the preliminary purchase price, including the value of the previously held equity method investment, at fair value is as follows:
(In thousands)December 10, 2021
ASSETS
Working capital assets$17,352 
Property and equipment16,230 
Operating lease right-of-use assets16,882 
Goodwill55,986 
Separately identifiable intangible assets9,201 
LIABILITIES
Total current liabilities(6,425)
Operating lease liabilities(17,734)
Total allocation (consideration)$91,492 

As additional information is obtained, adjustments may be made to the preliminary purchase price allocation. The Company is still finalizing the estimated fair value of certain of the tangible and identifiable intangible assets acquired and liabilities assumed. The separately identifiable intangible assets are primarily made up of a customer relationship intangible asset that will be amortized over a period of 9 years, which represents the estimated useful life of the economic benefit.

Cintas is required to provide additional disclosures about fair value measurements as part of the consolidated condensed financial statements for each major category of assets and liabilities measured at fair value on a nonrecurring basis (including business combinations). The working capital assets and liabilities, as well as the property and equipment acquired, were valued using Level 2 inputs which included data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets (market approach). Goodwill and separately identifiable intangible assets were valued using Level 3 inputs, which are unobservable by nature, and included internal estimates of future cash flows (income approach). The results of operations of the acquisition are included in Cintas' consolidated condensed statements of income subsequent to the date of acquisition, and are not material to the consolidated condensed financial statements.
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Note 11 - Accumulated Other Comprehensive Income (Loss)
The following tables summarize the changes in the accumulated balances for each component of accumulated other comprehensive income (loss) income,, net of tax:
(In thousands)Foreign
Currency
Unrealized Loss on
Interest Rate Hedges
OtherTotal
Balance at June 1, 2021$41,839 $(7,308)$(3,643)$30,888 
Other comprehensive loss before reclassifications(24,016)(36,679)— (60,695)
Amounts reclassified from accumulated other
   comprehensive (loss) income
— (459)— (459)
Net current period other comprehensive loss(24,016)(37,138)— (61,154)
Balance at August 31, 2021$17,823 $(44,446)$(3,643)$(30,266)
(In thousands)Foreign
Currency
Unrealized Income
on Interest Rate Locks
OtherTotal
Balance at June 1, 2022$17,006 $92,688 $(1,777)$107,917 
Other comprehensive (loss) income before reclassifications(19,206)934 — (18,272)
Amounts reclassified from accumulated other
   comprehensive income (loss)
— (1,521)— (1,521)
Net current period other comprehensive loss(19,206)(587)— (19,793)
Balance at August 31, 2022$(2,200)$92,101 $(1,777)$88,124 

(In thousands)Foreign
Currency
Unrealized Loss on
Interest Rate Hedges
OtherTotal
Balance at June 1, 2020$(26,343)$(112,718)$(14,319)$(153,380)
Other comprehensive income before reclassifications26,946 10,842 — 37,788 
Amounts reclassified from accumulated other comprehensive (loss) income— (358)— (358)
Net current period other comprehensive income26,946 10,484 — 37,430 
Balance at August 31, 2020$603 $(102,234)$(14,319)$(115,950)
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(In thousands)Foreign
Currency
Unrealized Loss on
Interest Rate Locks
OtherTotal
Balance at June 1, 2021$41,839 $(7,308)$(3,643)$30,888 
Other comprehensive loss before reclassifications(24,016)(36,679)— (60,695)
Amounts reclassified from accumulated other
   comprehensive income (loss)
— (459)— (459)
Net current period other comprehensive loss(24,016)(37,138)— (61,154)
Balance at August 31, 2021$17,823 $(44,446)$(3,643)$(30,266)

The following table summarizes the reclassifications out of accumulated other comprehensive income (loss) income for the three months ended August 31:

Details about Accumulated
Other Comprehensive
(Loss) Income Components
Amount Reclassified from
Accumulated Other
 Comprehensive (Loss) Income
Affected Line in the
Consolidated Condensed
Statements of Income
Details about Accumulated
Other Comprehensive
Income (Loss) Components
Details about Accumulated
Other Comprehensive
Income (Loss) Components
Amount Reclassified from
Accumulated Other
 Comprehensive Income (Loss)
Affected Line in the
Consolidated Condensed
Statements of Income
(In thousands)(In thousands)20212020(In thousands)20222021
Amortization of interest rate locksAmortization of interest rate locks$607 $474 Interest expenseAmortization of interest rate locks$2,033 $607 Interest expense
Tax expenseTax expense(148)(116)Income taxesTax expense(512)(148)Income taxes
Amortization of interest rate locks,
net of tax
Amortization of interest rate locks,
net of tax
$459 $358 Amortization of interest rate locks, net of tax$1,521 $459 

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

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

(In thousands)(In thousands)Uniform Rental
and Facility Services
First Aid
and Safety Services
All
Other
Corporate (1)
Total(In thousands)Uniform Rental
and Facility Services
First Aid
and Safety Services
All
Other
Corporate (1)
Total
As of and for the three months ended August 31, 2021   
As of and for the three months ended August 31, 2022As of and for the three months ended August 31, 2022   
RevenueRevenue$1,508,176 $199,116 $189,658 $— $1,896,950 Revenue$1,697,772 $234,161 $234,521 $— $2,166,454 
Income (loss) before income taxesIncome (loss) before income taxes$329,382 $25,728 $38,991 $(21,798)$372,303 Income (loss) before income taxes$364,771 $40,846 $34,503 $(27,565)$412,555 
Total assetsTotal assets$6,770,296 $636,829 $370,876 $79,749 $7,857,750 Total assets$7,036,979 $680,864 $468,625 $74,558 $8,261,026 
As of and for the three months ended August 31, 2020
As of and for the three months ended August 31, 2021As of and for the three months ended August 31, 2021
RevenueRevenue$1,394,411 $204,481 $147,683 $— $1,746,575 Revenue$1,508,176 $199,116 $189,658 $— $1,896,950 
Income (loss) before income taxesIncome (loss) before income taxes$315,028 $18,527 $16,151 $(24,486)$325,220 Income (loss) before income taxes$329,382 $25,728 $38,991 $(21,798)$372,303 
Total assetsTotal assets$6,628,127 $620,169 $373,543 $421,542 $8,043,381 Total assets$6,770,296 $636,829 $370,876 $79,749 $7,857,750 
(1) Corporate assets include cash and cash equivalents and marketable securities, if applicable, in all periods.

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

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

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

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

We pursue the strategy of broadening our customer base in several ways. Cintas has a national sales organization introducing all its products and services to prospects in all market segments. Our broad range of products and services allows our sales organization to consider any type of business a prospect. We also broaden our customer base through geographic expansion. Finally, we evaluate strategic acquisitions as opportunities arise.
  
Results of Operations
Cintas classifies its business into two reportable operating segments and places the remainder of its operating segments in an All Other category. Cintas’ two reportable operating segments are Uniform Rental and Facility Services and First Aid and Safety Services. The Uniform Rental and Facility Services reportable operating segment consists of the rental and servicing of uniforms and other garments including flame resistant clothing, mats, mops and shop towels and other ancillary items. In addition to these rental items, restroom cleaning services and supplies 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. These operating segments consist of fire protection products and services and the direct sale of uniforms and related items. Cintas evaluates operating segment performance based on revenue and income before income taxes. Revenue and income before income taxes for the three months ended August 31, 20212022 and 2020,2021, for the two reportable operating segments and All Other are presented in Note 1212 entitled Segment Information of “Notes to Consolidated Condensed Financial Statements.”

We have operations throughout the U.S. and Canada and participate in a global supply chain. During most of fiscal 2021, the existence of the novel strain of coronavirus (COVID-19) pandemic, the fear associated with the COVID-19 pandemic and the reactions of governments around the world in response to the COVID-19 pandemic to regulate the flow of labor and products and impede the business of our customers, impacted our ability to conduct normal business operations, which had an adverse effect on our business. Many of Cintas' customers were also impacted by the COVID-19 pandemic, and we saw an impact on some customer's ability to pay timely. While there was
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minimal disruption to our supply chain, Cintas did increase inventory, primarily personal protective equipment and facility services inventory, in response to the customer needs and demand associated with the safety and cleanliness requirements of COVID-19. The increase in inventory resulted in additional inventory reserves during fiscal 2021 and could result in future inventory reserve increases if demand for personal protective equipment materially declines. The on-going roll out of the COVID-19 vaccines and gradual lifting of COVID-19 restrictions had a positive impact on our business during the three months ended August 31, 2021. The impact of the COVID-19 pandemic is fluid and continues to evolve, and therefore, we cannot predict the extent to which our business, consolidated results of operations, consolidated financial condition or liquidity will ultimately be impacted.

Consolidated Results
Three Months Ended August 31, 20212022 Compared to Three Months Ended August 31, 20202021
 
Total revenue increased 8.6%14.2% to $2,166.5 million for the three months ended August 31, 2022, compared to $1,897.0 million for the three months ended August 31, 2021, compared to $1,746.6 million for the three months ended August 31, 2020.2021. The organic revenue growth rate, which adjusts for the impact of acquisitions, divestitures and foreign currency exchange rate fluctuations, was 8.6%13.9%. Revenue growth was negatively impacted by a net 0.5% due to acquisitions and divestitures and positively impacted by 0.5% due primarily to acquisitions and negatively impacted by 0.2% due to foreign currency exchange rate fluctuations.

Uniform Rental and Facility Services reportable operating segment revenue was $1,508.2$1,697.8 million for the three months ended August 31, 2021,2022, compared to $1,394.4$1,508.2 million for the same period in the prior fiscal year, which was an increase of 8.2%12.6%. The organic revenue growgrowth rate for this reportable operating segment was 8.2%12.3%. Revenue growth in the Uniform Rental and Facility Services reportable operating segment was negativelypositively impacted by a net 0.5%0.6% due to acquisitions and divestitures and positivelynegatively impacted by 0.5%0.3% due to foreign currency exchange rate fluctuations. Revenue growth was a result of new business, the penetration of additional products and services into existing customers and price increases, partially offset by lost business. New business growth resulted from an increase in the number and productivity of sales representatives.

Other revenue, consisting of revenue from the First Aid and Safety Services reportable operating segment and All Other, increased 10.4%20.6% for the three months ended August 31, 2021,2022, compared to the same period in the prior fiscal year, from $352.2$388.8 million to $388.8$468.7 million. The organic revenue growgrowth rate for other revenue was 10.3%20.6%. Revenue growth was positively impacted by 0.1% due primarily to acquisitions and negatively impacted by 0.1% due to foreign currency exchange rate fluctuations.

Cost of uniform rental and facility services consists primarily of production expenses, delivery expenses and the amortization of in service inventory, including uniforms, mats, shop towels and other ancillary items. Cost of uniform rental and facility services increased $63.9$111.5 million, or 8.9%14.3%, for the three months ended August 31, 2021,2022, compared to the three months ended August 31, 2020.2021. This change from the same period in the prior fiscal year was primarily due to higher Uniform Rental and Facility Services reportable operating segment sales volume, as well as increased energy costs and investments in labor and energy costs.material cost to support increased revenue growth achieved during the three months ended August 31, 2022.

Cost of other consists primarily of cost of goods sold (predominantly first aid and safety products, personal protective equipment, uniforms, and fire protection products), delivery expenses and distribution expenses in the First Aid and Safety Services reportable operating segment and All Other. Cost of other increased $9.9$32.7 million, or 4.8%15.2%, for the three months ended August 31, 2021,2022, compared to the three months ended August 31, 2020.2021, primarily due to increased sales volume in each of the underlying operating segments. Cost of other improved as a percentage of revenue, decreasing from 58.2%55.3% for three months ended August 31, 20202021 to 55.3%52.8% for the three months ended August 31, 2021.2022. The decreaseimprovement in cost of sales as a percent to revenue was primarily due to a favorable changechanges in the sales mix including a decreasefor each of the underlying operating segments as well as efficiencies gained in the proportion of sales related to personal protective equipment.labor and delivery routes, partially offset by increases in energy costs.

Selling and administrative expenses increased $32.2$79.3 million, or 6.7%15.6%, in the three months ended August 31, 2021,2022, compared to the same period of the prior fiscal year. The increase in expenseIn the three months ended August 31, 2021, there was due to increases in selling labor and increased travel and meeting expenses, partially offset by a gain on the sale of certain operating assets within the Uniform Direct Sales operating segment.segment of $12.2 million, which was recorded as a reduction of selling and administrative expenses. The remaining increase of $67.2 million, or 12.9%, was primarily due to increases in labor and other employee-partner expenses. Selling and administrative expenses as a percent of revenue were 26.8%27.1% for the three months ended August 31, 2021, which is a 50 basis point improvement2022, compared to 27.3%26.8% for the same period in the prior fiscal year. The improvementpreviously mentioned gain on the sale of certain operating assets of $12.2 million in the same period of the prior year reduced selling and administrative expenses by 70 basis points for such period. The remaining selling and administrative expenses improved as a percent ofto revenue was primarily due to employee-partner related expenses increasing at a lower rate than revenue growth outpacingin the growth in expenses.
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Operating income was $440.1 million, or 20.3% of revenue, for the three months ended August 31, 2022, compared to $394.1 million, or 20.8% of revenue, for the three months ended August 31, 2021, compared to $349.7 million, or 20.0% of revenue, for the three months ended August 31, 2020.2021. The 80 basis point increasedecrease in operating income as a percent of revenue was due to both costa gain on the sale of sales and selling and administrative expenses decreasing as a percentcertain operating assets within the Uniform Direct Sales operating segment of revenue$12.2 million, or 70 basis points, recorded in the three months ended August 31, 2021.
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The remaining operating income for the three months ended August 31, 2021.2022 improved as a percent of revenue due to previously mentioned improvements in selling and administrative expenses as a percent of revenue.

Net interest expense (interest expense less interest income) was $27.6 million for the three months ended August 31, 2022, compared to $21.8 million for the three months ended August 31, 2021, compared2021. The change was primarily due to $24.5 million foran increase in interest rates on commercial paper and an increase in outstanding short-term debt during the three months ended August 31, 2020. The change was primarily due2022 compared to the refinancing of $250.0 million from senior debt with an interest rate of 4.30% which matured on June 1, 2021, into commercial paper which had an interest rate of 0.20% atthree months ended August 31, 2021.

Cintas’ effective tax rate for continuing operations was 11.0%14.8% and 7.8%11.0% for the three months ended August 31, 20212022 and 2020,2021, respectively. The effective tax rate in both periods was impacted by certain discrete items, primarily the tax accounting impact for stock-based compensation.

Net income for the three months ended August 31, 20212022, increased $31.2$20.5 million, or 10.4%6.2%, compared to the three months ended August 31, 2020.2021. Diluted earnings per share were $3.11$3.39 for the three months ended August 31, 2021,2022, which was an increase of 11.9%9.0% compared to the same period in the prior fiscal year. Diluted earnings per share increased primarily due to the increase in net income combined with the decrease in diluted weighted average common shares outstanding. The decrease in diluted weighted average common shares outstanding resulted from purchasing an aggregate of approximately 3.02.7 million shares of common stock under the October 30, 2018 and October 29, 2019board approved share buyback programs since the beginning of the third quarter of fiscal 20212022 through the first quarter of fiscal 2022.2023.

Uniform Rental and Facility Services Reportable Operating Segment
Three Months Ended August 31, 20212022 Compared to Three Months Ended August 31, 20202021
 
Uniform Rental and Facility Services reportable operating segment revenue was $1,508.2$1,697.8 million for the three months ended August 31, 20212022 compared to $1,394.4$1,508.2 million for the same period of the prior fiscal year, andyear. The organic revenue growth rate for the reportable operating segment was 12.3%. The cost of uniform rental and facility services increased $63.9$111.5 million, or 8.9%. The organic revenue grow rate for the reportable operating segment was 8.2%14.3%. The reportable operating segment’s gross margin was $728.9 million, or$807.0 million. Gross margin as a percentage of revenue was 47.5% for the three months ended August 31, 2022 and 48.3% of revenue.for the three months ended August 31, 2021. The change in gross margin was caused by a 40 basis points lower than the prior fiscal year’s first quarter gross margin of 48.7%. The differencepoint increase in gross margin as a percent to revenue was driven primarily by an increaseenergy-related expenses and investments in labor and energymaterial cost to support increased revenue growth achieved, partially offset by improved leverage of fixed costs.

Selling and administrative expenses for the Uniform Rental and Facility Services reportable operating segment increased $35.5$42.7 million in the three months ended August 31, 20212022 compared to the same period of the prior fiscal year. Selling and administrative expenses as a percent of revenue for the three months ended August 31, 2021 was 26.5%2022 improved to 26.0% compared to 26.1%the 26.5% in the first quarter of the prior fiscal year. The increaseimprovement as a percent of revenue was primarily due to increasesefficiencies in selling labor and increased travel and meeting expenses.realized in the three months ended August 31, 2022.

Income before income taxes increased $14.4$35.4 million, or 4.6%10.7%, for the Uniform Rental and Facility Services reportable operating segment for the three months ended August 31, 2021,2022, compared to the same period in the prior fiscal year. Income before income taxes was 21.8%21.5% of the reportable operating segment’s revenue, which was a 8030 basis point decrease compared tofrom the first quarter of the prior fiscal year of 22.6%21.8%. This decrease was primarily due to the previously discussed changesdecrease in gross margin andpartially offset by the improvements in selling and administrative expenses as a percent of revenue.expenses.

First Aid and Safety Services Reportable Operating Segment
Three Months Ended August 31, 20212022 Compared to Three Months Ended August 31, 20202021

First Aid and Safety Services reportable operating segment revenue decreasedincreased from $204.5$199.1 million to $199.1$234.2 million, or 2.6%17.6%, for the three months ended August 31, 2021,2022, over the same period in the prior fiscal year. RevenueThe organic revenue growth rate for the reportable operating segment declined organically by 3.3%was 15.8%. First Aid and Safety Services reportable operating segment revenue was positively impacted by 0.5%1.8% due to acquisitions and by 0.2% due to foreign currency exchange rate fluctuations.acquisitions. The changeincrease in revenue was causeddriven by many factors including new business sold by sales representatives, penetration of additional products and services into existing customers, price increases and strong customer retention.

Cost of first aid and safety services increased $8.2 million, or 7.4%, for the three months ended August 31, 2022, over the three months ended August 31, 2021, due to higher sales volume. The gross margin as a decrease in demand for personal protective equipment.percent of
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Cost of first aid and safety services decreased $12.5 million, or 10.2%, for the three months ended August 31, 2021, over the three months ended August 31, 2020, due to lower sales volume. The gross margin as a percent of revenue was 44.8%49.6% for the quarter ended August 31, 2021,2022, compared to the gross margin as a percent of revenue of 40.2%44.8% in the same period of the prior fiscal year. The improvement in gross margin from the first quarter of the prior fiscal year was primarily driven by a decreasefavorable changes in the proportion of sales related to personal protective equipment, which typically have lower gross margins than first aid cabinet sales.mix as well as efficiencies gained in labor and delivery routes.
Selling and administrative expenses remained at $63.5increased $11.7 million which is in line with the first quarterthree months ended August 31, 2022, compared to the same period of the prior fiscal year, but increasedyear. Selling and administrative expenses as a percent of revenue to 31.9%for the three months ended August 31, 2022 were 32.2%, compared to 31.1%31.9% in the first quarter of the prior fiscal year. The change as a percent of revenue from the same period in the prior fiscal year was primarily due to an increase in bad debt expense partially offset by lower revenue.labor in selling and administrative expenses.

Income before income taxes for the First Aid and Safety Services reportable operating segment increased $7.2$15.1 million to $25.7$40.8 million for the three months ended August 31, 2021,2022, compared to the same period in the prior fiscal year. Income before income taxes was 12.9%17.4% of the reportable operating segment’s revenue compared to the first quarter of the prior fiscal year of 9.1%12.9%. This changeThe increase in income before income taxes was primarily due to the previously discussed increase in gross margin.

Liquidity and Capital Resources
The following is a summary of our cash flows and cash and cash equivalents as of and for the three months ended August 31:
(In thousands)(In thousands)20212020(In thousands)20222021
Net cash provided by operating activitiesNet cash provided by operating activities$262,141 $312,292 Net cash provided by operating activities$298,156 $262,141 
Net cash used in investing activitiesNet cash used in investing activities$(84,321)$(39,942)Net cash used in investing activities$(86,595)$(84,321)
Net cash (used in) provided by financing activities$(590,084)$2,243 
Net cash used in financing activitiesNet cash used in financing activities$(226,199)$(590,084)
Cash and cash equivalents at the end of the periodCash and cash equivalents at the end of the period$79,749 $421,542 Cash and cash equivalents at the end of the period$74,558 $79,749 
Cash and cash equivalents as of August 31, 2022 and 2021, and 2020, include $38.1$23.4 million and $36.3$38.1 million, respectively, that is located outside of the U.S.

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

We expect our cash flows from operating activities to remain sufficient to provide us with adequate levels of short-term liquidity. In addition, we have access to $1.0$2.0 billion of short-term debt capacity from our amended and restated revolving credit facility. Although the impact of the COVID-19 pandemic is fluid and continues to evolve, we believe our long-term liquidity position remains strong. We believe the Company has sufficient liquidity to operate in the current business environment. Acquisitions, repurchases of our common stock and dividends remain strategic objectives, but they will be dependent on the economic outlook and liquidity of the Company.

Net cash provided by operating activities was $298.2 million for the three months ended August 31, 2022, compared to $262.1 million for the three months ended August 31, 2021, compared to $312.3 million for the three months ended August 31, 2020.2021. The change from the prior fiscal year was primarily due to an increase in net income and favorable changes in working capital, specifically accounts payable and current income taxes, which was partially offset by unfavorable changes in working capital, specifically, accounts receivable and uniforms and other rental items in service, which resulted from the growth in sales. Additionally, there were uses of cash from the change in accrued compensation and other related liabilities, which was caused by the differences in the annual bonus payments and accounts payable, which was due to timing. These uses of cash were partially offset by increased net income and favorable changes in working capital, specifically, inventories, net.revenue.

Net cash used in investing activities includes capital expenditures, purchases of investments, proceeds from sale of operating assets and cash paid for acquisitions of businesses. Capital expenditures were $48.7$70.0 million and $30.9$48.7 million for the three months ended August 31, 20212022 and 2020,2021, respectively. Capital expenditures in the three months ended August 31, 20212022 included $34.5$54.1 million for the Uniform Rental and Facility Services reportable operating segment and $10.7$11.7 million for the First Aid and Safety Services reportable operating segment. The increase in capital expenditures during the three months ended August 31, 2022 over the same period in the prior fiscal year is due to an investment in the operating segments to support continued market penetration and revenue growth. Cash paid for acquisitions of businesses was $35.7$7.1 million and $2.0$35.7 million for the three months ended August 31, 2021 and
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2020,August 31, 2022 and 2021, respectively. The acquisitions during both the three months ended August 31, 2022 and 2021 occurred in our Uniform Rental and Facility Services reportable operating segment, our First Aid and Safety Services reportable operating segment and our Fire Protection operating segment, which is included in All Other. The acquisitions during the three months ended August 31, 2020 occurred in our Uniform Rental and Facility Services reportable operating segment. Also, duringDuring the three months ended August 31, 2021, the Company received proceeds of $15.1 million from the sale of certain operating assets, net of cash disposed in the Uniform Direct Sales operating segment, which is included in All Other. Net cash used in investing activities also includes $8.7$5.9 million and $4.9$8.7 million of purchases of investments during the three months ended August 31, 20212022 and 2020,2021, respectively.

Net cash used in financing activities was $226.2 million and $590.1 million for the three months ended August 31, 2022 and 2021, and net cash provided by financing activities was $2.2 million for the three months ended August 31, 2020.respectively. The changedecrease in cash used in financing activities was primarily due to the increasedecrease in share buyback activity debt payments and dividenddebt payments, partially offset by the decrease in net issuance of commercial paper in the three months ended August 31, 2021.2022.

On October 29, 2019, we announced that the Board of Directors authorized a $1.0 billion share buyback program, which was completed during the first quarter of fiscal 2022. On July 27, 2021, weCintas announced that the Board of Directors authorized a $1.5 billion share buyback program, which does not have an expiration date. From the inception of the July 27, 2021 share buyback program through August 31, 2022, Cintas purchased a total of 2.7 million shares of Cintas common stock at an average price of $385.66 per share for a total purchase price of $1.0 billion. On July 26, 2022, Cintas announced that the Board of Directors authorized a new $1.5$1.0 billion share buyback program, which does not have an expiration date. The following table summarizes the buyback activity by program and for the three months ended August 31:
2021202020222021
Buyback Program
(In thousands except per share data)
SharesAvg. Price
per Share
Purchase
Price
SharesAvg. Price
per Share
Purchase
Price
Buyback Activity
(In thousands except per share data)
Buyback Activity
(In thousands except per share data)
SharesAvg. Price
per Share
Purchase
Price
SharesAvg. Price
per Share
Purchase
Price
October 29, 2019October 29, 20191,590 $365.41 $581,220 — $— $— October 29, 2019— $— $— 1,590 $365.41 $581,220 
July 27, 2021July 27, 2021— $— $— — $— $— July 27, 2021532 396.39 210,751 — — — 
July 26, 2022July 26, 2022— — — — — — 
1,590 $— $581,220 — $— $— 532 $396.39 $210,751 1,590 $365.41 $581,220 
Shares acquired for taxes due (1)
Shares acquired for taxes due (1)
270 $405.93 $109,583 198 $394.19 $78,015 
Total repurchase of Cintas
common stock
Total repurchase of Cintas
common stock
$320,334 $659,235 

(1)
There were no share buybacks in the period subsequent to August 31, 2021, through October 7, 2021 under any share buyback program. In addition, for the three months ended August 31, 2021, Cintas acquired 0.2 million shares Shares of Cintas common stock acquired for employee payroll taxes due on options exercised and vested restricted stock awards that vestedawards.






















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Our Board of Directors declared the following dividends:

Paid Dividends
Declaration Date
(In millions except per share data)
Record
 Date
Payment
 Date
Dividend
Per Share
Total
Amount
Three months ended August 31, 2022
April 12, 2022May 16, 2022June 15, 2022$0.95 $97.7 
Three months ended August 31, 2021
April 13, 2021May 15, 2021June 15, 2021$0.75 $79.1 
Accrued Dividends
As of August 31, 2022
July 26, 2022 (1)
August 15, 2022September 15, 2022$1.15 $117.5 
As of August 31, 2021
July 27, 2021 (1)
August 13, 2021September 15, 2021$0.95 $98.8 

(1) The dividends declared during the three months ended August 31, 2021. These shares2022 and 2021 were acquired at an average price of $394.19 per share for a total purchase price of $78.0 million. For the three months ended August 31, 2020, Cintas acquired 0.2 million shares of Cintas common stock for employee payroll taxes due on restricted stock awards that vested during the three months ended August 31, 2020. These shares were acquired at an average price of $300.01 per share for a total purchase price of $69.0 million.

On April 13, 2021, our Board of Directors declared a quarterly dividend of $0.75 per share on outstanding common stock. These dividends, totaling $79.1 million, were paid on June 15, 2021, to shareholders of record as of May 15, 2021. On July 27, 2021, the Board of Directors declared a quarterly dividend of $0.95 per share on outstanding common stock. This dividend of $98.8 million wasincluded in current accrued liabilities on the August 31, 2021 consolidated condensed balance sheet at August 31, 2022 and was paid on September 15, 2021, during the second quarter of fiscal 2022, to shareholders of record as of August 13, 2021.
Any future dividend declarations, including the amount of any dividends, are at the discretion of the Board of Directors and dependent upon then-existing conditions, including the Company's consolidated operating results and consolidated financial condition, capital requirements, contractual restrictions, business prospects and other factors that the Board of Directors may deem relevant.

During the three months ended August 31, 2022 and 2021, Cintas issued $196.0 million and $326.0 million, net of commercial paper, borrowings. On June 1, 2021, in accordance with the terms of the notes, Cintas paid the $250.0 million aggregate principal amount of its 4.30%, 10-year senior notes that matured on that date with cash on hand. During the next 12 months, Cintas expects to issue long-term debt to pay the $650 million principal amount of its 2.90%, 5-year senior notes that mature in the fourth quarter of fiscal 2022 and the $300 million principal amount of its 3.25%, 10-year senior notes that mature in the first quarter of fiscal 2023.
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respectively.

The following table summarizes Cintas' outstanding debt:
(In thousands)(In thousands)Interest
 Rate
Fiscal Year
Issued
Fiscal Year
 Maturity
August 31, 2021May 31,
2021
(In thousands)Interest
 Rate
Fiscal Year
Issued
Fiscal Year
 Maturity
August 31,
2022
May 31,
2022
Debt due within one yearDebt due within one yearDebt due within one year
Senior notes4.30 %20122022$— $250,000 
Senior notes2.90 %20172022650,000 650,000 
Senior notes3.25 %20132023300,000 — 
Commercial paperCommercial paper0.20 %(1)20222022326,000 — Commercial paper2.69 %(1)20232023$457,200 $261,200 
Senior notes (2)
Senior notes (2)
2.78 %2013202350,272 50,380 
Debt issuance costsDebt issuance costs(833)(930)Debt issuance costs(5)(6)
Total debt due within one yearTotal debt due within one year$1,275,167 $899,070 Total debt due within one year$507,467 $311,574 
Debt due after one yearDebt due after one yearDebt due after one year
Senior notes (3)
Senior notes (3)
3.11 %20152025$50,881 $50,965 
Senior notesSenior notes3.25 %20132023$— $300,000 Senior notes3.45 %20222025400,000 400,000 
Senior notes (2)
2.78 %2013202350,707 50,815 
Senior notes (3)
3.11 %2015202551,217 51,301 
Senior notesSenior notes3.70 %201720271,000,000 1,000,000 
Senior notesSenior notes3.70 %201720271,000,000 1,000,000 Senior notes4.00 %20222032800,000 800,000 
Senior notesSenior notes6.15 %20072037250,000 250,000 Senior notes6.15 %20072037250,000 250,000 
Debt issuance costsDebt issuance costs(8,702)(9,283)Debt issuance costs(16,279)(17,033)
Total debt due after one yearTotal debt due after one year$1,343,222 $1,642,833 Total debt due after one year$2,484,602 $2,483,932 

(1)  Variable rate debt instrument. The rate presented is the variable borrowing rate at August 31, 2021.2022.
(1)(2)  Cintas assumed these senior notes with the acquisition of G&K Services, Inc. (G&K) in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.73%.
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(3)    Cintas assumed these senior notes with the acquisition of G&K in the fourth quarter of fiscal 2017, and they were recorded at fair value. The interest rate shown above is the effective interest rate. The principal amount of these notes is $50.0 million with a stated interest rate of 3.88%.
The credit agreement that supports our commercial paper program has a revolving credit facility with a capacity to $1.0of $2.0 billion. The credit agreement has an accordion feature that provides Cintas the ability to request increases to the borrowing commitments under the revolving credit facility of up to $250.0$500.0 million in the aggregate, subject to customary conditions. The maturity date of the revolving credit facility is MayMarch 23, 2024.2027. As of August 31, 2021,2022, there was $326.0$457.2 million of commercial paper outstanding with a weighted average interest rate of 2.69% and maturity dates less than 120 days and no borrowings on our revolving credit facility. As of May 31, 2021,2022, there was no$261.2 million of commercial paper outstanding with a weighted average interest rate of 1.20% and maturity dates less than 120 days and no borrowings on our revolving credit facility.

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

Our access to the commercial paper and long-term debt markets has historically provided us with sources of liquidity. We do not anticipate having difficulty in obtaining financing from those markets in the future in view of our favorable experiences in the debt markets in the recent past, including, without limitation, to repay our long-term debt that is maturing in the next twelve months. However, the COVID-19 pandemic, which has caused disruption in the capital markets, could make financing more difficult and/or expensive. Additionally, our ability to continue to access the commercial paper and long-term debt markets on favorable interest rate and other terms will depend, to
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a significant degree, on the ratings assigned by the credit rating agencies to our indebtedness. As of August 31, 2021,2022, our ratings were as follows:
Rating AgencyOutlookCommercial
Paper
Long-term
 Debt
Standard & Poor’sStableA-2A-
Moody’s Investors ServiceStableP-2A3

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

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


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Financial and Nonfinancial Disclosure About Issuers and Guarantors of Cintas’ Senior Notes
Cintas Corporation No. 2 (Corp. 2) is the indirectly, wholly owned principal operating subsidiary of Cintas. Corp. 2 is the issuer of the $2,300.0$2,550.0 million aggregate principal amount of senior notes outstanding as of August 31, 2021,2022, which are unconditionally guaranteed, jointly and severally, by Cintas Corporation and its wholly owned, direct and indirect domestic subsidiaries.

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

The summarized financial information of the Obligor Group is presented on a combined basis with intercompany balances and transactions between entities in the Obligor Group eliminated. The Obligor Group’s amounts due from, amounts due to and transactions with non-guarantors have been presented in separate line items, if they are material. Summarized financial information of the Obligor Group is as follows:
Three Months EndedThree Months Ended
Summarized Consolidated Condensed Statement of Income
(In thousands)
Summarized Consolidated Condensed Statement of Income
(In thousands)
August 31,
2021
August 31,
2020
Summarized Consolidated Condensed Statement of Income
(In thousands)
August 31,
2022
August 31,
2021
Net sales to unrelated partiesNet sales to unrelated parties$1,788,303 $1,647,338 Net sales to unrelated parties$2,046,494 $1,788,303 
Net sales to non-guarantorsNet sales to non-guarantors$1,493 $831 Net sales to non-guarantors$2,828 $1,493 
Operating incomeOperating income$380,322 $338,962 Operating income$427,521 $380,322 
Net incomeNet income$320,957 $292,039 Net income$342,321 $320,957 

Summarized Consolidated Condensed Balance Sheets
(In thousands)
Summarized Consolidated Condensed Balance Sheets
(In thousands)
August 31,
2021
May 31,
2021
Summarized Consolidated Condensed Balance Sheets
(In thousands)
August 31,
2022
May 31,
2022
ASSETSASSETSASSETS
Receivables due from non-obligor subsidiariesReceivables due from non-obligor subsidiaries$4,667 $2,292 Receivables due from non-obligor subsidiaries$9,690 $11,759 
Total other current assetsTotal other current assets$2,283,848 $2,652,810 Total other current assets$2,559,715 $2,427,494 
Total other noncurrent assetsTotal other noncurrent assets$4,935,913 $4,924,550 Total other noncurrent assets$5,097,949 $5,081,265 
LIABILITIESLIABILITIESLIABILITIES
Amounts due to non-obligor subsidiariesAmounts due to non-obligor subsidiaries$1,446 $457 Amounts due to non-obligor subsidiaries$3,846 $11,383 
Current liabilitiesCurrent liabilities$2,234,867 $1,893,352 Current liabilities$1,568,885 $1,388,310 
Noncurrent liabilitiesNoncurrent liabilities$2,216,902 $2,549,911 Noncurrent liabilities$3,373,716 $3,346,851 

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

Forward-Looking Statements
This Quarterly Report on Form 10-Q contains forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides a safe harbor from civil litigation for forward-looking statements.  Forward-looking statements may be identified by words such as “estimates,” “anticipates,” “predicts,” “projects,” “plans,” “expects,” “intends,” “target,” “forecast,” “believes,” “seeks,” “could,” “should,” “may” and “will” or the negative versions thereof and similar words, terms and expressions and by the context in which they are used. Such statements are based upon current expectations of Cintas and speak only as of the date made. You should not place undue reliance on any forward-looking statement. We cannot guarantee that any forward-looking statement will be realized. These statements are subject to various risks, uncertainties, potentially inaccurate assumptions and other factors that could cause actual results to differ from those set forth in or implied by this Quarterly Report. Factors that might cause such a difference include, but are not limited to, the possibility of greater than anticipated operating costs including energy and fuel costs; lower sales volumes; loss of customers due to outsourcing trends; the performance and costs of integration of acquisitions; inflationary pressures and fluctuations in costs of materials and labor, including increased medical costs; interest rate volatility; costs and possible effects of union organizing activities; failure to comply with government regulations concerning employment discrimination, employee pay and benefits and employee health and safety; the effect on operations of exchange rate fluctuations, tariffs and other political, economic and regulatory risks; uncertainties regarding any existing or newly-discovered expenses and liabilities related to environmental compliance and remediation; our ability to meet our goals relating to environmental, social and governance (ESG) opportunities, improvements and efficiencies; the cost, results and ongoing assessment of internal controls for financial reporting; the effect of new accounting pronouncements; disruptions caused by the inaccessibility of computer systems data, including cybersecurity risks; the initiation or outcome of litigation, investigations or other proceedings; higher assumed sourcing or distribution costs of products; the disruption of operations from catastrophic or extraordinary events including viralglobal health pandemics such as the COVID-19 coronavirus; the amount and timing of repurchases of our common stock, if any; changes in federal and state tax and labor laws; and the reactions of competitors in terms of price and service. Cintas undertakes no obligation to publicly release any revisions to any forward-looking statements or to otherwise update any forward-looking statements whether as a result of new information or to reflect events, circumstances or any other unanticipated developments arising after the date on which such statements are made. A further list and description of risks, uncertainties and other matters can be found in our Annual Report on Form 10-K for the year ended May 31, 20212022 and in our reports on Forms 10-Q and 8-K. The risks and uncertainties described herein are not the only ones we may face. Additional risks and uncertainties presently not known to us, or that we currently believe to be immaterial, may also harm our business.

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ITEM 3.                          
QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
 
In our normal operations, Cintas has market risk exposure to interest rates. There has been no material change to this market risk exposure to interest rates from that which was previously disclosed on page 2930 of our Annual Report on Form 10-K for the year ended May 31, 2021.2022.
 
Through its foreign operations, Cintas is exposed to foreign currency risk. Foreign currency exposures arise from transactions denominated in a currency other than the functional currency and from foreign currency denominated revenue and profit translated into U.S. dollars. The primary foreign currency to which Cintas is exposed is the Canadian dollar. 

 
ITEM 4.                             
CONTROLS AND PROCEDURES
 
Disclosure Controls and Procedures
With the participation of Cintas’ management, including Cintas’ President and Chief Executive Officer, Chief Financial Officer, General Counsel and Controllers, Cintas has evaluated the effectiveness of the disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (Exchange Act)) as of August 31, 2021.2022. Based on such evaluation, Cintas’ management, including Cintas’ President and Chief Executive Officer, Chief Financial Officer, General Counsel and Controllers, has concluded that Cintas’ disclosure controls and procedures were effective as of August 31, 2021,2022, in ensuring (i) information required to be disclosed by Cintas in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission's rules and forms and (ii) information required to be disclosed by Cintas in the reports that it files or submits under the Exchange Act is accumulated and communicated to Cintas’ management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Internal Control over Financial Reporting
There were no changes in Cintas’ internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended August 31, 2021,2022, that have materially affected, or are reasonably likely to materially affect, Cintas' internal control over financial reporting.




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Part II.  Other Information
 
ITEM 1.                              
LEGAL PROCEEDINGS

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


ITEM 2.                           
UNREGISTERED SALES OF EQUITY
SECURITIES AND USE OF PROCEEDS
Period
(In millions, except share and per share data)
Total number
of shares
purchased
Average
price paid
per share
Total number of
shares purchased
as part of the
publicly announced
plan (1)
Maximum
approximate dollar
value of shares
that may yet be
purchased under
the plan (1)
June 1 - 30, 2021 (2)
1,158,068 $358.64 1,153,324 $167.6 
July 1 - 31, 2021 (3)
628,949 $386.86 437,265 $1,500.0 
August 1 - 31, 2021 (4)
1,484 $395.77 — $1,500.0 
Total1,788,501 $368.60 1,590,589 $1,500.0 
Period
(In millions, except share and per share data)
Total number
of shares
purchased
Average
price paid
per share
Total number of
shares purchased
as part of the
publicly announced
plan (1)
Maximum
approximate dollar
value of shares
that may yet be
purchased under
the plan (1)
June 1 - 30, 2022 (2)
539,081 $396.20 531,671 $465.9 
July 1 - 31, 2022 (3)
195,972 $399.53 — $1,465.9 
August 1 - 31, 2022 (4)
66,571 $427.45 — $1,465.9 
Total801,624 $399.61 531,671 $1,465.9 

(1)   On October 29, 2019, Cintas announced that the Board of Directors authorized a $1.0 billion share buyback program, which was completed during the first quarter of fiscal 2022. From the inception of the October 29, 2019 share buyback program through July, 2021, Cintas has purchased a total of 2.8 million shares of Cintas common stock at an average price of $358.93 per share for a total purchase price of $1.0 billion. On July 27, 2021, Cintas announced that the Board of Directors authorized a $1.5 billion share buyback program, which does not have an expiration date. From the inception of the July 27, 2021 share buyback program through August 31, 2022, Cintas has purchased a total of 2.7 million shares of Cintas common stock at an average price of $385.66 per share for a total purchase price of $1.0 billion. On July 26, 2022, Cintas announced that the Board of Directors authorized a new $1.5$1.0 billion share buyback program, which does not have an expiration date. There were no share buybacks under the July 27 202126, 2022 share buyback program through August 31, 2021.2022.
(2)   During June 2021,2022, Cintas acquired 4,7447,410 shares of Cintas common stock in trade for employee payroll taxes due on options exercised and restricted stock awards that vested during the fiscal year. These shares were acquired at an average price of $357.11$381.93 per share for a total purchase price of $1.7$2.8 million.
(3)  During July 2021,2022, Cintas acquired 191,684195,972 shares of Cintas common stock in trade for employee payroll taxes due on options exercised and restricted stock awards that vested during the fiscal year. These shares were acquired at an average price of $395.10$399.53 per share for a total purchase price of $75.7$78.3 million.
(4)  During August 2021,2022, Cintas acquired 1,48466,571 shares of Cintas common stock in trade for employee payroll taxes due on options exercised and restricted stock awards that vested during the fiscal year. These shares were acquired at an average price of $395.77$427.45 per share for a total purchase price of $0.6$28.5 million.


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ITEM 6.                                   
EXHIBITS

101The following financial statements from Cintas' Quarterly Report on Form 10-Q for the period ended August 31, 2021,2022, formatted in Inline XBRL: (i) Consolidated Condensed Statements of Income (unaudited), (ii) Consolidated Condensed Statements of Comprehensive Income (unaudited), (iii) Consolidated Condensed Balance Sheets (unaudited), (iv) Consolidated Condensed Statements of Shareholders' Equity (unaudited), (v) Consolidated Condensed Statements of Cash Flows (unaudited) and (vi) Notes to Consolidated Condensed Financial Statements, tagged as blocks of text and including detailed tags.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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Signatures
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
  CINTAS CORPORATION 
  (Registrant) 
Date:October 7, 20216, 2022 /s/J. Michael Hansen 
   J. Michael Hansen
   Executive Vice President and Chief Financial Officer
   (Principal Financial and Accounting Officer)

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